Core Insights - NOV achieved a full-year book-to-bill ratio of approximately 91% with a 15% increase in revenue from backlog, ending 2025 with a total backlog of $4.34 billion, driven by offshore production technologies [1][6] - The company reported fourth-quarter revenue of $2.28 billion and a GAAP net loss of $78 million, while full-year revenue was $8.74 billion with a GAAP net income of $145 million [4][7] - Free cash flow for 2025 was reported at $876 million, with over 85% of EBITDA converted to cash, marking the best two-year free cash flow performance in a decade [7][9] Financial Performance - Fourth-quarter revenue rose 5% sequentially but fell 1% year-over-year, against a global drilling activity decline of 6%, with adjusted EBITDA totaling $267 million [3] - Tariff expenses were approximately $25 million in Q4 and expected to rise slightly in Q1, impacting overall financial performance [5][10] - Adjusted operating profit for Q4 was $177 million, or 7.8% of sales, with a higher effective tax rate affecting net loss [8] Segment Performance - In the Energy Equipment segment, fourth-quarter revenue was $1.33 billion, up 7% sequentially and 4% year-over-year, with adjusted EBITDA of $180 million [12] - Energy Products and Services reported fourth-quarter revenue of $989 million, up 2% sequentially but down 7% year-over-year, with adjusted EBITDA of $140 million [15] - Record performance in subsea flexible pipe was noted, with backlog doubling since the end of 2023 and annual shipments increasing by about 50% [14] Market Outlook - The outlook for 2026 is cautious, with expectations of a challenging environment due to oversupply in the oil market, but a potential rebalancing in the second half of the year [17] - In the U.S., activity is expected to decline mid-single digits year-over-year, while international activity is anticipated to be flat to slightly up [18] - Long-term opportunities in Venezuela were highlighted, with new orders exceeding past revenue generation, contingent on governance and security conditions [19] Capital Allocation and Cost Management - The company repurchased $85 million in shares during Q4, totaling $505 million returned to shareholders in 2025 [5][20] - A $100 million cost-out program is in progress, aiming for over $100 million in annualized savings by the end of 2026 [22] - For 2026, NOV expects slightly lower revenue year-over-year, with capital expenditures projected between $315 million and $345 million [23]

NOV (NYSE:NOV) Q4 2025 Earnings call February 05, 2026 11:00 AM ET Company ParticipantsAmy D'Ambrosio - Director of Investor RelationsJeff LeBlanc - TPH and CompanyJim Rollyson - DirectorJose Bayardo - CEOMarc Bianchi - Managing DirectorRodney Reed - CFOStephen Gengaro - Managing DirectorConference Call ParticipantsDaniel Kutz - VP and Equity AnalystOperatorDay, and thank you for standing by. Welcome to the NOV Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only ...

Core Insights - NOV Inc. is a leading provider of equipment and technology for energy companies, focusing on long-term returns and leveraging its proprietary technologies and manufacturing model [1] - The company has seen a significant rise in its stock price, with a 33.3% increase over the past six months, outperforming its sub-industry and the broader energy sector [3][7] - Despite recent stock performance, NOV faces challenges such as declining earnings per share and pressure on margins due to tariffs and market softness [2][11] Stock Performance - Over the last six months, NOV's shares increased by 33.3%, while the Mechanical and Equipment Oil and Gas sub-industry rose by 21.9% and the broader energy sector by 10.8% [3] - NOV outperformed USA Compression Partners, LP, which saw a decline of 4.5%, but lagged behind peers like Solaris Energy Infrastructure, Inc. and Oil States International, Inc., which surged by 91.5% and 48.5%, respectively [3] Positive Factors for NOV - The company is well-positioned to benefit from the global rebound in offshore development, with record orders and backlogs in subsea flexible pipe and FPSO systems [6] - NOV's long-term investment in R&D has led to innovative products that enhance safety and efficiency, providing a competitive advantage in high-barrier markets [8] - The Energy Equipment segment has shown consistent margin expansion, achieving a 14.4% Adjusted EBITDA margin, indicating effective pricing discipline and cost optimization [9] Strategic Positioning - NOV's expertise in subsea and gas-processing systems aligns with the increasing role of natural gas as a transition fuel, showcasing its adaptability to market changes [10] - The company is expanding its portfolio with new gas-related infrastructure projects, which supports its long-term relevance in the energy sector [10] Challenges Facing NOV - The company is experiencing near-term market softness, with tariffs expected to rise to $25 million in Q4 2025, which may impact margins and earnings momentum [11] - A sharp decline in net income by 68% year-over-year to $42 million and a contraction in operating margins to 4.9% highlight profitability challenges [12] - Management anticipates a 5-7% revenue decline in Q4 2025, indicating ongoing demand softness and uncertainty in near-term execution [13] Segment Performance - The Energy Products and Services segment saw a 3% revenue decline, with operating profit dropping to $38 million due to lower drilling activity and project delays [14] - The segment's Adjusted EBITDA margin fell to 13.9%, reflecting vulnerabilities tied to cyclical drilling markets and E&P spending slowdowns [14] Conclusion - Despite near-term challenges, NOV's long-term fundamentals remain strong, supported by its positioning in offshore markets and record backlogs [15] - The company's leadership in drilling automation and gas-focused infrastructure aligns with evolving global energy needs, suggesting potential for improved profitability as offshore activity accelerates in 2026-27 [15]