NOV(NOV) - 2025 Q2 - Quarterly Results

Financial Highlights NOV Inc. achieved $2.19 billion in revenue in Q2 2025, a 1% year-over-year decrease but a 4% sequential increase, with net income significantly down 52% to $108 million due to a prior-year business sale gain, and adjusted EBITDA decreasing 10% year-over-year to $252 million, while returning $176 million to shareholders through buybacks and dividends Financial Performance Overview | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change | QoQ Change | | :------------------- | :------------------- | :------------------- | :--------- | :--------- | | Revenue | 2,190 | 2,216 | -1% | +4% | | Net Income | 108 | 223 | -52% | -51.3% | | EPS (Diluted) | 0.29 | 0.57 | -49.1% | -49.1% | | Operating Profit | 143 | 313 | -54% | -6.0% | | Adjusted EBITDA | 252 | 281 | -10% | 0% | | Cash Flow from Operations | 191 | 354 | -46.1% | +10.3% | | Free Cash Flow | 108 | 203 | -46.8% | +46.0% | - Net income and operating profit decline primarily attributed to approximately $130 million pre-tax gain from a business sale in Q2 2024[3] - $176 million capital returned to shareholders this quarter, including stock repurchases and dividends[6] CEO Commentary and Market Outlook CEO Clay Williams noted that despite sequential sales growth, macroeconomic uncertainty, rapid unwinding of OPEC+ quotas, and Middle East conflicts led to cautious customers and delayed orders, resulting in a year-over-year revenue decline, with market headwinds and sales mix shifts pressuring margins, prompting additional cost control measures and supply chain adjustments, while anticipating current market dynamics to persist into H2, offshore activity to recover in 2026, and long-term energy demand to drive core market investments - Macroeconomic uncertainty, rapid unwinding of OPEC+ production quotas, and Middle East conflicts led to customer caution and delayed orders, resulting in a year-over-year revenue decline[4] - North American customers continued to reduce oil drilling, partially offset by modest growth in natural gas drilling; offshore activity remained relatively strong[5] - The company is implementing additional cost control measures and adjusting its global supply chain to better mitigate rising costs[5] - Current market dynamics are expected to persist, leading to lower industry activity levels in the second half, with offshore activity projected to resume growth in 2026[7] Segment Performance Energy Products and Services revenue decreased 2% year-over-year, with declines in operating profit and adjusted EBITDA due to reduced global drilling and unfavorable sales mix, while Energy Equipment revenue was flat, but operating profit significantly decreased due to prior-year business sale gains, though adjusted EBITDA grew from strong execution of high-margin backlog, with new orders and backlog both decreasing Energy Products and Services The Energy Products and Services segment experienced a 2% year-over-year revenue decrease, with operating profit down 35.1% and adjusted EBITDA down 20.6%, primarily due to reduced global drilling activity and an unfavorable sales mix Energy Products and Services Financials | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change | | :------------------- | :------------------- | :------------------- | :--------- | | Revenue | 1,030 | 1,050 | -2% | | Operating Profit | 83 | 128 | -35.1% | | Operating Margin | 8.1% | 12.2% | -4.1 pp | | Adjusted EBITDA | 146 | 184 | -20.6% | | Adjusted EBITDA Margin | 14.2% | 17.5% | -3.3 pp | - Revenue decline attributed to lower global drilling activity impacting demand for short-cycle consumables, partially offset by increased capital equipment sales[8] - Profitability impacted by unfavorable sales mix, tariffs, other inflationary pressures, and certain expenses in Latin America[8] Energy Equipment The Energy Equipment segment reported flat year-over-year revenue, a 47.4% decrease in operating profit primarily due to a prior-year business sale gain, but an 11.3% increase in adjusted EBITDA driven by strong execution of high-margin backlog, while new orders and backlog decreased Energy Equipment Financials | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change | | :------------------- | :------------------- | :------------------- | :--------- | | Revenue | 1,210 | 1,204 | 0% | | Operating Profit | 122 | 232 | -47.4% | | Operating Margin | 10.1% | 19.3% | -9.2 pp | | Adjusted EBITDA | 158 | 142 | +11.3% | | Adjusted EBITDA Margin | 13.1% | 11.8% | +1.3 pp | - Operating profit decreased by $110 million year-over-year, primarily due to approximately $130 million pre-tax gain from a business sale in Q2 2024[9] - Improved profitability driven by strong execution of high-margin backlog[9] Energy Equipment Orders and Backlog | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change | | :------------------- | :------------------- | :------------------- | :--------- | | New Orders | 420 | 977 | -57.0% | | Backlog Shipments | 632 | 553 | +14.3% | | Book-to-bill Ratio | 66% | 177% | -111 pp | | Capital Equipment Backlog (as of June 30) | 4,300 | 4,331 | -0.7% | Q3 2025 Outlook NOV anticipates a 1% to 3% year-over-year decrease in consolidated revenue for Q3 2025, with adjusted EBITDA projected to be between $230 million and $250 million Q3 2025 Financial Projections | Metric | Q3 2025 Expectation | | :------------------- | :------------------- | | Consolidated Revenue YoY Change | -1% to -3% | | Adjusted EBITDA | $230 million to $250 million | Corporate Information NOV repurchased approximately 5.5 million common shares and paid $176 million in total dividends during Q2, recorded $19 million in other items related to severance, facility closures, and business process streamlining, and as of June 30, 2025, had $1.73 billion in total debt, $1.5 billion available on its revolving credit facility, and $1.08 billion in cash and cash equivalents Capital Allocation and Liquidity NOV's capital allocation in Q2 included $69 million in stock repurchases and $176 million in total capital returned to shareholders, while maintaining strong liquidity with $1.08 billion in cash and $1.5 billion available on its revolving credit facility against $1.73 billion in total debt as of June 30, 2025 Capital Allocation Summary | Metric | Amount (million USD) | | :------------------- | :------------------- | | Stock Repurchases | 69 | | Supplemental Dividend | 0.21/share | | Regular Dividend | 0.075/share | | Total Capital Returned to Shareholders | 176 | Liquidity Position | Metric | As of June 30, 2025 (million USD) | | :------------------- | :------------------- | | Total Debt | 1,730 | | Available Revolving Credit Facility | 1,500 | | Cash and Cash Equivalents | 1,080 | Other Items In Q2 2025, NOV recorded $19 million in other items, primarily related to severance, facility closures, and business process streamlining - In Q2 2025, NOV recorded $19 million in other items, primarily related to severance, facility closures, and business process streamlining[13] Significant Achievements NOV secured multiple contracts for advanced digital and automated drilling solutions, MEG recovery systems, FLNG mooring and fluid transfer systems, and next-generation wind turbine installation vessel designs, while delivering composite piping and underground diesel storage solutions, and launching drilling performance technologies like Agitator™X2 and ION+™ Intrepid PDC cutters, alongside advancements in high-pressure/high-temperature drilling - Secured a multi-year contract to provide instrumentation and digital services for a major U.S. land drilling contractor, enabling real-time insights and collaboration via the Max™ platform[15] - Signed a contract to provide a monoethylene glycol (MEG) recovery system for an Eastern Mediterranean project, supporting long-term natural gas infrastructure development[16] - Awarded a contract to provide a Submerged Swivel and Yoke (SSY) system for an Argentinian FLNG project, ensuring continuous and safe natural gas transfer[17] - Secured a multi-year, multi-rig contract to provide surface automation suites for four land rigs and one jackup rig for a major Middle East operator, utilizing NOVOS™ and Kaizen™ AI technology, which can increase overall mechanical rate of penetration (ROP) by 52% and reduce drilling time by 34%[18] - Awarded a contract to provide a next-generation wind turbine installation jackup vessel design and jacking system for an Asian customer, based on the GustoMSC™ NG-16000X design[19] - Completed installations of four offshore rig automation suites, including ATOM RTX™ robotic systems, with one operator reporting nearly 99% utilization of the Multi-Machine Control pipe handling system[20] - Received three new orders totaling 93,800 feet of Star Super Seal Key-Lock™ (SSKL) piping to support produced water infrastructure in the Permian Basin, manufactured in the continental U.S.