Nabors Industries Ltd.(“Nabors” or the “Company”) (NYSE: NBR) today reported first quarter 2025 operating revenues of $736 million, compared to operating revenues of $730 million in the fourth quarter of 2024. Net income attributable to Nabors shareholders for the quarter was $33 million, compared to a net loss of $54 million in the fourth quarter. This equates to earnings per diluted share of $2.18, compared to a loss per diluted share of $6.67 in the fourth quarter. The first quarter included a one-time, non-cash net gain on the Parker transaction of $113.0 million, or $9.68 per diluted share. This gain was partially offset by non-cash charges related to the wind-down of operations in Russia totaling $28.6 million, or $2.45 per diluted share, and by expenses related to the Parker acquisition. First-quarter adjusted EBITDA was $206 million, compared to $221 million in the previous quarter.
Highlights
— In March, Nabors completed the acquisition of Parker Wellbore, strengthening its portfolio with complementary businesses. This transaction adds Quail Tools, the leading tubular rental franchise in the U.S., along with the largest casing running contractor in Saudi Arabia and the United Arab Emirates, and a fleet of ten drilling rigs in several international markets and Alaska. This acquisition is expected to be immediately accretive to Nabors' 2025 free cash flow and to improve leverage metrics.
— In the first quarter, the SANAD joint venture deployed its tenth newbuild rig. The eleventh commenced in April, and the twelfth is expected to start later in the second quarter. Two additional rigs are planned for startup in the second half of 2025. As these rigs come online, they should make a material contribution to SANAD's adjusted EBITDA while supporting their customer's program to maintain production capacity and develop its natural gas resources.
— Nabors and Corva AI expanded their existing strategic alliance, extending their collaboration into Nabors' RigCLOUD® platform. The resulting solution combines Nabors' edge and cloud computing platform with Corva's AI-driven analytics, enhancing real-time data processing, predictive insights, and performance, improving decision-making and maximizing efficiency.
— In the month of March, the Company suspended activity on its three rigs in Russia in response to the recently expanded sanctions. Nabors does not expect activity in this market to resume in the near term. Financial performance in this market had become increasingly marginal.
Anthony G. Petrello, Nabors Chairman, CEO and President, commented, “With the acquisition of Parker completed, we are already realizing the benefits we anticipated. Parker's operations contributed to our first quarter. We commenced our well-planned integration, and the early achievements are encouraging.
“Our first quarter results reflect improving performance in certain international markets, as well as challenges in the U.S. In the U.S. specifically, rig churn placed pressure on rig utilization and operating expenses. More recently, we are encouraged by our success adding rigs in the Lower 48 after our rig count troughed in February. However, in view of the current activity level we have responded with actions to improve efficiency and align our cost structure.
“Daily adjusted gross margin in the International Drilling business was $17,421, an improvement of more than $700 per day. This expansion was driven by higher margins in most of our international geographies. Our international drilling activity was essentially flat, as two rig startups in Saudi Arabia offset the impact of the suspension of our Russia operations and lower activity in Colombia. Looking ahead over the balance of 2025, we have a number of startups planned, in Saudi Arabia, Kuwait, Argentina, Mexico, and India. These offset the completion of some drilling programs in the Eastern Hemisphere.
“SANAD, our 50/50 joint venture with Saudi Aramco, began operating its tenth newbuild rig during the first quarter, and the eleventh early in the second quarter. Another three are scheduled to commence operations during the balance of 2025. SANAD, with its newbuild program totaling 50 rigs over 10 years, is growing rapidly and provides a source of significant value to Nabors and our shareholders.”
Segment Results
International Drilling adjusted EBITDA totaled $115.5 million, compared to $112.0 million in the fourth quarter of 2024. Average rig count was essentially in line with activity expectations. Daily adjusted gross margin for the first quarter averaged $17,421, reflecting additional newbuild rigs in Saudi Arabia and improved operating performance in several geographies.
The U.S. Drilling segment reported first quarter adjusted EBITDA of $92.7 million, compared to $105.8 million in the fourth quarter. This decrease was driven by reduced rig count in the Lower 48 and somewhat higher operational expenses. Nabors' first quarter Lower 48 rig count averaged 61, versus 66 in the fourth quarter. Lower 48 daily margins averaged $14,276 in the first quarter, as compared to $14,940 in the previous quarter. Operating inefficiencies from elevated rig churn primarily led to this change.
