Momentum Accelerates. Cash Flow Improves. Nabors 2Q 2026 Results

About this update from Nabors Industries Ltd.

HAMILTON, Bermuda , July 28, 2026 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported second quarter 2026 operating revenues of $815 million, an increase of approximately 4% from the first quarter. Net loss attributable to Nabors' shareholders for the quarter was $22 million. Adjusted EBITDA for the second quarter was $222 million. Nabors' second quarter results reflected continued momentum across the international drilling franchise, strengthening Lower 48 activity, and higher free cash flow, supported by disciplined capital allocation and expanding technology adoption. Selected Financial Information (In millions, except rig activity) Three Months Ended June 30, March 31, June 30, 2026 2026 2025 Operating revenues $            814.8 $            783.5 $            832.8 Adjusted EBITDA $            221.7 $            204.8 $            248.5 Adjusted operating income $              61.1 $              48.6 $              73.4 Adjusted free cash flow $              12.3 $             (48.2) $              40.6 Average rigs working: Lower 48 67.8 65.3 62.4 International Drilling 93.4 92.6 85.9 Average total rigs working 171.2 167.9 158.3 The quarter ended June 30, 2025 includes revenue of $63 million, EBITDA of $37 million, and operating income of $26 million from Quail Tools, which was sold in August 2025. 2Q 2026 Highlights The SANAD land drilling joint venture deployed one newbuild rig in the Kingdom of Saudi Arabia, bringing total newbuild deployments to 16. Three more are scheduled for 2026. In addition, SANAD reactivated another previously suspended rig. Nabors added five rigs in the Lower 48 during the second quarter. One of these is drilling Quaise Energy's Project Obsidian, the first commercial superhot geothermal development. The Company's working rig count in this market currently stands at 73, bringing the increase to 15 rigs since November 2025. Two of the additional rigs in the Lower 48 were Nabors PACE-X Ultra® rigs. The PACE-X Ultra® combines upgraded drilling capabilities, integrated automation and managed pressure drilling to enable operators to drill increasingly complex wells. Canrig deployed the first Canrig TITAN™ ("Titan") fully-automated rig floor wrench, with field results exceeding high performance targets. Titan is designed to deliver greater accuracy, faster speed, and lower cost of ownership than competing units.  Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "Second quarter results reflected another quarter of solid operational and financial progress. All our operating segments exceeded the targets we set. "In the Lower 48 market, Nabors' average rig count grew and we exceeded the expected exit rate. At the same time, daily gross margin outperformed our guidance. We also gained market share and extended the duration of our contract backlog. Our strategy continues to align us with customers that prioritize high-specification rigs, integrated technology and consistent operating execution in increasingly complex drilling environments. "In our International Drilling segment, we maintained reliable operations across the Gulf markets in the Middle East. In Saudi Arabia our SANAD joint venture added two rigs, including a previously suspended rig that returned to service.  Daily gross margin improved through greater operating efficiency in several geographies and additional SANAD deployments. "Drilling Solutions' Lower 48 business delivered double-digit sequential revenue growth in the second quarter, with contributions on Nabors rigs as well as third-party rigs. Performance Software, RigCLOUD ® , and Managed Pressure Drilling led this growth." Segment Results International Drilling adjusted EBITDA was $131 million in the second quarter, compared to $121 million in the first quarter. Daily adjusted gross margin for the second quarter increased by more than $650 from the first quarter, to $17,534. This increase reflects stronger execution, and contributions from SANAD newbuild deployments. The U.S. Drilling segment reported second quarter adjusted EBITDA of $94 million, compared