NOV (NOV) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $2.22 billion, up 6% year-over-year, driven by strong offshore and international growth, with offshore contributing 44% and international 62% of revenue.

• Net income was $226 million ($0.57 per diluted share), up $71 million year-over-year, aided by a $118 million gain from the Pole Products divestiture.

• Adjusted EBITDA rose 15% year-over-year to $281 million (12.7% margin), the highest since 2015.

• Free cash flow was $350 million, supporting increased shareholder returns and strategic investments.

• Bookings surged, with a 177% book-to-bill ratio and backlog at its highest since 2015.

Financial highlights

• Cash flow from operations was $432 million; free cash flow reached $350 million; CapEx was $82 million.

• Operating profit was $313 million (14.1% margin), up from $181 million in Q2 2023.

• Gross profit for Q2 2024 was $590 million (26.6% margin), up from 21.8% a year ago.

• Net proceeds from the Pole Products divestiture were $176 million in Q2 2024.

• Annualized Q2 2024 revenue was $8.9 billion; annualized adjusted EBITDA was $1.1 billion.

Outlook and guidance

• Q3 2024 consolidated revenue expected flat to up low single digits year-over-year; Adjusted EBITDA guidance is $270–$305 million.

• Full year 2024 revenue growth anticipated in the low- to mid-single digit percent range; Adjusted EBITDA expected between $1.10 billion and $1.18 billion; CapEx $330 million.

• Margin expansion expected into Q4 2024 (targeting ~14%) and further into 2025 as higher-margin backlog replaces legacy contracts.

• At least 50% of excess free cash flow to be returned to shareholders via dividends and buybacks.

• Management expects continued growth in energy transition markets, with ongoing investments in wind, geothermal, rare earth extraction, biogas, and carbon sequestration.