NOV Inc. (NYSE: NOV) Q2 profit reaches $112M with $4.44B backlog
Rhea-AI Filing Summary
NOV Inc. reported Q2 2026 revenue of $2,134 million, slightly below $2,188 million a year earlier, while net income attributable to the Company rose to $112 million from $108 million. Diluted EPS was $0.31. Segment operating profit was $177 million for Energy Equipment and $85 million for Energy Products and Services.
For the first six months of 2026, revenue was $4,186 million versus $4,291 million in 2025, with net income attributable to the Company of $131 million. Net cash from operating activities was $(9) million, reflecting higher receivables, inventories and contract assets, and capital expenditures of $146 million. NOV ended June 30, 2026 with $1,164 million of cash, total debt of $1,706 million and a debt-to-capitalization ratio of 23.9%, plus an undrawn $1.5 billion revolving credit facility. Remaining performance obligations totaled $4,443 million, with the company expecting to recognize $1,071 million in the remainder of 2026 and $1,588 million in 2027.
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accumulated other comprehensive loss financial
remaining performance obligations financial
cash flow hedge financial
Secured Overnight Financing Rate (SOFR) financial
debt-to-capitalization ratio financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did NOV (NOV) perform financially in Q2 2026?
What were NOV (NOV) segment results for Q2 2026?
What was NOV (NOV) cash flow from operations for the first half of 2026?
What is NOV (NOV)'s debt and liquidity position as of June 30, 2026?
How large are NOV (NOV)'s remaining performance obligations and when will they be recognized?
What dividends did NOV (NOV) pay and what was Q2 2026 EPS?
How did NOV (NOV) invest and return capital in the first half of 2026?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 24, 2026 the registrant had
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NOV INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
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June 30, |
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December 31, |
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2026 |
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2025 |
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ASSETS |
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(Unaudited) |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Receivables, net |
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Inventories, net |
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Contract assets |
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Prepaid and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Lease right-of-use assets, operating |
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Lease right-of-use assets, financing |
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Deferred income taxes |
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Goodwill |
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Intangibles, net |
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Investment in unconsolidated affiliates |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Contract liabilities |
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Current portion of lease liabilities |
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Current portion of long-term debt |
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Accrued income taxes |
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Total current liabilities |
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Long-term debt |
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Lease liabilities |
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Deferred income taxes |
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Other liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Common stock - par value $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Retained deficit |
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Total Company stockholders’ equity |
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Noncontrolling interests |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See notes to unaudited consolidated financial statements.
2
NOV INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In millions, except per share data)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Cost of revenue |
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Gross profit |
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Selling, general and administrative |
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Operating profit |
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Interest and financial costs |
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Interest income |
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Equity income (loss) in unconsolidated affiliates |
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Other expense, net |
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( |
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( |
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Net income before income taxes |
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Provision for income taxes |
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Net income |
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Net income attributable to noncontrolling interests |
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Net income attributable to Company |
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$ |
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$ |
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$ |
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$ |
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Net income attributable to Company per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Cash dividends per share |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding: |
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Basic |
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Diluted |
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See notes to unaudited consolidated financial statements.
3
NOV INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(In millions)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Currency translation adjustments |
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( |
) |
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( |
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Changes in derivative financial instruments, net of tax |
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( |
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( |
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Changes in defined benefit plans, net of tax |
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Comprehensive income |
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Comprehensive income attributable to noncontrolling interests |
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Comprehensive income attributable to Company |
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$ |
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$ |
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$ |
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$ |
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See notes to unaudited consolidated financial statements.
4
NOV INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In millions)
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Six Months Ended June 30, |
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2026 |
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2025 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Deferred income taxes |
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Stock-based compensation |
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Other, net |
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Change in operating assets and liabilities, net of acquisitions: |
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Receivables |
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( |
) |
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Inventories |
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( |
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( |
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Contract assets |
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( |
) |
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( |
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Prepaid and other current assets |
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( |
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( |
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Accounts payable |
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( |
) |
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Accrued liabilities |
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( |
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( |
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Contract liabilities |
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Income taxes payable |
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( |
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Other assets/liabilities, net |
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Net cash provided by (used in) operating activities |
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$ |
( |
) |
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$ |
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Cash flows from investing activities: |
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Purchases of property, plant and equipment |
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( |
) |
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( |
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Business acquisitions, net of cash acquired |
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( |
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— |
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Proceeds from sales of fixed assets |
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Net cash used in investing activities |
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$ |
( |
) |
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$ |
( |
) |
Cash flows from financing activities: |
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Payments against lines of credit and other debt |
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( |
) |
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( |
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Cash dividends paid |
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( |
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( |
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Share repurchases |
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( |
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( |
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Financing leases |
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( |
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( |
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Other |
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( |
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( |
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Net cash used in financing activities |
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( |
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( |
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Effect of exchange rates on cash |
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( |
) |
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Decrease in cash and cash equivalents |
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( |
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( |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental disclosures of cash flow information: |
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Cash payments during the period for: |
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Interest |
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$ |
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$ |
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Income taxes |
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$ |
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$ |
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See notes to unaudited consolidated financial statements.
5
NOV INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(In millions)
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Shares Issued |
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Common |
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Additional |
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Accumulated |
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Retained |
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Total |
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Noncontrolling |
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Total |
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Balance at December 31, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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— |
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Cash dividends, $ |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Common stock issued |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock options exercised |
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— |
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— |
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— |
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— |
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Withholding taxes |
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( |
) |
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— |
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( |
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— |
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— |
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( |
) |
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— |
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( |
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Share repurchases |
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( |
) |
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— |
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( |
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— |
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— |
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( |
) |
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— |
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( |
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Other |
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— |
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— |
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— |
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— |
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Balance at March 31, 2026 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
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— |
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( |
) |
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— |
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( |
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Cash dividends, $ |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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— |
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( |
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Transactions with non-controlling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Stock options exercised |
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— |
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— |
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— |
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— |
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— |
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Share repurchases |
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( |
) |
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— |
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( |
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— |
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— |
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( |
) |
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— |
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( |
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Other |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
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( |
) |
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( |
) |
Balance at June 30, 2026 |
|
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
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||||||
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Shares Issued |
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Common |
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Additional |
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Accumulated |
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Retained |
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Total |
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Noncontrolling |
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Total |
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||||||||
Balance at December 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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|
|
— |
|
|
|
|
|||
Cash dividends, $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common stock issued |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Withholding taxes |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Share repurchases |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Other |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
Balance at March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Cash dividends, $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Transactions with non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Share repurchases |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Other |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See notes to unaudited consolidated financial statements.
6
NOV INC.
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of NOV Inc. (“NOV” or the “Company”) present information in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X. They do not include all information or footnotes required by GAAP for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s 2025 Annual Report on Form 10-K. Certain reclassifications have been made to prior period financial information in order to conform with current period presentation.
In our opinion, the consolidated financial statements include all adjustments, which are of a normal recurring nature unless otherwise disclosed, necessary for a fair presentation of the results for the interim periods. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The fair values of cash and cash equivalents, receivables and payables were approximately the same as their presented carrying values because of the short maturities of these instruments. The fair value of long-term debt is provided in Note 8, and the fair values of derivative financial instruments are provided in Note 11.
