NOV (NYSE:NOV) Q3 2025 Earnings Call October 28, 2025 11:00 AM ET Company ParticipantsRodney Reed - Senior VP and CFOStephen Gengaro - Managing DirectorClay Williams - Chairman and CEOAmie Ambrosio - Director of Investor RelationsJose Bayardo - President and COOConference Call ParticipantsArun Jayaram - Research AnalystNone - AnalystDoug Becker - Managing Director and Senior Equity Research AnalystJim Rollyson - Director and Equity Research AnalystOperatorToday, and thank you for standing by. Welcome to NOV ...

NOV (NYSE:NOV) Q3 2025 Earnings Call October 28, 2025 11:00 AM ET Company ParticipantsAmy Ambrosio - Director of Investor RelationsStephen Gengaro - Managing DirectorClay Williams - Chairman and CEORodney Reid - Senior VP and CFOJose Bayardo - President and COOConference Call ParticipantsArun Jayaram - Research AnalystNone - AnalystDoug Becker - Managing Director and Senior Equity Research AnalystJim Rollyson - Director and Equity Research AnalystOperatorToday, and thank you for standing by. Welcome to NOV ...

Financial Data and Key Metrics Changes - For Q3 2025, NOV Inc. reported revenues of $2.18 billion, a slight decrease of less than 1% year-over-year and sequentially [3][4] - Net income was $42 million, or $0.11 per fully diluted share, with adjusted EBITDA totaling $258 million, representing 11.9% of sales [3][15] - Free cash flow generation remained robust at $245 million, with a 95% conversion rate during the quarter [15][16] Business Line Data and Key Metrics Changes - The energy equipment segment generated $1.25 billion in revenue, up 2% year-over-year, with EBITDA increasing by $21 million to $180 million, resulting in a 14.4% EBITDA margin [17][18] - Capital equipment sales accounted for 63% of the energy equipment segment's revenue, increasing 20% year-over-year due to strong growth in offshore production equipment [17][18] - The intervention and stimulation capital equipment revenue fell double digits year-over-year due to a steep drop in demand for pressure pumping equipment in North America [22] Market Data and Key Metrics Changes - North America represented 57% of the energy products and services segment revenue, growing 7% year-over-year, while international markets saw a 15% year-over-year decline [25] - The global rig count declined by 8% year-over-year, impacting overall activity levels [25][26] - Demand for unconventional resources is increasing in regions like Argentina, Saudi Arabia, and the UAE, with emerging interest in countries such as Algeria and Turkey [64][66] Company Strategy and Development Direction - The company is focused on capitalizing on key secular trends, including offshore production supplanting U.S. unconventional resources and the application of technology to drive efficiencies [30][31] - NOV aims to improve operational efficiencies while positioning itself to benefit from the anticipated recovery in demand starting in late 2026 [30][31] - The company is executing strategic sourcing initiatives to reduce tariff impacts and is on track to deliver over $100 million in annualized cost savings by the end of 2026 [16][17] Management's Comments on Operating Environment and Future Outlook - Management expects market conditions to remain soft through the next few quarters, with tariffs and inflationary uncertainty weighing on margins [13][30] - The outlook for the second half of 2026 and beyond is more positive, with expectations of strengthening demand across both offshore and international land markets [13][30] - Management highlighted the importance of technology and innovation in maintaining competitive advantage and driving future growth [40][45] Other Important Information - The company repurchased 6.2 million shares for $80 million and paid dividends of $28 million, bringing total capital return to shareholders year-to-date to $393 million [16] - The backlog at the end of Q3 was $4.56 billion, the highest since reporting energy equipment as a segment [18] Q&A Session Summary Question: About the energy equipment business and backlog - Management indicated that the backlog will help maintain decent year-over-year growth through 2026, despite a softer near-term market [48][49] Question: On margins and capital equipment - Management expressed optimism about maintaining margin profiles in 2026, driven by a favorable mix of capital equipment orders [52][53] Question: Outlook for orders and book-to-bill ratio - Management expects orders in Q4 to slip slightly below 100% book-to-bill but remains positive about the long-term trend [58][59] Question: Discussion on unconventionals and international markets - Management highlighted increasing demand for unconventional resources in regions like Argentina and Saudi Arabia, with a growing interest in other countries [64][66] Question: FPSOs and future FIDs - Management noted a cautious outlook for FPSOs in 2025 but expects demand to pick up in late 2026 and 2027 as the oil overhang is resolved [72]