NOV: Q4 2025 TAKE THREE

2026 Outlook and Key Orders: Looking ahead, NOV expects near-term customer caution to persist amid an oversupplied oil market and geopolitical uncertainty, with budgets weighted toward the back half of 2026. Offshore activity shows signs of bottoming, which could support improving demand for drilling equipment and aftermarket services later in the year. Management expects 2026 EBITDA to be in line to slightly lower than 2025, before a more favorable setup emerges longer term, supported by higher offshore and international activity and prolonged industry underinvestment. 

In Q4, NOV’s key project wins included drilling equipment and integrated solutions for offshore developments in the Middle East and Brazil, alongside orders for composite technologies and digital drilling systems supporting projects across offshore basins and select international land markets. The company also booked gas processing and infrastructure-related orders in North America and international markets, reinforcing exposure to gas-led, long-cycle projects without materially changing near-term earnings dynamics.

Revenue and Operating Income in Q4

Despite a 5% sequential revenue increase in Q4, NOV reported a net loss of $78 million, largely related to goodwill and long-lived asset impairment charges, along with unfavorable tax impacts. Segment revenues increased quarter over quarter in both Energy Products and Services and Energy Equipment, supported by modest activity improvement and backlog execution, respectively. 

However, operating profit declined sequentially as the impairment charges—concentrated in Energy Equipment—and cost pressures outweighed underlying revenue gains, resulting in weaker reported profitability despite stable underlying demand conditions.

Cash Flows And Repurchases: In FY2025, NOV generated $876 million in free cash flow, down modestly from 2024 but still reflecting strong EBITDA-to-cash conversion. Balance sheet leverage remained stable year over year. Importantly, the company returned $505 million to shareholders in 2025 through dividends and share repurchases and reiterated its commitment to return at least 50% of excess free cash flow annually, including a supplemental dividend expected in the first half of 2026.

Thanks for reading the NOV Take Three, designed to give you three critical takeaways from NOV's earnings report.  Soon, we will present a second update on NOV earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.