HAMILTON, Bermuda, Feb.11, 2026 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported fourth quarter 2025 operating revenues of $798 million, compared to operating revenues of $818 million in the third quarter. Net income attributable to Nabors' shareholders for the quarter was $10 million, compared to $274 million in the third quarter. This equates to earnings per diluted share of $0.17, compared to $16.85 in the third quarter. The third quarter included a one-time, after-tax gain on the disposition of Quail Tools, LLC ("Quail") of $314 million, or $20.52 per diluted share. Fourth-quarter adjusted EBITDA was $222 million, compared to $236 million in the previous quarter.
4Q 2025 Highlights
- Nabors completed several transactions that materially reduced total debt and significantly strengthened its leverage metrics:
- Related to the sale of Quail, Nabors collected the $250 million seller financing note in full.
- The Company issued $700 million of notes due in 2032.
- In turn, the Company redeemed the $546 million remaining balance of its notes due in 2027.
- In January, the Company redeemed in full the remaining outstanding notes due in 2028.
- These actions contributed to a reduction in Nabors' outstanding net debt by approximately $554 million since the end of 2024. The Company's next debt maturity is $250 million due in 2029.
- The performance of the retained Parker Wellbore businesses improved. Adjusted EBITDA contribution from these operations increased by 11% sequentially, with stronger drilling activity in Canada and Indonesia. This growth also includes additional realization of cost synergies, reaching the $40 million synergy target for 2025.
- The SANAD joint venture deployed one newbuild rig in the Kingdom. The number of newbuild deployments now totals 14. Five more are scheduled for 2026, followed by one more in early 2027.
- In the fourth quarter, Nabors installed the first unit of its new Canrig® automated floor wrench on a Nabors rig working in the Haynesville Shale. This wrench represents a technological step-change for this critical rig floor component. Its field performance demonstrates a 30% reduction in cycle time and improved positioning. Available as a retrofit to Canrig wrenches deployed in the field, it is already generating significant customer interest.
Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "2025 proved to be a transformational year for our capital structure. Including the redemption in January, we reduced our total debt by $388 million since the end of 2024. This represents significant progress on our path to delevering. As a result of this significant reduction in debt, our annual interest expense should decline by approximately $45 million, translating into a dollar-for-dollar improvement in adjusted free cash flow.
"Nabors' fourth quarter results improved compared to the third quarter, excluding the contribution from Quail. This sequential improvement was broad-based across all segments of our operations.
"In the Lower 48 business and International Drilling segment, our average rig counts in the fourth quarter exceeded both our expectations and those of the prior quarter. Our Lower 48 count increased in the latter portion of the quarter, highlighting our success executing on opportunities to add rigs. In our International Drilling segment, SANAD added a newbuild in Saudi Arabia, two rigs were redeployed in Argentina, and three platform rigs in Mexico continued to work throughout the quarter.
"The sequential increase in Drilling Solutions' ("NDS") adjusted EBITDA was particularly encouraging. The largest contributors to this increase include casing running, managed pressure drilling, and performance software in our international markets. In the Lower 48 market, NDS's revenue on third-party drilling contractors' rigs increased sequentially by more than 10%, even as that market's rig count grew by just 1%. This performance demonstrates the value of the NDS portfolio and our success targeting the third-party rig market."
Segment Results
International Drilling adjusted EBITDA totaled $131.3 million, compared to $127.6 million in the third quarter. Average rig count increased by more than four rigs, reflecting the recent startup of rigs in Argentina, Saudi Arabia and Colombia. Daily adjusted gross margin for the fourth quarter was $17,630, partially reflecting rig startup inefficiencies and activity interruptions in certain markets.
The U.S. Drilling segment reported fourth quarter adjusted EBITDA of $93.2 million, compared to $94.2 million in the previous quarter. Results in the Lower 48 operation improved on increases in average rig count and daily gross margin. These were mainly offset by a margin decline in Alaska and Offshore which was smaller than expected.
Drilling Solutions adjusted EBITDA was $41.3 million, compared to $60.7 million in the third quarter. The segment's third quarter results included the contribution from Quail through its disposition in August. Excluding the impact of Quail from the third quarter results, Drilling Solutions adjusted EBITDA grew 2.3%.
