Nabors Announces Fourth Quarter and Full-Year 2025 Results

HAMILTON, Bermuda, Feb.11, 2026 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported fourth quarter 2025 operating revenues of $798 million, compared to operating revenues of $818 million in the third quarter. Net income attributable to Nabors' shareholders for the quarter was $10 million, compared to $274 million in the third quarter. This equates to earnings per diluted share of $0.17, compared to $16.85 in the third quarter. The third quarter included a one-time, after-tax gain on the disposition of Quail Tools, LLC ("Quail") of $314 million, or $20.52 per diluted share. Fourth-quarter adjusted EBITDA was $222 million, compared to $236 million in the previous quarter.

4Q 2025 Highlights

Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "2025 proved to be a transformational year for our capital structure. Including the redemption in January, we reduced our total debt by $388 million since the end of 2024. This represents significant progress on our path to delevering. As a result of this significant reduction in debt, our annual interest expense should decline by approximately $45 million, translating into a dollar-for-dollar improvement in adjusted free cash flow.

"Nabors' fourth quarter results improved compared to the third quarter, excluding the contribution from Quail. This sequential improvement was broad-based across all segments of our operations.

"In the Lower 48 business and International Drilling segment, our average rig counts in the fourth quarter exceeded both our expectations and those of the prior quarter. Our Lower 48 count increased in the latter portion of the quarter, highlighting our success executing on opportunities to add rigs. In our International Drilling segment, SANAD added a newbuild in Saudi Arabia, two rigs were redeployed in Argentina, and three platform rigs in Mexico continued to work throughout the quarter.

"The sequential increase in Drilling Solutions' ("NDS") adjusted EBITDA was particularly encouraging. The largest contributors to this increase include casing running, managed pressure drilling, and performance software in our international markets. In the Lower 48 market, NDS's revenue on third-party drilling contractors' rigs increased sequentially by more than 10%, even as that market's rig count grew by just 1%. This performance demonstrates the value of the NDS portfolio and our success targeting the third-party rig market."

Segment Results

International Drilling adjusted EBITDA totaled $131.3 million, compared to $127.6 million in the third quarter. Average rig count increased by more than four rigs, reflecting the recent startup of rigs in Argentina, Saudi Arabia and Colombia. Daily adjusted gross margin for the fourth quarter was $17,630, partially reflecting rig startup inefficiencies and activity interruptions in certain markets.

The U.S. Drilling segment reported fourth quarter adjusted EBITDA of $93.2 million, compared to $94.2 million in the previous quarter. Results in the Lower 48 operation improved on increases in average rig count and daily gross margin. These were mainly offset by a margin decline in Alaska and Offshore which was smaller than expected.

Drilling Solutions adjusted EBITDA was $41.3 million, compared to $60.7 million in the third quarter. The segment's third quarter results included the contribution from Quail through its disposition in August. Excluding the impact of Quail from the third quarter results, Drilling Solutions adjusted EBITDA grew 2.3%.

Rig Technologies adjusted EBITDA was $4.9 million, a 31% increase from $3.8 million in the prior quarter. Sales of capital equipment improved in the quarter.

Adjusted Free Cash Flow

Consolidated adjusted free cash flow was $132 million in the fourth quarter, a significant increase from $6 million in the third quarter. Several factors contributed to this performance. In addition to stronger EBITDA, collections in Mexico improved substantially. Capital spending in the fourth quarter was below expectations, both for the SANAD newbuild rig program and in the balance of the operation. The Company also received settlements from several outstanding claims.

Miguel Rodriguez, Nabors CFO, stated, "Our achievements over the past year demonstrate that we are delivering on our commitments. Our top priority is the reduction of debt. We intend to follow the recent progress with an additional decrease this year.

"In the fourth quarter, our adjusted EBITDA exceeded our expectations. The U.S. Drilling and Drilling Solutions segments contributed to this outperformance. All three of the U.S. Drilling operations were stronger than expected. In the Lower 48, the increase in rig count late in the quarter sets us up for a positive start to 2026. Drilling Solutions' strength was evident across multiple service lines, especially in its international markets.

"Adjusted free cash flow in the fourth quarter also exceeded our expectations. Going forward, our focus will remain strengthening our capital structure, while delivering durable growth and long-term value."

Outlook

Nabors expects the following metrics for the first quarter of 2026:

U.S. Drilling

International

Drilling Solutions

Rig Technologies

Capital Expenditures

Adjusted Free Cash Flow

Nabors expects the following metrics for full-year 2026:

U.S. Drilling

International

Drilling Solutions

Rig Technologies

Capital Expenditures

Adjusted Free Cash Flow

Mr. Petrello concluded, "The steps we have taken over the past year have significantly reduced our debt, improved our leverage metrics, and lowered our interest payments. In addition, we retain a business portfolio from Parker that contributes materially to EBITDA and free cash flow.

