1. Nabors reported Q1 2025 revenue of $736 million, up from $730 million. 2. Net income for Q1 was $33 million, reversing a $54 million loss in Q4. 3. Parker acquisition added a $113 million gain but incurred $28.6 million in costs. 4. U.S. rig count dropped from 66 to 61, affecting operational expenses. 5. International operations showed improved margins despite challenges in the U.S.
The turnaround to profitability with Parker's contribution can boost investor confidence, similar to past recovery phases following acquisitions in the sector.
The details of improved financial performance and successful integration of Parker are crucial for NBR’s short-term stock potential.
Expected improvements from the Parker acquisition should reflect positively in subsequent quarters, as seen with similar past mergers enhancing operational performance.
Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported first quarter 2025 operating revenues of $736 million, compared to operating revenues of $730 million in the fourth quarter of 2024. Net income attributable to Nabors shareholders for the quarter was $33 million, compared to a net loss of $54 million in the fourth quarter. This equates to earnings per diluted share of $2.18, compared to a loss per diluted share of $6.67 in the fourth quarter. The first quarter included a one-time, non-cash net gain on the Parker transaction of $113.0 million, or $9.68 per diluted share. This gain was partially offset by non-cash charges related to the wind-down of operations in Russia totaling $28.6 million, or $2.45 per diluted share, and by expenses related to the Parker acquisition. First-quarter adjusted EBITDA was $206 million, compared to $221 million in the previous quarter.
Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "With the acquisition of Parker completed, we are already realizing the benefits we anticipated. Parker's operations contributed to our first quarter. We commenced our well-planned integration, and the early achievements are encouraging.
"Our first quarter results reflect improving performance in certain international markets, as well as challenges in the U.S. In the U.S. specifically, rig churn placed pressure on rig utilization and operating expenses. More recently, we are encouraged by our success adding rigs in the Lower 48 after our rig count troughed in February. However, in view of the current activity level we have responded with actions to improve efficiency and align our cost structure.
"Daily adjusted gross margin in the International Drilling business was $17,421, an improvement of more than $700 per day. This expansion was driven by higher margins in most of our international geographies. Our international drilling activity was essentially flat, as two rig startups in Saudi Arabia offset the impact of the suspension of our Russia operations and lower activity in Colombia. Looking ahead over the balance of 2025, we have a number of startups planned, in Saudi Arabia, Kuwait, Argentina, Mexico, and India. These offset the completion of some drilling programs in the Eastern Hemisphere.
"SANAD, our 50/50 joint venture with Saudi Aramco, began operating its tenth newbuild rig during the first quarter, and the eleventh early in the second quarter. Another three are scheduled to commence operations during the balance of 2025. SANAD, with its newbuild program totaling 50 rigs over 10 years, is growing rapidly and provides a source of significant value to Nabors and our shareholders."
International Drilling adjusted EBITDA totaled $115.5 million, compared to $112.0 million in the fourth quarter of 2024. Average rig count was essentially in line with activity expectations. Daily adjusted gross margin for the first quarter averaged $17,421, reflecting additional newbuild rigs in Saudi Arabia and improved operating performance in several geographies.
The U.S. Drilling segment reported first quarter adjusted EBITDA of $92.7 million, compared to $105.8 million in the fourth quarter. This decrease was driven by reduced rig count in the Lower 48 and somewhat higher operational expenses. Nabors' first quarter Lower 48 rig count averaged 61, versus 66 in the fourth quarter. Lower 48 daily margins averaged $14,276 in the first quarter, as compared to $14,940 in the previous quarter.
Drilling Solutions, or NDS, adjusted EBITDA was $40.9 million. The addition of the Parker operations contributed $9.6 million in the first quarter. The decline in Nabors' Lower 48 rig count in the quarter impacted NDS results. This segment's gross margin remained strong, at 53%.
Rig Technologies adjusted EBITDA was $5.6 million. Lower capital equipment deliveries in the Middle East and decreased OEM aftermarket volumes contributed to a sequential decline in adjusted EBITDA.
In the first quarter, consolidated adjusted free cash flow was a use of $71 million. Nabors legacy business, excluding the impact from Parker, consumed $61 million in adjusted free cash flow. The first quarter normally includes higher payments, mainly annual bonuses, property taxes and interest expenses. In addition, the first quarter for the Nabors legacy business included approximately $14 million in severance and other costs mainly related to the Parker transaction. On a positive note, Nabors collected approximately $20 million from its main customer in Mexico.
William Restrepo, Nabors CFO, stated, "The addition of Parker marks a significant milestone for Nabors, materially expanding our Drilling Solutions business and adding significant cash generation to our combined company. With a full quarter of Parker, we expect NDS results in the second quarter to account for approximately 25% of adjusted EBITDA from consolidated operations. The Parker business is forecast to add material free cash flow.
Nabors expects the following metrics for the second quarter of 2025, which reflect a full quarter from Parker Wellbore operations: U.S. Drilling, International, Drilling Solutions, Rig Technologies, Capital Expenditures, Adjusted Free Cash Flow.
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.
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.
William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via e-mail investor@email.com.