Rig Technologies adjusted EBITDA was $4.9 million, a 31% increase from $3.8 million in the prior quarter. Sales of capital equipment improved in the quarter.
Adjusted Free Cash Flow
Consolidated adjusted free cash flow was $132 million in the fourth quarter, a significant increase from $6 million in the third quarter. Several factors contributed to this performance. In addition to stronger EBITDA, collections in Mexico improved substantially. Capital spending in the fourth quarter was below expectations, both for the SANAD newbuild rig program and in the balance of the operation. The Company also received settlements from several outstanding claims.
Miguel Rodriguez, Nabors CFO, stated, "Our achievements over the past year demonstrate that we are delivering on our commitments. Our top priority is the reduction of debt. We intend to follow the recent progress with an additional decrease this year.
"In the fourth quarter, our adjusted EBITDA exceeded our expectations. The U.S. Drilling and Drilling Solutions segments contributed to this outperformance. All three of the U.S. Drilling operations were stronger than expected. In the Lower 48, the increase in rig count late in the quarter sets us up for a positive start to 2026. Drilling Solutions' strength was evident across multiple service lines, especially in its international markets.
"Adjusted free cash flow in the fourth quarter also exceeded our expectations. Going forward, our focus will remain strengthening our capital structure, while delivering durable growth and long-term value."
Outlook
Nabors expects the following metrics for the first quarter of 2026:
U.S. Drilling
- Lower 48 average rig count of 64 - 65 rigs
- Lower 48 daily adjusted gross margin of approximately $13,200
- Alaska and Gulf of America combined adjusted EBITDA of $16 - $17 million
International
- Average rig count of 91 - 92 rigs
- Daily adjusted gross margin of approximately $17,500 - $17,600
Drilling Solutions
- Adjusted EBITDA of approximately $39 million
Rig Technologies
- Adjusted EBITDA of approximately $2 million
Capital Expenditures
- Capital expenditures of $170 - $180 million, including approximately $85 million for newbuilds in Saudi Arabia
Adjusted Free Cash Flow
- First quarter adjusted free cash consumption of $80 - $90 million, including free cash consumption at SANAD of $50 - $60 million
Nabors expects the following metrics for full-year 2026:
U.S. Drilling
- Lower 48 average rig count of 61 - 64 rigs
- Lower 48 daily adjusted gross margin of $13,000 - $13,400
- Alaska and Gulf of America combined adjusted EBITDA of $55 - $60 million
International
- Average rig count of 96 - 98 rigs
- Daily adjusted gross margin of approximately $18,500
Drilling Solutions
- Adjusted EBITDA of $160 - $170 million
Rig Technologies
- Adjusted EBITDA of $22 - $25 million
Capital Expenditures
- Capital expenditures of approximately $730 - $760 million, with $360 - $380 million for SANAD newbuilds
Adjusted Free Cash Flow
- Adjusted free cash flow excluding SANAD of $80 - $90 million, with SANAD consuming $100 - $120 million
Mr. Petrello concluded, "The steps we have taken over the past year have significantly reduced our debt, improved our leverage metrics, and lowered our interest payments. In addition, we retain a business portfolio from Parker that contributes materially to EBITDA and free cash flow.
"Looking forward, the Lower 48 market appears to be stabilizing. At the same time, the opportunity set in our international markets looks attractive. Our diversified business portfolio is designed to capitalize on this environment."
About Nabors Industries
Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With presence in more than 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com.
Forward-looking Statements
The information included in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to a number of risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements. The forward-looking statements contained in this press release reflect management's estimates and beliefs as of the date of this press release. Nabors does not undertake to update these forward-looking statements.
Non-GAAP Disclaimer
This press release presents certain "non-GAAP" financial measures. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Adjusted operating income (loss) represents income (loss) before income taxes, interest expense, investment income (loss), gain on disposition of Quail Tools, gain on bargain purchase, and other, net. Adjusted EBITDA is computed similarly, but also excludes depreciation and amortization expenses. In addition, adjusted EBITDA and adjusted operating income (loss) exclude certain cash expenses that the Company is obligated to make. Net debt is calculated as total debt minus the sum of cash, cash equivalents and short-term investments.
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition-related costs. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.