2. Inventories, net
Inventories consist of (in millions):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Raw materials and supplies |
|
$ |
|
|
$ |
|
||
Work in process |
|
|
|
|
|
|
||
Finished goods and purchased products |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less: Inventory reserve |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
|
|
$ |
|
||
3. Accrued Liabilities
Accrued liabilities consist of (in millions):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Compensation |
|
$ |
|
|
$ |
|
||
Vendor costs |
|
|
|
|
|
|
||
Taxes (non-income) |
|
|
|
|
|
|
||
Warranties |
|
|
|
|
|
|
||
Insurance |
|
|
|
|
|
|
||
Commissions |
|
|
|
|
|
|
||
Derivatives |
|
|
|
|
|
|
||
Interest |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
7
4. Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss are as follows (in millions):
|
|
|
|
|
Derivative |
|
|
Employee |
|
|
|
|
||||
|
|
Currency |
|
|
Financial |
|
|
Benefit |
|
|
|
|
||||
|
|
Translation |
|
|
Instruments, |
|
|
Plans, |
|
|
|
|
||||
|
|
Adjustments |
|
|
Net of Tax |
|
|
Net of Tax |
|
|
Total |
|
||||
Balance at December 31, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Accumulated other comprehensive loss before reclassifications |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Amounts reclassified from accumulated other comprehensive loss |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance at June 30, 2026 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The components of amounts reclassified from accumulated other comprehensive loss during the three and six months ended June 30, 2026 represent gains and losses reclassified on cash flow hedges when the hedged transaction occurs (see Note 11 to the Consolidated Financial Statements for further discussion) and the amortization of net actuarial gains and losses, prior service credits, settlements, and curtailments, which are included in the computation of net periodic pension cost.
5. Segments
The Company has
The following tables present financial data by business segment (in millions):
|
|
Three Months Ended June 30, |
|
|||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
||||
Revenue from external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Intersegment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less significant segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general, and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on sales of fixed assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total significant segment expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment operating profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||||||||
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
|
Elims. and corporate costs (2) |
|
|
Total |
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
|
Elims. and corporate costs (2) |
|
|
Total |
|
||||||||
Segment operating profit |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
Corporate and other unallocated (3) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Interest and financial costs |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Interest income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Equity income (loss) in unconsolidated affiliates |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|||
Other expenses, net |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Income before income taxes |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other segment information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
8
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
||||
Revenue from external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Intersegment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less significant segment expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general, and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill and long-lived asset impairment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on sales of fixed assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total significant segment expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment operating profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||||||||
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
|
Elims. and corporate costs (2) |
|
|
Total |
|
|
Energy Equipment |
|
|
Energy Products and Services |
|
|
Elims. and corporate costs (2) |
|
|
Total |
|
||||||||
Segment operating profit |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
Corporate and other unallocated (3) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Interest and financial costs |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Interest income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Equity income (loss) in unconsolidated affiliates |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Other expenses, net |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Income before income taxes |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other segment information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Investment in unconsolidated affiliates |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||||||
Goodwill |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
Intangibles, net |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
9
6. Revenue
Disaggregation of Revenue
The following tables disaggregate our revenue by destinations and revenue streams, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors (in millions).
In the table below, North America includes only the U.S. and Canada:
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||||||||
|
|
|
|
|
Energy |
|
|
|
|
|
|
|
|
|
|
|
Energy |
|
|
|
|
|
|
|
||||||||
|
|
Energy |
|
|
Products |
|
|
|
|
|
|
|
|
Energy |
|
|
Products |
|
|
|
|
|
|
|
||||||||
|
|
Equipment |
|
|
and Services |
|
|
Eliminations |
|
|
Total |
|
|
Equipment |
|
|
and Services |
|
|
Eliminations |
|
|
Total |
|
||||||||
North America |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
International |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Intersegment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Land |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
Offshore |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Intersegment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||||||||||||||||||
|
|
|
|
|
Energy |
|
|
|
|
|
|
|
|
|
|
|
Energy |
|
|
|
|
|
|
|
||||||||
|
|
Energy |
|
|
Products |
|
|
|
|
|
|
|
|
Energy |
|
|
Products |
|
|
|
|
|
|
|
||||||||
|
|
Equipment |
|
|
and Services |
|
|
Elims. |
|
|
Total |
|
|
Equipment |
|
|
and Services |
|
|
Elims. |
|
|
Total |
|
||||||||
North America |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
International |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Intersegment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Land |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
Offshore |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Intersegment revenue |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
In the table below, the revenue streams of Energy Equipment are categorized as long-lived capital equipment sales and aftermarket sales and services. The revenue streams of the Energy Products and Services segment are categorized as services and rentals, sales of shorter-lived capital equipment, and sales of consumable products.
|
|
Three Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Energy Equipment: |
|
|
|
|
|
|
||
Capital equipment |
|
$ |
|
|
$ |
|
||
Aftermarket |
|
|
|
|
|
|
||
Intersegment revenue |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Energy Products and Services: |
|
|
|
|
|
|
||
Services & rental |
|
$ |
|
|
$ |
|
||
Capital equipment |
|
|
|
|
|
|
||
Product sales |
|
|
|
|
|
|
||
Intersegment revenue |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Eliminations |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Total consolidated |
|
$ |
|
|
$ |
|
||
10
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Energy Equipment: |
|
|
|
|
|
|
||
Capital equipment |
|
$ |
|
|
$ |
|
||
Aftermarket |
|
|
|
|
|
|
||
Intersegment revenue |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Energy Products and Services: |
|
|
|
|
|
|
||
Services & rental |
|
$ |
|
|
$ |
|
||
Capital equipment |
|
|
|
|
|
|
||
Product sales |
|
|
|
|
|
|
||
Intersegment revenue |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Eliminations |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Total consolidated |
|
$ |
|
|
$ |
|
||
Performance Obligations
Net revenue recognized from performance obligations satisfied in previous periods was not material for the six months ended June 30, 2026.
Remaining performance obligations represent the transaction price of firm orders for all revenue streams for which work has not been performed on contracts with original expected duration of one year or more. We do not disclose the remaining performance obligations of royalty contracts, service contracts for which there is a right to invoice, and short-term contracts that are expected to have a duration of one year or less. As of June 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $
Contract Assets and Liabilities
Contract assets include unbilled amounts when revenue recognized exceeds the amount billed to the customer under contracts where revenue is recognized over-time. There were
Contract liabilities consist of advance payments, billings in excess of revenue recognized and deferred revenue.
The changes in the carrying amount of contract assets and contract liabilities are as follows (in millions):
|
|
Contract |
|
|
Contract |
|
||
Balance at December 31, 2025 |
|
$ |
|
|
$ |
|
||
Billings |
|
|
( |
) |
|
|
|
|
Revenue recognized |
|
|
|
|
|
( |
) |
|
Currency translation adjustments and other |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2026 |
|
$ |
|
|
$ |
|
||
11
Allowance for Credit Losses
The Company estimates its allowance for credit losses using information about past events, current conditions and risk characteristics of each customer, and reasonable and supportable forecasts relevant to assessing risk associated with the collectability of receivables and contract assets. The Company’s customer base, mostly in the oil and gas industry, have generally similar collectability risk characteristics, although larger and state-owned customers may have lower risk than smaller independent customers. As of June 30, 2026, the allowance for credit losses on accounts receivable and contract assets totaled $
The changes in the carrying amount of the allowance for credit losses are as follows (in millions):
Balance at December 31, 2025 |
|
$ |
|
|
Provision for expected credit losses |
|
|
|
|
Recoveries collected |
|
|
( |
) |
Write-offs |
|
|
( |
) |
Reclass for long-term receivables |
|
|
|
|
Other |
|
|
( |
) |
Balance at June 30, 2026 |
|
$ |
|
7. Leases
The Company leases certain facilities and equipment to support its operations around the world. These leases generally require the Company to pay maintenance, insurance, taxes and other operating costs in addition to rent. Renewal options are common in longer term leases; however, it is rare that the Company intends to exercise a lease option at inception due to the cyclical nature of the Company’s business. Residual value guarantees are not typically part of the Company’s leases. Occasionally, the Company sub-leases excess facility space, generally at terms similar to the source lease. The Company reviews new agreements to determine if they include a lease and, when they do, uses its incremental borrowing rate to determine the present value of the future lease payments as most do not include implicit interest rates.