"Looking forward, the Lower 48 market appears to be stabilizing. At the same time, the opportunity set in our international markets looks attractive. Our diversified business portfolio is designed to capitalize on this environment."

About Nabors Industries

Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With presence in more than 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com.

Forward-looking Statements

The information included in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to a number of risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements. The forward-looking statements contained in this press release reflect management's estimates and beliefs as of the date of this press release. Nabors does not undertake to update these forward-looking statements.

Non-GAAP Disclaimer

This press release presents certain "non-GAAP" financial measures. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Adjusted operating income (loss) represents income (loss) before income taxes, interest expense, investment income (loss), gain on disposition of Quail Tools, gain on bargain purchase, and other, net. Adjusted EBITDA is computed similarly, but also excludes depreciation and amortization expenses. In addition, adjusted EBITDA and adjusted operating income (loss) exclude certain cash expenses that the Company is obligated to make. Net debt is calculated as total debt minus the sum of cash, cash equivalents and short-term investments.

Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition-related costs. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.

Each of these non-GAAP measures has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including Adjusted EBITDA, adjusted operating income (loss), net debt, and adjusted free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability, performance and liquidity. Securities analysts and investors also use these measures as some of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. Reconciliations of consolidated adjusted EBITDA and adjusted operating income (loss) to income (loss) from continuing operations before income taxes, net debt to total debt, and adjusted free cash flow to net cash provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release. We do not provide a forward-looking reconciliation of our outlook for Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash Flow, as the amount and significance of items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.

Investor Contacts: William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via e-mail [email protected] or Kara K. Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email [email protected]. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail [email protected]

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

(In thousands, except per share amounts)

2025

2024

2025

2024

Revenues and other income:

Operating revenues

$ 797,529

$ 729,819

$ 818,190

$ 3,184,693

$ 2,930,126

Investment income (loss)

7,600

8,828

7,323

27,648

38,713

Total revenues and other income

805,129

738,647

825,513

3,212,341

2,968,839

Costs and other deductions:

Direct costs

486,367

433,404

491,828

1,914,376

1,742,411

General and administrative expenses

76,279

61,436

77,076

304,587

249,317

Research and engineering

13,328

14,434

12,978

53,063

57,063

Depreciation and amortization

159,188

156,348

160,347

649,234

633,408

Interest expense

50,625

53,642

54,334

215,366

210,864

Gain on disposition of Quail Tools

1,595

(415,557)

(413,962)

Gain on bargain purchase

2,846

(113,653)

Other, net

(9,532)

37,021

24,470

65,802

106,816

Total costs and other deductions

780,696

756,285

405,476

2,674,813

2,999,879

Income (loss) before income taxes

24,433

(17,638)

420,037

537,528

(31,040)

Income tax expense (benefit)

7,440

15,231

117,571

163,095

56,947

Net income (loss)

16,993

(32,869)

302,466

374,433

(87,987)

Less: Net (income) loss attributable to noncontrolling interest

(6,645)

(20,802)

(28,268)

(87,809)

(88,097)

Net income (loss) attributable to Nabors

$ 10,348

$ (53,671)

$ 274,198

$ 286,624

$ (176,084)

Earnings (losses) per share:

Basic

$ 0.17

$ (6.67)

$ 18.25

$ 18.75

$ (22.37)

Diluted

$ 0.17

$ (6.67)

$ 16.85

$ 17.39

$ (22.37)

Weighted-average number of common shares outstanding:

Basic

14,131

9,213

14,098

13,193

9,202

Diluted

14,210

9,213

15,321

14,416

9,202

Adjusted EBITDA

$ 221,555

$ 220,545

$ 236,308

$ 912,667

$ 881,335

Adjusted operating income (loss)

$ 62,367

$ 64,197

$ 75,961

$ 263,433

$ 247,927

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31,

September 30,

December 31,

(In thousands)

2025

2024

ASSETS

Current assets:

Cash and short-term investments

$ 940,738

$ 428,079

$ 397,299

Notes receivable

250,035

Accounts receivable, net

391,705

487,062

387,970

Other current assets

219,130

259,251

214,268

Total current assets

1,551,573

1,424,427

999,537

Property, plant and equipment, net

2,920,019

2,931,290

2,830,957

Other long-term assets

318,065

477,787

673,807

Total assets

$ 4,789,657

$ 4,833,504

$ 4,504,301

LIABILITIES AND EQUITY

Current liabilities:

Current debt, net

$ 377,492

$ -

Trade accounts payable

300,467

352,415

321,030

Other current liabilities

315,042

327,799

250,887

Total current liabilities

993,001

680,214

571,917

Long-term debt, net

2,117,187

2,347,984

2,505,217

Other long-term liabilities

241,826

237,136

220,829

Total liabilities

3,352,014

3,265,334

3,297,963

Redeemable noncontrolling interest in subsidiary

482,446

629,261

785,091

Equity:

Shareholders' equity

590,727

579,776

134,996

Noncontrolling interest

364,470

359,133

286,251

Total equity

955,197

938,909

421,247

Total liabilities and equity

$ 4,789,657

$ 4,833,504

$ 4,504,301

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

SEGMENT REPORTING

(Unaudited)

The following tables set forth certain information with respect to our reportable segments and rig activity:

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

(In thousands, except rig activity)

2025

2024

2025

2024

Operating revenues:

U.S. Drilling

$ 240,624

$ 241,637

$ 249,836

$ 976,644

$ 1,028,122

International Drilling

423,842

371,406

407,235

1,597,765

1,446,092

Drilling Solutions

107,879

75,992

141,942

513,283

314,071

Rig Technologies (1)

37,747

56,166

35,597

154,036

201,677

Other reconciling items (2)

(12,563)

(15,382)

(16,420)

(57,035)

(59,836)

Total operating revenues

$ 797,529

$ 729,819

$ 818,190

$ 3,184,693

$ 2,930,126

Adjusted EBITDA: (3)

U.S. Drilling

$ 93,213

$ 105,757

$ 94,161

$ 381,906

$ 448,840

International Drilling

131,262

111,962

127,551

491,957

436,782

Drilling Solutions

41,302

33,809

60,666

219,322

132,375

Rig Technologies (1)

4,946

9,208

3,770

19,453

29,443

Other reconciling items (4)

(49,168)

(40,191)

(49,840)

(199,971)

(166,105)

Total adjusted EBITDA

$ 221,555

$ 220,545

$ 236,308

$ 912,667

$ 881,335

Adjusted operating income (loss): (5)

U.S. Drilling

$ 28,556

$ 38,973

$ 31,429

$ 131,372

$ 176,281

International Drilling

49,638

29,528

45,476

164,123

107,858

Drilling Solutions

34,022

28,944

49,982

167,282

112,387

Rig Technologies (1)

1,341

8,413

877

8,274

20,243

Other reconciling items (4)

(51,190)

(41,661)

(51,803)

(207,618)

(168,842)

Total adjusted operating income (loss)

$ 62,367

$ 64,197

$ 75,961

$ 263,433

$ 247,927

Rig activity:

Average Rigs Working: (7)

Lower 48

59.8

65.9

59.2

60.5

68.6

Other US

9.8

6.8

10.0

9.4

6.5

U.S. Drilling

69.6

72.7

69.2

69.9

75.1

International Drilling

93.3

84.8

89.2

88.4

83.7

Total average rigs working

162.9

157.5

158.4

158.3

158.8

Daily Rig Revenue: (6),(8)

Lower 48

$ 32,938

$ 33,396

$ 34,017

$ 33,737

$ 34,771

Other US

66,003

62,624

70,035

67,698

65,264

U.S. Drilling (10)

37,582

36,137

39,219

38,290

37,419

International Drilling

49,391

47,620

49,596

49,532

47,189

Daily Adjusted Gross Margin: (6),(9)

Lower 48

$ 13,303

$ 14,940

$ 13,151

$ 13,660

$ 15,411

Other US

29,557

34,707

31,527

30,921

36,440

U.S. Drilling (10)

15,586

16,793

15,805

15,974

17,237

International Drilling

17,630

16,687

17,931

17,634

16,478

(1)

Includes our oilfield equipment manufacturing activities.

(2)

Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment.

(3)

Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)".

(4)

Represents the elimination of inter-segment transactions and unallocated corporate expenses.

(5)

Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)".

(6)

Rig revenue days represents the number of days the Company's rigs are contracted and performing under a contract during the period. These would typically include days in which operating, standby and move revenue is earned.

(7)

Average rigs working represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year. Average rigs working can also be calculated as rig revenue days during the period divided by the number of calendar days in the period.

(8)

Daily rig revenue represents operating revenue, divided by the total number of revenue days during the quarter.

(9)

Daily adjusted gross margin represents operating revenue less direct costs, divided by the total number of rig revenue days during the quarter.

(10)

The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas.