Drilling Solutions, or NDS, adjusted EBITDA was $40.9 million. The addition of the Parker operations contributed $9.6 million in the first quarter. The decline in Nabors' Lower 48 rig count in the quarter impacted NDS results. This segment's gross margin remained strong, at 53%.
Rig Technologies adjusted EBITDA was $5.6 million. Lower capital equipment deliveries in the Middle East and decreased OEM aftermarket volumes contributed to a sequential decline in adjusted EBITDA.
Adjusted Free Cash Flow
In the first quarter, consolidated adjusted free cash flow was a use of $71 million. Nabors legacy business, excluding the impact from Parker, consumed $61 million in adjusted free cash flow. The first quarter normally includes higher payments, mainly annual bonuses, property taxes and interest expenses. In addition, the first quarter for the Nabors legacy business included approximately $14 million in severance and other costs mainly related to the Parker transaction. On a positive note, Nabors collected approximately $20 million from its main customer in Mexico. The Company had targeted another $20 million in collections that dropped out of the first quarter. Nabors is working on further material payments with its customer, which it expects to collect during the second quarter. Parker consumed $10 million in adjusted free cash flow, including capital expenditures of $6 million, $5 million in accrued interest on the Parker term loan, which was retired at the end of the first quarter, and a small amount of transaction-related expenses.
William Restrepo, Nabors CFO, stated, “The addition of Parker marks a significant milestone for Nabors, materially expanding our Drilling Solutions business and adding significant cash generation to our combined company. With a full quarter of Parker, we expect NDS results in the second quarter to account for approximately 25% of adjusted EBITDA from consolidated operations. The Parker business is forecast to add material free cash flow. In addition to $130 million in incremental adjusted EBITDA for 2025 post-closing, we are on track to realize $40 million of cost synergies. Parker capital expenditures post-closing are targeted at $60 million for 2025.
“Nabors adjusted free cash flow for the quarter was impacted by several factors as compared to our forecast. Capital expenses were $70 million below target mainly on delayed milestones for SANAD's newbuild rigs that shifted into the second quarter. Additionally, collections were $30 million below our expectations. Payments related to our Parker transaction were approximately $14 million.
“As a result of the ongoing uncertainty with the increased U.S. tariffs, we have quantified the potential impact of these changes on our future free cash flow. We estimate the total amount would land between $10 million and $20 million on a full-year basis. We also believe that some of this impact would be offset by commercial negotiations with our customers.
“We are targeting a substantial improvement in free cash flow generation over the remaining three quarters of the year, driven by continued progress in our international drilling profitability, some recovery in our Lower 48 rig count and Parker's incremental contribution including material synergy capture.”
Outlook
Nabors expects the following metrics for the second quarter of 2025, which reflect a full quarter from Parker Wellbore operations:
U.S. Drilling
— Lower 48 average rig count of 63 – 64 rigs
— Lower 48 daily adjusted gross margin of approximately $14,100
— Alaska and Gulf of Mexico combined adjusted EBITDA of approximately $26 million
International
— Average rig count of 85 – 86 rigs, including two rigs from Parker
— Daily adjusted gross margin of approximately $17,700
Drilling Solutions
— Adjusted EBITDA of approximately $75 million, including an approximate $43 million contribution from Parker
Rig Technologies
— Adjusted EBITDA approximately in line with the first quarter
Capital Expenditures
— Capital expenditures of $220 – $230 million, including $35 million for the Parker operations and $100 – $105 million for the newbuilds in Saudi Arabia
— Full-year capital expenditures of approximately $770 – $780 million, with $360 million for the SANAD newbuilds and $60 million for Parker
Adjusted Free Cash Flow
— Adjusted free cash flow for 2025 of approximately $80 million (excluding any impact from tariffs), with SANAD consuming approximately $150 million, while the remaining operations including Parker should generate around $230 million
Mr. Petrello concluded, “Our business and geographic diversity, and our industry-leading technology, will help us navigate this current environment. We expect the Parker business to make an immediate positive impact to our position.
“The investments we have made in our international business should generate meaningful returns, as we deploy a significant number of rigs over the next several quarters. In particular, SANAD is on track to operate 15 newbuild rigs by early 2026, with additional newbuilds already under discussion. The outlook for this program, and SANAD in total, is for considerable free cash generation, which should lead to material value creation for our shareholders.”
About Nabors Industries
Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With presence in more than 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com.
Forward-looking Statements
The information included in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to a number of risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements.The forward-looking statements contained in this press release reflect management's estimates and beliefs as of the date of this press release.Nabors does not undertake to update these forward-looking statements.