Components of leases are as follows (in millions):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Current portion of lease liabilities: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
||
Long-term portion of lease liabilities: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
||
8. Debt
Debt consists of (in millions):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
$ |
|
$ |
|
|
$ |
|
||
$ |
|
|
|
|
|
|
||
Other debt |
|
|
|
|
|
|
||
Total debt |
|
|
|
|
|
|
||
Less current portion |
|
|
|
|
|
|
||
Long-term debt |
|
$ |
|
|
$ |
|
||
12
The Company has a revolving credit facility with a borrowing capacity of $
A consolidated joint venture of the Company borrowed $
Other debt at June 30, 2026 included $
The Company had $
At June 30, 2026 and December 31, 2025, the fair value of the Company’s unsecured Senior Notes approximated $
9. Income Taxes
The effective tax rate for the three and six months ended June 30, 2026 was
10. Stock-Based Compensation
The Company’s stock-based compensation plan, known as the NOV Inc. Long-Term Incentive Plan (the “NOV Plan”), was approved by shareholders on May 11, 2018 and amended and restated on May 24, 2022 and May 20, 2025. The NOV Plan provides for the granting of stock options, restricted stock, restricted stock units, performance awards, phantom shares, stock appreciation rights, stock payments and substitute awards. The number of shares authorized under the NOV Plan is
On May 20, 2026, under the NOV Plan, the Company granted
Total expense for all stock-based compensation arrangements was $
The total income tax expense (benefit) recognized in the Consolidated Statements of Income for stock-based compensation arrangements was $(
13
11. Derivative Financial Instruments
The Company uses forward currency contracts to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit (cash flow hedge). The Company also executes forward currency contracts to manage the foreign currency exchange rate risk on recognized nonfunctional currency monetary accounts (non-designated hedge).
The fair values of these derivative financial instruments are determined using Level 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange and interest rates at each financial reporting date.
Forward currency contracts consist of (in millions):
|
|
|
|
Currency Denomination |
||
Currency |
|
|
|
June 30, 2026 |
|
December 31, 2025 |
South Korean Won |
|
KRW |
|
|
||
Norwegian Krone |
|
NOK |
|
|
||
U.S. Dollar |
|
USD |
|
|
||
Euro |
|
EUR |
|
|
||
Japanese Yen |
|
JPY |
|
|
||
Singapore Dollar |
|
SGD |
|
|
||
British Pound Sterling |
|
GBP |
|
|
||
Cash Flow Hedging Strategy
To protect against the volatility of forecasted foreign currency cash flows resulting from forecasted revenues and expenses, the Company maintains a cash flow hedging program. For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is recorded in accumulated other comprehensive loss and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “revenues” when the hedged transactions are cash flows associated with forecasted revenues). The Company includes time value in hedge relationships.
The Company expects accumulated other comprehensive loss of $
Non-designated Hedging Strategy
The Company enters into forward exchange contracts to hedge certain nonfunctional currency monetary accounts. The gain or loss on the derivative instrument is recognized in earnings in “other expense, net”, together with the changes in the hedged nonfunctional monetary accounts.
The amount of gain (loss) recognized in “other expense, net” was $(
The Company has the following fair values of its derivative instruments and their balance sheet classifications (in millions):
|
|
Asset Derivatives |
|
|
Liability Derivatives |
|
||||||||||||||
|
|
Balance Sheet |
|
June 30, |
|
|
December 31, |
|
|
Balance Sheet |
|
June 30, |
|
|
December 31, |
|
||||
|
|
Location |
|
2026 |
|
|
2025 |
|
|
Location |
|
2026 |
|
|
2025 |
|
||||
Derivatives designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts |
|
Prepaid and other current assets |
|
$ |
|
|
$ |
|
|
Accrued liabilities |
|
$ |
|
|
$ |
|
||||
Foreign exchange contracts |
|
Other assets |
|
|
— |
|
|
|
— |
|
|
Other liabilities |
|
|
— |
|
|
|
— |
|
Designated total |
|
|
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts |
|
Prepaid and other current assets |
|
$ |
|
|
$ |
|
|
Accrued liabilities |
|
$ |
|
|
$ |
|
||||
Foreign exchange contracts |
|
Other assets |
|
|
— |
|
|
|
— |
|
|
Other liabilities |
|
|
— |
|
|
|
— |
|
Non-designated total |
|
|
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
$ |
|
||||
14
12. Net Income Attributable to Company Per Share
The following table sets forth the computation of weighted average basic and diluted shares outstanding (in millions, except per share data):
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Company |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic—weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of employee stock options and other unvested stock awards |
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted—weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Company per share: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends per share |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Companies with unvested participating securities are required to utilize a two-class method for the computation of net income attributable to Company per share. The two-class method requires a portion of net income attributable to Company to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents if declared. Net income attributable to the Company allocated to these participating securities was immaterial for each of the three and six months ended June 30, 2026 and 2025, respectively.
The Company had stock options and restricted shares outstanding that were anti-dilutive totaling
15
13. Cash Dividends
Cash dividends were $
14. Share Repurchase Program
On April 25, 2024, the Company established a share repurchase program for up to $
The Company intends to fund the repurchases using its available U.S. cash balances, which may involve the repatriation of foreign earnings not indefinitely reinvested. However, depending on U.S. cash balances, the Company may choose to borrow against its revolving credit facility or issue new debt to finance the repurchases. As shares are repurchased, they are constructively retired and returned to an unissued state. During the three and six months ended June 30, 2026, the Company repurchased approximately
15. Commitments and Contingencies
From time to time, the Company is involved in various claims, regulatory agency audits, investigations and legal actions involving a variety of matters. As of June 30, 2026, in the ordinary course of business, the Company recorded reserves in an amount believed to be sufficient, given the estimated range of potential outcomes, for contingent liabilities believed to be probable. These estimated liabilities are based on the Company’s assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s experience. The litigation process and the outcome of regulatory oversight is inherently uncertain, and our best judgment concerning the probable outcome of litigation or regulatory enforcement matters may prove to be incorrect. No assurance can be given as to the outcome of these matters. The total potential loss on these matters cannot be determined; however, in our opinion, any ultimate liability, to the extent not otherwise provided for, should not materially affect our financial position, cash flows or results of operations.
Developments in global trade policy, including tariffs, geopolitical tensions, sanctions, and regulatory changes, have impacted and may continue to influence our operations. In February 2026, the U.S. Supreme Court determined that certain tariffs were unlawful, effectively nullifying the legal basis for some incremental tariffs implemented since February 2025 and sending related cases back to the Court of International Trade. In response, the U.S. administration introduced new tariffs under different authorities, increasing uncertainty around the scope, duration, and potential changes to current and future tariffs, as well as the risk of retaliatory measures. We have submitted Consolidated Administration and Processing of Entries (“CAPE”) Declarations for International Emergency Economic Powers Act (“IEEPA”) duty refunds and are closely monitoring developments to better understand the government’s next steps. For the three months ended June 30, 2026, we have recorded a benefit of approximately $
16
The Company is currently pursuing litigation against several companies involving royalties due under licenses for technology related to drill bits. This technology resulted in a portfolio of patents related to leaching technology, a revolutionary technology owned by the Company that improves the performance of drill bits and other products utilizing certain synthetic diamond parts. The Company previously sued several drill bit manufacturers for patent infringement and those lawsuits were resolved by a series of licensing agreements with various drill bit manufacturers (the “License Agreements”). To settle and end litigation or to avoid litigation, the licensees were provided access to the portfolio of leaching patents owned by the Company in exchange for a royalty payment, as defined in each License Agreement. The companies agreed to pay the royalties for the right to use the portfolio of patents, whether they used some, all or none of the specific patented claims in any particular patent. The license agreements provide that they terminate on the date of the last to expire of the patents in the licensed portfolio. Having obtained the benefit of these licenses for more than a decade, all of the drill bit manufacturer licensees unilaterally stopped making royalty payments even though all of the patents in the portfolio have not expired. These companies have asserted, among other reasons, that they are entitled to stop making these payments because they claim to not manufacture products covered by the unexpired patents. Some of these companies stopped making payments upon expiration of what are allegedly the patents in the portfolio that they elected to use. Others paid for some period of time after that date but have since stopped making payments. The Company has sued asserting that failure to pay the royalties is a breach of the License Agreements. The Company is in litigation with most of the licensees seeking a judicial determination that it is entitled to be paid royalties pursuant to the terms of the License Agreements. The licensees have responded with a number of alleged defenses and requests for declaratory judgment all focused on avoiding the payments called for under the License Agreements. The parties’ legal filings to date can be found in the following cases: Grant Prideco, Inc., et al. v. Schlumberger Technology Corp., et al., No. 4:23-cv-00730; Halliburton Energy Services, Inc. v. Grant Prideco, Inc., et al., No. 4:23-cv-01789; and Grant Prideco, Inc., et al. v. Baker Hughes Oilfield Operations Inc., et al., No. 4:25-cv-03459, all in the United States District Court for the Southern District of Texas. We have also subsequently initiated litigation against Taurex Drill Bits. The legal filings to date for that proceeding can be found in the case Grant Prideco, Inc., et al. v. Taurex Drill Bits, L.L.C., No. 25-BC11B-0065, in the Eleventh Business Court Division for Harris County, Texas. On September 29, 2025, and October 7, 2025, in the lawsuits against Halliburton, Ulterra and Varel, the district court issued rulings, the effect of which is that NOV cannot collect royalties under the License Agreements after the date each licensee stopped making royalty payments. NOV believes the court’s ruling is incorrect and is appealing the court’s decision, which can be found in the case: Halliburton Energy Services, Inc. v. Grant Prideco, Inc. et al., Nos. 26-1256, 26-1266, In the United States Court of Appeals for the Federal Circuit. The Company continues to strongly believe that the royalties for which it has sued are due and owing pursuant to the terms of the License Agreements. Of course, there is inherent risk with the related litigation and the Company makes no assurances as to the outcome of such litigation. As of June 30, 2026, royalty receivables of $
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
NOV is a leading independent equipment and technology provider to the global energy industry. NOV and its predecessor companies have spent over 160 years helping transform oil and gas development and improving its cost-effectiveness, efficiency, safety, and environmental impact.
