Nabors Industries (NBR) Q1 2025 earnings summary

Executive summary

• Completed acquisition of Parker Wellbore (Parker Drilling), adding significant assets, 4.8 million shares, $0.6 million cash consideration, and a $113 million bargain purchase gain; integration and synergy realization on track for $40 million in 2025.

• Net income attributable to shareholders was $33 million ($2.18 per diluted share) for Q1 2025, reversing a prior net loss, aided by a $113 million non-cash gain from the Parker acquisition.

• International drilling, especially in Saudi Arabia, performed well; U.S. Lower 48 faced margin pressure and rig count volatility due to operational inefficiencies and customer churn.

• Adjusted EBITDA was $206.3 million, down from $220.5 million in Q4, with Parker contributing $7.8 million post-acquisition.

• SANAD JV in Saudi Arabia deployed its tenth newbuild rig, with more scheduled for 2025, supporting international growth.

Financial highlights

• Q1 2025 revenue was $736 million, up 1% sequentially; international segment and Parker Wellbore offset U.S. declines.

• Net income for Q1 2025 was $57.2 million, up from a net loss of $9 million in Q1 2024.

• Adjusted EBITDA was $206.3 million, with a margin of approximately 27%.

• Adjusted free cash flow for Q1 2025 was negative $71.4 million, reflecting high capital expenditures and seasonal payments.

• Net debt at March 31, 2025, was $2.28 billion, up from $2.11 billion at year-end 2024.

Outlook and guidance

• Expect to add 10 rigs internationally over the next three quarters, with six deploying in Q2; international average daily gross margin projected to increase to $17,700 in Q2.

• U.S. Lower 48 rig count expected to rise to 63–64 in Q2, with daily margins forecast around $14,100.

• Parker Wellbore expected to generate $150 million EBITDA in 2025, with $130 million consolidated and $40 million in synergies.

• Full-year 2025 capex expected at $770–$780 million, including $60 million for Parker.

• Adjusted free cash flow for 2025 targeted at ~$80 million (excluding tariffs).