Nabors Industries Ltd. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Operating revenues were $872.2 million for the three months ended September 30, 2026, an increase of 7% sequentially from $814.8 million in the second quarter and 7% year-over-year from $818.2 million in the third quarter of 2025.
• Net loss attributable to shareholders was $11.2 million for the quarter, compared to a net loss of $22.3 million in the second quarter of 2026 and net income of $274.2 million in the third quarter of 2025 (which included a $415.6 million gain on the disposition of Quail Tools).
• Adjusted EBITDA was $245.5 million, up nearly 11% sequentially from $221.7 million in the second quarter and up 4% from $236.3 million in the third quarter of 2025.
• Adjusted operating income was $85.8 million, up from $61.1 million in the second quarter and $76.0 million in the third quarter of 2025.
• Adjusted free cash flow was $74.5 million, a significant increase from $12.3 million in the second quarter and $5.6 million in the third quarter of 2025.
• Total debt was $2,022.8 million as of September 30, 2026, down from $2,120.3 million in June 2026 and $2,494.7 million in December 2025.
• Net debt was $1,547.6 million as of September 30, 2026.
• Cash and short-term investments were $475.1 million as of September 30, 2026.

Guidance and Future Outlook:

• Full-year 2026 adjusted EBITDA is expected to be approximately $930 million, reaching the upper end of prior guidance.
• Full-year consolidated adjusted free cash flow is now expected to be $100 million to $110 million, including approximately $20 million of cash consumption at SANAD, revised higher than previous guidance.
• Full-year consolidated capital spending is expected to be $710 million to $720 million, including $295 million to $305 million for SANAD's newbuild program.
• Fourth quarter 2026 U.S. Drilling guidance includes a Lower 48 average rig count of 75 rigs, a Lower 48 daily adjusted gross margin of $14,500 to $14,700, and combined Alaska and Gulf of Mexico adjusted EBITDA of approximately $12 million.
• Fourth quarter 2026 International Drilling guidance includes an average rig count of 92 to 93 rigs and a daily adjusted gross margin of approximately $19,500.
• Fourth quarter 2026 Drilling Solutions adjusted EBITDA is expected to be approximately $46 million.
• Fourth quarter 2026 Rig Technologies adjusted EBITDA is expected to be approximately $8 million.
• Fourth quarter 2026 capital expenditures are expected to be $250 million to $260 million, including $140 million to $150 million for SANAD newbuilds.
• Fourth quarter 2026 adjusted free cash flow is expected to be $60 million to $70 million, including approximately $20 million of cash consumption at SANAD.
• Management expects an annualized adjusted EBITDA run rate of approximately $1 billion heading into 2027.

Business Segments and Product Lines:

• International Drilling adjusted EBITDA increased to $145.7 million from $130.5 million in the second quarter, driven by strong field performance and contributions from a recently deployed rig in Argentina and the SANAD newbuild.
• International Drilling daily adjusted gross margin reached a record $19,060, up $1,526 (8.7%) sequentially.
• U.S. Drilling adjusted EBITDA increased to $99.4 million from $94.1 million in the second quarter, driven by a 7% increase in the average Lower 48 working fleet and higher daily adjusted gross margin.
• Drilling Solutions adjusted EBITDA increased to $43.9 million from $40.0 million in the second quarter, driven by growth on Nabors rigs in the Lower 48 and international markets.
• Rig Technologies adjusted EBITDA increased to $5.0 million from $3.2 million in the second quarter, with increases in both aftermarket revenue and capital equipment sales.
• The SANAD land drilling joint venture successfully deployed its 17th newbuild rig in Saudi Arabia, with one additional rig scheduled for deployment in 2026 and two in the first quarter of 2027, bringing the total newbuild fleet to 20.
• Nabors signed a multiyear contract to deploy one rig in Venezuela in early 2027, marking the company's return to drilling operations in the country.
• Nabors rigs helped two Lower 48 operators achieve new drilling records: a PACE®-B rig in North Dakota drilled more than 27,600 feet in 148 hours, and a PACE®-X rig in South Texas drilled an 18,500-foot well in under six days.
• Canrig secured commitments for four additional RZR™ rig floor automation modules, bringing the total deployed to six.

Market and Competitive Landscape:

• Average total rigs working increased to 177.1 in the third quarter of 2026 from 171.2 in the second quarter and 158.4 in the third quarter of 2025.
• Average Lower 48 rigs working increased to 72.8 in the third quarter of 2026 from 67.8 in the second quarter and 59.2 in the third quarter of 2025.
• Average International Drilling rigs working increased to 94.9 in the third quarter of 2026 from 93.4 in the second quarter and 89.2 in the third quarter of 2025.
• Management remains constructive on the Lower 48 market, citing advanced drilling technology and reliable field delivery as positioning factors for increasing rig count and daily margin.

Risks and Challenges:

• The outlook for the fourth quarter reflects the impact of rig suspensions in Saudi Arabia, which will result in a lower SANAD rig count.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated.

Management Commentary and Tone:

• Anthony G. Petrello, Chairman, CEO, and President, stated that each of the four reporting segments met or exceeded its targets and that the company delivered higher earnings and $75 million in adjusted free cash flow.
• Petrello noted that International Drilling achieved a record daily adjusted gross margin driven by strong field performance and new rig deployments with attractive economics, and expects further margin improvement in the fourth quarter despite the rig suspensions.
• Petrello expressed confidence in the Lower 48 market, stating that daily adjusted gross margin again exceeded guidance.
• Miguel Rodriguez, CFO, stated that third quarter adjusted free cash flow exceeded expectations, driven by lower SANAD newbuild spending, controlled capital spending outside SANAD, and improved working capital.
• Management highlighted the redemption of $100 million of 9.125% notes with cash on hand as a step in reducing gross debt and strengthening the balance sheet.

Other Key Points:

• During the quarter, the company redeemed $100 million of its 9.125% notes using cash on hand.
• The quarter ended September 30, 2025, included revenue of $34 million, EBITDA of $20 million, and operating income of $14 million from Quail Tools, which was sold in August 2025.
• The company reported a gain on the disposition of Quail Tools of $415.6 million in the third quarter of 2025.
• Adjusted free cash flow is defined as 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.