Nabors Industries (NBR) Q1 2025 earnings summary

Executive summary

• Completed acquisition of Parker Wellbore (Parker Drilling), adding Quail Tools, major casing running operations, 10 international/Alaska rigs, 4.8 million shares, and $0.6 million cash consideration, resulting in a $113 million bargain purchase gain.

• Net income attributable to shareholders was $33 million ($2.18 per diluted share) for Q1 2025, reversing a prior-year loss, aided by a $113 million non-cash gain from the Parker acquisition and $28.6 million in non-cash charges from the Russia wind-down.

• International drilling, especially in Saudi Arabia, performed well; U.S. Lower 48 faced margin pressure due to operational inefficiencies and customer churn.

• SANAD joint venture deployed its tenth newbuild rig, with more rigs scheduled to come online in 2025, supporting international growth.

• Focused on technology innovation, automation, and energy transition initiatives to drive growth and sustainability.

Financial highlights

• Q1 2025 operating revenues were $736 million, up slightly from $730 million in Q4 2024; adjusted EBITDA was $206 million, down from $221 million sequentially.

• Net income for Q1 2025 was $57.2 million, up from a net loss of $9 million in Q1 2024.

• Adjusted free cash flow for Q1 2025 was negative $71 million, reflecting high capital expenditures and Parker-related costs.

• Net debt at March 31, 2025, was $2.28 billion, up from $2.11 billion at year-end 2024.

• Cash and short-term investments at March 31, 2025 were $404.1 million; working capital was $531.2 million.

Outlook and guidance

• Expect to add 10 international rigs in 2025, with six deploying in Q2; SANAD newbuild program in Saudi Arabia expected to drive significant adjusted EBITDA and free cash flow growth through 2033.

• U.S. Lower 48 rig count expected to rise to 63–64 in Q2; daily margins forecast at ~$14,100; international daily gross margin expected to increase to $17,700 in Q2.

• Parker Wellbore expected to contribute ~$150 million EBITDA in 2025, with $130 million consolidated and $40 million in cost synergies.

• Full-year 2025 capex expected at $770–$780 million; adjusted free cash flow for 2025 targeted at ~$80 million (excluding tariffs).

• Management expects to remain in compliance with all credit covenants and maintain liquidity for at least the next 12 months.