Each of these non-GAAP measures has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including Adjusted EBITDA, adjusted operating income (loss), net debt, and adjusted free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability, performance and liquidity. Securities analysts and investors also use these measures as some of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. Reconciliations of consolidated adjusted EBITDA and adjusted operating income (loss) to income (loss) from continuing operations before income taxes, net debt to total debt, and adjusted free cash flow to net cash provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release. We do not provide a forward-looking reconciliation of our outlook for Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash Flow, as the amount and significance of items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.
Investor Contacts: William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via e-mail william.conroy@nabors.com or Kara K. Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email kara.peak@nabors.com. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail mark.andrews@nabors.com
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three Months Ended
Year Ended
December 31, September 30,
December 31,
(In thousands, except per share amounts) 2025 2024 2025 2025 2024
Revenues and other income:
Operating revenues $797,529 $729,819 $818,190 $3,184,693 $2,930,126
Investment income (loss) 7,600 8,828 7,323 27,648 38,713
Total revenues and other income 805,129 738,647 825,513 3,212,341 2,968,839
Costs and other deductions:
Direct costs 486,367 433,404 491,828 1,914,376 1,742,411
General and administrative expenses 76,279 61,436 77,076 304,587 249,317
Research and engineering 13,328 14,434 12,978 53,063 57,063
Depreciation and amortization 159,188 156,348 160,347 649,234 633,408
Interest expense 50,625 53,642 54,334 215,366 210,864
Gain on disposition of Quail Tools 1,595 (415,557) (413,962)
Gain on bargain purchase 2,846 (113,653)
Other, net (9,532) 37,021 24,470 65,802 106,816
Total costs and other deductions 780,696 756,285 405,476 2,674,813 2,999,879
Income (loss) before income taxes 24,433 (17,638) 420,037 537,528 (31,040)
Income tax expense (benefit) 7,440 15,231 117,571 163,095 56,947
Net income (loss) 16,993 (32,869) 302,466 374,433 (87,987)
Less: Net (income) loss attributable to noncontrolling interest (6,645) (20,802) (28,268) (87,809) (88,097)
Net income (loss) attributable to Nabors $10,348 $(53,671) $274,198 $286,624 $(176,084)
Earnings (losses) per share:
Basic $0.17 $(6.67) $18.25 $18.75 $(22.37)
Diluted $0.17 $(6.67) $16.85 $17.39 $(22.37)
Weighted-average number of common shares outstanding:
Basic 14,131 9,213 14,098 13,193 9,202
Diluted 14,210 9,213 15,321 14,416 9,202
Adjusted EBITDA $221,555 $220,545 $236,308 $912,667 $881,335
Adjusted operating income (loss) $62,367 $64,197 $75,961 $263,433 $247,927
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, September 30, December 31,
(In thousands) 2025 2025 2024
ASSETS
Current assets:
Cash and short-term investments $940,738 $428,079 $397,299
Notes receivable 250,035
Accounts receivable, net 391,705 487,062 387,970
Other current assets 219,130 259,251 214,268
Total current assets 1,551,573 1,424,427 999,537
Property, plant and equipment, net 2,920,019 2,931,290 2,830,957
Other long-term assets 318,065 477,787 673,807
Total assets $4,789,657 $4,833,504 $4,504,301
LIABILITIES AND EQUITY
Current liabilities:
Current debt, net $377,492
$ -
$ -
Trade accounts payable 300,467 352,415 321,030
Other current liabilities 315,042 327,799 250,887
Total current liabilities 993,001 680,214 571,917
Long-term debt, net 2,117,187 2,347,984 2,505,217
Other long-term liabilities 241,826 237,136 220,829
Total liabilities 3,352,014 3,265,334 3,297,963
Redeemable noncontrolling interest in subsidiary 482,446 629,261 785,091
Equity:
Shareholders' equity 590,727 579,776 134,996
Noncontrolling interest 364,470 359,133 286,251
Total equity 955,197 938,909 421,247
Total liabilities and equity $4,789,657 $4,833,504 $4,504,301
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
SEGMENT REPORTING
(Unaudited)
The following tables set forth certain information with respect to our reportable segments and rig activity:
Three Months Ended Year Ended
