Summary of Nabors Industries Ltd (NBR) Q2 2026 Earnings Call

1Key Financial Results and Metrics:

Consolidated Revenue: $815 million, a 4% sequential increase.

Adjusted EBITDA: $222 million, exceeding guidance, with an EBITDA margin of 27.2%.

International Drilling Revenue: $432 million (3.1% increase), with EBITDA of $131 million (7.6% increase).

U.S. Drilling Revenue: $252 million (4.7% increase), with EBITDA of $94 million (6.8% increase).

Average Daily Rig Margin: Increased to $17.5 thousand in International Drilling and $13.8 thousand in U.S. Drilling.

Adjusted Free Cash Flow: $12 million generated in Q2, with expectations of $20 million to $30 million for the full year.

2Strategic Updates and Business Highlights:

Operational Execution: Strong performance across all segments, particularly in Lower 48 and International Drilling.

Joint Ventures: SANAD joint venture added a newbuild rig and returned suspended rigs to service, maintaining a 28% market share in Saudi Arabia.

Technological Advancements: Introduction of advanced automated rig technologies, including the Titan Rig floor wrench and ROC drill string oscillation software.

Geothermal Initiatives: Commenced drilling for Quaise Energy's project, marking a significant step in enhanced geothermal systems.

3Forward Guidance and Outlook:

Q3 Expectations:

International drilling average rig count projected to be between 94-96, with daily gross margins expected to improve to $18.1-$18.4 thousand.

U.S. Lower 48 rig count expected to increase to approximately 73, with stable daily margins around $13.8 thousand.

Full Year EBITDA Guidance: Increased to $920 million to $930 million, reflecting strong operational momentum and market conditions.

4Bad News, Challenges, or Points of Concern:

Cost Pressures: Ongoing geopolitical tensions in the Middle East continue to pose operational risks and cost pressures.

Venezuela Outlook: While potential exists, current drilling activity remains limited with only a few rigs operational.

Capital Expenditure: Anticipated increase in Q3 CapEx to $245-$255 million, primarily for SANAD new builds, reflecting timing delays in milestones.

5Notable Q&A Insights:

U.S. Lower 48 Market: Management expressed confidence in pricing reaching mid-$30 thousand levels by year-end, driven by disciplined major operators and increased demand for super-spec rigs.

International Rig Deployments: Discussions regarding the fifth tranche of new rigs in Saudi Arabia are ongoing, with positive momentum expected.

Geothermal Technology: The potential of Quaise's millimeter-wave technology was highlighted as a unique opportunity to expand geothermal energy capabilities significantly. Overall, Nabors Industries demonstrated robust financial performance and strategic execution in Q2 2026, with a positive outlook for continued growth despite some geopolitical and operational challenges.