Nabors Industries Ltd.

What they do

Nabors operates land-based drilling rigs in the United States and international markets, along with offshore platform rigs, in over 20 countries. The company also sells performance software, tubular running services, managed pressure drilling services, rig instrumentation and manufactured drilling equipment to its own fleet and third parties. As of December 31, 2025, it had 242 actively marketed land rigs and 27 actively marketed offshore platform rigs. Its four reportable segments are U.S. Drilling, International Drilling, Drilling Solutions and Rig Technologies.

Revenue drivers

• International Drilling — Land drilling in the Middle East and Latin America, notably Saudi Arabia, Kuwait, Argentina, Colombia and Mexico. Second quarter 2026 adjusted EBITDA was $131 million, the largest segment contribution, and daily adjusted gross margin rose to $17,534.
• U.S. Drilling — Land and offshore platform drilling in the Lower 48, Alaska and the Gulf of America, with a marketed fleet of 121 land rigs and 13 offshore platform rigs at year-end 2025. Second quarter 2026 adjusted EBITDA was $94 million.
• Drilling Solutions — Performance software, RigCLOUD, managed pressure drilling and tubular running services sold to Nabors and third-party rigs. Second quarter 2026 adjusted EBITDA was $40 million, with double-digit sequential Lower 48 revenue growth.
• Rig Technologies — Manufacturing of advanced drilling equipment, rig instrumentation and automation products such as Canrig equipment and the RZR rig floor module, sold to Nabors and third-party customers.

Recent performance

Second quarter 2026 operating revenues were $814.8 million, up about 4% from $783.5 million in the first quarter but below $832.8 million in the prior-year quarter, which included $63 million from the divested Quail Tools. The company reported a net loss of $22 million for the quarter and adjusted EBITDA of $221.7 million, up from $204.8 million sequentially but below $248.5 million a year earlier. Adjusted free cash flow turned positive at $12.3 million after a $48.2 million outflow in the first quarter. Average total rigs working rose to 171.2 from 167.9 sequentially and 158.3 a year earlier, with Lower 48 at 67.8 and International at 93.4.

Strategy

Nabors is integrating downhole hardware, surface equipment and software into its rig designs while pushing drilling automation to improve performance. The company expanded internationally through the March 2025 Parker Drilling acquisition and the SANAD joint venture in Saudi Arabia, which had deployed 16 newbuild rigs as of the second quarter 2026 with three more scheduled for 2026. In the Lower 48, it is adding high-specification PACE-X Ultra rigs and automation products such as the Canrig TITAN automated rig floor wrench. It divested Quail Tools in August 2025 for $375 million cash plus a $250 million seller note that was prepaid in full in 2025. Management also cites technology adoption, disciplined capital allocation and higher free cash flow as priorities.

Risks

• Commodity price and demand swings — Nabors' revenue depends on oil and gas company spending for exploration and development, which is influenced by volatile crude oil and natural gas prices.
• Excess rig capacity and price competition — The company states drilling capacity has historically exceeded demand in many markets, and contracts are largely awarded on a bid basis, pressuring pricing.
• Customer concentration and contract renewal — Nabors must renew contracts to stay competitive, and the loss of one or more large customers could materially hurt results; contracts may be renegotiated or terminated on short notice.
• Indebtedness and financial flexibility — Long-term debt was $2.12 billion against $544.1 million of shareholder equity at June 30, 2026, and the company cites its long-term indebtedness as a constraint on financial and operating flexibility.

Outlook

Management said second quarter 2026 results showed momentum, with all operating segments exceeding targets. It cited a strengthened Lower 48 rig count and longer contract backlog, plus reliable Middle East operations and SANAD newbuild deployments internationally. The company expects three more SANAD newbuilds to be deployed in 2026. The filing notes that demand for its services depends on oil and gas prices and customer spending, which can fluctuate widely.