December 31, September 30, December 31,
(In thousands, except rig activity) 2025 2024 2025 2025 2024
Operating revenues:
U.S. Drilling $240,624 $241,637 $249,836 $976,644 $1,028,122
International Drilling 423,842 371,406 407,235 1,597,765 1,446,092
Drilling Solutions 107,879 75,992 141,942 513,283 314,071
Rig Technologies (1) 37,747 56,166 35,597 154,036 201,677
Other reconciling items
(2) (12,563) (15,382) (16,420) (57,035) (59,836)
Total operating revenues $797,529 $729,819 $818,190 $3,184,693 $2,930,126
Adjusted EBITDA: (3)
U.S. Drilling $93,213 $105,757 $94,161 $381,906 $448,840
International Drilling 131,262 111,962 127,551 491,957 436,782
Drilling Solutions 41,302 33,809 60,666 219,322 132,375
Rig Technologies (1) 4,946 9,208 3,770 19,453 29,443
Other reconciling items
(4) (49,168) (40,191) (49,840) (199,971) (166,105)
Total adjusted EBITDA $221,555 $220,545 $236,308 $912,667 $881,335
Adjusted operating income (loss): (5)
U.S. Drilling $28,556 $38,973 $31,429 $131,372 $176,281
International Drilling 49,638 29,528 45,476 164,123 107,858
Drilling Solutions 34,022 28,944 49,982 167,282 112,387
Rig Technologies (1) 1,341 8,413 877 8,274 20,243
Other reconciling items
(4) (51,190) (41,661) (51,803) (207,618) (168,842)
Total adjusted operating
income (loss) $62,367 $64,197 $75,961 $263,433 $247,927
Rig activity:
Average Rigs Working: (7)
Lower 48 59.8 65.9 59.2 60.5 68.6
Other US 9.8 6.8 10.0 9.4 6.5
U.S. Drilling 69.6 72.7 69.2 69.9 75.1
International Drilling 93.3 84.8 89.2 88.4 83.7
Total average rigs
working 162.9 157.5 158.4 158.3 158.8
Daily Rig Revenue: (6),(8)
Lower 48 $32,938 $33,396 $34,017 $33,737 $34,771
Other US 66,003 62,624 70,035 67,698 65,264
U.S. Drilling (10) 37,582 36,137 39,219 38,290 37,419
International Drilling 49,391 47,620 49,596 49,532 47,189
Daily Adjusted Gross Margin: (6),(9)
Lower 48 $13,303 $14,940 $13,151 $13,660 $15,411
Other US 29,557 34,707 31,527 30,921 36,440
U.S. Drilling (10) 15,586 16,793 15,805 15,974 17,237
International Drilling 17,630 16,687 17,931 17,634 16,478
(1)
Includes our oilfield equipment manufacturing activities.
(2)
Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment.
(3) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on
disposition of Quail Tools, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial
measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA
excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments
and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes
that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use
this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these
measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is
provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)".
(4)
Represents the elimination of inter-segment transactions and unallocated corporate expenses.
(5) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense,
gain on disposition of Quail Tools, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure
and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income
(loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating
segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it
believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and
investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute
these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP
measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income
(Loss)".
(6) Rig revenue days represents the number of days the Company's rigs are contracted and performing under a contract during the period. These would
typically include days in which operating, standby and move revenue is earned.
(7) Average rigs working represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days
during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days
represents approximately 0.5 average rigs working for the year. Average rigs working can also be calculated as rig revenue days during the
period divided by the number of calendar days in the period.
(8)
Daily rig revenue represents operating revenue, divided by the total number of revenue days during the quarter.
(9) Daily adjusted gross margin represents operating revenue less direct costs, divided by the total number of rig revenue days during the quarter.
(10)
The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas.
