Nabors Industries (NBR) Q4 2024 earnings summary

Executive summary

• Adjusted EBITDA for Q4 2024 was $221 million, with free cash flow negatively impacted by delayed receivables in Mexico and higher capex, while international markets saw robust rig deployments and Parker Wellbore acquisition advanced.

• International expansion included new rig awards in Argentina, Colombia, Algeria, and Saudi Arabia, with SANAD JV growth and technology-driven performance improvements.

• The U.S. Lower 48 market remained flat, with stable margins but reduced rig count and muted recovery prospects.

• Technology-focused segments (NDS and Rig Tech) contributed 19.5% of consolidated EBITDA, with NDS gross margin exceeding 54%.

• SANAD JV in Saudi Arabia continues its new build program, targeting 50 rigs over 10 years, with strong EBITDA contributions and long-term contracts.

Financial highlights

• Q4 2024 revenue was $730 million, nearly flat sequentially, with U.S. drilling revenue declining and international drilling revenue increasing.

• Adjusted EBITDA for Q4 was $221 million, with net income of $10.1 million and net loss attributable to shareholders of $54 million.

• Adjusted free cash flow for Q4 was negative $53 million, mainly due to delayed Mexican receivables and higher capex.

• Year-end net debt was $2.1 billion, with cash and short-term investments at $397 million.

• Q4 capex was $241 million, with full-year 2024 capex at $610 million, exceeding initial targets due to SANAD new builds.

Outlook and guidance

• 2025 guidance anticipates a flat U.S. market, robust international growth, and continued investment in Saudi Arabia.

• Lower 48 average rig count expected at 61–64, with daily gross margin around $14,800.

• International Drilling targeting daily margin of ~$17,000, with average rig count of 85–89.

• NDS EBITDA projected to improve by 6% to $140 million; Rig Tech EBITDA to reach $30 million.

• 2025 capex forecasted at $710–$720 million, with $360 million for SANAD new builds; consolidated free cash flow expected to be around break-even.