Nabors Announces Second Quarter 2025 Results

, /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported second quarter 2025 operating revenues of $833 million, compared to operating revenues of $736 million in the first quarter. Net loss attributable to Nabors shareholders for the quarter was $31 million, compared to net income of $33 million in the first quarter. This equates to a loss per diluted share of $2.71, compared to earnings per diluted share of $2.18 in the first 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. Second-quarter adjusted EBITDA was $248 million, compared to $206 million in the previous quarter. 2Q 2025 Highlights The SANAD drilling joint venture with Saudi Aramco deployed two newbuild rigs in the Kingdom. These bring the total number of deployments to twelve. Two more units are scheduled to start operations over the balance of this year. Saudi Aramco awarded the fourth tranche of newbuilds to SANAD. This award of five rigs marks the next step in SANAD's 50-rig newbuild program. The first rigs of this tranche are scheduled to commence operating in 2026, with the final one in 2027. Several impactful international rig reactivations were completed in Kuwait. All three previously announced awards have commenced operations, one of which began in early July. These high-specification rigs are working under multiyear contracts and are expected to contribute materially to the International Drilling segment earnings during the second half of 2025 and beyond. Nabors' high-specification PACE® series SmartRigs® set several milestones extending lateral wellbore lengths. In the Bakken, a PACE®-X rig followed up drilling an operator's first four-mile lateral in the formation with two more four-mile lateral wells. Also in the Bakken, another operator utilizing a PACE®-B rig drilled back-to-back four-mile lateral wells. In the Haynesville a PACE®-X rig drilled the basin's longest lateral at 20,000 feet; the well reached a total depth of 32,000 feet. In the Eagle Ford, a PACE®-M rig drilled a record well in the basin, at 32,525 feet, including a 22,500-foot lateral section. Significant progress was made on the integration of the Parker Wellbore businesses acquired in March. These contributed materially to Nabors financial results in the second quarter. Cost synergies realized during the quarter support the $40 million previously targeted for 2025. Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "Our second quarter results demonstrated the strength of the Nabors portfolio while reflecting a full quarter contribution from the acquisition of Parker Wellbore. In total, EBITDA from the legacy Nabors businesses increased sequentially. I am pleased with the performance of the Parker operations, and our progress to realize expected cost synergies. "Recent deployments of high-spec rigs in the Middle East along with those scheduled over the balance of 2025 should drive growth in our International Drilling segment. The SANAD newbuild program is a key element of our future value creation. The award of the fourth five-rig tranche cements SANAD's growth prospects into 2027. "Before the impact from Parker, adjusted EBITDA grew sequentially in all three of the business lines in our U.S. Drilling segment. The Lower-48 rig market in oil focused basins remains flat to down, and we are working to mitigate the impact of the current industry rig count and dayrates. At the same time, natural gas drilling has moved upwards. We see our rig count and leading-edge pricing stabilizing in the third quarter and through the end of the year. "Our U.S. Offshore and Alaska operations are performing well. Including the contributions of Parker, these two businesses comprise a growing portion of our overall U.S. Drilling segment. In particular, our Alaska fleet is poised to capitalize on growth in that market. "With the addition of Parker's operations, Nabors Drilling Solutions now comprises over 25% of adjusted EBITDA from our operating segments. The Parker product lines in NDS – the largest being Quail Tools – outperformed our expectations in the second quarter. These results highlight the potential that led us to the acquisition." Segment Results International Drilling adjusted EBITDA totaled $117.7 million, compared to $115.5 million in the first quarter. Average rig count increased by one, primarily reflecting the startup of newbuild rigs in Saudi Arabia and Kuwait, offset by the conclusion of contracts for a rig each