Oct 28, 2026 earnings call — Offshore and international growth focus
NOV reported Q3 revenue of $2.23 billion and adjusted EBITDA of $281 million, and management expects stronger offshore bookings in 2027.
Revenue $2.2B (est $2.2B) · EPS $0.25 (est $0.25)
Key quotes
"Finally, turning to offshore, where we continue to see some of the strongest industry momentum and some of the most attractive opportunities for NOV."
"Despite these challenges, our team in The Middle East delivered sequential and year over year growth of over 20%, during the quarter."
"We expect a significant improvement in free cash flow with working capital to percentage of fourth quarter annualized revenue to be around 25%."
Analyst Q&A 5
Outlook for energy equipment in 2027
Q (Arun Jayaram · J.P. Morgan): Analyst asked how two trends — book-to-bill below 1 recently and management's expectation of strong 2027 orders — will interact and what to expect for 2027 growth in energy equipment.
A: Management said the pipeline for 2027 looks strong and bookings stepped up in the year. They expect year-end book-to-bill of about 80% to 85% and see much higher order intake in 2027, with backlog and several sub-businesses already growing.
"So probably helpful to talk just a little bit more about sort of the bookings, cadence, not just 2027, but kind of what we have seen, year to date and where we see it going." — Jose A. Bayardo (CEO·CHAIR)
Timing of rig aftermarket recovery
Q (James Rollyson · Raymond James): Analyst asked when rig aftermarket revenue will ramp as offshore activity recovers, and also asked how large the international unconventional opportunity might become versus North America.
A: Management said they see gradual improvement and expect more rigs to restart in the second half of the year, which will increase demand for spare parts, upgrades, and reactivation projects. On international unconventionals, they said it is early but accelerating in places like Argentina and the Middle East, and over time it could approach the scale seen in North America.
"So the number of rigs that will be turning to the right in the second half of the year will be a bit higher than certainly where we where we sit today." — Jose A. Bayardo (CEO·CHAIR)
EE margins and mix dynamics
Q (Marc Bianchi · TD Cowen): Analyst asked why recent revenue increases did not produce much margin leverage in EE and whether mix, freight, or other items explain it. He also asked how mix and pricing could change into 2027.
A: Management said the quarter-to-quarter change is largely mix and higher service/repair content in aftermarket, which is lower margin than spare parts. They also cited elevated freight costs (about 20% higher year over year) and moderated Eastern Hemisphere product sales, and said pricing and operational improvements should help margins over time into 2027.
"And, also, you know, while we do have a big pickup in our aftermarket business, it tends to be more service and repair, which is a little bit lower margin than, what we get from just a large, ramp up in terms of the spare parts sales." — Rodney Reed (CFO)
Free cash flow drivers and 2027 conversion
Q (Goldman Sachs): Analyst asked what drove free cash flow weakness in the quarter and how to think about normalized free cash flow conversion in 2027 and any structural improvement.
A: Management said two discrete, mostly transitory items depressed free cash flow: milestone billings related to Middle East projects (working capital build) and higher inventory safety stock because of logistics. They expect some improvement in Q4 and Q1 and said they expect to return to about a 50% EBITDA to free cash flow conversion in 2027.
"As we look into 2027, which is the other part of your question, we do think we get back to that you know, 50% range on EBITDA to free cash flow. Conversion." — Rodney Reed (CFO)
Pricing and margin recovery potential
Q (Stephen Gengaro · Stifel): Analyst asked where pricing sits now versus recent troughs and historically for big product lines, and whether management can reach its earnings targets without strong demand.
A: Management said pricing has risen versus past troughs but inflation and tariffs outpaced pricing recently; now pricing and internal efficiencies are beginning to outpace inflation. They highlighted margin upside in both EE and EPS segments and said restoring EPS margins by about 300 basis points would add materially to EBITDA toward their target.
"If we are able to drive that up 300 basis points back up to 17 and a half, percent, which would be a little bit lower than sort of the recent peak." — Jose A. Bayardo (CEO·CHAIR)