[21] - Provided advanced composite piping systems and underground diesel storage solutions for major data center facilities in New Jersey, Arizona, and North Dakota, supporting critical operations for hyperscale data centers[22] - NOV's bottom hole assembly (BHA), comprising the MONZA™ 40 drilling motor, High Flow Agitator™ friction reduction tool, and ReedHycalog™ drill bit, set a new record of 5,200 feet drilled in 24 hours in the Eagle Ford Shale[23] - Launched Agitator™X2 dual Agitator friction reduction technology in the Argentinian unconventional market, drilling the longest 3,500-meter horizontal well in the Vaca Muerta formation[24] - Released ION+™ Intrepid 14.5mm PDC cutters, helping operators break drilling speed records in the Bakken region, and secured a multi-year drill bit contract for the New Gas Consortium (NGC) project in Angola[25] - Delivered an integrated coiled tubing equipment, nitrogen converter, and pressure control equipment package to a multinational oilfield service company in Latin America, indicating strong international demand for critical well intervention technologies[26] - Deployed Tundra™ Max mud coolers and TK™-Drakon insulated drill pipe coating in South Texas and the Haynesville Shale, enhancing high-pressure/high-temperature (HP/HT) drilling performance and reducing non-productive time[27] Investor Relations & Company Profile NOV will host a conference call on July 29, 2025, to discuss Q2 results and provides a company profile highlighting its role as a technology-driven solutions provider for the global energy industry, committed to safe, efficient energy production through innovation and supporting the energy transition Earnings Conference Call NOV will host an earnings conference call on July 29, 2025, at 10:00 AM CT (11:00 AM ET) to discuss its Q2 2025 results - NOV will host a conference call on July 29, 2025, at 10:00 AM CT (11:00 AM ET) to discuss its Q2 2025 results[28] - The conference call will be webcast live at www.nov.com/investors, with a replay available on the website for 30 days[28] About NOV NOV (NYSE: NOV) is a technology-driven solutions provider for the global energy industry, with over 150 years of innovation, dedicated to enabling safe and abundant energy production while minimizing environmental impact and supporting the energy transition - NOV (NYSE: NOV) is a technology-driven solutions provider for the global energy industry, with over 150 years of innovation[29] - The company is committed to helping customers safely produce abundant energy while minimizing environmental impact, continuously improving oilfield operations through deep expertise and technology, and assisting in the energy transition[29] Non-GAAP Financial Measures This section explains NOV's non-GAAP financial measures, such as Free Cash Flow, Excess Free Cash Flow, and Adjusted EBITDA, providing reconciliations to the most directly comparable GAAP measures, emphasizing their utility for internal assessment and investor understanding of performance trends, but not as substitutes for GAAP metrics Explanation of Non-GAAP Measures This section clarifies that non-GAAP financial measures are provided for internal use and investor evaluation of NOV's overall financial performance, serving as a supplement to, not a substitute for, GAAP measures, and notes that Free Cash Flow and Excess Free Cash Flow do not represent remaining discretionary cash flow - This press release includes non-GAAP financial measures that management believes are useful for internal use and for the investment