NOV Inc.

What they do

NOV designs, manufactures, and services a line of drilling, well servicing, and offshore production and construction equipment, and sells and rents drilling motors, downhole tools, and rig instrumentation. It also performs inspection and internal coating of oilfield tubular products, provides drill cuttings separation and waste management, and supplies expendables and spare parts for its installed equipment base. The company operates in approximately 503 locations across six continents and serves contract drillers, oilfield service companies, and oil and gas producers.

Revenue drivers

• Energy Equipment — Manufactures capital equipment and integrated systems for onshore and offshore drilling and production, including land rigs, offshore drilling packages, managed pressure drilling, hydraulic fracturing, coiled tubing, and subsea production technologies. Generated $1.22 billion of revenue in Q2 2026, an increase of 1% year-over-year, with operating profit of $177 million.
• Energy Products and Services — Designs, manufactures, rents, and sells products used in drilling, intervention, completion, and production, including drill bits, downhole tools, premium drill pipe, drilling fluids, completion tools, and artificial lift systems, plus software and digital solutions. Generated $974 million of revenue in Q2 2026, a decrease of 5% year-over-year, with operating profit of $85 million.
• Aftermarket support and spare parts — The company provides spare parts, service, repair, and advanced analytics for its large installed base of equipment, a recurring revenue stream tied to its role as an original equipment manufacturer.
• Capital equipment backlog — Energy Equipment backlog for capital equipment orders totaled $4.08 billion as of June 30, 2026, down $220 million from June 30, 2025. Q2 2026 new orders were $474 million with a book-to-bill of 74%.

Recent performance

For the second quarter of 2026, NOV reported revenues of $2.13 billion, up 4% sequentially and down 2% year-over-year, with net income of $112 million, or $0.31 per share. Adjusted EBITDA was $283 million, or 13.3% of sales, including a benefit of approximately $40 million related to tariff refunds. Operating profit was $193 million, or 9.0% of sales, up 35% versus the second quarter of 2025. Energy Equipment revenue rose 1% year-over-year to $1.22 billion with operating profit of $177 million, while Energy Products and Services revenue fell 5% to $974 million with operating profit of $85 million. NOV returned $127 million of capital to shareholders through share repurchases and dividends during the quarter.

Strategy

NOV's stated objective is to generate above-average, long-term capital returns by leveraging its scale, proprietary technology, and global footprint to lower the marginal cost and environmental footprint of energy development. The company focuses on digital, automation, and robotics solutions, and applies its expertise to alternative energy sources such as wind power and carbon sequestration. It emphasizes its large installed base for aftermarket support, customer fleet standardization, and a business model it describes as less asset- and capital-intensive than most energy industry participants. Management cites continued investment in superior solutions and initiatives to drive operational efficiencies.

Risks

• Dependence on oil and gas activity — Demand for NOV's products and services depends primarily on the number of rigs in operation, wells drilled, completions, and capital spending by oilfield service companies and producers, all of which can fluctuate significantly in a short period.
• Commodity price volatility — Average West Texas Intermediate crude was $65.46 per barrel in 2025, down 14.5% from 2024, and the fourth-quarter 2025 average was $59.64, which can reduce customer capital spending and demand for NOV equipment.
• Evolving environmental and climate policies — Governmental energy policies, climate change regulations, and political conditions in the United States and abroad can adversely impact exploration or development of oil or gas and therefore NOV's customers' activity.
• Geopolitical and supply chain disruptions — Interruptions from war, trade sanctions, or restrictions on oil-producing countries such as Russia, Iran, and Venezuela can disrupt NOV's global supply chain and operations.

Outlook

Management said the second quarter reflected significantly improved underlying industry fundamentals and that the company was better able to navigate logistical challenges in the Middle East while benefiting from improving demand in most major regions. CEO Jose Bayardo cited a growing pipeline of capital equipment opportunities and improving short-cycle activity, and said depleting inventories, heightened focus on energy security, and a decade of constrained investment in the industry's asset base is starting a synchronized global recovery. Management expects these actions and conditions to position NOV for meaningfully higher earnings over the coming years.