NOV’s extensive proprietary technology portfolio supports the industry’s drilling, completion, and production needs. With unmatched cross-segment capabilities, scope, and scale, NOV continues to develop and introduce technologies that further enhance the economics and efficiencies of energy production, with a focus on digital, automation, and robotics solutions.
Lower-cost, reliable sources of energy significantly contribute to raising the global standard of living by powering economic development, enabling better infrastructure and facilitating the production of goods and services that improve quality of life. Over the past few decades, the Company has pioneered and refined key technologies to improve the economic viability of frontier resources, including unconventional and deepwater oil and gas. More recently, by applying its deep expertise and technology, NOV has developed solutions to improve the economics of alternative energy sources.
NOV serves major-diversified, national, and independent service companies, contractors, and energy producers in 57 countries. NOV operates under two segments, Energy Equipment and Energy Products and Services.
Results of operations are presented in accordance with GAAP. Certain reclassifications have been made to prior period financial information in order to conform with current period presentation. The Company discloses Adjusted operating profit (defined as operating profit excluding gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items (as defined below under “Executive Summary”)) and Adjusted EBITDA (defined as operating profit excluding depreciation, amortization, gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items) in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. See “Non-GAAP Financial Measures and Reconciliations in Results of Operations” for an explanation of our use of non-GAAP financial measures and reconciliations to their corresponding measures calculated in accordance with GAAP.
Energy Equipment
The Company’s Energy Equipment segment manufactures and supports the capital equipment and integrated systems needed for oil and gas exploration and production, both onshore and offshore, as well as for other marine-based, industrial and renewable energy markets.
The segment designs, manufactures, and integrates technologies for drilling and producing oil and gas wells. This includes equipment and technologies needed for drilling, including land rigs, offshore drilling equipment packages, drilling rig components, managed pressure drilling, and software control systems that mechanize and automate the drilling process and rig functionality; hydraulic fracture stimulation; well intervention, including coiled tubing units, coiled tubing, and wireline units and tools; cementing products; onshore production, including fluid and gas processing, flow control and pumping solutions; offshore production, including integrated production systems and subsea production technologies; and aftermarket support of these technologies, providing spare parts, service, and repair.
Energy Equipment primarily serves contract drillers, oilfield service companies, and oil and gas companies. Demand for the segment’s products primarily depends on capital spending plans by drilling contractors, service companies, and oil and gas companies, and secondarily on the overall level of oilfield drilling, completions, and workover activity which drives demand for equipment, spare parts, service, and repair for the segment’s large installed base of equipment.
The segment also serves marine and offshore markets, where it designs and builds equipment for wind turbine installation and cable lay vessels, and offers heavy lift cranes and jacking systems; industrial markets, where the segment provides pumps and mixers for a wide breadth of industrial end markets; and other renewable energy markets, where it provides solutions that support wind power development, and carbon sequestration by applying its gas processing expertise.
18
Energy Products and Services
The Company’s Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling, intervention, completion, and production activities. Products include drill bits, downhole tools, premium drill pipe, drilling fluids, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems. The segment also designs, manufactures, and delivers high-end composite pipe, tanks, and structures engineered to solve both corrosion and weight challenges in a wide variety of applications, including oil and gas, chemical, industrial, wastewater, fuel handling, marine and offshore, and rare earth mineral extraction.
In addition to product and equipment sales, the segment provides services, software, and digital solutions to improve drilling and completion operational performance. Services include tubular inspection and coating, solids control, waste management. Software and digital solutions offered include drilling and completion optimization and remote monitoring (via downhole and surface instrumentation), wired drill pipe services, software controls and applications, and data management and analytics services at the edge and in the cloud.
Energy Products and Services serves oil and gas companies, drilling contractors, oilfield service companies, oilfield equipment rental companies and developers of geothermal energy. Demand for the segment’s products and services primarily depends on the level of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies. Demand for the segment’s composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth.
Critical Accounting Policies and Estimates
In our annual report on Form 10-K for the year ended December 31, 2025, we identified our most critical accounting policies. In preparing the financial statements, we make assumptions, estimates and judgments that affect the amounts reported. We periodically evaluate our estimates and judgments that are most critical in nature which are related to revenue recognition under long-term construction contracts, impairment of goodwill and other indefinite-lived intangible assets, inventory reserves, and income taxes. Our estimates are based on historical experience and on our future expectations that we believe are reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material.
EXECUTIVE SUMMARY
For the second quarter ended June 30, 2026, the Company generated revenues of $2.13 billion, an increase of four percent sequentially and a decrease of two percent compared to the second quarter of 2025. Net income increased $4 million, or $0.02 per diluted share, year-over-year to $112 million. Operating profit was $193 million, or 9.0 percent of sales, an increase of 35 percent versus the second quarter of 2025. Adjusted operating profit was $190 million, an increase of 15 percent versus the second quarter of 2025. Adjusted EBITDA increased $31 million year-over-year to $283 million, or 13.3 percent of sales. Second quarter 2026 Adjusted operating profit and Adjusted EBITDA include a benefit of approximately $40 million related to tariff refunds.
Segment Performance
Energy Equipment
Energy Equipment generated revenues of $1.22 billion in the second quarter of 2026, an increase of one percent from the second quarter of 2025. Operating profit increased $55 million from the prior year to $177 million, or 14.5 percent of sales, and included $2 million in pre-tax Other Items and a $7 million gain on sales of fixed assets. Adjusted EBITDA increased $42 million from the prior year to $200 million, or 16.4 percent of sales, and includes a benefit of approximately $14 million related to tariff refunds. Strong execution on offshore production projects nearing completion and a more favorable sales mix drove the improvement in revenue and profitability.
New orders booked during the quarter totaled $474 million, an increase of $54 million when compared to the $420 million of new orders booked during the second quarter of 2025. Orders shipped from backlog were $638 million, representing a book-to-bill of 74 percent and an increase of $6 million when compared to the $632 million orders shipped and a 66 percent book-to-bill during the second quarter 2025. As of June 30, 2026, backlog for capital equipment orders for Energy Equipment totaled $4.08 billion, a decrease of $220 million from June 30, 2025.