community to evaluate NOV's overall financial performance[31] - Non-GAAP financial measures are not substitutes for financial measures prepared in accordance with GAAP and should be considered only as a supplement to GAAP financial measures[31] - Free Cash Flow and Excess Free Cash Flow do not represent the company's remaining cash flow available for discretionary expenditures, as the calculation of these measures does not consider certain debt repayment requirements or other non-discretionary expenditures[31] - Adjusted EBITDA is defined as Operating Profit adjusted for depreciation, amortization, gain or loss on the sale of property, plant, and equipment, and other items as applicable[47] Reconciliation of Cash Flows to Free Cash Flow This table provides a reconciliation of cash flow from operations to free cash flow and excess free cash flow for Q2 2025, H1 2025, and H1 2024 Cash Flow Reconciliation | Metric | Q2 2025 (million USD) | H1 2025 (million USD) | H1 2024 (million USD) | | :------------------- | :------------------- | :------------------- | :------------------- | | Cash Flow from Operations | 191 | 326 | 354 | | Capital Expenditures | (83) | (167) | (151) | | Free Cash Flow | 108 | 159 | 203 | | Business Acquisitions (net of cash acquired) | — | — | (252) | | Business Divestitures (net of cash divested) | — | — | 176 | | Excess Free Cash Flow | 108 | 159 | 127 | Reconciliation of Net Income to Adjusted EBITDA This table reconciles GAAP net income attributable to the company to total adjusted EBITDA for Q2 2025, Q2 2024, Q1 2025, H1 2025, and H1 2024 Net Income to Adjusted EBITDA Reconciliation | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Q1 2025 (million USD) | H1 2025 (million USD) | H1 2024 (million USD) | | :--------------------------- | :------------------- | :------------------- | :------------------- | :------------------- | :------------------- | | GAAP Net Income Attributable to the Company | 108 | 226 | 73 | 181 | 345 | | Noncontrolling Interests | 6 | (3) | 1 | 7 | (1) | | Provision for Income Taxes | 1 | 70 | 47 | 48 | 114 | | Interest and Finance Costs | 22 | 22 | 22 | 44 | 46 | | Interest Income | (10) | (8) | (11) | (21) | (16) | | Equity in Earnings of Unconsolidated Affiliates | (1) | (8) | — | (1) | (37) | | Other Expense, Net | 17 | 14 | 20 | 37 | 24 | | (Gain) Loss on Sale of Property, Plant and Equipment | 3 | — | (2) | 1 | (1) | | Depreciation and Amortization | 87 | 86 | 89 | 176 | 169 | | Other Items, Net | 19 | (118) | 13 | 32 | (121) | | Total Adjusted EBITDA | 252 | 281 | 252 | 504 | 522 | Consolidated Financial Statements This section presents NOV Inc.'s unaudited consolidated financial statements, including the Consolidated Statements of Income, Consolidated Balance Sheets, and Consolidated Statements of Cash Flows, covering Q2 and H1 2025 compared to 2024, and balance sheet data as of June 30, 2025, and December 31, 2024 Consolidated Statements of Income This table provides NOV Inc.'s unaudited consolidated statements of income for Q2 2025, Q2 2024, Q1 2025, H1 2025, and H1 2024 Consolidated Statements of Income | Metric (million USD) | Q2 2025 | Q2 2024 | Q1 2025 | H1 2025 | H1 2024 | | :------------------- | :------- | :------- | :------- | :----------- | :----------- | | Energy Products and Services Revenue | 1,025 | 1,050 | 992 | 2,017 | 2,067 | | Energy Equipment Revenue | 1,207 | 1,204 | 1,146 | 2,353 | 2,382 | | Total Revenue | 2,188 | 2,216 | 2,103 | 4,291 | 4,371 | | Gross Profit | 446 | 590 | 447 | 893 | 1,048 | | Gross Margin | 20.4% | 26.6% | 21.3% | 20.8% | 24.0% | | Selling, General and Administrative Expenses | 303 | 277 | 295 | 598 | 573 | | Operating Profit | 143 | 313 | 152 | 295 | 475 | | Earnings Before Income Taxes | 115 | 293 | 121 | 236 | 458 | | Provision for Income Taxes | 1 | 70 | 47 | 48 | 114 | | Net Income | 114 | 223 | 74 | 188 | 344 | | Net Income Attributable to NOV Inc. | 108 | 226 | 73 | 181 | 345 | | Basic Earnings Per Share | 0.29 | 0.57 | 0.19 | 0.48 | 0.88 | | Diluted Earnings Per Share | 0.29 | 0.57 | 0.19 | 0.48 | 0.87 | Consolidated Balance Sheets This table presents NOV Inc.'s unaudited consolidated balance