NOV Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenues reached $2.23 billion, an increase of 4% sequentially and 2% year-over-year compared to Q3 2025.
• Net income was $90 million ($0.25 per diluted share), an increase of $48 million year-over-year but a decrease of $22 million sequentially.
• Operating profit was $142 million (6.4% of sales), a 33% increase year-over-year.
• Adjusted operating profit was $188 million, an 11% increase year-over-year.
• Adjusted EBITDA was $281 million (12.6% of sales), an increase of $23 million year-over-year; this figure includes a $5 million benefit from tariff refunds.
• Gross profit was $439 million (19.7% of sales), up from 18.9% in the prior year period.
• Total debt stood at $1.71 billion as of September 30, 2026, with $1.50 billion available on the revolving credit facility.
• Cash and cash equivalents were $1.06 billion.
• Free Cash Flow for the quarter was negative $47 million, calculated as operating cash flow of $41 million less capital expenditures of $88 million.
• Excess Free Cash Flow for the quarter was negative $55 million.

Guidance and Future Outlook:

• Management expects consolidated revenues for the fourth quarter of 2026 to be roughly flat year-over-year.
• Adjusted EBITDA for Q4 2026 is projected to be between $260 million and $300 million.
• Guidance assumes the operating environment in the Middle East remains consistent with Q3 conditions, excluding expected moderation in activity as customers adjust drilling programs.
• Management anticipates geopolitical events will continue to cause near-term disruptions.
• The broader geopolitical backdrop is viewed as reinforcing the need for energy security, supply diversification, and inventory replenishment.
• Limited availability of modern, higher-specification equipment following a decade of restrained reinvestment is expected to create a constructive demand backdrop.

Business Segments and Product Lines:

• Energy Equipment: Generated $1.22 billion in revenue (down 2% year-over-year) and $122 million in operating profit (down $8 million year-over-year). Adjusted EBITDA was $187 million (15.3% of sales), up $7 million year-over-year. Revenue decline was due to the completion of certain offshore production projects not fully offset by other demand.
• Energy Products and Services: Generated $1.06 billion in revenue (up 9% year-over-year) and $88 million in operating profit (up $50 million year-over-year). Adjusted EBITDA was $153 million (14.5% of sales), up $18 million year-over-year. Growth was driven by increasing manufacturing throughput against a growing backlog of drill pipe and composite equipment.
• Backlog: Capital equipment order backlog for Energy Equipment totaled $3.98 billion as of September 30, 2026.
• Book-to-Bill: Bookings totaled $577 million against $632 million shipped, resulting in a book-to-bill ratio of 91%.
• New Orders: Secured awards for data aggregation services across a supermajor's global offshore fleet, mooring systems for floating production in the U.S., Eastern Mediterranean, and Angola, and a drillship upgrade package.
• Specific Wins: Received an initial order for 160 km of Fiberspar composite spoolable linepipe in Oman (up to 300 km under a frame agreement), six well service rig electrification conversions, and vessel designs for offshore wind jackups.
• Technology Deployments: DAYTONA drilling motors achieved high rates of penetration in the Haynesville and Beetaloo Basin; TUNDRA MAX and managed pressure drilling technologies were deployed in Louisiana and South Texas; a geothermal project in Utah received an order for 6-5/8-in. drill pipe.

Market and Competitive Landscape:

• Management cites technology leadership, strong market positions, and a global footprint as competitive advantages.
• North American customers continue investing in rig performance for unconventional resources, including DC to AC electric conversions and top drive upgrades.
• Pumping technologies are gaining traction in production optimization in the Eastern Hemisphere, with sales in Nigeria and the Middle East.
• The company is positioned to capitalize on expanding opportunities driven by the need for efficiency, reliability, and improved project economics.

Risks and Challenges:

• Geopolitical events and conflicts in the Middle East pose risks to near-term activity and could cause actual results to differ materially from guidance.
• Risks include changes in oil and gas prices, customer demand fluctuations, challenges related to Middle East operations, and potential catastrophic events.
• Risks also encompass protection of intellectual property, compliance with laws, worldwide economic activity, sanctions, and changes in U.S. trade policies including tariffs and retaliatory tariffs.
• The outcome of challenges to or reversals of tariff refunds could significantly impact financial results.

Management Commentary and Tone:

• Chairman, President, and CEO Jose Bayardo described the quarter as "strong," citing operational momentum and disciplined execution.
• Management expressed confidence in the company's ability to capitalize on the expanding opportunity set and demonstrate materially greater earnings power over the coming years.
• The tone highlighted continued efficiency gains and efforts to leverage NOV's global platform.

Other Key Points:

• Capital returned to shareholders totaled $47 million in the third quarter, comprising $15 million in share repurchases (0.8 million shares) and $32 million in dividends.
• The company recorded $28 million in pre-tax Other Items, primarily related to severance, inventory write-downs, and business streamlining costs.
• Net write-downs of fixed assets totaled $18 million, primarily related to facility closures.
• Energy Equipment segment included $14 million in pre-tax Other Items and a $22 million net loss on write-down of fixed assets.
• Energy Products and Services segment included $7 million in pre-tax Other Items and a $4 million gain on sales of fixed assets.
• Adjusted EBITDA for Q2 and Q3 2026 included tariff refund benefits of approximately $40 million and $5 million, respectively.