Non-GAAP Disclaimer
This press release presents certain “non-GAAP” financial measures.The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”).Adjusted operating income (loss) represents income (loss) from continuing operations before income taxes, interest expense, investment income (loss), gain on bargain purchase, and other, net. Adjusted EBITDA is computed similarly, but also excludes depreciation and amortization expenses. In addition, adjusted EBITDA and adjusted operating income (loss) exclude certain cash expenses that the Company is obligated to make. Net debt is calculated as total debt minus the sum of cash, cash equivalents and short-term investments.
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets.Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders.Management believes that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies.
Each of these non-GAAP measures has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including Adjusted EBITDA, adjusted operating income (loss), net debt, and adjusted free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability, performance and liquidity.Securities analysts and investors also use these measures as some of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.Reconciliations of consolidated adjusted EBITDA and adjusted operating income (loss) to income (loss) from continuing operations before income taxes, net debt to total debt, and adjusted free cash flow to net cash provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release.We do not provide a forward-looking reconciliation of our outlook for Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash Flow, as the amount and significance of items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.
Investor Contacts: William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via e-mail william.conroy@nabors.com, or Kara K. Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via emailkara.peak@nabors.com. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail mark.andrews@nabors.com
NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) Three Months Ended March 31, December 31, (In thousands, except per share amounts) 2025 2024 2024 Revenues and other income: Operating revenues $ 736,186 $ 733,704 $ 729,819 Investment income (loss) 6,596 10,201 8,828 Total revenues and other income 742,782 743,905 738,647 Costs and other deductions: Direct costs 447,300 437,077 433,404 General and administrative expenses 68,506 61,751 61,436 Research and engineering 14,035 13,863 14,434 Depreciation and amortization 154,638 157,685 156,348 Interest expense 54,326 50,379 53,642 Gain on bargain purchase (112,999) – – Other, net 44,790 16,108 37,021 Total costs and other deductions 670,596 736,863 756,285 Income (loss) before income taxes 72,186 7,042 (17,638) Income tax expense (benefit) 15,007 16,044 15,231 Net income (loss) 57,179 (9,002) (32,869) Less: Net (income) loss attributable to noncontrolling interest (24,191) (25,331) (20,802) Net income (loss) attributable to Nabors $ 32,988 $ (34,333) $ (53,671) Earnings (losses) per share: Basic $ 2.35 $ (4.54) $ (6.67) Diluted $ 2.18 $ (4.54) $ (6.67) Weighted-average number of common shares outstanding: Basic 10,460 9,176 9,213 Diluted 11,671 9,176 9,213 Adjusted EBITDA $ 206,345 $ 221,013 $ 220,545 Adjusted operating income (loss) $ 51,707 $ 63,328 $ 64,197
NABORS INDUSTRIES LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) March 31, December 31,(In thousands) 2025 2024ASSETSCurrent assets:Cash and short-term investments $ 404,109 $ 397,299Accounts receivable, net 549,626 387,970Other current assets 245,083 214,268Total current assets 1,198,818 999,537Property, plant and equipment, net 3,074,789 2,830,957Other long-term assets 776,077 673,807Total assets $ 5,049,684 $ 4,504,301LIABILITIES AND EQUITYCurrent liabilities:Trade accounts payable $ 375,440 $ 321,030Other current liabilities 292,205 250,887Total current liabilities 667,645 571,917Long-term debt 2,685,169 2,505,217Other long-term liabilities 251,493 220,829Total liabilities 3,604,307 3,297,963Redeemable noncontrolling interest in subsidiary 795,643 785,091Equity:Shareholders' equity 342,660 134,996Noncontrolling interest 307,074 286,251Total equity 649,734 421,247Total liabilities and equity $ 5,049,684 $ 4,504,301
