Nabors Announces First Quarter 2025 Results
HAMILTON, Bermuda, April 29, 2025 /PRNewswire/ -- 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.
Highlights
- In March, Nabors completed the acquisition of Parker Wellbore, strengthening its portfolio with complementary businesses. This transaction adds Quail Tools, the leading tubular rental franchise in the U.S., along with the largest casing running contractor in Saudi Arabia and the United Arab Emirates, and a fleet of ten drilling rigs in several international markets and Alaska. This acquisition is expected to be immediately accretive to Nabors' 2025 free cash flow and to improve leverage metrics.
- In the first quarter, the SANAD joint venture deployed its tenth newbuild rig. The eleventh commenced in April, and the twelfth is expected to start later in the second quarter. Two additional rigs are planned for startup in the second half of 2025. As these rigs come online, they should make a material contribution to SANAD's adjusted EBITDA while supporting their customer's program to maintain production capacity and develop its natural gas resources.
- Nabors and Corva AI expanded their existing strategic alliance, extending their collaboration into Nabors' RigCLOUD® platform. The resulting solution combines Nabors' edge and cloud computing platform with Corva's AI-driven analytics, enhancing real-time data processing, predictive insights, and performance, improving decision-making and maximizing efficiency.
- In the month of March, the Company suspended activity on its three rigs in Russia in response to the recently expanded sanctions. Nabors does not expect activity in this market to resume in the near term. Financial performance in this market had become increasingly marginal.
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."
Segment Results
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. Operating inefficiencies from elevated rig churn primarily led to this change.
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.
Adjusted Free Cash Flow
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. The Company had targeted another $20 million in collections that dropped out of the first quarter. Nabors is working on further material payments with its customer, which it expects to collect during the second quarter. Parker consumed $10 million in adjusted free cash flow, including capital expenditures of $6 million, $5 million in accrued interest on the Parker term loan, which was retired at the end of the first quarter, and a small amount of transaction-related expenses.
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. In addition to $130 million in incremental adjusted EBITDA for 2025 post-closing, we are on track to realize $40 million of cost synergies. Parker capital expenditures post-closing are targeted at $60 million for 2025.
"Nabors adjusted free cash flow for the quarter was impacted by several factors as compared to our forecast. Capital expenses were $70 million below target mainly on delayed milestones for SANAD's newbuild rigs that shifted into the second quarter. Additionally, collections were $30 million below our expectations. Payments related to our Parker transaction were approximately $14 million.
"As a result of the ongoing uncertainty with the increased U.S. tariffs, we have quantified the potential impact of these changes on our future free cash flow. We estimate the total amount would land between $10 million and $20 million on a full-year basis. We also believe that some of this impact would be offset by commercial negotiations with our customers.
"We are targeting a substantial improvement in free cash flow generation over the remaining three quarters of the year, driven by continued progress in our international drilling profitability, some recovery in our Lower 48 rig count and Parker's incremental contribution including material synergy capture."
Outlook
Nabors expects the following metrics for the second quarter of 2025, which reflect a full quarter from Parker Wellbore operations:
U.S. Drilling
- Lower 48 average rig count of 63 - 64 rigs
- Lower 48 daily adjusted gross margin of approximately $14,100
- Alaska and Gulf of Mexico combined adjusted EBITDA of approximately $26 million
International
- Average rig count of 85 - 86 rigs, including two rigs from Parker
- Daily adjusted gross margin of approximately $17,700
Drilling Solutions
- Adjusted EBITDA of approximately $75 million, including an approximate $43 million contribution from Parker
Rig Technologies
- Adjusted EBITDA approximately in line with the first quarter
Capital Expenditures
- Capital expenditures of $220 - $230 million, including $35 million for the Parker operations and $100 - $105 million for the newbuilds in Saudi Arabia
- Full-year capital expenditures of approximately $770 - $780 million, with $360 million for the SANAD newbuilds and $60 million for Parker
Adjusted Free Cash Flow
- Adjusted free cash flow for 2025 of approximately $80 million (excluding any impact from tariffs), with SANAD consuming approximately $150 million, while the remaining operations including Parker should generate around $230 million
Mr. Petrello concluded, "Our business and geographic diversity, and our industry-leading technology, will help us navigate this current environment. We expect the Parker business to make an immediate positive impact to our position.
"The investments we have made in our international business should generate meaningful returns, as we deploy a significant number of rigs over the next several quarters. In particular, SANAD is on track to operate 15 newbuild rigs by early 2026, with additional newbuilds already under discussion. The outlook for this program, and SANAD in total, is for considerable free cash generation, which should lead to material value creation for our shareholders."
