Third quarter 2026
Filed Oct 27, 2026Record International Drilling Margin. $75 Million in Adjusted Free Cash Flow. Nabors Reports Third Quarter 2026 Results.
Operating revenues, adjusted EBITDA, adjusted operating income and adjusted free cash flow all increased sequentially, supported by International Drilling margins, a larger Lower 48 working fleet and Drilling Solutions growth. GAAP net income attributable to Nabors remained a loss of $11 million, while the company highlighted Saudi rig suspensions and substantial SANAD capital spending.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 operating revenuesGAAP | $872.2M | up 7% sequentially | – |
| Q3 2026 total revenues and other incomeGAAP | $876.3M | – | – |
| Q3 2026 income (loss) before income taxesGAAP | $36.43M | – | – |
| Q3 2026 net income (loss)GAAP | $15.98M | – | – |
| Q3 2026 net income (loss) attributable to NaborsGAAP | −$11.16M | – | – |
| Q3 2026 basic earnings (losses) per shareGAAP | $ (1.24 ) | – | – |
| Q3 2026 diluted earnings (losses) per shareGAAP | $ (1.24 ) | – | – |
| Q3 2026 adjusted EBITDAnon-GAAP | $245.5M | up nearly 11% from the second quarter | – |
| Q3 2026 adjusted operating income (loss)non-GAAP | $85.80M | – | – |
| Q3 2026 net cash provided by operating activitiesGAAP | $238.9M | – | – |
| Q3 2026 capital expenditures, net of proceeds from sales of assetsother | −$164.4M | – | – |
| Q3 2026 free cash flownon-GAAP | $74.52M | – | – |
| Q3 2026 adjusted free cash flownon-GAAP | $74.52M | up $62 million sequentially | – |
| Q3 2026 average Lower 48 rigs workingother | 72.8 | A 7% increase in the average Lower 48 working fleet | – |
| Q3 2026 average International Drilling rigs workingother | 94.9 | – | – |
| Q3 2026 total average rigs workingother | 177.1 | – | – |
| Q3 2026 Lower 48 daily rig revenueother | $34.76M | – | – |
| Q3 2026 Lower 48 daily adjusted gross marginnon-GAAP | $14.02M | – | – |
| Q3 2026 International Drilling daily rig revenueother | $52.52M | – | – |
| Q3 2026 International Drilling daily adjusted gross marginnon-GAAP | $19.06M | up $1,526, or 8.7%, sequentially | – |
| Nine months ended September 30, 2026 operating revenuesGAAP | $2.47B | – | – |
| Nine months ended September 30, 2026 net income (loss) attributable to NaborsGAAP | −$48.66M | – | – |
| Nine months ended September 30, 2026 adjusted EBITDAnon-GAAP | $672.0M | – | – |
| Nine months ended September 30, 2026 adjusted operating income (loss)non-GAAP | $195.5M | – | – |
| Nine months ended September 30, 2026 net cash provided by operating activitiesGAAP | $487.5M | – | – |
| Nine months ended September 30, 2026 adjusted free cash flownon-GAAP | $38.65M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. DrillingA 7% increase in the average Lower 48 working fleet and higher daily adjusted gross margin drove adjusted EBITDA improvement. | $274.9M | – | – |
| International DrillingStrong field performance and contributions from the recently deployed rig in Argentina and the SANAD newbuild supported record daily adjusted gross margin. | $458.5M | – | – |
| Drilling SolutionsGrowth on Nabors rigs in the Lower 48 and growth in international markets drove adjusted EBITDA improvement. | $116.1M | – | – |
| Rig TechnologiesBoth aftermarket revenue and capital equipment sales increased sequentially. | $41.75M | – | – |
| Other reconciling itemsRepresents the elimination of inter-segment transactions related to the Rig Technologies operating segment. | −$19.09M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fourth quarter and full-year 2026 outlook
- NoteFourth quarter 2026 Lower 48 average rig count of 75 rigs
- NoteFourth quarter 2026 Lower 48 daily adjusted gross margin of $14,500 to $14,700
- NoteFourth quarter 2026 Alaska and Gulf of America combined adjusted EBITDA of approximately $12 million
- NoteFourth quarter 2026 International average rig count of 92 to 93 rigs