NABORS INDUSTRIES LTD. AND SUBSIDIARIESSEGMENT REPORTING(Unaudited)The following tables set forth certain information with respect to our reportable segments and rig activity: Three Months Ended March 31, December 31,(In thousands, except rig activity) 2025 2024 2024Operating revenues: U.S. Drilling $ 230,746 $ 271,989 $ 241,637 International Drilling 381,718 349,359 371,406 Drilling Solutions 93,179 75,574 75,992 Rig Technologies (1) 44,165 50,156 56,166 Other reconciling items (2) (13,622) (13,374) (15,382) Total operating revenues $ 736,186 $ 733,704 $ 729,819Adjusted EBITDA: (3) U.S. Drilling $ 92,711 $ 120,403 $ 105,757 International Drilling 115,486 102,498 111,962 Drilling Solutions 40,853 31,787 33,809 Rig Technologies (1) 5,563 6,801 9,208 Other reconciling items (4) (48,268) (40,476) (40,191) Total adjusted EBITDA $ 206,345 $ 221,013 $ 220,545Adjusted operating income (loss): (5) U.S. Drilling $ 31,599 $ 50,529 $ 38,973 International Drilling 32,958 22,476 29,528 Drilling Solutions 32,913 26,893 28,944 Rig Technologies (1) 4,335 4,209 8,413 Other reconciling items (4) (50,098) (40,779) (41,661) Total adjusted operating income (loss) $ 51,707 $ 63,328 $ 64,197Rig activity:Average Rigs Working: (7) Lower 48 60.6 71.9 65.9 Other US 7.6 6.8 6.8 U.S. Drilling 68.2 78.7 72.7 International Drilling 85.0 81.0 84.8 Total average rigs working 153.2 159.7 157.5Daily Rig Revenue: (6),(8) Lower 48 $ 34,546 $ 35,468 $ 33,396 Other US 61,361 64,402 62,624 U.S. Drilling (10) 37,557 37,968 36,137 International Drilling 49,895 47,384 47,620Daily Adjusted Gross Margin: (6),(9) Lower 48 $ 14,276 $ 16,011 $ 14,940 Other US 30,374 35,184 34,707 U.S. Drilling (10) 16,084 17,667 16,793 International Drilling 17,421 16,061 16,687
(1) Includes our oilfield equipment manufacturing activities.(2) Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment.(3) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading “Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)”.(4) Represents the elimination of inter-segment transactions and unallocated corporate expenses.(5) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading “Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)”.(6) Rig revenue days represents the number of days the Company's rigs are contracted and performing under a contract during the period. These would typically include days in which operating, standby and move revenue is earned.(7) Average rigs working represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year. Average rigs working can also be calculated as rig revenue days during the period divided by the number of calendar days in the period.(8) Daily rig revenue represents operating revenue, divided by the total number of revenue days during the quarter.(9) Daily adjusted gross margin represents operating revenue less direct costs, divided by the total number of rig revenue days during the quarter.(10) The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas.
NABORS INDUSTRIES LTD. AND SUBSIDIARIESReconciliation of Earnings per Share(Unaudited) Three Months Ended March 31, December 31,(in thousands, except per share amounts) 2025 2024 2024BASIC EPS:Net income (loss) (numerator):Income (loss), net of tax $ 57,179 $ (9,002) $ (32,869)Less: net (income) loss attributable to noncontrolling interest (24,191) (25,331) (20,802)Less: distributed and undistributed earnings allocated to unvested shareholders (1,177) – -Less: accrued distribution on redeemable noncontrolling interest in subsidiary (7,184) (7,283) (7,794)Numerator for basic earnings per share:Adjusted income (loss), net of tax – basic $ 24,627 $ (41,616) $ (61,465)Weighted-average number of shares outstanding – basic 10,460 9,176 9,213Earnings (losses) per share:Total Basic $ 2.35 $ (4.54) $ (6.67)DILUTED EPS:Adjusted income (loss), net of tax – basic $ 24,627 $ (41,616) $ (61,465)Add: after tax interest expense of convertible notes 848 – -Add: effect of reallocating undistributed earnings of unvested shareholders 3 – -Adjusted income (loss), net of tax – diluted $ 25,478 $ (41,616) $ (61,465)Weighted-average number of shares outstanding – basic 10,460 9,176 9,213Add: if converted dilutive effect of convertible notes 1,176 – -Add: dilutive effect of potential common shares 35 – -Weighted-average number of shares outstanding – diluted 11,671 9,176 9,213Earnings (losses) per share:Total Diluted $ 2.18 $ (4.54) $ (6.67)