Energy Products and Services
Energy Products and Services generated revenues of $974 million in the second quarter of 2026, a decrease of five percent from the second quarter of 2025. Operating profit increased $2 million from the prior year to $85 million, or 8.7 percent of sales, and included $9 million in pre-tax Other Items and a $13 million gain on sales of fixed assets. Adjusted EBITDA decreased $2 million from the prior year to $144 million, or 14.8 percent of sales, and includes a benefit of approximately $26 million related to tariff refunds. Market share gains by the segment’s drill bit and artificial lift operations and continued growth in digital services were more than offset by lower capital equipment sales, despite orders booked in the first half of 2026 that are expected to support higher shipments in the second half of the year.
19
Oil & Gas Equipment and Services Market and Outlook
Macroeconomic and geopolitical uncertainty remains elevated due to the conflict in the Middle East. Widespread damage to energy infrastructure and the closure of the Strait of Hormuz have materially tightened oil and gas fundamentals, causing volatility in global commodity markets and renewing focus on the need for energy security. Management believes reduced production capacity resulting from years of underinvestment in the oil and gas industry along with the growing need to diversify supply sources will spur renewed investment in upstream capacity and regional infrastructure needed to support more resilient supply. In this environment, management expects increased demand for the Company’s equipment and technology.
NOV remains focused on the development and commercialization of innovative products and services that lower the marginal cost and environmental footprint of energy production. The Company also remains focused on improving operational efficiency, simplifying processes, and allocating capital to opportunities where it believes it has competitive advantages, technology differentiation, and the ability to generate attractive returns. Management believes this strategy will further strengthen the Company’s competitive position across market cycles and create value for shareholders.
Operating Environment Overview
The Company’s results are dependent on, among other things, the level of worldwide oil and gas drilling, well remediation activity, the prices of crude oil and natural gas, capital spending by exploration and production companies and drilling contractors, worldwide oil and gas inventory levels and, to a lesser degree, the level of investment in wind and geothermal energy projects. Key industry indicators for the second quarter of 2026 and 2025, and the first quarter of 2026 include the following:
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% increase (decrease) |
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2Q26 v |
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2Q26 v |
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2Q26* |
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2Q25* |
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1Q26* |
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2Q25 |
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1Q26 |
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Active Drilling Rigs: |
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|||||
U.S. |
|
|
554 |
|
|
|
571 |
|
|
|
548 |
|
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|
(3.0 |
)% |
|
|
1.1 |
% |
Canada |
|
|
150 |
|
|
|
129 |
|
|
|
201 |
|
|
|
16.3 |
% |
|
|
(25.4 |
)% |
International |
|
|
1,056 |
|
|
|
1,078 |
|
|
|
1,083 |
|
|
|
(2.0 |
)% |
|
|
(2.5 |
)% |
Worldwide |
|
|
1,760 |
|
|
|
1,778 |
|
|
|
1,832 |
|
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|
(1.0 |
)% |
|
|
(3.9 |
)% |
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|||||
West Texas Intermediate Crude Prices (per barrel) |
|
$ |
95.75 |
|
|
$ |
64.63 |
|
|
$ |
71.98 |
|
|
|
48.2 |
% |
|
|
33.0 |
% |
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|
|||||
Natural Gas Prices ($/mmbtu) |
|
$ |
2.95 |
|
|
$ |
3.19 |
|
|
$ |
4.79 |
|
|
|
(7.5 |
)% |
|
|
(38.4 |
)% |
* Averages for the quarters indicated. See sources below.
20
The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate Crude Oil prices for the past nine quarters ended June 30, 2026, on a quarterly basis.
Source: Rig count: Baker Hughes, Inc. (www.bakerhughes.com); West Texas Intermediate Crude Oil and Natural Gas Prices: US Department of Energy, Energy Information Administration (www.eia.doe.gov).
The worldwide quarterly average rig count decreased 4 percent (from 1,832 to 1,760) in the second quarter of 2026 when compared to the first quarter of 2026. The average per barrel price of West Texas Intermediate Crude Oil increased 33 percent (from $71.98 per barrel to $95.75 per barrel) and natural gas prices decreased 38 percent (from $4.79 per mmbtu to $2.95 per mmbtu) in the second quarter of 2026 compared to the first quarter of 2026.
On July 24, 2026, there were 791 rigs actively drilling in North America, comprised of U.S. and Canada, which increased 12 percent from the second quarter average of 704 rigs. The price for West Texas Intermediate Crude Oil was $89.31 per barrel at July 24, 2026, a decrease of 7 percent from the second quarter of 2026 average. The price for natural gas was $2.89 per mmbtu at July 24, 2026, a decrease of 2 percent from the second quarter of 2026 average.
21
Results of Operations
Financial results by operating segment are as follows (in millions):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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||||
Revenue: |
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||||
Energy Equipment |
|
$ |
1,218 |
|
|
$ |
1,207 |
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|
$ |
2,408 |
|
|
$ |
2,353 |
|
Energy Products and Services |
|
|
974 |
|
|
|
1,025 |
|
|
|
1,871 |
|
|
|
2,017 |
|
Eliminations |
|
|
(58 |
) |
|
|
(44 |
) |
|
|
(93 |
) |
|
|
(79 |
) |
Total revenue |
|
$ |
2,134 |
|
|
$ |
2,188 |
|
|
$ |
4,186 |
|
|
$ |
4,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy Equipment |
|
$ |
177 |
|
|
$ |
122 |
|
|
$ |
270 |
|
|
$ |
256 |
|
Energy Products and Services |
|
|
85 |
|
|
|
83 |
|
|
|
111 |
|
|
|
166 |
|
Eliminations and corporate costs |
|
|
(69 |
) |
|
|
(62 |
) |
|
|
(141 |
) |
|
|
(127 |
) |
Total operating profit |
|
$ |
193 |
|
|
$ |
143 |
|
|
$ |
240 |
|
|
$ |
295 |
|
Energy Equipment
three and six months ended June 30, 2026 and 2025. Revenue from Energy Equipment was $1,218 million for the three months ended June 30, 2026, compared to $1,207 million for the three months ended June 30, 2025, an increase of $11 million or 1 percent. For the six months ended June 30, 2026, revenue was $2,408 million compared to $2,353 million for the six months ended June 30, 2025, an increase of $55 million or 2 percent. Revenue remained relatively flat when compared to the prior year with higher sales of production related capital equipment, mostly offset by lower revenue from aftermarket parts and services.
Operating profit from Energy Equipment was $177 million for the three months ended June 30, 2026, compared to an operating profit of $122 million for the three months ended June 30, 2025, an increase of $55 million. Strong execution on offshore production equipment projects nearing completion, a more favorable sales mix, and a benefit of approximately $14 million related to tariff refunds drove the improvement in profitability for the three months ended June 30, 2026 when compared to the same period of the prior year. For the six months ended June 30, 2026, operating profit was $270 million compared to $256 million for the six months ended June 30, 2025, an increase of $14 million. Strong execution on offshore production related equipment projects, partially offset by disruptions in the Middle East during the first quarter of 2026, led to improved profitability for the six months ended June 30, 2026 when compared to the same period of the prior year.
The Energy Equipment segment monitors its capital equipment backlog to plan its business. New orders are added to backlog only when the Company receives a firm written order for major completion and production components or a contract related to a construction project. The capital equipment backlog was $4.08 billion at June 30, 2026, a decrease of $220 million from backlog of $4.30 billion at June 30, 2025. Although numerous factors can affect the timing of revenue out of backlog (including, but not limited to, customer change orders, supplier accelerations or delays, and the current uncertainty and conflict in the Middle East), the Company reasonably expects approximately 29 percent of backlog to become revenue during the rest of 2026 and the remainder thereafter. At June 30, 2026, approximately 57 percent of the capital equipment backlog was for offshore products and approximately 94 percent of the capital equipment backlog was destined for international markets.