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

Reconciliation of Earnings per Share

(Unaudited)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

(in thousands, except per share amounts)

2025

2024

2025

2024

BASIC EPS:

Net income (loss) (numerator):

Income (loss), net of tax

16,993

(32,869)

302,466

374,433

(87,987)

Less: net (income) loss attributable to noncontrolling interest

(6,645)

(20,802)

(28,268)

(87,809)

(88,097)

Less: deemed dividends to SPAC public shareholders

(250)

—

(750)

(1,000)

—

Less: distributed and undistributed earnings allocated to unvested shareholders

(301)

—

(8,828)

(9,149)

—

Less: accrued distribution on redeemable noncontrolling interest in subsidiary

(7,344)

(7,794)

(7,344)

(29,136)

(29,723)

Numerator for basic earnings per share:

Adjusted income (loss), net of tax - basic

2,453

(61,465)

257,276

247,339

(205,807)

Weighted-average number of shares outstanding - basic

14,131

9,213

14,098

13,193

9,202

Earnings (losses) per share:

Total Basic

0.17

(6.67)

18.25

18.75

(22.37)

DILUTED EPS:

Adjusted income (loss), net of tax - basic

2,453

(61,465)

257,276

247,339

(205,807)

Add: after tax interest expense of convertible notes

—

848

3,392

—

Add: effect of reallocating undistributed earnings of unvested shareholders

—

Adjusted income (loss), net of tax - diluted

2,454

(61,465)

258,152

250,763

(205,807)

Weighted-average number of shares outstanding - basic

14,131

9,213

14,098

13,193

9,202

Add: if converted dilutive effect of convertible notes

—

1,176

—

Add: dilutive effect of potential common shares

—

Weighted-average number of shares outstanding - diluted

14,210

9,213

15,321

14,416

9,202

Earnings (losses) per share:

Total Diluted

0.17

(6.67)

16.85

17.39

(22.37)

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT

(Unaudited)

(In thousands)

Three Months Ended December 31, 2025

U.S.

Drilling

International

Drilling

Solutions

Rig

Technologies

Other

reconciling

items

Total

Adjusted operating income (loss)

$ 28,556

$ 49,638

$ 34,022

$ 1,341

$ (51,190)

$ 62,367

Depreciation and amortization

64,657

81,624

7,280

3,605

2,022

159,188

Adjusted EBITDA

$ 93,213

$ 131,262

$ 41,302

$ 4,946

$ (49,168)

$ 221,555

Three Months Ended December 31, 2024

U.S.

Drilling

International

Drilling

Solutions

Rig

Technologies

Other

reconciling

items

Total

Adjusted operating income (loss)

$ 38,973

$ 29,528

$ 28,944

$ 8,413

$ (41,661)

$ 64,197

Depreciation and amortization

66,784

82,434

4,865

795

1,470

156,348

Adjusted EBITDA

$ 105,757

$ 111,962

$ 33,809

$ 9,208

$ (40,191)

$ 220,545

Three Months Ended September 30, 2025

U.S.

Drilling

International

Drilling

Solutions

Rig

Technologies

Other

reconciling

items

Total

Adjusted operating income (loss)

$ 31,429

$ 45,476

$ 49,982

$ 877

$ (51,803)

$ 75,961

Depreciation and amortization

62,732

82,075

10,684

2,893

1,963

160,347

Adjusted EBITDA

$ 94,161

$ 127,551

$ 60,666

$ 3,770

$ (49,840)

$ 236,308

Year Ended December 31, 2025

U.S.

Drilling

International

Drilling

Solutions

Rig

Technologies

Other

reconciling

items

Total

Adjusted operating income (loss)

$ 131,372

$ 164,123

$ 167,282

$ 8,274

$ (207,618)

$ 263,433

Depreciation and amortization

250,534

327,834

52,040

11,179

7,647

649,234

Adjusted EBITDA

$ 381,906

$ 491,957

$ 219,322

$ 19,453

$ (199,971)

$ 912,667

Year Ended December 31, 2024

U.S.

