Key Highlights

  • Revenue rose to $872.2 million from $818.2 million, and adjusted EBITDA rose to $245.5 million from $236.3 million.
  • The net loss was $1.24 per share, against income of $16.85 diluted a year earlier that included a $415.6 million gain.
  • Adjusted free cash flow was $74.5 million, up from $5.6 million.
  • Full-year adjusted EBITDA is guided to about $930 million, at the upper end of prior guidance.
  • International daily adjusted gross margin hit a record $19,060, up 8.7% from the second quarter.

Nabors Industries Earnings: Why Did Cash Flow Surge Despite a Per-Share Loss?

Nabors Industries (NYSE:NBR) reported third-quarter results on Tuesday, October 27. Revenue was $872.2 million, up from $818.2 million, and adjusted EBITDA was $245.5 million, against $236.3 million. Adjusted free cash flow reached $74.5 million, compared with $5.6 million a year earlier.

The net loss attributable to Nabors was $11.2 million, or $1.24 per share, against a screen estimate of negative $0.90 as screened. The year-ago quarter showed income of $274.2 million, or $16.85 per diluted share, because it included a $415.6 million gain on the August 2025 sale of Quail Tools.

Segment Results: How Did International and U.S. Drilling Compare?

International Drilling was the largest contributor, with adjusted EBITDA of $145.7 million against $127.6 million, on revenue of $458.5 million. Average rigs working were 94.9, up from 89.2. Daily adjusted gross margin was a record $19,060, and daily rig revenue was $52,524.

U.S. Drilling adjusted EBITDA rose to $99.4 million from $94.2 million, on revenue of $274.9 million. Lower 48 rigs averaged 72.8 against 59.2, with daily adjusted gross margin of $14,016, up from $13,151.

Drilling Solutions EBITDA fell to $43.9 million from $60.7 million, and the year-ago figure included $20.3 million from Quail Tools.

Guidance: What Does the $930 Million EBITDA Outlook Imply?

Full-year adjusted EBITDA is expected at about $930 million, at the upper end of prior guidance. Adjusted free cash flow is guided to $100 million to $110 million, described as materially higher than before, and includes about $20 million of SANAD cash consumption. Consolidated capital expenditures are $710 million to $720 million, with $295 million to $305 million for SANAD newbuilds.

For the fourth quarter, Nabors expects 75 Lower 48 rigs at $14,500 to $14,700 daily margin, and 92 to 93 international rigs at about $19,500. Drilling Solutions should deliver about $46 million of EBITDA and Rig Technologies about $8 million. Capital expenditures are $250 million to $260 million, and adjusted free cash flow is $60 million to $70 million.

Management reiterated a target of an annualized adjusted EBITDA run rate of about $1 billion heading into 2027.

SANAD, Venezuela and Debt: What Is Shaping the Balance Sheet?

The SANAD land drilling joint venture deployed its 17th newbuild in Saudi Arabia, with five rigs suspended and 20 newbuilds planned in total. Nabors also signed a multiyear contract for one rig in Venezuela, deploying in early 2027.

Net cash from operations was $238.9 million, and net capital expenditures were $164.4 million, against $202.3 million. Total debt fell to $2,022.8 million from $2,120.3 million at June 30 after a $100 million redemption of 9.125% notes, and net debt was $1,547.6 million.

What to Watch Next for Nabors as SANAD Spending Peaks

Investors will look for fourth-quarter delivery against the 75 Lower 48 rig and $19,500 international margin marks, plus how SANAD capital spending of $140 million to $150 million in the quarter converts into cash.