NOV (NOV)·Q4 2025 Earnings Summary

NOV Q4 2025 Earnings: Revenue Beat, Net Loss on Impairments

February 5, 2026 · by Fintool AI Agent

NOV Inc. delivered a mixed Q4 2025 report—beating top-line and Adjusted EBITDA expectations while swinging to a net loss of $78 million (-$0.21 per share) due to $86 million in goodwill and long-lived asset impairments . The stock rose 3.2% on earnings day as investors focused on the strong free cash flow generation and revenue beat rather than the one-time charges.

The call marked new CEO Jose Bayardo's first full quarter leading NOV, following Clay Williams' retirement after 10+ years as CEO and nearly 30 years shaping the company . Bayardo struck an optimistic tone on the offshore recovery and signaled NOV is "moving from playing defense to playing offense" on growth opportunities .

Did NOV Beat Earnings?

Revenue: Beat by 4.7%

• Actual: $2.28 billion
• Consensus: $2.17 billion*
• Sequential: +5%, YoY: -1%

Adjusted EBITDA: Beat by 8.0%

• Actual: $267 million (11.7% margin)
• Consensus: $247 million*

EPS: Significant Miss

• GAAP: -$0.21 per share
• Prior Year: +$0.41 per share
• The $86M in pre-tax impairments and a higher effective tax rate drove the loss

*Values retrieved from S&P Global

How Did the Stock React?

NOV shares rose 3.2% on earnings day, closing at $19.38 on February 4, 2026. Despite the headline net loss, investors responded positively to:

1. Revenue beat (+4.7% vs consensus)
2. Strong free cash flow of $472M, representing 177% conversion of Adjusted EBITDA
3. Continued capital returns with $505M returned to shareholders in 2025

The stock has been on a strong run, up from $10.84 (52-week low) to current levels, with the Feb 4 close marking a new 52-week high of $19.51.

What Changed From Last Quarter?

Positive Developments:

• Sequential revenue acceleration: +5% vs +0.4% in Q3
• Working capital improvement: Cash conversion cycle down to 119 days from 143 days in 2023, freeing up ~$630M
• Cash build: Cash position increased to $1.55B from $1.21B at Q3
• Offshore contracting surge: 59 floater contracts awarded Sept 2025-Jan 2026 vs just 33 in the same period last year—a 79% increase
• Contract duration extending: Average duration of new offshore contracts increasing significantly, signaling shift from single-well to development mode

Negative Developments:

• Impairment charges: $86M in goodwill and long-lived asset impairments
• Higher effective tax rate: From valuation allowances on deferred tax assets and higher mix of foreign earnings
• Offshore wind deterioration: Forecast for turbine capacity additions through 2030 down over 35% since last year
• Lower aftermarket demand: Mid-teens% YoY decline in drilling equipment aftermarket

What Drove Segment Performance?

Q4 2025 Revenue Mix :

• By Geography: 36% North America, 64% International
• By Type: 48% Land, 52% Offshore

Energy Equipment

Revenue Stream Mix: 63% Capital Equipment, 37% Aftermarket

Strong execution on backlog drove revenue growth, but lower demand for aftermarket spare parts and services led to a less favorable sales mix .

Energy Products & Services

Revenue Stream Mix: 49% Services & Rentals, 33% Capital Equipment, 18% Product Sales

Lower revenues reflected reduced global activity, partially offset by market share gains. Profitability was further impacted by increased tariffs and inflationary pressures .

What Did Management Guide?

Q1 2026 Outlook

Full-Year 2026 Commentary

CEO Jose Bayardo provided cautious near-term guidance but expressed strong optimism for H2 2026 and beyond:

"We see the potential for up to 10 FPSO FIDs and expect demand to remain strong, with an average of 8 FIDs per year through 2030."

Key 2026 Expectations:

• Revenue: Slightly lower YoY, weighted to H2
• EBITDA: In-line to slightly lower than 2025's $1.03B
• Free cash flow conversion: 40-50% (vs 85% in 2025 due to timing of project billings)
• CapEx: $315M-$345M
• Tax rate: 34-36% (higher due to foreign earnings mix)
• Book-to-bill: Near 100% for full year; expect below 1x in Q1 but improving thereafter
• Tariff expense: Expected to slightly increase in Q1, then level off for remainder of 2026

Activity Outlook by Geography:

• U.S.: Down mid-single digits YoY; oil-directed declines offset by gas basin activity
• International: Flat to up slightly, led by Saudi Arabia rigs returning and unconventional expansion in Middle East, Latin America, Australia
• Offshore: Industry spend down low-to-mid single digits, but NOV sees offshore "rapidly nearing the beginning of a strong, extended upcycle"

What About Cash Flow and Capital Returns?