NABORS INDUSTRIES LTD. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESRECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT(Unaudited)(In thousands) Three Months Ended March 31, 2025 U.S. Drilling International Drilling Rig Other Total Drilling Solutions Technologies reconciling itemsAdjusted operating income (loss) $ 31,599 $ 32,958 $ 32,913 $ 4,335 $ (50,098) $ 51,707Depreciation and amortization 61,112 82,528 7,940 1,228 1,830 154,638Adjusted EBITDA $ 92,711 $ 115,486 $ 40,853 $ 5,563 $ (48,268) $ 206,345 Three Months Ended March 31, 2024 U.S. Drilling International Drilling Rig Other Total Drilling Solutions Technologies reconciling itemsAdjusted operating income (loss) $ 50,529 $ 22,476 $ 26,893 $ 4,209 $ (40,779) $ 63,328Depreciation and amortization 69,874 80,022 4,894 2,592 303 157,685Adjusted EBITDA $ 120,403 $ 102,498 $ 31,787 $ 6,801 $ (40,476) $ 221,013 Three Months Ended December 31, 2024 U.S. Drilling International Drilling Rig Other Total Drilling Solutions Technologies reconciling itemsAdjusted operating income (loss) $ 38,973 $ 29,528 $ 28,944 $ 8,413 $ (41,661) $ 64,197Depreciation and amortization 66,784 82,434 4,865 795 1,470 156,348Adjusted EBITDA $ 105,757 $ 111,962 $ 33,809 $ 9,208 $ (40,191) $ 220,545
NABORS INDUSTRIES LTD. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESRECONCILIATION OF ADJUSTED GROSS MARGIN BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT(Unaudited) Three Months Ended March 31, December 31,(In thousands) 2025 2024 2024Lower 48 – U.S. Drilling Adjusted operating income (loss) $ 18,995 $ 39,264 $ 27,354 Plus: General and administrative costs 4,817 4,823 5,156 Plus: Research and engineering 823 964 1,002 GAAP Gross Margin 24,635 45,051 33,512 Plus: Depreciation and amortization 53,225 59,733 57,019 Adjusted gross margin $ 77,860 $ 104,784 $ 90,531Other – U.S. Drilling Adjusted operating income (loss) $ 12,604 $ 11,265 $ 11,619 Plus: General and administrative costs 405 326 305 Plus: Research and engineering 62 47 72 GAAP Gross Margin 13,071 11,638 11,996 Plus: Depreciation and amortization 7,887 10,141 9,765 Adjusted gross margin $ 20,958 $ 21,779 $ 21,761U.S. Drilling Adjusted operating income (loss) $ 31,599 $ 50,529 $ 38,973 Plus: General and administrative costs 5,222 5,149 5,461 Plus: Research and engineering 885 1,011 1,074 GAAP Gross Margin 37,706 56,689 45,508 Plus: Depreciation and amortization 61,112 69,874 66,784 Adjusted gross margin $ 98,818 $ 126,563 $ 112,292International Drilling Adjusted operating income (loss) $ 32,958 $ 22,476 $ 29,528 Plus: General and administrative costs 16,378 14,415 16,758 Plus: Research and engineering 1,414 1,508 1,431 GAAP Gross Margin 50,750 38,399 47,717 Plus: Depreciation and amortization 82,528 80,022 82,434 Adjusted gross margin $ 133,278 $ 118,421 $ 130,151 Adjusted gross margin by segment represents adjusted operating income (loss) plus general and administrative costs, research and engineering costs and depreciation and amortization.
NABORS INDUSTRIES LTD. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO NET INCOME (LOSS)(Unaudited) Three Months Ended March 31, December 31,(In thousands) 2025 2024 2024Net income (loss) $ 57,179 $ (9,002) $ (32,869)Income tax expense (benefit) 15,007 16,044 15,231Income (loss) from continuing operations before income taxes 72,186 7,042 (17,638)Investment (income) loss (6,596) (10,201) (8,828)Interest expense 54,326 50,379 53,642Gain on bargain purchase (112,999) – -Other, net 44,790 16,108 37,021Adjusted operating income (loss) (1) 51,707 63,328 64,197Depreciation and amortization 154,638 157,685 156,348Adjusted EBITDA (2) $ 206,345 $ 221,013 $ 220,545
(1) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.(2) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.
NABORS INDUSTRIES LTD. AND SUBSIDIARIESRECONCILIATION OF NET DEBT TO TOTAL DEBT(Unaudited) March 31, December 31,(In thousands) 2025 2024Long-term debt $ 2,685,169 $ 2,505,217Less: Cash and short-term investments 404,109 397,299Net Debt $ 2,281,060 $ 2,107,918
NABORS INDUSTRIES LTD. AND SUBSIDIARIESRECONCILIATION OF ADJUSTED FREE CASH FLOW TONET CASH PROVIDED BY OPERATING ACTIVITIES(Unaudited) Three Months Ended March 31, December 31,(In thousands) 2025 2024 2024Net cash provided by operating activities $ 87,735 $ 107,239 $ 148,919Add: Capital expenditures, net of proceeds from sales of assets (159,161) (99,125) (202,215)Adjusted free cash flow $ (71,426) $ 8,114 $ (53,296)
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.
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