NOV (NYSE:NOV) capped 2025 with fourth-quarter revenue of $2.28 billion and a GAAP net loss of $78 million, or $0.21 per diluted share, as the company highlighted resilient performance amid softer industry activity and continued tariff and inflation pressures. For the full year, NOV reported revenue of $8.74 billion and GAAP net income of $145 million, or $0.39 per diluted share.
On the company’s fourth-quarter 2025 earnings call, Chairman, President and CEO Jose Bayardo said NOV delivered “an outstanding fourth quarter to cap off a solid year,” noting revenue rose 5% sequentially but fell 1% year-over-year “against a global drilling activity decline of 6%.” Adjusted EBITDA totaled $267 million in the quarter, up $9 million sequentially, while full-year EBITDA exceeded $1 billion for the third consecutive year.
Leadership transition and 2025 operating highlights
In discussing the year’s execution, Bayardo said NOV achieved a full-year book-to-bill of approximately 91% on a 15% increase in revenue out of backlog and ended 2025 with total backlog of $4.34 billion. He said 2025 orders were led by offshore production technologies, with offshore-related backlog growing more than 10% during the year, supported by demand for subsea flexible pipe, offshore construction equipment, and processing modules.
Bayardo also emphasized cash generation and efficiency initiatives, pointing to $876 million of free cash flow in 2025 and $1.8 billion over the last two years, supported by what he described as NOV’s second consecutive year converting more than 85% of EBITDA to cash.
Fourth-quarter results, cash flow, and tariffs
Chief Financial Officer Rodney Reed said fourth-quarter results were impacted by several items. Net loss reflected “a higher effective tax rate from valuation allowances on deferred tax assets and a higher mix of foreign earnings,” and the company recorded $86 million in other items “primarily related to the impairment of goodwill and long-lived assets.” Adjusted operating profit was $177 million, or 7.8% of sales.
Free cash flow was a key focus, with Reed reporting $472 million in the quarter and reiterating that 2025 represented NOV’s best two-year free cash flow performance in a decade. He added that working capital as a percentage of revenue run rate fell to 22%, the lowest level in 10 years.
Tariffs remained a headwind. Reed said tariff expense was $25 million in the fourth quarter, about $8 million higher sequentially, and the company expected tariff expense to “slightly increase” in the first quarter before leveling off for the remainder of 2026 in the current regulatory environment. He also cited secondary supply chain effects, including “sizable increases” for materials such as tungsten carbide.
Segment performance: Energy Equipment and Energy Products & Services
In NOV’s Energy Equipment segment, fourth-quarter revenue was $1.33 billion, up 7% sequentially and 4% year-over-year. Adjusted EBITDA was $180 million, or 13.5% of sales, which Reed attributed to execution on “a higher quality backlog” and strength in offshore and production-oriented businesses.
- Capital equipment represented 63% of segment revenue, rising 8% sequentially and 15% year-over-year, led by subsea flexible pipe, process systems, and marine and construction.
- Aftermarket sales and services were 37% of segment revenue, up 6% sequentially but down 12% year-over-year.
Energy Equipment capital equipment orders were $532 million in the quarter and $2.34 billion for the year. Reed said orders included a new-build offshore jackup rig equipment package, additional scope on offshore production projects, subsea flexible pipe, subsea cranes, and a cable lay vessel. Management said it expected full-year 2026 book-to-bill to be near 100%.
Reed highlighted record performance in subsea flexible pipe, which posted its highest quarterly revenue and EBITDA on record for the second consecutive quarter. He said backlog since the end of 2023 had doubled and annual shipments increased about 50%, with another “sizable” project booked in the fourth quarter and expectations for strong bookings in the first quarter of 2026.
In Energy Products and Services, fourth-quarter revenue was $989 million, up 2% sequentially but down 7% year-over-year. Adjusted EBITDA was $140 million, or 14.2% of sales. Reed said the year-over-year decline was driven by lower drilling activity in the U.S., Saudi Arabia, and Argentina, and that “lower volumes, increased tariff expense, and other inflationary pressures” outweighed cost control and efficiency efforts.
Reed said the segment continued to outperform underlying activity levels in North America, citing market share gains and technology adoption. He also pointed to growth in NOV’s wired pipe-enabled downhole broadband services (DBS), where revenue “more than doubled” year-over-year, driven by increased North Sea activity. NOV’s drill bit rental business also “captured additional market share” across U.S. land markets, delivering roughly 20% revenue growth in the region for the full year despite a 6% decline in U.S. rig count.
Market outlook: cautious 2026, improving setup into 2027
Bayardo said 2026 would likely remain challenging, describing a consensus view that the oil market was oversupplied by 2–3 million barrels per day, with inventories high and downside risk to prices. He said customers were taking a cautious approach to the start of 2026, though NOV expected oil markets to begin rebalancing in the second half, improving customer spending and setting up a healthier 2027.
In the U.S., Bayardo said NOV expected activity to be down mid-single digits year-over-year, with oil-directed declines offset by higher activity in gas basins. Internationally, he expected activity to be flat to up slightly in 2026, driven by rigs returning to work in Saudi Arabia and unconventional expansion in several regions.
Bayardo also pointed to potential longer-term opportunity in Venezuela, saying NOV had recently received new orders “with a value that exceeds the total amount of revenue we’ve generated during the past several years” supporting an operator in the country, while cautioning that broader re-engagement would depend on appropriate governance, rules, and security conditions.
Capital allocation, cost-out efforts, and 2026 guidance items
NOV continued returning capital. Reed said the company repurchased 5.7 million shares for $85 million in the quarter and paid $27 million in dividends, bringing total 2025 capital returned to shareholders to $505 million, including a supplemental dividend paid in the second quarter. He added that shares outstanding were at their lowest level in 18 years and net debt-to-EBITDA was 0.2x.
Bayardo and Reed said NOV’s $100 million cost-out program was progressing, with efforts including facility consolidations and exiting underperforming product lines and geographies. Reed said the programs were on track to deliver more than $100 million in annualized cost savings by the end of 2026, though tariffs and inflation remained headwinds. In response to a question on passing through tariffs, Bayardo said NOV was having some success but noted it was difficult in a soft market and highlighted sharp input volatility, including a 200% increase in tungsten carbide costs over a one-month period due to supply constraints.
For 2026, Reed said NOV expected slightly lower revenue year-over-year, with results more weighted to the second half, and full-year EBITDA “in line to slightly lower” than 2025. The company forecast EBITDA free cash flow conversion of 40%–50% for 2026, capital expenditures of $315 million to $345 million, and an effective tax rate of roughly 34%–36%.
On first-quarter 2026 segment expectations, NOV guided to Energy Equipment revenue up 3%–5% year-over-year with EBITDA of $145 million to $165 million, while Energy Products and Services was expected to see a seasonal decline, with revenue down 6%–8% year-over-year and EBITDA between $105 million and $125 million.
About NOV (NYSE:NOV)
National Oilwell Varco (NYSE: NOV) is a leading provider of equipment and technology to the oil and gas industry. The company designs, manufactures and services an extensive portfolio of products used in drilling, completion and production operations. Its offerings include drilling rigs and related components, wellbore technologies such as tubulars and completion tools, surface equipment including mud pumps and blowout preventers, and aftermarket parts and services that support ongoing field operations.
NOV’s business is organized to serve upstream energy companies around the world.
