Nabors Lifts 2026 Free Cash Flow Outlook

The Tip Desk · November 8, 2026 · 3 min read

Adjusted free cash flow reached $74.5 million in the third quarter, and the company now expects $100 million to $110 million for the full year.

Nabors Industries Ltd. (NBR) reported third-quarter 2026 operating revenues of $872.2 million, up 7% from $814.8 million in the second quarter, and raised its full-year adjusted free cash flow outlook to $100 million to $110 million, which it said was materially higher than prior guidance.

Adjusted EBITDA was $245.5 million, up nearly 11% from $221.7 million in the prior quarter. Net loss attributable to Nabors’ shareholders was $11 million, or $1.24 a share.

The company said record International Drilling daily adjusted gross margin, a larger Lower 48 working fleet, and growth in Drilling Solutions drove the sequential improvement. Higher profitability, lower capital spending and improved working capital contributed to the cash-flow rebound.

International Drilling daily adjusted gross margin reached a record $19,060, up $1,526, or 8.7%, from the second quarter. The company attributed the increase to strong field performance across multiple countries and high-margin rig deployments, including a recently deployed rig in Argentina and a SANAD newbuild. International Drilling adjusted EBITDA rose to $146 million from $131 million.

The SANAD land drilling joint venture deployed its 17th newbuild rig in Saudi Arabia. One additional newbuild is scheduled for deployment in 2026 and two in the first quarter of 2027, bringing the total newbuild fleet to 20. Nabors also signed a multiyear contract to deploy one rig in Venezuela in early 2027, a return to drilling operations in the country.

U.S. Drilling adjusted EBITDA increased to $99 million from $94 million in the second quarter. Average Lower 48 rigs working rose to 72.8 from 67.8. Lower 48 daily adjusted gross margin was $14,016. The company said a 7% increase in the average Lower 48 working fleet and higher daily adjusted gross margin drove the improvement.

Drilling Solutions adjusted EBITDA increased to $44 million from $40 million, which the company said was driven primarily by growth on Nabors rigs in the Lower 48 and growth in international markets. Rig Technologies adjusted EBITDA increased to $5 million from $3 million, with both aftermarket revenue and capital equipment sales higher sequentially.

Consolidated adjusted free cash flow was $74.5 million, up $62 million from $12.3 million in the second quarter. Chief Financial Officer Miguel Rodriguez said third-quarter adjusted free cash flow exceeded expectations, with SANAD newbuild spending below forecast as certain construction milestones shifted to later periods. Outside SANAD, he said, controlled capital spending and improved working capital supported cash generation.

During the quarter, Nabors redeemed $100 million of its 9.125% notes with cash on hand. Cash and short-term investments were $475 million at September 30. Long-term debt was $2.02 billion.

The company now expects full-year 2026 adjusted EBITDA of approximately $930 million, reaching the upper end of prior guidance, an outlook Rodriguez said reflects the strength of the business, including the impact of rig suspensions in Saudi Arabia. Full-year consolidated capital spending is now expected at $710 million to $720 million, including $295 million to $305 million for SANAD’s newbuild program.

For the fourth quarter of 2026, Nabors expects a Lower 48 average rig count of 75 and Lower 48 daily adjusted gross margin of $14,500 to $14,700. International average rig count is expected at 92 to 93 rigs with daily adjusted gross margin of approximately $19,500. Drilling Solutions adjusted EBITDA is expected at approximately $46 million and Rig Technologies at approximately $8 million. Fourth-quarter adjusted free cash flow is expected at $60 million to $70 million, including approximately $20 million of cash consumption at SANAD.

Chairman, CEO and President Anthony G. Petrello said the company expects further sequential adjusted EBITDA growth in the fourth quarter, led by U.S. Drilling, and remains on track to achieve an annualized adjusted EBITDA run rate of approximately $1 billion heading into 2027. He said the company expects further International Drilling margin improvement in the fourth quarter despite a lower SANAD rig count following the suspension of five rigs.