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. 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. Management believes that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies.
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 | ||||||||
March 31, | December 31, | |||||||
(In thousands, except per share amounts) | 2025 | 2024 | 2024 | |||||
Revenues and other income: | ||||||||
Operating revenues | $ 736,186 | $ 733,704 | $ 729,819 | |||||
Investment income (loss) | 6,596 | 10,201 | 8,828 | |||||
Total revenues and other income | 742,782 | 743,905 | 738,647 | |||||
Costs and other deductions: | ||||||||
Direct costs | 447,300 | 437,077 | 433,404 | |||||
General and administrative expenses | 68,506 | 61,751 | 61,436 | |||||
Research and engineering | 14,035 | 13,863 | 14,434 | |||||
Depreciation and amortization | 154,638 | 157,685 | 156,348 | |||||
Interest expense | 54,326 | 50,379 | 53,642 | |||||
Gain on bargain purchase | (112,999) | - | - | |||||
Other, net | 44,790 | 16,108 | 37,021 | |||||
Total costs and other deductions | 670,596 | 736,863 | 756,285 | |||||
Income (loss) before income taxes | 72,186 | 7,042 | (17,638) | |||||
Income tax expense (benefit) | 15,007 | 16,044 | 15,231 | |||||
Net income (loss) | 57,179 | (9,002) | (32,869) | |||||
Less: Net (income) loss attributable to noncontrolling interest | (24,191) | (25,331) | (20,802) | |||||
Net income (loss) attributable to Nabors | $ 32,988 | $ (34,333) | $ (53,671) | |||||
Earnings (losses) per share: | ||||||||
Basic | $ 2.35 | $ (4.54) | $ (6.67) | |||||
Diluted | $ 2.18 | $ (4.54) | $ (6.67) | |||||
Weighted-average number of common shares outstanding: | ||||||||
Basic | 10,460 | 9,176 | 9,213 | |||||
Diluted | 11,671 | 9,176 | 9,213 | |||||
Adjusted EBITDA | $ 206,345 | $ 221,013 | $ 220,545 | |||||
Adjusted operating income (loss) | $ 51,707 | $ 63,328 | $ 64,197 | |||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Unaudited) | |||||
March 31, | December 31, | ||||
(In thousands) | 2025 | 2024 | |||
ASSETS | |||||
Current assets: | |||||
Cash and short-term investments | $ 404,109 | $ 397,299 | |||
Accounts receivable, net | 549,626 | 387,970 | |||
Other current assets | 245,083 | 214,268 | |||
Total current assets | 1,198,818 | 999,537 | |||
Property, plant and equipment, net | 3,074,789 | 2,830,957 | |||
Other long-term assets | 776,077 | 673,807 | |||
Total assets | $ 5,049,684 | $ 4,504,301 | |||
LIABILITIES AND EQUITY | |||||
Current liabilities: | |||||
Trade accounts payable | $ 375,440 | $ 321,030 | |||
Other current liabilities | 292,205 | 250,887 | |||
Total current liabilities | 667,645 | 571,917 | |||
Long-term debt | 2,685,169 | 2,505,217 | |||
Other long-term liabilities | 251,493 | 220,829 | |||
Total liabilities | 3,604,307 | 3,297,963 | |||
Redeemable noncontrolling interest in subsidiary | 795,643 | 785,091 | |||
Equity: | |||||
Shareholders' equity | 342,660 | 134,996 | |||
Noncontrolling interest | 307,074 | 286,251 | |||
Total equity | 649,734 | 421,247 | |||
Total liabilities and equity | $ 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 | ||||||||
March 31, | December 31, | |||||||
(In thousands, except rig activity) | 2025 | 2024 | 2024 | |||||
Operating revenues: | ||||||||
U.S. Drilling | $ 230,746 | $ 271,989 | $ 241,637 | |||||
International Drilling | 381,718 | 349,359 | 371,406 | |||||
Drilling Solutions | 93,179 | 75,574 | 75,992 | |||||
Rig Technologies (1) | 44,165 | 50,156 | 56,166 | |||||
Other reconciling items (2) | (13,622) | (13,374) | (15,382) | |||||
Total operating revenues | $ 736,186 | $ 733,704 | $ 729,819 | |||||
Adjusted EBITDA: (3) | ||||||||
U.S. Drilling | $ 92,711 | $ 120,403 | $ 105,757 | |||||