- NoteFourth quarter 2026 International daily adjusted gross margin of approximately $19,500
- NoteFourth quarter 2026 Drilling Solutions adjusted EBITDA of approximately $46 million
- NoteFourth quarter 2026 Rig Technologies adjusted EBITDA of approximately $8 million
- NoteFourth quarter 2026 capital expenditures of $250 to $260 million, including $140 to $150 million for SANAD newbuilds in Saudi Arabia
- NoteFourth quarter 2026 adjusted free cash flow of $60 to $70 million, including approximately $20 million of cash consumption at SANAD
- NoteFull-year 2026 adjusted EBITDA of approximately $930 million
- NoteFull-year 2026 consolidated adjusted free cash flow of $100 to $110 million, including approximately $20 million of cash consumption at SANAD
- NoteFull-year 2026 consolidated capital spending of $710 to $720 million, including $295 to $305 million for SANAD’s newbuild program
- NoteAnnualized adjusted EBITDA run rate of approximately $1 billion heading into 2027
Capital returns
- Redeemed $100 million of its 9.125% notes with cash on hand during the quarter.
What drove it
- Record International Drilling daily adjusted gross margin of $19,060.
- Strong field performance across multiple countries and high-margin rig deployments.
- Recently deployed rig in Argentina and the SANAD newbuild contribution.
- A larger Lower 48 working fleet and higher Lower 48 daily adjusted gross margin.
- Greater adoption of Performance Software and Downhole Services on Nabors rigs in the Lower 48.
- International growth in Surface and Tubular services.
- Lower capital spending at SANAD and across the rest of Nabors, together with lower working capital.
Concerns
- Net loss attributable to Nabors’ shareholders was $11 million.
- The quarter ended September 30, 2025 included revenue of $34 million, EBITDA of $20 million, and operating income of $14 million from Quail Tools, which was sold in August 2025.
- SANAD rig count will be lower following the suspension of five rigs.
- Fourth quarter adjusted free cash flow guidance includes approximately $20 million of cash consumption at SANAD.
- Full-year adjusted free cash flow guidance includes approximately $20 million of cash consumption at SANAD.
- Higher cash interest payments partially offset adjusted free cash flow improvement.
What to watch
- Deployment of one additional SANAD newbuild in 2026 and two in the first quarter of 2027, bringing the total newbuild fleet to 20.
- Whether International Drilling daily adjusted gross margin reaches approximately $19,500 in the fourth quarter despite the lower SANAD rig count.
- Lower 48 average rig count guidance of 75 rigs and daily adjusted gross margin guidance of $14,500 to $14,700.
- Deployment of one rig in Venezuela in early 2027 under a multiyear contract.
- Additional RZR™ rig floor automation module awards after commitments for four additional modules.
- Delivery of approximately $930 million of full-year 2026 adjusted EBITDA and $100 to $110 million of full-year consolidated adjusted free cash flow.
Balance sheet and cash flow
- Cash and short-term investments were $ 475,145 at September 30, 2026, compared with $ 509,833 at June 30, 2026 and $ 940,738 at December 31, 2025.
- Total Debt was $ 2,022,758 at September 30, 2026, compared with $ 2,120,276 at June 30, 2026 and $ 2,494,679 at December 31, 2025.
- Net Debt was $ 1,547,613 at September 30, 2026, compared with $ 1,610,443 at June 30, 2026 and $ 1,553,941 at December 31, 2025.
- Accounts receivable, net was $ 511,663 at September 30, 2026, compared with $ 443,417 at June 30, 2026 and $ 391,705 at December 31, 2025.
- Long-term debt was $ 2,022,758 at September 30, 2026, compared with $ 2,120,276 at June 30, 2026 and $ 2,117,187 at December 31, 2025.
- Total assets were $ 4,443,317 at September 30, 2026, compared with $ 4,419,945 at June 30, 2026 and $ 4,789,657 at December 31, 2025.