to $88 million in the previous quarter. Lower 48 results improved as daily margin expanded 5% and the working fleet grew 4%. As expected, results from Offshore and Alaska operations declined sequentially. Drilling Solutions adjusted EBITDA was $40 million, compared to $39 million in the first quarter. Growth in the Lower 48 market was partially offset by slightly lower international activity, mainly attributable to Surface & Tubular. Rig Technologies adjusted EBITDA increased to $3 million, compared to $1 million in the previous quarter. Aftermarket revenue accelerated sequentially, reflecting higher customer activity. Capital Equipment revenue also improved as deliveries increased. Adjusted Free Cash Flow Consolidated adjusted free cash flow was $12 million in the second quarter. Adjusted free cash flow improved $60 million sequentially, reflecting higher profitability, lower cash interest payments, and seasonal working-capital movements. Miguel Rodriguez, Nabors CFO, stated, "In the second quarter we delivered free cash flow slightly higher than our expectations. Capital spending for SANAD's newbuild program was lower than forecast, as the timing of a few construction milestones was delayed. Outside SANAD, working capital consumed more cash than expected, impacting free cash flow. "Our full-year outlook for rig count in the Lower 48 has once again increased. We now expect to exit the third quarter with approximately 74 rigs running and to expand slightly from that level through the remainder of the year. Our revised full-year consolidated capital spending now totals $710 to $730 million, a $25 million reduction at the midpoint of our previous range. For the SANAD newbuild program, capital spending is expected to be in the range of $325 to $335 million. Previously the range was $360 to $380 million. "We now expect full-year adjusted EBITDA of $920 to $930 million and full-year adjusted free cash flow of $20 to $30 million. This outlook includes expected free cash flow consumption at SANAD of $60 to $80 million. Our priority remains reducing debt and further strengthening the balance sheet while supporting profitable growth, which we believe positions Nabors to enhance long-term shareholder value." Outlook Nabors expects the following metrics for the third quarter of 2026: U.S. Drilling Lower 48 average rig count of 73 rigs Lower 48 daily adjusted gross margin of approximately $13,800 Alaska and Gulf of America combined adjusted EBITDA of approximately $11 million International Average rig count of 94 - 96 rigs Daily adjusted gross margin of $18,100 - $18,400 Drilling Solutions Adjusted EBITDA of approximately $42 million Rig Technologies Adjusted EBITDA of $5 - $6 million Capital Expenditures Capital expenditures of $245 - $255 million, including approximately $130 million for SANAD newbuilds in Saudi Arabia Adjusted Free Cash Flow Adjusted free cash flow consumption of approximately $40 million, including free cash consumption at SANAD of approximately $65 million Mr. Petrello concluded, "Our performance through the first half of the year has exceeded our expectations. As we look forward, we anticipate second-half adjusted EBITDA to reach an annualized run-rate of $1 billion. Contracted rig additions across our drilling businesses provide strong visibility into that outlook. At the same time, prudent capital allocation should support free cash flow expansion and further strengthening of the balance sheet." About Nabors Industries Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With operations in approximately 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com . Forward-looking Statements The information included in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to a number of risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements. The forward-looking statements contained in this press release reflect management's estimates and beliefs as of the date of this press release. Nabors does not undertake to update these forward-looking statements.  Non-GAAP Disclaimer This press release presents certain "non-GAAP" financial measures. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Adjusted operating income (loss) represents income (loss) before income taxes, interest expense, investment income (loss), gain on bargain purchase, and other, net. Adjusted EBITDA is computed similarly, but also excludes depreciation and amortization expenses. Adjusted gross margin represents adjusted operating income (loss) plus general and administrative costs, research and engineering costs and depreciation and amortization. In addition, adjusted EBITDA and adjusted operating income (loss) exclude certain cash expenses that the Company is obligated to make. Net debt is calculated as total debt minus the sum of cash, cash equivalents and short-term investments.  Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition-related costs. Management believes that adjusted free cash flow is an important liquidity measure for the Company and that it is useful to investors and management as a measure of the Company's ability to generate cash flow, after reinvesting in the Company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP. Each of these non-GAAP measures has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including Adjusted EBITDA, adjusted operating income (loss), net debt, and adjusted free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability, performance and liquidity. Securities analysts and investors also use these measures as some of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. Reconciliations of consolidated adjusted EBITDA and adjusted operating income (loss) to income (loss) before income taxes, net debt to total debt, and adjusted free cash flow to net cash provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release. We do not provide a forward-looking reconciliation of our outlook for Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash Flow, as the amount and significance of items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful. Investor Contacts :  William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via email [email protected] , or Kara Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email [email protected] . To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via email [email protected] NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, (In thousands, except per share amounts) 2026 2025 2026 2026 2025 Revenues and other income: Operating revenues  $ 814,795 $ 832,788 $ 783,548 $ 1,598,343 $ 1,568,974 Investment income (loss) 2,131 6,129 2,887 5,018 12,725 Total revenues and other income 816,926 838,917 786,435 1,603,361 1,581,699 Costs and other deductions: Direct costs 507,551 488,881 493,469 1,001,020 936,181 General and administrative expenses 71,375 82,726 71,760 143,135 151,232 Research and engineering 14,209 12,722 13,506 27,715 26,757 Depreciation and amortization 160,549 175,061 156,186 316,735 329,699 Interest expense 42,678 56,081 43,761 86,439 110,407 Gain on bargain purchase - (3,500) - - (116,499) Other, net 5,682 6,074 (13,393) (7,711) 50,864 Total costs and other deductions 802,044 818,045 765,289 1,567,333 1,488,641 Income (loss) before income taxes 14,882 20,872 21,146 36,028 93,058 Income tax expense (benefit) 16,405 23,077 16,884 33,289 38,084 Net income (loss) (1,523) (2,205) 4,262 2,739 54,974 Less: Net (income) loss attributable to noncontrolling interest (20,807) (28,705) (19,428) (40,235) (52,896) Net income (loss) attributable to Nabors $ (22,330) $ (30,910) $ (15,166) $    (37,496) $        2,078 Earnings (losses) per share:    Basic  $     (2.04) $     (2.71) $     (1.54) $        (3.58) $        (1.01)    Diluted  $     (2.04) $     (2.71) $     (1.54) $        (3.58) $        (1.01) Weighted-average number of common shares outstanding:    Basic  14,273 14,083 14,213 14,243 12,271    Diluted  14,273 14,083 14,213 14,243 12,271 Adjusted EBITDA $ 221,660 $ 248,459 $ 204,813 $    426,473 $    454,804 Adjusted operating income (loss) $   61,111 $   73,398 $   48,627 $    109,738 $    125,105   NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, March 31, December 31, (In thousands) 2026 2026 2025 ASSETS Current assets: Cash and short-term investments $    509,833 $    500,853 $       940,738 Accounts receivable, net 443,417 