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Nabors Industries Releases Fourth Quarter and Full-Year 2025 Financial Results

Nabors Industries Ltd., listed on the NYSE under the symbol NBR, has recently disclosed its financial results for the fourth quarter and the full year of 2025. This report underscores not only the company’s operating revenues and earnings but also significant transactions that have reshaped their financial standing as they look toward the future.

Financial Highlights

For the fourth quarter of 2025, Nabors reported operating revenues of $798 million, a slight decrease from the $818 million earned in the previous quarter. Notably, the net income attributable to Nabors' shareholders was recorded at $10 million, contrasting sharply with the $274 million from the third quarter. This change can largely be attributed to a one-time gain of $314 million related to the sale of Quail Tools in the previous quarter, which had significantly inflated their previous financial results.

Despite this downturn in quarterly earnings, Nabors managed to maintain a healthy adjusted EBITDA of $222 million, evidencing solid operational performance even as revenues fluctuated. Compared to the $236 million from the third quarter, this performance demonstrates resilience amid challenging market conditions.

Debt Management and Strategic Moves

A significant aspect of Nabors’ report was centered on its efforts to reduce debt. The company successfully executed various financial strategies aimed at strengthening its capital structure. The completion of several transactions allowed for a reduction of outstanding net debt by roughly $554 million since the end of 2024. Some notable actions included the full collection of a $250 million seller financing note tied to Quail Tools and the issuance of $700 million in new long-term notes.

Moreover, Nabors redeemed a substantial part of its notes due in 2027 and 2028, positioning itself to manage future liabilities more effectively. By focusing on these strategies, the company has laid a foundation to lower its annual interest expense substantially, projecting declines in interest costs by about $45 million annually. This deliberate deleveraging approach is anticipated to enhance the firm’s free cash flow, ultimately benefiting shareholders.

Operational Insights

In terms of operational performance, Nabors reported noteworthy improvements within various segments of its business. The adjusted EBITDA from its U.S. drilling segment reflected a strong average rig count, marking an increase in activity at a time when many in the industry face challenges from reduced demand.

Nabors’ International Drilling segment also showed resilience with a reported adjusted EBITDA of $131.3 million for the quarter. The company experienced an increase in average rig count, contributing positively to overall performance. Moreover, their efforts in the Drilling Solutions sector resulted in increased revenue from services to third-party contractors, evidencing the company’s strategic moves are paying off across diverse operations.

Additionally, the introduction of innovative technologies on their rigs, such as the new Canrig® automated floor wrench, has underscored Nabors’ commitment to operational efficiency and technological advancement. This tool not only promises to reduce rig operation cycle times by 30% but has garnered significant interest from customers, reflecting the firm’s focus on evolving with industry demands.

Future Outlook

Looking ahead, Nabors has provided projections for the first quarter of 2026, anticipating an average rig count of 64-65 rigs in the Lower 48 market along with a daily adjusted gross margin of around $13,200. The company expects to continue benefiting from increases in drilling activity in both domestic and international markets, aiming for sustainable growth in 2026.

Nabors’ strategic pivots in its financial management and operational capabilities reflect a broader trend within the energy sector, where companies are increasingly prioritizing efficiency and financial prudence amidst a volatile market landscape. CEO Anthony G. Petrello emphasized the company's pathway towards improved leverage metrics and long-term value creation, setting a positive tone for Nabors’ future endeavors in the complex energy landscape.