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
Reconciliation of Earnings per Share
(Unaudited)
Three Months Ended Year Ended
December 31, September 30, December 31,
(in thousands, except per share amounts) 2025 2024 2025 2025 2024
BASIC EPS:
Net income (loss) (numerator):
Income (loss), net of tax $
16,993 $
(32,869) $
302,466 $
374,433 $
(87,987)
Less: net (income) loss attributable to noncontrolling interest (6,645) (20,802) (28,268) (87,809) (88,097)
Less: deemed dividends to SPAC public shareholders (250) (750) (1,000)
Less: distributed and undistributed earnings allocated to unvested shareholders (301) (8,828) (9,149)
Less: accrued distribution on redeemable noncontrolling interest in subsidiary (7,344) (7,794) (7,344) (29,136) (29,723)
Numerator for basic earnings per share:
Adjusted income (loss), net of tax - basic $
2,453 $
(61,465) $
257,276 $
247,339 $
(205,807)
Weighted-average number of shares outstanding - basic 14,131 9,213 14,098 13,193 9,202
Earnings (losses) per share:
Total Basic $
0.17 $
(6.67) $
18.25 $
18.75 $
(22.37)
DILUTED EPS:
Adjusted income (loss), net of tax - basic $
2,453 $
(61,465) $
257,276 $
247,339 $
(205,807)
Add: after tax interest expense of convertible notes 848 3,392
Add: effect of reallocating undistributed earnings of unvested shareholders 1 28 32
Adjusted income (loss), net of tax - diluted $
2,454 $
(61,465) $
258,152 $
250,763 $
(205,807)
Weighted-average number of shares outstanding - basic 14,131 9,213 14,098 13,193 9,202
Add: if converted dilutive effect of convertible notes 1,176 1,176
Add: dilutive effect of potential common shares 79 47 47
Weighted-average number of shares outstanding - diluted 14,210 9,213 15,321 14,416 9,202
Earnings (losses) per share:
Total Diluted $
0.17 $
(6.67) $
16.85 $
17.39 $
(22.37)
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT
(Unaudited)
(In thousands)
Three Months Ended December 31, 2025
U.S. International Drilling Rig Other Total
Drilling Drilling Solutions Technologies reconciling
items
Adjusted operating income (loss) $28,556 $49,638 $34,022 $1,341 $(51,190) $62,367
Depreciation and amortization 64,657 81,624 7,280 3,605 2,022 159,188
Adjusted EBITDA $93,213 $131,262 $41,302 $4,946 $(49,168) $221,555
Three Months Ended December 31, 2024
U.S. International Drilling Rig Other Total
Drilling Drilling Solutions Technologies reconciling
items
Adjusted operating income (loss) $38,973 $29,528 $28,944 $8,413 $(41,661) $64,197
Depreciation and amortization 66,784 82,434 4,865 795 1,470 156,348
Adjusted EBITDA $105,757 $111,962 $33,809 $9,208 $(40,191) $220,545
Three Months Ended September 30, 2025
U.S. International Drilling Rig Other Total
Drilling Drilling Solutions Technologies reconciling
items
Adjusted operating income (loss) $31,429 $45,476 $49,982 $877 $(51,803) $75,961
Depreciation and amortization 62,732 82,075 10,684 2,893 1,963 160,347
Adjusted EBITDA $94,161 $127,551 $60,666 $3,770 $(49,840) $236,308
Year Ended December 31, 2025
U.S. International Drilling Rig Other Total
Drilling Drilling Solutions Technologies reconciling
items
Adjusted operating income (loss) $131,372 $164,123 $167,282 $8,274 $(207,618) $263,433
Depreciation and amortization 250,534 327,834 52,040 11,179 7,647 649,234
Adjusted EBITDA $381,906 $491,957 $219,322 $19,453 $(199,971) $912,667
Year Ended December 31, 2024
U.S. International Drilling Rig Other Total
Drilling Drilling Solutions Technologies reconciling
items
Adjusted operating income (loss) $176,281 $107,858 $112,387 $20,243 $(168,842) $247,927
Depreciation and amortization 272,559 328,924 19,988 9,200 2,737 633,408
Adjusted EBITDA $448,840 $436,782 $132,375 $29,443 $(166,105) $881,335
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED GROSS MARGIN BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT
(Unaudited)
Three Months Ended Year Ended
December 31, September 30, December 31,
(In thousands) 2025 2024 2025 2025 2024
Lower 48 - U.S. Drilling
Adjusted operating
income (loss) $13,015 $27,354 $13,689 $67,214 $129,812
Plus: General and
administrative
costs 4,874 5,156 4,745 18,917 19,452
Plus: Research and