NOV generated exceptional cash flow in Q4 and full-year 2025:

Capital Returns in 2025:

• Share repurchases: $315M (22.8M shares)
• Dividends: $190M
• Total returned: $505M

The company expects to achieve its 50% Excess Free Cash Flow return threshold for 2025 via a supplemental dividend in H1 2026 .

Balance Sheet Position (12/31/2025):

• Cash: $1.55B
• Total debt: $1.72B
• Net debt leverage: <0.5x
• Available credit: $1.50B

What Were the Significant Achievements?

Several notable wins and technology milestones were highlighted in the call :

Technology Leadership:

• Downhole Broadband Services (DBS): Revenue more than doubled YoY, with a North Sea operator crediting the technology with "enabling drilling of a reservoir section that likely would not have been achievable without real-time data transmission"
• Drill bit rental business: Up ~20% in U.S. vs 6% rig count decline—significant market share gains
• Subsea flexible pipe: Achieved highest quarterly revenue and EBITDA on record for second consecutive quarter; backlog doubled since end of 2023
• Process systems: Record revenue and EBITDA for full year; bookings doubled vs 2024

Contract Wins:

• New-build offshore jackup rig equipment package (Kingdom 4 for Saudi Arabia)
• Gas dehydration unit for Saudi Arabia gas plant
• Cable lay vessel order in Q4
• 2 dual-trailer large-diameter coil tubing units with 50,000-ft reels

Operational Excellence:

• Subsea flexible pipe business received "Best Supplier of the Year" award from top customer for third consecutive year
• Cost of quality metrics (warranty, scrap, rework) now in top quartile vs industrial manufacturing peers
• Inventory turns improved from 3.1 in 2023 to 3.9 in 2025

What Did Management Say in Q&A?

On M&A Strategy:

"We did not complete a single acquisition in 2025. It's not that we're no longer interested—we've just set a much higher standard. Any acquisition must be accretive to our margins, earnings, cash flow, and return on capital."

CEO Bayardo outlined three M&A criteria: (1) core technology bolt-ons, (2) direct consolidation, or (3) larger acquisitions with scale and competitive advantage .

On Venezuela Opportunity:

"Just over the past several weeks, we've received new orders with a value that exceeds the total amount of revenue we've generated during the past several years while supporting this operator's activity in the country."

NOV has history in Venezuela dating to 1949 and employed 450+ people before shutting down operations .

On ATOM RTX Robotics: Management disclosed the company now has 6 rigs operating with ATOM robotics (3 land, 3 offshore) and has sold 27-30 robot arms . The first pilot system has been operating for two years with continuous improvements.

On Tariff Pass-Through:

"We're certainly having some success passing on those costs. But it is a difficult market environment... Tungsten carbide has gone up 200% in a one-month time period."

On Stacked Deepwater Rigs: When asked about reactivation opportunities, Bayardo noted the opportunity is "limited" to a "handful" of high-spec rigs that have been stacked for a long time. He emphasized these would require significant investment to bring back but represent "a good opportunity for us" .

Key Risks and Concerns

1. Oil market oversupply: Current oversupply estimated at 2-3 million barrels/day from OPEC unwind and pandemic-era non-OPEC FIDs
2. Global inventories elevated: OECD inventories at high end of 5-year range; global inventories at highest since 2021
3. Tariff and inflation headwinds: $25M tariff expense in Q4, with tungsten carbide up 200% in one month
4. Offshore wind deterioration: Capacity additions through 2030 down 35%+
5. Aftermarket weakness: Mid-teens% YoY decline in drilling aftermarket creating unfavorable mix

Forward Catalysts

• Offshore drilling inflection: Open tenders for floating rigs up 100%+ YoY; contracting pace accelerating
• FPSO FID wave: Potential for 10 FPSO FIDs in 2026 vs 5 in 2025, averaging 8/year through 2030
• Venezuela upside: New orders already exceeding years of prior activity; major opportunity if governance improves
• H2 2026 recovery: Oil markets expected to rebalance, customer spend weighted to back half
• $100M cost-out program: On track to deliver annualized savings by end of 2026
• Spare parts recovery: Two straight quarters of increased bookings with further improvement expected H2
• Saudi Arabia activity: Rigs expected to go back to work; Kingdom 4 jackup deliveries continuing

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Report generated by Fintool AI Agent on February 5, 2026. Updated with earnings call transcript details. For the full earnings call transcript, visit NOV Q4 2025 Transcript. View the NOV company page for more analysis.