International Drilling | 115,486 | 102,498 | 111,962 | |||||
Drilling Solutions | 40,853 | 31,787 | 33,809 | |||||
Rig Technologies (1) | 5,563 | 6,801 | 9,208 | |||||
Other reconciling items (4) | (48,268) | (40,476) | (40,191) | |||||
Total adjusted EBITDA | $ 206,345 | $ 221,013 | $ 220,545 | |||||
Adjusted operating income (loss): (5) | ||||||||
U.S. Drilling | $ 31,599 | $ 50,529 | $ 38,973 | |||||
International Drilling | 32,958 | 22,476 | 29,528 | |||||
Drilling Solutions | 32,913 | 26,893 | 28,944 | |||||
Rig Technologies (1) | 4,335 | 4,209 | 8,413 | |||||
Other reconciling items (4) | (50,098) | (40,779) | (41,661) | |||||
Total adjusted operating income (loss) | $ 51,707 | $ 63,328 | $ 64,197 | |||||
Rig activity: | ||||||||
Average Rigs Working: (7) | ||||||||
Lower 48 | 60.6 | 71.9 | 65.9 | |||||
Other US | 7.6 | 6.8 | 6.8 | |||||
U.S. Drilling | 68.2 | 78.7 | 72.7 | |||||
International Drilling | 85.0 | 81.0 | 84.8 | |||||
Total average rigs working | 153.2 | 159.7 | 157.5 | |||||
Daily Rig Revenue: (6),(8) | ||||||||
Lower 48 | $ 34,546 | $ 35,468 | $ 33,396 | |||||
Other US | 61,361 | 64,402 | 62,624 | |||||
U.S. Drilling (10) | 37,557 | 37,968 | 36,137 | |||||
International Drilling | 49,895 | 47,384 | 47,620 | |||||
Daily Adjusted Gross Margin: (6),(9) | ||||||||
Lower 48 | $ 14,276 | $ 16,011 | $ 14,940 | |||||
Other US | 30,374 | 35,184 | 34,707 | |||||
U.S. Drilling (10) | 16,084 | 17,667 | 16,793 | |||||
International Drilling | 17,421 | 16,061 | 16,687 | |||||
(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 | ||||||||||
March 31, | December 31, | |||||||||
(in thousands, except per share amounts) | 2025 | 2024 | 2024 | |||||||
BASIC EPS: | ||||||||||
Net income (loss) (numerator): | ||||||||||
Income (loss), net of tax | $ | 57,179 | $ | (9,002) | $ | (32,869) | ||||
Less: net (income) loss attributable to noncontrolling interest | (24,191) | (25,331) | (20,802) | |||||||
Less: distributed and undistributed earnings allocated to unvested shareholders | (1,177) | — | — | |||||||
Less: accrued distribution on redeemable noncontrolling interest in subsidiary | (7,184) | (7,283) | (7,794) | |||||||
Numerator for basic earnings per share: | ||||||||||
Adjusted income (loss), net of tax - basic | $ | 24,627 | $ | (41,616) | $ | (61,465) | ||||
Weighted-average number of shares outstanding - basic | 10,460 | 9,176 | 9,213 | |||||||
Earnings (losses) per share: | ||||||||||
Total Basic | $ | 2.35 | $ | (4.54) | $ | (6.67) | ||||
DILUTED EPS: | ||||||||||
Adjusted income (loss), net of tax - basic | $ | 24,627 | $ | (41,616) | $ | (61,465) | ||||
Add: after tax interest expense of convertible notes | 848 | — | — | |||||||
Add: effect of reallocating undistributed earnings of unvested shareholders | 3 | — | — | |||||||
Adjusted income (loss), net of tax - diluted | $ | 25,478 | $ | (41,616) | $ | (61,465) | ||||
Weighted-average number of shares outstanding - basic | 10,460 | 9,176 | 9,213 | |||||||
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 | 11,671 | 9,176 | 9,213 | |||||||
Earnings (losses) per share: | ||||||||||
Total Diluted | $ | 2.18 | $ | (4.54) | $ | (6.67) | ||||
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 March 31, 2025 | |||||||||||||
U.S. Drilling | International | Drilling | Rig | Other | 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 | |||||||
Three Months Ended March 31, 2024 | |||||||||||||
U.S. Drilling | International | Drilling | Rig | Other | Total | ||||||||
Adjusted operating income (loss) | $ 50,529 | $ 22,476 | $ 26,893 | $ 4,209 | $ (40,779) | $ 63,328 | |||||||
Depreciation and amortization | 69,874 | 80,022 | 4,894 | 2,592 | 303 | 157,685 | |||||||
