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Nabors Q1 2025 Earnings Report
Nabors reported its first quarter 2025 operating results, with revenues of $736 million and net income of $33 million, driven by the acquisition of Parker Wellbore and strategic alliances.
Key Takeaways
Nabors Industries Ltd. reported a strong first quarter in 2025, with operating revenues of $736 million and a net income attributable to shareholders of $33 million, or $2.18 per diluted share. This performance was significantly boosted by a one-time, non-cash net gain of $113 million from the Parker transaction, which also contributed to the company's portfolio and free cash flow. Despite some challenges in the U.S. drilling segment, international operations showed improving performance, and strategic initiatives like the SANAD joint venture and the expanded alliance with Corva AI are expected to drive future growth.
Operating revenues for Q1 2025 were $736 million, a slight increase from $730 million in Q4 2024.
Net income attributable to Nabors shareholders was $33 million, a significant improvement from a net loss of $54 million in the previous quarter.
The acquisition of Parker Wellbore was completed in March, strengthening Nabors' portfolio and is expected to be immediately accretive to 2025 free cash flow.
The SANAD joint venture deployed its tenth newbuild rig, with two more planned for startup in the second half of 2025, contributing materially to adjusted EBITDA.
Revenue by Segment
Forward Guidance
Nabors expects a substantial improvement in free cash flow generation over the remaining three quarters of 2025, driven by international drilling profitability, recovery in Lower 48 rig count, and Parker's incremental contribution.
Positive Outlook
- Parker acquisition expected to add material free cash flow and contribute approximately 25% of adjusted EBITDA from consolidated operations in Q2 2025.
- Targeting $40 million in cost synergies from the Parker acquisition.
- SANAD is on track to operate 15 newbuild rigs by early 2026, with additional newbuilds under discussion, leading to considerable free cash generation.
- Investments in international business are expected to generate meaningful returns with a significant number of rigs deployed.
- Anticipated recovery in Lower 48 rig count and continued progress in international drilling profitability.
Challenges Ahead
- Adjusted free cash flow for Q1 was impacted by $70 million below target capital expenses due to delayed SANAD newbuild rig milestones.
- Collections were $30 million below expectations in Q1.
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