Nabors Industries Reports Smaller-Than-Expected Q1 Loss as Revenue Beats Estimates

Nabors Industries Ltd. (NYSE: NBR) reported a first-quarter 2026 loss that was narrower than analysts expected, while revenue also came in above market estimates. The oilfield drilling and services company posted operating revenue of about $783.5 million, compared with the Zacks Consensus Estimate of roughly $779 million. Its adjusted loss was $1.54 per share, better than the expected loss of $2.39 per share.

Q1 Results Show Revenue Growth Despite Bottom-Line Pressure

Nabors’ first-quarter revenue increased from the prior-year period, helped by stronger drilling activity in key markets. The company reported operating revenues of about $784 million, up from $736.2 million a year earlier. However, Nabors still recorded a net loss attributable to shareholders of about $15 million, compared with net income in the previous quarter.

The results show a mixed but improving picture. While the company remained unprofitable on a reported basis, the smaller-than-expected loss suggests better cost control and steadier execution than analysts had forecast. Revenue strength also points to healthy demand in parts of Nabors’ drilling portfolio.

Adjusted EBITDA Remains Solid

Nabors reported first-quarter adjusted EBITDA of about $205 million. This figure is important because it reflects the company’s operating performance before interest, taxes, depreciation, and amortization. A stable EBITDA level suggests that Nabors’ core business remained resilient even as seasonal patterns and segment-level challenges affected results.

Segment Performance: U.S. and International Drilling in Focus

International Drilling

The International Drilling segment generated adjusted EBITDA of about $121 million. Activity was supported by new deployments and recent startups, although some contract expirations and higher Middle East staffing and logistics costs pressured margins.

U.S. Drilling

In U.S. Drilling, adjusted EBITDA reached about $88 million. Nabors said activity improved in the Lower 48, where average rig count rose sequentially. This helped offset weaker results from Offshore and Alaska operations.

Drilling Solutions

Drilling Solutions produced adjusted EBITDA of about $39 million. Growth in international markets helped the segment, but weaker third-party U.S. activity limited the overall gain.

Rig Technologies

Rig Technologies reported adjusted EBITDA of less than $1 million, down from the previous quarter. Lower aftermarket revenue and logistical challenges in the Middle East weighed on performance.

Debt Reduction Strengthens the Balance Sheet

A major positive from the quarter was Nabors’ progress on debt reduction. The company’s total debt fell to about $2.15 billion after redeeming the remaining $379.1 million of its 7.50% senior guaranteed notes due 2028. Interest expense also declined to about $43.8 million, down from $54.3 million a year earlier.

This debt reduction matters because drilling companies often carry large capital needs. Lower debt and reduced interest expense can give Nabors more flexibility to invest in rigs, technology, and international expansion while managing market volatility.

Cash Flow Improves Year Over Year

Nabors reported adjusted free cash flow of about negative $48 million for the first quarter. While still negative, this was an improvement from negative $61 million in the first quarter of 2025. The company said the year-over-year improvement was mainly driven by lower cash interest payments.

Management also noted that first-quarter cash flow was better than expected, supported by stronger working capital performance. However, the company said fourth quarters are usually stronger for free cash flow due to seasonal business patterns.

Outlook: Lower 48 Rig Count Expected to Stay Strong

Nabors’ management offered a more optimistic outlook for activity in the Lower 48. The company now expects to exit the second quarter with about 69 rigs running and maintain that level through the end of 2026.

Even with higher expected activity, Nabors plans to keep capital spending within its previously guided range of $730 million to $760 million. A large part of that spending is tied to SANAD newbuilds, with projected investment of $360 million to $380 million.

Investor Takeaway

Nabors’ first-quarter report gives investors several key signals. Revenue beat expectations, the adjusted loss was smaller than forecast, and debt levels moved lower. At the same time, the company still posted a reported net loss, and some segments faced cost pressure and weaker activity.

Overall, the quarter suggests that Nabors is moving in a better direction, especially in U.S. land drilling and international operations. Still, future performance will depend on rig demand, oil and gas producer spending, cost control, and the company’s ability to turn revenue growth into stronger profits.

Note: This article is an original rewrite based on publicly available earnings information and should not be considered financial advice.

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