Adjusted EBITDA | $ 120,403 | $ 102,498 | $ 31,787 | $ 6,801 | $ (40,476) | $ 221,013 | |||||||
Three Months Ended December 31, 2024 | |||||||||||||
U.S. Drilling | International | Drilling | Rig | Other | Total | ||||||||
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 | |||||||
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 | ||||||||
March 31, | December 31, | |||||||
(In thousands) | 2025 | 2024 | 2024 | |||||
Lower 48 - U.S. Drilling | ||||||||
Adjusted operating income (loss) | $ 18,995 | $ 39,264 | $ 27,354 | |||||
Plus: General and administrative costs | 4,817 | 4,823 | 5,156 | |||||
Plus: Research and engineering | 823 | 964 | 1,002 | |||||
GAAP Gross Margin | 24,635 | 45,051 | 33,512 | |||||
Plus: Depreciation and amortization | 53,225 | 59,733 | 57,019 | |||||
Adjusted gross margin | $ 77,860 | $ 104,784 | $ 90,531 | |||||
Other - U.S. Drilling | ||||||||
Adjusted operating income (loss) | $ 12,604 | $ 11,265 | $ 11,619 | |||||
Plus: General and administrative costs | 405 | 326 | 305 | |||||
Plus: Research and engineering | 62 | 47 | 72 | |||||
GAAP Gross Margin | 13,071 | 11,638 | 11,996 | |||||
Plus: Depreciation and amortization | 7,887 | 10,141 | 9,765 | |||||
Adjusted gross margin | $ 20,958 | $ 21,779 | $ 21,761 | |||||
U.S. Drilling | ||||||||
Adjusted operating income (loss) | $ 31,599 | $ 50,529 | $ 38,973 | |||||
Plus: General and administrative costs | 5,222 | 5,149 | 5,461 | |||||
Plus: Research and engineering | 885 | 1,011 | 1,074 | |||||
GAAP Gross Margin | 37,706 | 56,689 | 45,508 | |||||
Plus: Depreciation and amortization | 61,112 | 69,874 | 66,784 | |||||
Adjusted gross margin | $ 98,818 | $ 126,563 | $ 112,292 | |||||
International Drilling | ||||||||
Adjusted operating income (loss) | $ 32,958 | $ 22,476 | $ 29,528 | |||||
Plus: General and administrative costs | 16,378 | 14,415 | 16,758 | |||||
Plus: Research and engineering | 1,414 | 1,508 | 1,431 | |||||
GAAP Gross Margin | 50,750 | 38,399 | 47,717 | |||||
Plus: Depreciation and amortization | 82,528 | 80,022 | 82,434 | |||||
Adjusted gross margin | $ 133,278 | $ 118,421 | $ 130,151 | |||||
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 | |||||||
March 31, | December 31, | ||||||
(In thousands) | 2025 | 2024 | 2024 | ||||
Net income (loss) | $ 57,179 | $ (9,002) | $ (32,869) | ||||
Income tax expense (benefit) | 15,007 | 16,044 | 15,231 | ||||
Income (loss) from continuing operations before income taxes | 72,186 | 7,042 | (17,638) | ||||
Investment (income) loss | (6,596) | (10,201) | (8,828) | ||||
Interest expense | 54,326 | 50,379 | 53,642 | ||||
Gain on bargain purchase | (112,999) | - | - | ||||
Other, net | 44,790 | 16,108 | 37,021 | ||||
Adjusted operating income (loss) (1) | 51,707 | 63,328 | 64,197 | ||||
Depreciation and amortization | 154,638 | 157,685 | 156,348 | ||||
Adjusted EBITDA (2) | $ 206,345 | $ 221,013 | $ 220,545 | ||||
(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) | ||||
March 31, | December 31, | |||
(In thousands) | 2025 | 2024 | ||
Long-term debt | $ 2,685,169 | $ 2,505,217 | ||
Less: Cash and short-term investments | 404,109 | 397,299 | ||
Net Debt | $ 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 | |||||||
March 31, | December 31, | ||||||
(In thousands) | 2025 | 2024 | 2024 | ||||
Net cash provided by operating activities | $ 87,735 | $ 107,239 | $ 148,919 | ||||
Add: Capital expenditures, net of proceeds from sales of assets | (159,161) | (99,125) | (202,215) | ||||
Adjusted free cash flow | $ (71,426) | $ 8,114 | $ (53,296) | ||||
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets. 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.
