NOV · NOV Inc.

NOV Inc.’s Q1 2026 results reflect pronounced headwinds from the Middle East conflict, which management quantified as a $54 million revenue and $32 million Adjusted EBITDA drag—driving the 2% year-over-year revenue decline and 51% drop in GAAP net income. Segment performance diverged sharply: Energy Equipment grew 4% to $1.19 billion on strong capital equipment backlog execution, while Energy Products and Services fell 10% to $897 million due to Middle East disruptions and lower global drilling activity. Gross margin compressed to 18.5% from 21.3% in Q1 2025, and operating profit plunged to $47 million (2.3% of sales) from $152 million (7.2%), with pre-tax Other Items totaling $37 million—including severance, facility closures, and a non-recurring stock-based compensation charge. Despite the pressure, bookings rose 19% year-over-year to $520 million, and the Energy Equipment backlog remained robust at $4.23 billion. Management’s commentary emphasized structural market tightening—citing a rapid shift from oversupply to undersupply—and positioned NOV for benefit from an emerging capital equipment cycle driven by energy security priorities and underinvestment over the prior decade. The Q2 2026 guidance—revenue down 4–6% and Adjusted EBITDA of $185–215 million—explicitly conditions expectations on no further deterioration in the Middle East, underscoring ongoing geopolitical sensitivity. Capital allocation remained disciplined: $100 million returned to shareholders and $65 million invested in capex, supporting strategic expansions like Brazil’s subsea flexible pipe capacity doubling. With cash of $1.34 billion and net debt leverage below 1x, the balance sheet remains resilient amid near-term volatility.