Energy Products and Services
three and six months ended June 30, 2026 and 2025. Revenue from Energy Products and Services was $974 million for the three months ended June 30, 2026, compared to $1,025 million for the three months ended June 30, 2025, a decrease of $51 million or 5 percent. For the six months ended June 30, 2026, revenue was $1,871 million compared to $2,017 million for the six months ended June 30, 2025, a decrease of $146 million or 7 percent. Revenue declines were primarily driven by a decrease in capital equipment sales which were impacted by the conflict in the Middle East, partially offset by market share gains from the segment’s drill bit and artificial lift operations, and continued growth in digital services.
Operating profit from Energy Products and Services was $85 million for the three months ended June 30, 2026, compared to an operating profit of $83 million for the three months ended June 30, 2025, an increase of $2 million. For the six months ended June 30, 2026, operating profit was $111 million compared to $166 million for the six months ended June 30, 2025, a decrease of $55 million. Lower net tariff costs, which includes a benefit of approximately $26 million related to tariff refunds in the current quarter, helped profitability remain relatively flat for the three months ended June 30, 2026 when compared to the prior year, while lower capital equipment sales reduced manufacturing plant absorption and impacted profitability for the six months ended June 30, 2026 when compared to the same period of the prior year.
22
Eliminations and corporate costs
Eliminations and corporate costs were $69 million and $141 million for the three and six months ended June 30, 2026, compared to $62 million and $127 million for the three and six months ended June 30, 2025.
Sales from one segment to another generally are priced at estimated equivalent commercial selling prices; however, segments originating an external sale are credited with the full profit to the Company. Eliminations include intercompany transactions conducted between the two reporting segments that are eliminated in consolidation. Intrasegment transactions are eliminated within each segment. Eliminations increased 21 percent when compared to the second quarter of 2025 due to higher activity, and remained relatively flat on a year-to-date basis.
Corporate costs remained relatively flat compared to the second quarter of 2025, while corporate costs increased 14 percent on a year-to-date basis primarily due to a non-recurring charge related to stock-based compensation during the first quarter of 2026 and other restructuring costs.
Interest and financial costs and Interest income
Interest and financial costs were $21 million and $43 million for the three and six months ended June 30, 2026, compared to $22 million and $44 million for the three and six months ended June 30, 2025, remaining relatively consistent year-over-year.
Interest income was $8 million and $19 million for the three and six months ended June 30, 2026, compared to $10 million and $21 million for the three and six months ended June 30, 2025, remaining relatively consistent year-over-year.
Equity income (loss) in unconsolidated affiliates
Equity income (loss) in unconsolidated affiliates was $(5) million and $(8) million for the three and six months ended June 30, 2026, compared to $1 million for each of the three and six months ended June 30, 2025. Sales for our largest investment in unconsolidated affiliates declined 29 percent for the second quarter of 2026 when compared to the second quarter of 2025. For the six months ended June 30, 2026, sales declined 22 percent year-over-year. The decline in sales is primarily due to pricing pressures for oil country tubular goods which led to lower profitability year-over-year.
Other expense, net
Other expense, net was $18 million and $16 million for the three and six months ended June 30, 2026, compared to $17 million and $37 million for three and six months ended June 30, 2025. The change in expense was primarily due to larger foreign currency fluctuations in the prior year, particularly with the devaluation of the U.S. Dollar.
Provision for income taxes
The effective tax rate for the three and six months ended June 30, 2026 was 26.1% and 29.2%, respectively, compared to 0.9% and 20.3% for the same period of 2025. The U.S. statutory tax rate was 21% for all periods. The effective tax rate for the three months ended June 30, 2026 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, partially offset by the release of previously recorded reserves for unrecognized tax benefits and adjustments to prior year taxes. The effective tax rate for the six months ended June 30, 2026 was negatively impacted by a mix of earnings in higher tax rate jurisdictions and a shortfall related to previously recognized stock compensation deductibility, partially offset by the release of previously recorded reserves for unrecognized tax benefits and adjustments to prior year taxes. The effective tax rate for the six months ended June 30, 2025 was positively impacted by the release of previously recorded reserves for unrecognized tax benefits of $58 million, partially offset by an increase to reserves for unrecognized tax benefits of $23 million, unfavorable adjustments related to the carrying value of deferred tax assets of $14 million, changes in certain foreign currency exchange rates of $4 million, and a mix of earnings in higher tax rate jurisdictions.
23
Non-GAAP Financial Measures and Reconciliations
This Form 10-Q contains certain non-GAAP financial measures that management believes are useful tools for internal use and the investment community in evaluating NOV’s overall financial performance. These non-GAAP financial measures are broadly used to value and compare companies in the oilfield services and equipment industry. Not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures.
The Company defines Adjusted operating profit as operating profit excluding gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items. The Company defines Adjusted EBITDA as operating profit excluding depreciation, amortization, gains and losses on sales of fixed assets, and, when applicable, pre-tax Other Items. Adjusted operating profit % is a ratio showing Adjusted operating profit as a percentage of sales and Adjusted EBITDA % is a ratio showing Adjusted EBITDA as a percentage of sales. Management believes this is important information to provide because it is used by management to evaluate the Company’s operational performance and trends between periods and manage the business. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s results of ongoing operations. Adjusted operating profit, Adjusted operating profit %, Adjusted EBITDA, and Adjusted EBITDA % are not intended to replace GAAP financial measures, such as Net Income and operating profit %.
24
The following tables set forth the reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure (in millions):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||||||
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2026 |
|
|
2025 |
|
|||||
Operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
$ |
177 |
|
|
$ |
122 |
|
|
$ |
93 |
|
|
$ |
270 |
|
|
$ |
256 |
|
Energy Products and Services |
|
|
85 |
|
|
|
83 |
|
|
|
26 |
|
|
|
111 |
|
|
|
166 |
|
Eliminations and corporate costs |
|
|
(69 |
) |
|
|
(62 |
) |
|
|
(72 |
) |
|
|
(141 |
) |
|
|
(127 |
) |
Total operating profit |
|
$ |
193 |
|
|
$ |
143 |
|
|
$ |
47 |
|
|
$ |
240 |
|
|
$ |
295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating profit %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
|
14.5 |
% |
|
|
10.1 |
% |
|
|
7.8 |
% |
|
|
11.2 |
% |
|
|
10.9 |
% |
Energy Products and Services |
|
|
8.7 |
% |
|
|
8.1 |
% |
|
|
2.9 |
% |
|
|
5.9 |
% |
|
|
8.2 |
% |
Eliminations and corporate costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total operating profit % |
|
|
9.0 |
% |
|
|
6.5 |
% |
|
|
2.3 |
% |
|
|
5.7 |
% |
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Pre-tax Other Items, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
$ |
2 |
|
|
$ |
9 |
|
|
$ |
9 |
|
|
$ |
11 |
|
|
$ |
12 |
|
Energy Products and Services |
|
|
9 |
|
|
|
6 |
|
|
|
8 |
|
|
|
17 |
|
|
|
11 |
|
Corporate |
|
|
6 |
|
|
|
4 |
|
|
|
20 |
|
|
|
26 |
|
|
|
9 |
|
Total pre-tax Other Items |
|
$ |
17 |
|
|
$ |
19 |
|
|
$ |
37 |
|
|
$ |
54 |
|
|
$ |
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||
(Gain) loss on sales of fixed assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