Drilling

International

Drilling

Solutions

Rig

Technologies

Other

reconciling

items

Total

Adjusted operating income (loss)

$ 176,281

$ 107,858

$ 112,387

$ 20,243

$ (168,842)

$ 247,927

Depreciation and amortization

272,559

328,924

19,988

9,200

2,737

633,408

Adjusted EBITDA

$ 448,840

$ 436,782

$ 132,375

$ 29,443

$ (166,105)

$ 881,335

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF ADJUSTED GROSS MARGIN BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT

(Unaudited)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

(In thousands)

2025

2024

2025

2024

Lower 48 - U.S. Drilling

Adjusted operating income (loss)

$ 13,015

$ 27,354

$ 13,689

$ 67,214

$ 129,812

Plus: General and administrative costs

4,874

5,156

4,745

18,917

19,452

Plus: Research and engineering

1,199

1,002

1,121

4,031

3,847

GAAP Gross Margin

19,088

33,512

19,555

90,162

153,111

Plus: Depreciation and amortization

54,123

57,019

52,120

211,548

233,555

Adjusted gross margin

$ 73,211

$ 90,531

$ 71,675

$ 301,710

$ 386,666

Other - U.S. Drilling

Adjusted operating income (loss)

$ 15,541

$ 11,619

$ 17,740

$ 64,158

$ 46,469

Plus: General and administrative costs

416

305

568

2,285

1,250

Plus: Research and engineering

301

206

GAAP Gross Margin

16,047

11,996

18,393

66,744

47,925

Plus: Depreciation and amortization

10,534

9,765

10,612

38,986

39,004

Adjusted gross margin

$ 26,581

$ 21,761

$ 29,005

$ 105,730

$ 86,929

U.S. Drilling

Adjusted operating income (loss)

$ 28,556

$ 38,973

$ 31,429

$ 131,372

$ 176,281

Plus: General and administrative costs

5,290

5,461

5,313

21,202

20,702

Plus: Research and engineering

1,289

1,074

1,206

4,332

4,053

GAAP Gross Margin

35,135

45,508

37,948

156,906

201,036

Plus: Depreciation and amortization

64,657

66,784

62,732

250,534

272,559

Adjusted gross margin

$ 99,792

$ 112,292

$ 100,680

$ 407,440

$ 473,595

International Drilling

Adjusted operating income (loss)

$ 49,638

$ 29,528

$ 45,476

$ 164,123

$ 107,858

Plus: General and administrative costs

18,207

16,758

18,015

70,468

62,306

Plus: Research and engineering

1,821

1,431

1,665

6,398

5,886

GAAP Gross Margin

69,666

47,717

65,156

240,989

176,050

Plus: Depreciation and amortization

81,624

82,434

82,075

327,834

328,924

Adjusted gross margin

$ 151,290

$ 130,151

$ 147,231

$ 568,823

$ 504,974

Adjusted gross margin by segment represents adjusted operating income (loss) plus general and administrative

costs, research and engineering costs and depreciation and amortization.

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO NET INCOME (LOSS)

(Unaudited)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

(In thousands)

2025

2024

2025

2024

Net income (loss)

$ 16,993

$ (32,869)

$ 302,466

$ 374,433

$ (87,987)

Income tax expense (benefit)

7,440

15,231

117,571

163,095

56,947

Income (loss) before income taxes

24,433

(17,638)

420,037

537,528

(31,040)

Investment (income) loss

(7,600)

(8,828)

(7,323)

(27,648)

(38,713)

Interest expense

50,625

53,642

54,334

215,366

210,864

Gain on disposition of Quail Tools

1,595

(415,557)

(413,962)

Gain on bargain purchase

2,846

(113,653)

Other, net

(9,532)

37,021

24,470

65,802

106,816

Adjusted operating income (loss) (1)

62,367

64,197

75,961

263,433

247,927

Depreciation and amortization

159,188

156,348

160,347

649,234

633,408

Adjusted EBITDA (2)

$ 221,555

$ 220,545

$ 236,308

$ 912,667

$ 881,335

(1) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.

(2) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

RECONCILIATION OF NET DEBT TO TOTAL DEBT

(Unaudited)

December 31,

September 30,

December 31,

(In thousands)

2025

2024

Current debt, net

$ 377,492

$ -

Long-term debt, net

2,117,187

2,347,984

2,505,217

Total Debt

2,494,679

2,347,984

2,505,217

Less: Cash and short-term investments

940,738

428,079

397,299

Net Debt

$ 1,553,941

$ 1,919,905

$ 2,107,918

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED FREE CASH FLOW TO

NET CASH PROVIDED BY OPERATING ACTIVITIES

(Unaudited)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

(In thousands)

2025

Net cash provided by operating activities

$ 245,841

$ 207,880

$ 693,266

Add: Capital expenditures, net of proceeds from

sales of assets

(114,043)

(202,267)

(617,320)

Free cash flow

$ 131,798

$ 5,613

$ 75,946

Cash paid for acquisition related costs (1)

40,816

Adjusted free cash flow

$ 131,798

$ 5,613

$ 116,762

(1) Cash paid related to the Parker Drilling acquisition

Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition related costs. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.

SOURCE Nabors Industries Ltd.