sheets as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheets | Metric (million USD) | As of June 30, 2025 | As of Dec 31, 2024 | | :------------------- | :------------------- | :------------------- | | Assets | | | | Cash and Cash Equivalents | 1,080 | 1,230 | | Accounts Receivable, Net | 1,902 | 1,819 | | Inventories, Net | 1,929 | 1,932 | | Contract Assets | 655 | 577 | | Prepaid and Other Current Assets | 215 | 212 | | Total Current Assets | 5,781 | 5,770 | | Property, Plant and Equipment, Net | 1,990 | 1,922 | | Operating Lease Right-of-Use Assets | 541 | 549 | | Goodwill and Intangible Assets, Net | 2,119 | 2,138 | | Other Assets | 932 | 982 | | Total Assets | 11,363 | 11,361 | | Liabilities and Stockholders' Equity | | | | Accounts Payable | 823 | 837 | | Accrued Liabilities | 742 | 861 | | Contract Liabilities | 513 | 492 | | Current Portion of Operating Lease Liabilities | 103 | 102 | | Current Portion of Long-Term Debt | 38 | 37 | | Accrued Income Taxes | 20 | 18 | | Total Current Liabilities | 2,239 | 2,347 | | Long-Term Debt | 1,690 | 1,703 | | Operating Lease Liabilities | 540 | 544 | | Other Liabilities | 336 | 339 | | Total Liabilities | 4,805 | 4,933 | | Total Stockholders' Equity | 6,558 | 6,428 | | Total Liabilities and Stockholders' Equity | 11,363 | 11,361 | Consolidated Statements of Cash Flows This table provides NOV Inc.'s unaudited consolidated statements of cash flows for Q2 2025, H1 2025, and H1 2024 Consolidated Statements of Cash Flows | Metric (million USD) | Q2 2025 | H1 2025 | H1 2024 | | :------------------- | :------- | :----------- | :----------- | | Net Income | 114 | 188 | 344 | | Depreciation and Amortization | 87 | 176 | 169 | | Working Capital, Net | (41) | (135) | (222) | | Other Operating Items, Net | 31 | 97 | 63 | | Net Cash Provided by Operating Activities | 191 | 326 | 354 | | Purchases of Property, Plant and Equipment | (83) | (167) | (151) | | Business Acquisitions, Net of Cash Acquired | — | — | (252) | | Business Divestitures, Net of Cash Divested | — | — | 176 | | Other | 2 | 5 | 1 | | Net Cash Used in Investing Activities | (81) | (162) | (226) | | Borrowings (Credit Facility and Other Debt) | — | — | 419 | | Repayments (Credit Facility and Other Debt) | (9) | (13) | (422) | | Cash Dividends Paid | (107) | (135) | (50) | | Stock Repurchases | (69) | (150) | (37) | | Other | (13) | (35) | (23) | | Net Cash Used in Financing Activities | (198) | (333) | (113) | | Effect of Exchange Rate Changes | 11 | 19 | (4) | | Increase (Decrease) in Cash and Cash Equivalents | (77) | (150) | 11 | | Cash and Cash Equivalents at Beginning of Period | 1,157 | 1,230 | 816 | | Cash and Cash Equivalents at End of Period | 1,080 | 1,080 | 827 | Legal Disclosures This section contains a cautionary note regarding forward-looking statements, advising investors of risks and uncertainties that could cause actual results to differ materially from expectations, and recommends reviewing risk factors in the company's latest 10-K and 10-Q reports Cautionary Note Regarding Forward-Looking Statements This document includes or refers to non-historical statements, including estimates, forecasts, and statements about business plans, objectives, and expected operating results, which are "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995, subject to risks and uncertainties - This document contains or refers to statements that are not historical facts, including estimates, forecasts, and statements regarding business plans, objectives, and expected operating results, which are "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995[34] - Forward-looking statements involve risks and uncertainties, and actual results may differ materially from expectations due to various factors such as changes in oil and gas prices, customer demand, potential catastrophic events, intellectual property protection, legal compliance, and global economic activity[34] - Investors should exercise caution with any forward-looking statements and refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections disclosed in the company's latest Form 10-K annual report and Form 10-Q quarterly reports[34]