$ |
(7 |
) |
|
$ |
(1 |
) |
|
$ |
— |
|
|
$ |
(7 |
) |
|
$ |
(1 |
) |
Energy Products and Services |
|
|
(13 |
) |
|
|
— |
|
|
|
1 |
|
|
|
(12 |
) |
|
|
(2 |
) |
Corporate |
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
Total (gain) loss on sales of fixed assets |
|
$ |
(20 |
) |
|
$ |
3 |
|
|
$ |
1 |
|
|
$ |
(19 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted operating profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
$ |
172 |
|
|
$ |
130 |
|
|
$ |
102 |
|
|
$ |
274 |
|
|
$ |
267 |
|
Energy Products and Services |
|
|
81 |
|
|
|
89 |
|
|
|
35 |
|
|
|
116 |
|
|
|
175 |
|
Eliminations and corporate costs |
|
|
(63 |
) |
|
|
(54 |
) |
|
|
(52 |
) |
|
|
(115 |
) |
|
|
(114 |
) |
Adjusted operating profit |
|
$ |
190 |
|
|
$ |
165 |
|
|
$ |
85 |
|
|
$ |
275 |
|
|
$ |
328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
$ |
28 |
|
|
$ |
28 |
|
|
$ |
29 |
|
|
$ |
57 |
|
|
$ |
56 |
|
Energy Products and Services |
|
|
63 |
|
|
|
57 |
|
|
|
61 |
|
|
|
124 |
|
|
|
116 |
|
Corporate |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
4 |
|
Total depreciation & amortization |
|
$ |
93 |
|
|
$ |
87 |
|
|
$ |
92 |
|
|
$ |
185 |
|
|
$ |
176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
$ |
200 |
|
|
$ |
158 |
|
|
$ |
131 |
|
|
$ |
331 |
|
|
$ |
323 |
|
Energy Products and Services |
|
|
144 |
|
|
|
146 |
|
|
|
96 |
|
|
|
240 |
|
|
|
291 |
|
Eliminations and corporate costs |
|
|
(61 |
) |
|
|
(52 |
) |
|
|
(50 |
) |
|
|
(111 |
) |
|
|
(110 |
) |
Total Adjusted EBITDA |
|
$ |
283 |
|
|
$ |
252 |
|
|
$ |
177 |
|
|
$ |
460 |
|
|
$ |
504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy Equipment |
|
|
16.4 |
% |
|
|
13.1 |
% |
|
|
11.0 |
% |
|
|
13.7 |
% |
|
|
13.7 |
% |
Energy Products and Services |
|
|
14.8 |
% |
|
|
14.2 |
% |
|
|
10.7 |
% |
|
|
12.8 |
% |
|
|
14.4 |
% |
Eliminations and corporate costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total Adjusted EBITDA % |
|
|
13.3 |
% |
|
|
11.5 |
% |
|
|
8.6 |
% |
|
|
11.0 |
% |
|
|
11.7 |
% |
25
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||||||
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2026 |
|
|
2025 |
|
|||||
Reconciliation of Adjusted operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP net income attributable to Company |
|
$ |
112 |
|
|
$ |
108 |
|
|
$ |
19 |
|
|
$ |
131 |
|
|
$ |
181 |
|
Noncontrolling interests |
|
|
4 |
|
|
|
6 |
|
|
|
1 |
|
|
|
5 |
|
|
|
7 |
|
Provision for income taxes |
|
|
41 |
|
|
|
1 |
|
|
|
15 |
|
|
|
56 |
|
|
|
48 |
|
Interest and financial costs |
|
|
21 |
|
|
|
22 |
|
|
|
22 |
|
|
|
43 |
|
|
|
44 |
|
Interest income |
|
|
(8 |
) |
|
|
(10 |
) |
|
|
(11 |
) |
|
|
(19 |
) |
|
|
(21 |
) |
Equity (income) loss in unconsolidated affiliates |
|
|
5 |
|
|
|
(1 |
) |
|
|
3 |
|
|
|
8 |
|
|
|
(1 |
) |
Other (income) expense, net |
|
|
18 |
|
|
|
17 |
|
|
|
(2 |
) |
|
|
16 |
|
|
|
37 |
|
(Gain) loss on sales of fixed assets |
|
|
(20 |
) |
|
|
3 |
|
|
|
1 |
|
|
|
(19 |
) |
|
|
1 |
|
Pre-tax Other Items, net |
|
|
17 |
|
|
|
19 |
|
|
|
37 |
|
|
|
54 |
|
|
|
32 |
|
Adjusted operating profit |
|
|
190 |
|
|
|
165 |
|
|
|
85 |
|
|
|
275 |
|
|
|
328 |
|
Depreciation and amortization |
|
|
93 |
|
|
|
87 |
|
|
|
92 |
|
|
|
185 |
|
|
|
176 |
|
Total Adjusted EBITDA |
|
$ |
283 |
|
|
$ |
252 |
|
|
$ |
177 |
|
|
$ |
460 |
|
|
$ |
504 |
|
Liquidity and Capital Resources
Overview
At June 30, 2026, the Company had cash and cash equivalents of $1,164 million and total debt of $1,706 million. At December 31, 2025, cash and cash equivalents were $1,552 million and total debt was $1,718 million. As of June 30, 2026, approximately $747 million of the $1,164 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash could be subject to foreign withholding taxes and incremental U.S. taxation if transferred among countries or repatriated to the U.S. If opportunities to invest in the U.S. are greater than available cash balances that are not subject to income tax, rather than repatriating cash, the Company may choose to borrow against its revolving credit facility.
The Company has a revolving credit facility with a borrowing capacity of $1.5 billion through September 12, 2030. The Company has the right to increase the aggregate commitments under this agreement to an aggregate amount of up to $2.5 billion upon the consent of only those lenders holding any such increase. Interest under the multicurrency facility is based upon Secured Overnight Financing Rate (SOFR), Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Canadian Overnight Repo Rate Average (CORRA), or Norwegian Interbank Offered Rate (NIBOR), plus 1.25% subject to a ratings-based grid or the U.S. prime rate. The credit facility contains a financial covenant establishing a maximum debt-to-capitalization ratio of 60%. As of June 30, 2026, the Company was in compliance with a debt-to-capitalization ratio of 23.9% and had no borrowings or letters of credit issued under the facility, resulting in $1.5 billion of available funds.
A consolidated joint venture of the Company borrowed $120 million against a $150 million bank line of credit, payable by June 2032, for the construction of a facility in Saudi Arabia. Interest under the bank line of credit is based upon SOFR plus 1.40%. The bank line of credit contains a financial covenant regarding maximum debt-to-equity ratio of 75%. As of June 30, 2026, the joint venture was in compliance and will not have future borrowings on the line of credit. As of June 30, 2026, the Company had $78 million in borrowings related to this line of credit. The Company has $12 million in payments related to this line of credit due in the next twelve months. The Company can repay the entire outstanding facility balance without penalty at its sole discretion.
Other debt at June 30, 2026 included $38 million of amounts owed to current minority interest partners of NOV consolidated joint ventures, of which $2 million is due in the next twelve months.
The Company’s outstanding debt at June 30, 2026 also consisted of $1,092 million in 3.95% Senior Notes, maturing on December 1, 2042, and $497 million in 3.60% Senior Notes, maturing on December 1, 2029. The Company was in compliance with all covenants at June 30, 2026. Long-term lease liabilities totaled $520 million at June 30, 2026.
The Company had $909 million of outstanding letters of credit at June 30, 2026, primarily in Norway and the United States, that are under various bilateral letter of credit facilities. Letters of credit are issued as bid bonds, advanced payment bonds and performance bonds.
26
The following table summarizes our net cash provided by (used in) continuing operating activities, continuing investing activities and continuing financing activities for the periods presented (in millions):
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash provided by (used in) operating activities |
|
$ |
(9 |
) |
|
$ |
326 |
|
Net cash used in investing activities |
|
|
(114 |
) |
|
|
(162 |
) |
Net cash used in financing activities |
|
|
(263 |
) |
|
|
(333 |
) |
Significant uses of cash during the first six months of 2026
Other
The effect of the change in exchange rates on cash flows was a decrease of $2 million for the first six months of 2026, and an increase of $19 million for the first six months of 2025.
We believe that cash on hand, cash generated from operations and amounts available under our credit facilities and from other sources of debt will be sufficient to fund operations, lease payments, working capital needs, capital expenditure requirements, dividends and financing obligations.
During the three and six months ended June 30, 2026, the Company repurchased approximately 3.2 million shares of common stock under the program for an aggregate amount of $63 million and 6.7 million shares of common stock under the program for an aggregate amount of $130 million, respectively. During the three and six months ended June 30, 2025, the Company repurchased approximately 5.5 million shares of common stock under the program for an aggregate amount of $69 million, and 10.9 million shares of common stock under the program for an aggregate amount of $150 million, respectively. The Company expects to return at least 50% of Excess Free Cash Flow (defined as cash flow from operations less capital expenditures and other investments, including acquisitions and divestitures), through a combination of quarterly base dividends, opportunistic stock buybacks, and an annual supplemental dividend to true-up returns to shareholders on an annual basis.