Analysis
Nabors reported third-quarter operating revenues of $ 872,194, compared with $ 814,795 in the second quarter and $ 818,190 in the prior-year quarter. The company described revenue as up 7% sequentially. Adjusted EBITDA was $ 245,543, compared with $ 221,660 in the second quarter, while adjusted operating income was $ 85,799, compared with $ 61,111. GAAP net income was $ 15,984, but net loss attributable to Nabors was $ (11,165 ), or $ (1.24 ) per basic and diluted share.
International Drilling was the principal profitability contributor. The segment reported adjusted EBITDA of $ 145,718 and daily adjusted gross margin of $ 19,060, which Nabors characterized as a record and said was up $1,526, or 8.7%, sequentially. The company cited field performance, a recently deployed rig in Argentina and the SANAD newbuild. U.S. Drilling adjusted EBITDA was $ 99,391, supported by a 7% increase in the average Lower 48 working fleet and higher daily adjusted gross margin. Lower 48 average rigs working were 72.8 and Lower 48 daily adjusted gross margin was $ 14,016.
Drilling Solutions adjusted EBITDA rose to $ 43,913 from $ 40,013 in the second quarter, with the company citing growth on Nabors rigs in the Lower 48 and international growth. Rig Technologies adjusted EBITDA increased to $ 4,987 from $ 3,180, as aftermarket revenue and capital equipment sales increased sequentially. Segment revenue comparisons require context because the prior-year period included Quail Tools, which was sold in August 2025. Quail Tools accounted for $ 34,198 of Drilling Solutions operating revenues and $ 20,305 of adjusted EBITDA in the third quarter of 2025.
Cash generation improved materially. Net cash provided by operating activities was $ 238,893 and adjusted free cash flow was $ 74,523, versus $ 12,342 in the second quarter. Nabors attributed the improvement to higher profitability, lower capital spending and lower working capital, partly offset by higher cash interest payments. Cash and short-term investments were $ 475,145 at September 30, while total debt was $ 2,022,758 and net debt was $ 1,547,613. The company redeemed $100 million of its 9.125% notes with cash on hand.
For the fourth quarter, Nabors expects higher sequential adjusted EBITDA led by U.S. Drilling. Guidance calls for 75 Lower 48 rigs, Lower 48 daily adjusted gross margin of $14,500 to $14,700, International daily adjusted gross margin of approximately $19,500, and adjusted free cash flow of $60 to $70 million. Full-year guidance calls for adjusted EBITDA of approximately $930 million, adjusted free cash flow of $100 to $110 million and capital spending of $710 to $720 million. The outlook incorporates the effect of Saudi rig suspensions and approximately $20 million of SANAD cash consumption.
Management, verbatim
We delivered higher earnings and $75 million in adjusted free cash flow. Each of our four reporting segments met or exceeded its targets.
Anthony G. Petrello, Nabors Chairman, CEO and President
International Drilling achieved a record daily adjusted gross margin. Strong field performance and new rig deployments with attractive economics drove the increase. We expect further margin improvement in the fourth quarter, despite a lower SANAD rig count following the suspension of five rigs.
Anthony G. Petrello, Nabors Chairman, CEO and President
Third quarter adjusted free cash flow exceeded our expectations. SANAD newbuild spending was below forecast as certain construction milestones shifted to later periods. Outside SANAD, controlled capital spending and improved working capital supported the cash generation.
Miguel Rodriguez, Nabors CFO
Not in the filing
stated, not guessed- GAAP operating income was not reported as a consolidated line item.
- Consolidated GAAP gross margin was not reported.
- Non-GAAP earnings per share was not reported.
- A consolidated tax rate was not reported.
- Share repurchases were not reported.
- Dividend declarations or payments were not reported.
- Prior guidance was not provided, so no reported result can be compared with prior guidance.
- Segment revenue year-over-year and sequential percentage changes were not reported for the segment revenue rows.
- Total Q3 2026 operating revenue year-over-year percentage change was not reported.
- Total Q3 2026 adjusted EBITDA year-over-year percentage change was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.