in Papua New Guinea and Mexico. Daily adjusted gross margin for the second quarter improved to $17,534, driven primarily by the high-margin additions. The U.S. Drilling segment reported second quarter adjusted EBITDA of $101.8 million, compared to $92.7 million in the previous quarter. All three of the U.S. Drilling segment's operations drove this improvement. In the Lower 48, the higher rig count more than offset a decline in daily margins. Improvements in Nabors legacy Alaska and Offshore were augmented by the contribution of a full quarter of the corresponding Parker operations. Drilling Solutions adjusted EBITDA was $76.5 million, compared to $40.9 million in the first quarter. The legacy Nabors business was down slightly, while the addition of Parker accounted for the sequential increase. This segment's gross margin, at 53%, improved moderately. Rig Technologies adjusted EBITDA was $5.2 million, compared to $5.6 million in the prior quarter. A decline in capital equipment deliveries, primarily in the Middle East, contributed to the sequential decrease in adjusted EBITDA. Adjusted Free Cash Flow In the second quarter, consolidated adjusted free cash flow was $41 million. This compares to free cash consumption of $61 million in the prior quarter. These figures exclude transaction costs related to the acquisition of Parker Wellbore. Lower quarterly cash interest payments and improved collections from customers contributed to the improved adjusted free cash flow in the second quarter, even as capital expenditures increased. Although receivable collections during the second quarter from Nabors' main customer in Mexico were significantly lower than expected, the company benefited from higher payments from other clients. The recently announced a $7 - $10 billion capital raise sponsored by the Mexico government is intended to address the issue of overdue vendor liabilities. William Restrepo, Nabors CFO, stated, "The current economic backdrop appears to be stabilizing, as markets digest recent developments on foreign trade, Federal Reserve policy, and geopolitical conflicts. Favorable trends in employment and inflation indicate a relatively constructive environment, for both our potential capital markets activities and our global operations. These factors have already had a positive impact on credit spreads. Interest rate actions by the Fed and a further narrowing of spreads later this year should benefit us, as we look to refinance our senior notes. "Our results for the second quarter were solid. In addition to the higher adjusted EBITDA contribution from Parker Wellbore, our legacy drilling rig business improved. Legacy Drilling Solutions and Rig Technologies declined slightly. "We are encouraged by our relatively stable Lower 48 rig count as we enter the second half and expect our rig count to continue at approximately its current level through year end. This outlook assumes some continued weakness in oil-focused activity, offset by anticipated strength in natural gas drilling. At the same time, our leading-edge daily revenue has remained resilient in the low $30,000 range, providing support to our daily gross margin. This environment gives us confidence about our expected pace of cash flow generation and debt reduction during the balance of 2025. "Adjusted free cash flow generated by our operations of $41 million in the second quarter improved by more than $100 million as compared to the first quarter. In the third quarter, we expect progress on our collections in Mexico. Assuming these materialize, we forecast similar adjusted free cash flow in the third quarter and anticipate reaching our $80 million target for the full year. "Parker Wellbore has exceeded our expectations as it grew sequentially on a comparable basis. Margins were high and cash flow generation was better than anticipated. In addition, our synergy capture post-closing has exceeded our targets." Outlook Nabors expects the following metrics for the third quarter of 2025: U.S. Drilling Lower 48 average rig count of 57 - 59 rigs Lower 48 daily adjusted gross margin of approximately $13,300 Alaska and Gulf of America combined adjusted EBITDA of approximately $26 million International Average rig count of 87 - 88 rigs Daily adjusted gross margin of approximately $17,900 Drilling Solutions Adjusted EBITDA approximately in line with the second quarter Rig Technologies Adjusted EBITDA up approximately $2 - $3 million from the second quarter