We may pursue acquisition candidates, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. We continue to expect to fund future cash acquisitions primarily with cash flow from operations and borrowings, including the unborrowed portion of the revolving credit facility or new debt issuances, but may also issue additional equity either directly or in connection with acquisitions. There can be no assurance that additional financing for acquisitions will be available at terms acceptable to us.
Cautionary Note Regarding Forward-Looking Statements
This document contains, or has incorporated by reference, statements that are not historical facts, including estimates, projections, and statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often contain words such as “may,” “can,” “likely,” “believe,” “plan,” “predict,” “potential,” “will,” “intend,” “think,” “should,” “expect,” “anticipate,” “estimate,” “forecast,” “expectation,” “goal,” “outlook,” “projected,” “projections,” “target,” and other similar words, although some such statements are expressed differently. Other oral or written statements we release to the public may also contain forward-looking statements. Forward-looking statements involve risk and uncertainties and reflect our best judgment based on current information. You should be aware that our actual results could differ materially from results anticipated in such forward-looking statements due to a number of factors, including but not limited to changes in oil and gas prices, customer demand for our products, challenges related to NOV’s operations in the Middle East, potential catastrophic events related to our operations, protection of intellectual property rights, compliance with laws, and worldwide economic activity, including matters related to recent Russian sanctions and changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs and their related impacts on the economy. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. We undertake no obligation to update any such factors or forward-looking statements to reflect future events or developments. You should also consider carefully the statements under “Risk Factors,” as disclosed in our most recent Annual Report on Form 10-K, as updated in Part II, Item 1A of our most recent Quarterly Report on Form 10-Q, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our most recent Annual Report on Form 10-K, which address additional factors that could cause our actual results to differ from those set forth in such forward-looking statements, as well as additional disclosures we make in our press releases and other securities filings. We also suggest that you listen to our quarterly earnings release conference calls with financial analysts.
27
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to changes in foreign currency exchange rates and interest rates. Additional information concerning each of these matters follows:
Foreign Currency Exchange Rates
We have extensive operations in foreign countries. The net assets and liabilities of these operations are exposed to changes in foreign currency exchange rates, although such fluctuations have a muted effect on net income since the functional currency for the majority of them is the local currency. These operations also have net assets and liabilities not denominated in the functional currency, which exposes us to changes in foreign currency exchange rates that impact income. We recorded a foreign exchange loss in our income statement of $11 million in the first six months of 2026, compared to a $31 million foreign exchange loss in the same period of the prior year. Gains and losses are primarily due to exchange rate fluctuations related to monetary asset balances denominated in currencies other than the functional currency and adjustments to our hedged positions as a result of changes in foreign currency exchange rates. Currency exchange rate fluctuations may create losses in future periods to the extent we maintain net monetary assets and liabilities not denominated in the functional currency of the NOV operation.
Some of our revenues in foreign countries are denominated in U.S. dollars, and therefore, changes in foreign currency exchange rates impact our earnings to the extent that costs associated with those U.S. dollar revenues are denominated in the local currency. Similarly, some of our revenues are denominated in foreign currencies, but have associated U.S. dollar costs, which also give rise to foreign currency exchange rate exposure. In order to mitigate that risk, we may utilize foreign currency forward contracts to better match the currency of our revenues and associated costs. We do not use foreign currency forward contracts for trading or speculative purposes.
The Company had other financial market risk sensitive instruments (cash balances, overdraft facilities, accounts receivable and accounts payable) denominated in foreign currencies with transactional exposures totaling $592 million and translation exposures totaling $430 million as of June 30, 2026. The Company estimates that a hypothetical 10% movement of all applicable foreign currency exchange rates on the transactional exposures could affect net income by $47 million and the translational exposures could affect other comprehensive income by $43 million.
The counterparties to forward contracts are major financial institutions. The credit ratings and concentration of risk of these financial institutions are monitored on a continuing basis. Because these contracts are net-settled the Company’s credit risk with the counterparties is limited to the foreign currency rate differential at the end of the contract.
Interest Rate Risk
At June 30, 2026, borrowings consisted of $1,092 million in 3.95% Senior Notes, $497 million in 3.60% Senior Notes, and other debt of $117 million. At June 30, 2026, there were no outstanding letters of credit issued under the Company’s revolving credit facility, resulting in $1.5 billion of available funds. Additionally, the Company’s joint venture has outstanding borrowings of $78 million under a $150 million bank line of credit for the construction of a facility in Saudi Arabia. Interest under the bank line of credit is based upon SOFR plus 1.40%. Occasionally a portion of borrowings under our credit facility could be denominated in multiple currencies which could expose us to market risk with exchange rate movements. These instruments carry interest at a pre-agreed upon percentage point spread from either SOFR, EURIBOR, SONIA, CORRA, or NIBOR, or at the U.S. prime rate. Under our credit facility, we may, at our option, fix the interest rate for certain borrowings based on a spread over SOFR, EURIBOR, SONIA, CORRA or NIBOR for one month to six months. Our objective is to maintain a portion of our debt in variable rate borrowings for the flexibility obtained regarding early repayment without penalties and lower overall cost as compared with fixed-rate borrowings.
Item 4. Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures and is recorded, processed, summarized and reported within the time period specified in the rules and forms of the Securities and Exchange Commission. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this report at a reasonable assurance level.
There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
28
PART II - OTHER INFORMATION
Item 1A. Risk Factors
As of the date of this filing, the Company and its operations continue to be subject to the risk factors previously disclosed in Part I, Item 1A “Risk Factors” in our 2025 Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Period |
|
Total number |
|
|
Average |
|
|
Total number of |
|
|
Approximate dollar |
|
||||
April 1 through April 30, 2026 |
|
|
1,401,844 |
|
|
$ |
19.13 |
|
|
|
1,401,662 |
|
|
$ |
362,703,607 |
|
May 1 through May 31, 2026 |
|
|
627,826 |
|
|
|
20.37 |
|
|
|
625,823 |
|
|
|
349,955,114 |
|
June 1 through June 30, 2026 |
|
|
1,177,015 |
|
|
|
19.85 |
|
|
|
1,177,015 |
|
|
|
326,593,050 |
|
Total |
|
|
3,206,685 |
|
|
$ |
19.64 |
|
|
|
3,204,500 |
|
|
|
|
|
Item 4. Mine Safety Disclosures
Information regarding mine safety and other regulatory actions at our mines is included in Exhibit 95 to this Form 10-Q.
Item 5. Other Information
During the quarter ended June 30, 2026, no director or Section 16 officer
Item 6. Exhibits
Reference is hereby made to the Exhibit Index commencing on page 30.
29
INDEX TO EXHIBITS
3.1 |
|
Seventh Amended and Restated Certificate of Incorporation of NOV Inc. (1) |
|
|
|
3.2 |
|
Amended and Restated Bylaws of NOV Inc. (2) |
|
|
|
31.1 |
|
Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. (3) |
|
|
|
31.2 |
|
Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended. (3) |
|
|
|
32.1 |
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3) |
|
|
|
32.2 |
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3) |
|
|
|
95 |
|
Mine Safety Information pursuant to section 1503 of the Dodd-Frank Act. (3) |
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* Compensatory plan or arrangement for management or others.
We hereby undertake, pursuant to Regulation S-K, Item 601(b), paragraph (4) (iii), to furnish to the U.S. Securities and Exchange Commission, upon request, all constituent instruments defining the rights of holders of our long-term debt not filed herewith.
30
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: July 29, 2026 |
By: |
|
/s/ Christy H. Novak |
|
Christy H. Novak |
||
|
Vice President, Corporate Controller & Chief Accounting Officer |
||
|
(Duly Authorized Officer, Principal Accounting Officer) |
||
31