engineering 1,199 1,002 1,121 4,031 3,847
GAAP Gross Margin 19,088 33,512 19,555 90,162 153,111
Plus: Depreciation
and amortization 54,123 57,019 52,120 211,548 233,555
Adjusted gross
margin $73,211 $90,531 $71,675 $301,710 $386,666
Other - U.S. Drilling
Adjusted operating
income (loss) $15,541 $11,619 $17,740 $64,158 $46,469
Plus: General and
administrative
costs 416 305 568 2,285 1,250
Plus: Research and
engineering 90 72 85 301 206
GAAP Gross Margin 16,047 11,996 18,393 66,744 47,925
Plus: Depreciation
and amortization 10,534 9,765 10,612 38,986 39,004
Adjusted gross
margin $26,581 $21,761 $29,005 $105,730 $86,929
U.S. Drilling
Adjusted operating
income (loss) $28,556 $38,973 $31,429 $131,372 $176,281
Plus: General and
administrative
costs 5,290 5,461 5,313 21,202 20,702
Plus: Research and
engineering 1,289 1,074 1,206 4,332 4,053
GAAP Gross Margin 35,135 45,508 37,948 156,906 201,036
Plus: Depreciation
and amortization 64,657 66,784 62,732 250,534 272,559
Adjusted gross
margin $99,792 $112,292 $100,680 $407,440 $473,595
International Drilling
Adjusted operating
income (loss) $49,638 $29,528 $45,476 $164,123 $107,858
Plus: General and
administrative
costs 18,207 16,758 18,015 70,468 62,306
Plus: Research and
engineering 1,821 1,431 1,665 6,398 5,886
GAAP Gross Margin 69,666 47,717 65,156 240,989 176,050
Plus: Depreciation
and amortization 81,624 82,434 82,075 327,834 328,924
Adjusted gross
margin $151,290 $130,151 $147,231 $568,823 $504,974
Adjusted gross margin by segment represents adjusted operating income (loss) plus
general and administrative
costs, research and engineering costs and depreciation and
amortization.
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO NET INCOME (LOSS)
(Unaudited)
Three Months Ended Year Ended
December 31, September 30, December 31,
(In thousands) 2025 2024 2025 2025 2024
Net income (loss) $16,993 $(32,869) $302,466 $374,433 $(87,987)
Income tax expense (benefit) 7,440 15,231 117,571 163,095 56,947
Income (loss) before income taxes 24,433 (17,638) 420,037 537,528 (31,040)
Investment (income) loss (7,600) (8,828) (7,323) (27,648) (38,713)
Interest expense 50,625 53,642 54,334 215,366 210,864
Gain on disposition of Quail Tools 1,595 (415,557) (413,962)
Gain on bargain purchase 2,846 (113,653)
Other, net (9,532) 37,021 24,470 65,802 106,816
Adjusted operating income (loss) (1) 62,367 64,197 75,961 263,433 247,927
Depreciation and amortization 159,188 156,348 160,347 649,234 633,408
Adjusted EBITDA (2) $221,555 $220,545 $236,308 $912,667 $881,335
(1) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the
amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss),
because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.
(2) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts
reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these
financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF NET DEBT TO TOTAL DEBT
(Unaudited)
December 31, September 30, December 31,
(In thousands) 2025 2025 2024
Current debt, net $377,492
$ -
$ -
Long-term debt, net 2,117,187 2,347,984 2,505,217
Total Debt 2,494,679 2,347,984 2,505,217
Less: Cash and short-term investments 940,738 428,079 397,299
Net Debt $1,553,941 $1,919,905 $2,107,918
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED FREE CASH FLOW TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
(Unaudited)
Three Months Ended Year Ended
December 31, September 30, December 31,
(In thousands) 2025 2025 2025
Net cash provided by operating activities $245,841 $207,880 $693,266
Add: Capital expenditures, net of proceeds from (114,043) (202,267) (617,320)
sales of assets
Free cash flow $131,798 $5,613 $75,946
Cash paid for acquisition related costs (1) 40,816
Adjusted free cash flow $131,798 $5,613 $116,762
(1) Cash paid related to the Parker Drilling acquisition
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition related costs. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management
as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow
is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.
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SOURCE Nabors Industries Ltd.