Capital Expenditures Capital expenditures of $200 - $210 million, including $110 - $115 million for the newbuilds in Saudi Arabia Full-year capital expenditures of $700 - $710 million, with $300 million for the SANAD newbuilds and $60 million for Parker Wellbore Adjusted Free Cash Flow Adjusted free cash flow should be in line with the second quarter Mr. Petrello concluded, "Challenge and change are constants in the oilfield services business. The current environment is no exception. Our strategy to diversify by service line and by geography continues to position Nabors for success throughout the cycle. The Parker business adds key complementary elements to our portfolio. "With the award of another tranche of newbuild rigs, the outlook for significant free cash flow at SANAD is solidified. We are confident this growth in SANAD will drive significant value creation." 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) from continuing operations before income taxes, interest expense, investment income (loss), 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 [email protected], or Kara Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email [email protected]. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail [email protected] NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, (In thousands, except per share amounts) 2025 2024 2025 2025 2024 Revenues and other income: Operating revenues $ 832,788 $ 734,798 $ 736,186 $ 1,568,974 $ 1,468,502 Investment income (loss) 6,129 8,181 6,596 12,725 18,382 Total revenues and other income 838,917 742,979 742,782 1,581,699 1,486,884 Costs and other deductions: Direct costs 488,881 440,225 447,300 936,181 877,302 General and administrative expenses 82,726 62,154 68,506 151,232 123,905 Research and engineering 12,722 14,362 14,035 26,757 28,225 Depreciation and amortization 175,061 160,141 154,638 329,699 317,826 Interest expense 56,081 51,493 54,326 110,407 101,872 Gain on bargain purchase (3,500) - (112,999) (116,499) - Other, net 6,074 12,079 44,790 50,864 28,187 Total costs and other deductions 818,045 740,454 670,596 1,488,641 1,477,317 Income (loss) before income taxes 20,872 2,525 72,186 93,058 9,567 Income tax expense (benefit) 23,077 15,554 15,007 38,084 31,598 Net income (loss) (2,205) (13,029) 57,179 54,974 (22,031) Less: Net (income) loss attributable to noncontrolling interest (28,705) (19,226) (24,191) (52,896) (44,557) Net income (loss) attributable to Nabors $ (30,910) $ (32,255) $ 32,988 $ 2,078 $ (66,588) Earnings (losses) per share: Basic $ (2.71) $ (4.29) $ 2.35 $ (1.01) $ (8.83) Diluted $ (2.71) $ (4.29) $ 2.18 $ (1.01) $ (8.83) Weighted-average number of common shares outstanding: Basic 14,083 9,207 10,460 12,271 9,191 Diluted 14,083 9,207 11,671 12,271 9,191 Adjusted EBITDA $ 248,459 $ 218,057 $ 206,345 $ 454,804 $ 439,070 Adjusted operating income (loss) $ 73,398 $ 57,916 $ 51,707 $ 125,105 $ 121,244 NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, March 31, December 31, (In thousands) 2025 2025 2024 ASSETS Current assets: Cash and short-term investments $ 387,355 $ 404,109 $ 397,299 Accounts receivable, net 537,071 549,626 387,970 Other current assets 272,465 245,083 214,268 Total current assets 1,196,891 1,198,818 999,537 Property, plant and equipment, net 3,063,033 3,074,789 2,830,957 Other long-term assets 778,739 776,077 673,807 Total assets $ 5,038,663 $ 5,049,684 $ 4,504,301 LIABILITIES AND EQUITY Current liabilities: Trade accounts payable $ 364,846 $ 375,440 321,030 Other current liabilities 304,599 292,205 250,887 Total current liabilities 669,445 667,645 571,917 Long-term debt 2,672,820 2,685,169 2,505,217 Other long-term liabilities 249,728 251,493 220,829 Total liabilities 3,591,993 3,604,307 3,297,963 Redeemable noncontrolling interest in subsidiary 806,342 795,643 785,091 Equity: Shareholders' equity 307,984 342,660 134,996 Noncontrolling interest 332,344 307,074 286,251 Total equity 640,328 649,734 421,247 Total liabilities and equity $ 5,038,663 $ 5,049,684 $ 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 Six Months Ended June 30, March 31, June 30, (In thousands, except rig activity) 2025 2024 2025 2025 2024 Operating revenues: U.S. Drilling $ 255,438 $ 259,723 $ 230,746 $ 486,184 $ 531,712 International Drilling 384,970 356,733 381,718 766,688 706,092 Drilling Solutions 170,283 82,961 93,179 263,462 158,535 Rig Technologies (1) 36,527 49,546 44,165 80,692 99,702 Other reconciling items (2) (14,430) (14,165) (13,622) (28,052) (27,539) Total operating revenues $ 832,788 $ 734,798 $ 736,186 $ 1,568,974 $ 1,468,502 Adjusted EBITDA: (3) U.S. Drilling $ 101,821 $ 114,020 $ 92,711 $ 194,532 $ 234,423 International Drilling 117,658 106,371 115,486 233,144 208,869 Drilling Solutions 76,501 32,468 40,853 117,354 64,255 Rig Technologies (1) 5,174 7,330 5,563 10,737 14,131 Other reconciling items (4) (52,695) (42,132) (48,268) (100,963) (82,608) Total adjusted EBITDA $ 248,459 $ 218,057 $ 206,345 $ 454,804 $ 439,070 Adjusted operating income (loss): (5) U.S. Drilling $ 39,788 $ 45,085 $ 31,599 $ 71,387 $ 95,614 International Drilling 36,051 23,672 32,958 69,009 46,148 Drilling Solutions 50,365 27,319 32,913 83,278 54,212 Rig Technologies (1) 1,721 4,860 4,335 6,056 9,069 Other reconciling items (4) (54,527) (43,020) (50,098) (104,625) (83,799) Total adjusted operating income (loss) $ 73,398 $ 57,916 $ 51,707 $ 125,105 $ 121,244 Rig activity: Average Rigs Working: (7) Lower 48 62.4 68.7 60.6 61.5 70.3 Other US 10.0 6.3 7.6 8.8 6.5 U.S. Drilling 72.4 75.0 68.2 70.3 76.8 International Drilling 85.9 84.4 85.0 85.4 82.7 Total average rigs working 158.3 159.4 153.2 155.7 159.5 Daily Rig Revenue: (6),(8) Lower 48 $ 33,466 $ 35,334 $ 34,546 $ 33,995 $ 35,402 Other US 71,814 68,008 61,361 67,306 66,135 U.S. Drilling (10) 38,761 38,076 37,557 38,180 38,020 International Drilling 49,263 46,469 49,895 49,575 46,917 Daily Adjusted Gross Margin: (6),(9) Lower 48 $ 13,902 $ 15,598 $ 14,276 $ 14,085 $ 15,809 Other US 32,073 38,781 30,374 31,340 36,912 U.S. Drilling (10) 16,411 17,544 16,084 16,253 17,607 International Drilling 17,534 16,050 17,421 17,478 16,056 (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 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 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 Six Months Ended June 30, March 31, June 30, (in thousands, except per share amounts) 2025 2024 2025 2025 2024 BASIC EPS: Net income (loss) (numerator): Income (loss), net of tax $ (2,205) $ (13,029) $ 57,179 $ 54,974 $ (22,031) Less: net (income) loss attributable to noncontrolling interest (28,705) (19,226) (24,191) (52,896) (44,557) Less: distributed and undistributed earnings allocated to unvested shareholders — — (1,177) — — Less: accrued distribution on redeemable noncontrolling interest in subsidiary (7,264) (7,283) (7,184) (14,448) (14,566) Numerator for basic earnings per share: Adjusted income (loss), net of tax - basic $ (38,174) $ (39,538) $ 24,627 $ (12,370) $ (81,154) Weighted-average number of shares outstanding - basic 14,083 9,207 10,460 12,271 9,191 Earnings (losses) per share: Total Basic $ (2.71) $ (4.29) $ 2.35 $ (1.01) $ (8.83) DILUTED EPS: Adjusted income (loss), net of tax - basic $ (38,174) $ (39,538) $ 24,627 $ (12,370) $ (81,154) Add: after tax interest expense of convertible notes — — 848 — — Add: effect of reallocating undistributed earnings of unvested shareholders — — 4 — — Adjusted income (loss), net of tax - diluted $ (38,174) $ (39,538) $ 25,479 $ (12,370) $ (81,154) Weighted-average number of shares outstanding - basic 14,083 9,207 10,460 12,271 9,191 Add: if converted dilutive effect of convertible notes — — 1,176 — — Add: dilutive effect of potential common shares — — 35 — — Weighted-average number of shares outstanding - diluted 14,083 9,207 11,671 12,271 9,191 Earnings (losses) per share: Total Diluted $ (2.71) $ (4.29) $ 2.18 $ (1.01) $ (8.83) 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 June 30, 2025 U.S.Drilling InternationalDrilling DrillingSolutions RigTechnologies Otherreconcilingitems Total Adjusted operating income (loss) $ 39,788 $ 36,051 $ 50,365 $ 1,721 $ (54,527) $ 73,398 Depreciation and amortization 62,033 81,607 26,136 3,453 1,832 175,061 Adjusted EBITDA $ 101,821 $ 117,658 $ 76,501 $ 5,174 $ (52,695) $ 248,459 Three Months Ended June 30, 2024 U.S.Drilling InternationalDrilling DrillingSolutions RigTechnologies Otherreconcilingitems Total Adjusted operating income (loss) $ 45,085 $ 23,672 $ 27,319 $ 4,860 $ (43,020) $ 57,916 Depreciation and amortization 68,935 82,699 5,149 2,470 888 160,141 Adjusted EBITDA $ 114,020 $ 106,371 $ 32,468 $ 7,330 $ (42,132) $ 218,057 Three Months Ended March 31, 2025 U.S.Drilling InternationalDrilling DrillingSolutions RigTechnologies Otherreconcilingitems Total Adjusted operating income (loss) $ 31,599 $ 32,958 $ 32,913 $ 4,335 $ (50,098) $ 51,707 Depreciation and amortization 61,112 82,528 7,940 1,228 1,830 154,638 