417,717 391,705 Other current assets 243,929 234,031 219,130      Total current assets 1,197,179 1,152,601 1,551,573 Property, plant and equipment, net 2,908,061 2,914,886 2,920,019 Other long-term assets 314,705 318,149 318,065      Total assets $ 4,419,945 $ 4,385,636 $    4,789,657 LIABILITIES AND EQUITY Current liabilities: Current debt $                - $                - $       377,492 Trade accounts payable 365,472 322,837 300,467 Other current liabilities 268,167 262,378 315,042      Total current liabilities 633,639 585,215 993,001 Long-term debt 2,120,276 2,118,729 2,117,187 Other long-term liabilities 224,152 240,163 241,826      Total liabilities 2,978,067 2,944,107 3,352,014 Redeemable noncontrolling interest in subsidiary 495,886 489,129 482,446 Equity: Shareholders' equity 544,128 568,942 590,727 Noncontrolling interest 401,864 383,458 364,470      Total equity 945,992 952,400 955,197      Total liabilities and equity $ 4,419,945 $ 4,385,636 $    4,789,657   NABORS INDUSTRIES LTD. AND SUBSIDIARIES SEGMENT REPORTING (Unaudited) The following tables set forth certain information with respect to our reportable segments and rig activity: Three Months Ended Six Months Ended June 30, March 31, June 30, (In thousands, except rig activity) 2026 2025 2026 2026 2025 Operating revenues: U.S. Drilling $ 252,459 $ 255,438 $ 241,144 $    493,603 $    486,184 International Drilling 432,497 384,970 419,496 851,993 766,688 Drilling Solutions 110,640 170,283 106,222 216,862 263,462 Rig Technologies (1) 37,485 36,527 27,222 64,707 80,692 Other reconciling items (2) (18,286) (14,430) (10,536) (28,822) (28,052) Total operating revenues $ 814,795 $ 832,788 $ 783,548 $ 1,598,343 $ 1,568,974 Adjusted EBITDA: (3) U.S. Drilling $   94,081 $ 101,821 $   88,065 $    182,146 $    194,532 International Drilling 130,533 117,658 121,281 251,814 233,144 Drilling Solutions 40,013 76,501 38,662 78,675 117,354 Rig Technologies (1) 3,180 5,174 505 3,685 10,737 Other reconciling items (4) (46,147) (52,695) (43,700) (89,847) (100,963) Total adjusted EBITDA $ 221,660 $ 248,459 $ 204,813 $    426,473 $    454,804 Adjusted operating income (loss): (5) U.S. Drilling $   30,961 $   39,788 $   24,624 $      55,585 $      71,387 International Drilling 45,860 36,051 40,757 86,617 69,009 Drilling Solutions 32,125 50,365 31,872 63,997 83,278 Rig Technologies (1) 1,497 1,721 (1,888) (391) 6,056 Other reconciling items (4) (49,332) (54,527) (46,738) (96,070) (104,625) Total adjusted operating income (loss) $   61,111 $   73,398 $   48,627 $    109,738 $    125,105 Rig activity: Average Rigs Working: (7)      Lower 48 67.8 62.4 65.3 66.5 61.5      Other US 10.0 10.0 10.0 10.0 8.8 U.S. Drilling 77.8 72.4 75.3 76.5 70.3 International Drilling 93.4 85.9 92.6 93.0 85.4 Total average rigs working 171.2 158.3 167.9 169.5 155.7 Daily Rig Revenue: (6),(8)      Lower 48 $   33,555 $   33,466 $   32,653 $      33,115 $      33,995      Other US 50,073 71,814 54,646 52,346 67,306 U.S. Drilling (10) 35,680 38,761 35,573 35,627 38,180 International Drilling 50,860 49,263 50,351 50,608 49,575 Daily Adjusted Gross Margin: (6),(9)      Lower 48 $   13,784 $   13,902 $   13,177 $      13,488 $      14,085      Other US 17,318 32,073 19,559 18,432 31,340 U.S. Drilling (10) 14,238 16,411 14,024 14,134 16,253 International Drilling 17,534 17,534 16,880 17,211 17,478 (1) Includes our oilfield equipment manufacturing activities. (2) Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment. (3) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)". (4) Represents the elimination of inter-segment transactions and unallocated corporate expenses. (5) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)". (6) Rig revenue days represents the number of days the Company's rigs are contracted and performing under a contract during the period. These would typically include days in which operating, standby and move revenue is earned. (7) Average rigs working represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year. Average rigs working can also be calculated as rig revenue days during the period divided by the number of calendar days in the period. (8) Daily rig revenue represents operating revenue, divided by the total number of revenue days during the quarter.    (9) Daily adjusted gross margin represents operating revenue less direct costs, divided by the total number of rig revenue days during the quarter.    (10) The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas.   NABORS INDUSTRIES LTD. AND SUBSIDIARIES Reconciliation of Earnings per Share (Unaudited) Three Months Ended  Six Months Ended June 30, March 31, June 30, (in thousands, except per share amounts) 2026 2025 2026 2026 2025 BASIC EPS: Net income (loss) (numerator): Income (loss), net of tax $ (1,523) $ (2,205) $ 4,262 $ 2,739 $ 54,974 Less: net (income) loss attributable to noncontrolling interest (20,807) (28,705) (19,428) (40,235) (52,896) Less: accrued distribution on redeemable noncontrolling interest in subsidiary (6,757) (7,264) (6,683) (13,440) (14,448) Numerator for basic earnings per share: Adjusted income (loss), net of tax - basic $ (29,087) $ (38,174) $ (21,849) $ (50,936) $ (12,370) Weighted-average number of shares outstanding - basic 14,273 14,083 14,213 14,243 12,271 Earnings (losses) per share: Total Basic $ (2.04) $ (2.71) $ (1.54) $ (3.58) $ (1.01) DILUTED EPS: Adjusted income (loss), net of tax - diluted $ (29,087) $ (38,174) $ (21,849) $ (50,936) $ (12,370) Weighted-average number of shares outstanding - diluted  14,273 14,083 14,213 14,243 12,271 Earnings (losses) per share: Total Diluted $ (2.04) $ (2.71) $ (1.54) $ (3.58) $ (1.01)   NABORS INDUSTRIES LTD. AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT (Unaudited) (In thousands) Three Months Ended June 30, 2026 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) $   30,961 $        45,860 $   32,125 $            1,497 $   (49,332) $   61,111 Depreciation and amortization  63,120 84,673 7,888 1,683 3,185 160,549 Adjusted EBITDA $   94,081 $      130,533 $   40,013 $            3,180 $   (46,147) $ 221,660 Three Months Ended June 30, 2025 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) $   39,788 $        36,051 $   50,365 $            1,721 $   (54,527) $   73,398 Depreciation and amortization  62,033 81,607 26,136 3,453 1,832 175,061 Adjusted EBITDA $ 101,821 $      117,658 $   76,501 $            5,174 $   (52,695) $ 248,459 Three Months Ended March 31, 2026 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) $   24,624 $        40,757 $   31,872 $          (1,888) $   (46,738) $   48,627 Depreciation and amortization  63,441 80,524 6,790 2,393 3,038 156,186 Adjusted EBITDA $   88,065 $      121,281 $   38,662 $               505 $   (43,700) $ 204,813 Six Months Ended June 30, 2026 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) $   55,585 $        86,617 $   63,997 $              (391) $   (96,070) $ 109,738 Depreciation and amortization  126,561 165,197 14,678 4,076 6,223 316,735 Adjusted EBITDA $ 182,146 $      251,814 $   78,675 $            3,685 $   (89,847) $ 426,473 Six Months Ended June 30, 2025 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) $   71,387 $        69,009 $   83,278 $            6,056 $ (104,625) $ 125,105 Depreciation and amortization  123,145 164,135 34,076 4,681 3,662 329,699 Adjusted EBITDA $ 194,532 $      233,144 $ 117,354 $          10,737 $ (100,963) $ 454,804   NABORS INDUSTRIES LTD. AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES RECONCILIATION OF ADJUSTED GROSS MARGIN BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, (In thousands) 2026 2025 2026 2026 2025 Lower 48 - U.S. Drilling Adjusted operating income (loss) $   24,722 $   21,515 $   17,405 $   42,127 $   40,510 Plus: General and administrative costs 4,974 4,481 5,324 10,298 9,298 Plus: Research and engineering 1,198 888 1,143 2,341 1,711 GAAP Gross Margin 30,894 26,884 23,872 54,766 51,519 Plus: Depreciation and amortization 54,093 52,080 53,595 107,688 105,305 Adjusted gross margin $   84,987 $   78,964 $   77,467 $ 162,454 $ 156,824 Other - U.S. Drilling Adjusted operating income (loss) $     6,239 $   18,273 $     7,219 $   13,458 $   30,877 Plus: General and administrative costs 407 896 458 865 1,301 Plus: Research and engineering 86 64 80 166 126 GAAP Gross Margin 6,732 19,233 7,757 14,489 32,304 Plus: Depreciation and amortization 9,027 9,953 9,846 18,873 17,840 Adjusted gross margin $   15,759 $   29,186 $   17,603 $   33,362 $   50,144 U.S. Drilling Adjusted operating income (loss) $   30,961 $   39,788 $   24,624 $   55,585 $   71,387 Plus: General and administrative costs 5,381 5,377 5,782 11,163 10,599 Plus: Research and engineering 1,284 952 1,223 2,507 1,837 GAAP Gross Margin 37,626 46,117 31,629 69,255 83,823 Plus: Depreciation and amortization 63,120 62,033 63,441 126,561 123,145 Adjusted gross margin $ 100,746 $ 108,150 $   95,070 $ 195,816 $ 206,968 International Drilling Adjusted operating income (loss) $   45,860 $   36,051 $   40,757 $   86,617 $   69,009 Plus: General and administrative costs 16,748 17,867 17,609 34,357 34,245 Plus: Research and engineering 1,826 1,499 1,749 3,575 2,913 GAAP Gross Margin 64,434 55,417 60,115 124,549 106,167 Plus: Depreciation and amortization 84,673 81,607 80,524 165,197 164,135 Adjusted gross margin $ 149,107 $ 137,024 $ 140,639 $ 289,746 $ 270,302 Adjusted gross margin by segment represents adjusted operating income (loss) plus general and administrative costs, research and engineering costs and depreciation and amortization.   NABORS INDUSTRIES LTD. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO NET INCOME (LOSS) (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, (In thousands) 2026 2025 2026 2026 2025 Net income (loss) $    (1,523) $    (2,205) $     4,262 $     2,739 $   54,974 Income tax expense (benefit) 16,405 23,077 16,884 33,289 38,084 Income (loss) before income taxes 14,882 20,872 21,146 36,028 93,058 Investment (income) loss (2,131) (6,129) (2,887) (5,018) (12,725) Interest expense 42,678 56,081 43,761 86,439 110,407 Gain on bargain purchase - (3,500) - - (116,499) Other, net 5,682 6,074 (13,393) (7,711) 50,864 Adjusted operating income (loss) (1) 61,111 73,398 48,627 109,738 125,105 Depreciation and amortization  160,549 175,061 156,186 316,735 329,699 Adjusted EBITDA (2) $ 221,660 $ 248,459 $ 204,813 $ 426,473 $ 454,804 (1) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance.  Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.   (2) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.     NABORS INDUSTRIES LTD. AND SUBSIDIARIES RECONCILIATION OF NET DEBT TO TOTAL DEBT (Unaudited) June 30, March 31, December 31, (In thousands) 2026 2026 2025 Current debt $                 - $                 - $       377,492 Long-term debt 2,120,276 2,118,729 2,117,187      Total Debt 2,120,276 2,118,729 2,494,679 Less: Cash and short-term investments 509,833 500,853 940,738      Net Debt $  1,610,443 $  1,617,876 $    1,553,941   NABORS INDUSTRIES LTD. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, (In thousands) 2026 2025 2026 2026 2025 Net cash provided by operating activities $ 135,242 $ 151,810 $ 113,339 $ 248,581 $ 239,545 Add: Capital expenditures, net of proceeds from sales of assets (122,900) (141,849) (161,558) (284,458) (301,010) Free cash flow $   12,342 $     9,961 $ (48,219) $ (35,877) $ (61,465) Cash paid for acquisition related costs (1) - 30,635 - - 40,816 Adjusted free cash flow $   12,342 $   40,596 $ (48,219) $ (35,877) $ (20,649) (1) Cash paid related to the Parker Drilling acquisition Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition related costs. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.   NABORS INDUSTRIES LTD. AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES RECONCILIATION OF QUAIL TOOLS  FINANCIAL MEASURES (Unaudited) Three months ended June 30, (In thousands) 2025 Drilling Solutions operating revenues $ 170,283 Less: remaining Drilling Solutions business (107,701) Quail Tools operating revenues $   62,582 Drilling Solutions adjusted operating income (loss) $   50,365 Less: remaining Drilling Solutions business (24,075) Quail Tools adjusted operating income (loss) $   26,290 Quail Tools depreciation and amortization  10,722 Quail Tools adjusted EBITDA $   37,012   View original content: https://www.prnewswire.com/news-releases/momentum-accelerates-cash-flow-improves-nabors-2q-2026-results-302836940.html SOURCE Nabors Industries Ltd.

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