NOV Q2 Earnings Call Highlights

NOV reported solid second-quarter results: Revenue reached $2.13 billion and net income was $112 million, while adjusted EBITDA was $283 million, including a $40 million tariff-refund benefit. Excluding the refund, EBITDA was $243 million, supported by project execution, product mix and cost improvements. Energy Equipment delivered record profitability, with a 16.4% adjusted EBITDA margin, while Energy Products and Services revenue rose 9% sequentially as drilling-related businesses recovered. NOV expects continued growth in Products and Services but a 1% to 3% year-over-year revenue decline in Energy Equipment during the third quarter. Middle East conditions remain the primary risk: The region contributes about 15% of revenue, and a failure to achieve the expected 10% to 15% sequential activity improvement could reduce quarterly EBITDA by roughly $20 million to $25 million. Free cash flow was negative $64 million due to billing timing and inventory buffers, but NOV returned $127 million to shareholders through buybacks and dividends.

NOV NYSE: NOV reported second-quarter 2026 revenue of $2.13 billion and net income of $112 million, or $0.31 per diluted share, as operational improvements, favorable project execution and stronger deliveries supported results despite continued disruption in the Middle East. Revenue increased 4% sequentially but declined about 2% from the prior-year period. Adjusted EBITDA was $283 million, including an approximately $40 million benefit from refunds related to IEEPA tariffs. Excluding that benefit, adjusted EBITDA was $243 million, according to Chairman, President and CEO Jose Bayardo.

“The strong incremental margins reflect excellent execution on several large projects nearing completion, a more favorable sales mix, improved deliveries into the Middle East, and operational initiatives that are beginning to outpace inflationary pressures,” Bayardo said. The company reported adjusted operating profit of $190 million, or 9% of sales, and adjusted EBITDA of 13.3% of sales. CFO Rodney Reed said the company incurred approximately $30 million in tariff expense during the quarter, compared with roughly $10 million in the second quarter of 2025, though tariff refunds produced the reported quarterly benefit.

NOV said its Middle East operations performed generally in line with, or modestly better than, expectations during the quarter. Bayardo said activity in the region remained below pre-conflict levels, particularly offshore, while land-based activity and unconventional gas development were more stable. Although the cessation of most “kinetic activity” during the quarter allowed customers to adapt operations, logistics remained constrained and costly. NOV said its supply-chain and operations teams delivered previously delayed orders and won some work where competitors could not meet customer requirements.

For the third quarter, the company’s guidance assumes operating conditions in the Middle East remain consistent with the second quarter. Bayardo said NOV expects regional activity to improve by roughly 10% to 15% sequentially under that scenario, though the company has risked its outlook toward the lower end of that range. The Middle East currently accounts for approximately 15% of NOV’s total revenue, Bayardo said. If the expected activity improvement does not materialize because of further disruptions, he estimated the potential EBITDA impact at roughly $20 million to $25 million, though he stressed that outcomes could be either better or worse depending on developments in the region.