Adjusted EBITDA $ 92,711 $ 115,486 $ 40,853 $ 5,563 $ (48,268) $ 206,345 Six Months Ended June 30, 2025 U.S.Drilling InternationalDrilling DrillingSolutions RigTechnologies Otherreconcilingitems Total Adjusted operating income (loss) $ 71,387 $ 69,009 $ 83,278 $ 6,056 $ (104,625) $ 125,105 Depreciation and amortization 123,145 164,135 34,076 4,681 3,662 329,699 Adjusted EBITDA $ 194,532 $ 233,144 $ 117,354 $ 10,737 $ (100,963) $ 454,804 Six Months Ended June 30, 2024 U.S.Drilling InternationalDrilling DrillingSolutions RigTechnologies Otherreconcilingitems Total Adjusted operating income (loss) $ 95,614 $ 46,148 $ 54,212 $ 9,069 $ (83,799) $ 121,244 Depreciation and amortization 138,809 162,721 10,043 5,062 1,191 317,826 Adjusted EBITDA $ 234,423 $ 208,869 $ 64,255 $ 14,131 $ (82,608) $ 439,070 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 Six Months Ended June 30, March 31, June 30, (In thousands) 2025 2024 2025 2025 2024 Lower 48 - U.S. Drilling Adjusted operating income (loss) $ 21,515 $ 32,841 $ 18,995 $ 40,510 $ 72,105 Plus: General and administrative costs 4,481 4,390 4,817 9,298 9,213 Plus: Research and engineering 888 909 823 1,711 1,873 GAAP Gross Margin 26,884 38,140 24,635 51,519 83,191 Plus: Depreciation and amortization 52,080 59,332 53,225 105,305 119,065 Adjusted gross margin $ 78,964 $ 97,472 $ 77,860 $ 156,824 $ 202,256 Other - U.S. Drilling Adjusted operating income (loss) $ 18,273 $ 12,244 $ 12,604 $ 30,877 $ 23,509 Plus: General and administrative costs 896 305 405 1,301 631 Plus: Research and engineering 64 45 62 126 92 GAAP Gross Margin 19,233 12,594 13,071 32,304 24,232 Plus: Depreciation and amortization 9,953 9,603 7,887 17,840 19,744 Adjusted gross margin $ 29,186 $ 22,197 $ 20,958 $ 50,144 $ 43,976 U.S. Drilling Adjusted operating income (loss) $ 39,788 $ 45,085 $ 31,599 $ 71,387 $ 95,614 Plus: General and administrative costs 5,377 4,695 5,222 10,599 9,844 Plus: Research and engineering 952 954 885 1,837 1,965 GAAP Gross Margin 46,117 50,734 37,706 83,823 107,423 Plus: Depreciation and amortization 62,033 68,935 61,112 123,145 138,809 Adjusted gross margin $ 108,150 $ 119,669 $ 98,818 $ 206,968 $ 246,232 International Drilling Adjusted operating income (loss) $ 36,051 $ 23,672 $ 32,958 $ 69,009 $ 46,148 Plus: General and administrative costs 17,867 15,435 16,378 34,245 29,850 Plus: Research and engineering 1,499 1,404 1,414 2,913 2,912 GAAP Gross Margin 55,417 40,511 50,750 106,167 78,910 Plus: Depreciation and amortization 81,607 82,699 82,528 164,135 162,721 Adjusted gross margin $ 137,024 $ 123,210 $ 133,278 $ 270,302 $ 241,631 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 Six Months Ended June 30, March 31, June 30, (In thousands) 2025 2024 2025 2025 2024 Net income (loss) $ (2,205) $ (13,029) $ 57,179 $ 54,974 $ (22,031) Income tax expense (benefit) 23,077 15,554 15,007 38,084 31,598 Income (loss) from continuing operations before income taxes 20,872 2,525 72,186 93,058 9,567 Investment (income) loss (6,129) (8,181) (6,596) (12,725) (18,382) Interest expense 56,081 51,493 54,326 110,407 101,872 Gain on bargain purchase (3,500) - (112,999) (116,499) - Other, net 6,074 12,079 44,790 50,864 28,187 Adjusted operating income (loss) (1) 73,398 57,916 51,707 125,105 121,244 Depreciation and amortization 175,061 160,141 154,638 329,699 317,826 Adjusted EBITDA (2) $ 248,459 $ 218,057 $ 206,345 $ 454,804 $ 439,070 (1) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, 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 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) June 30, March 31, December 31, (In thousands) 2025 2025 2024 Long-term debt $ 2,672,820 $ 2,685,169 $ 2,505,217 Less: Cash and short-term investments 387,355 404,109 397,299 Net Debt $ 2,285,465 $ 2,281,060 $ 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 Six Months Ended June 30, March 31, June 30, (In thousands) 2025 2025 2025 Net cash provided by operating activities $ 151,810 $ 87,735 $ 239,545 Add: Capital expenditures, net of proceeds from sales of assets (141,849) (159,161) (301,010) Free cash flow $ 9,961 $ (71,426) $ (61,465) Cash paid for acquisition related costs (1) 30,635 10,181 40,816 Adjusted free cash flow $ 40,596 $ (61,245) $ (20,649) (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. SOURCE Nabors Industries Ltd. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Nabors Announces Second Quarter 2025 Results

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