NOV Inc. Q2 2026 10-Q Summary
Business Context and Reporting Period
NOV Inc. (NOV) is a leading independent equipment and technology provider to the global energy industry, operating through two segments: Energy Equipment and Energy Products and Services. This report covers the quarterly period ended June 30, 2026. The company serves major diversified, national, and independent service companies, contractors, and energy producers in 57 countries.
Key Financial Metrics
| Metric (in millions) | Q2 2026 | Q2 2025 | 6M 2026 | 6M 2025 |
|---|---|---|---|---|
| Revenue | $2,134 | $2,188 | $4,186 | $4,291 |
| Operating Profit | $193 | $143 | $240 | $295 |
| Operating Margin | 9.0% | 6.5% | 5.7% | 6.9% |
| Net Income (Company) | $112 | $108 | $131 | $181 |
| Diluted EPS | $0.31 | $0.29 | $0.36 | $0.48 |
| Adjusted EBITDA | $283 | $252 | $460 | $504 |
| Cash Flow from Operations | — | — | $(9) | $326 |
| Cash & Equivalents | $1,164 | — | — | — |
| Total Debt | $1,706 | — | — | — |
Note: Cash flow from operations is presented for the six-month period only as per the filing.
Material Changes vs. Prior Period
- Revenue: Q2 2026 revenue decreased 2% year-over-year (YoY) to $2.13 billion, driven by a 5% decline in the Energy Products and Services segment, partially offset by a 1% increase in Energy Equipment.
- Profitability: Operating profit increased 35% YoY to $193 million, despite lower revenue. This was driven by a favorable sales mix, strong execution on offshore projects, and a $40 million benefit from tariff refunds recorded in Cost of Revenue.
- Cash Flow: Operating cash flow turned negative at $(9) million for the six months ended June 30, 2026, a significant decline from $326 million in the prior year. This was primarily due to increases in working capital components (receivables, inventories, and contract assets).
- Capital Allocation: The company repurchased $130 million of shares and paid $97 million in dividends during the first six months of 2026.
Guidance, Outlook, and Risks
- Outlook: Management expects increased demand for equipment and technology due to reduced production capacity from years of underinvestment and the need for energy security amidst geopolitical conflict in the Middle East.
- Backlog: Energy Equipment capital equipment backlog stood at $4.08 billion, a decrease of $220 million from the prior year. The company expects approximately 29% of this backlog to convert to revenue in the remainder of 2026.
- Tariff Uncertainty: While the company recorded a $40 million benefit from tariff refunds in Q2, future tariff policies remain uncertain following U.S. Supreme Court rulings and new administration actions. The company is monitoring potential retaliatory measures.
- Legal Contingencies: NOV is engaged in litigation regarding royalty payments under license agreements for drill bit technology. A district court ruled against NOV in September/October 2025, but the company is appealing. Royalty receivables of $140 million (net of reserves) are recorded in Other Assets.
- Geopolitical Risks: Conflict in the Middle East has caused volatility in commodity markets and disrupted operations, impacting capital equipment sales in the Energy Products and Services segment.
Investor Verification Checklist
- Tariff Refund Realization: Verify the timing and certainty of the remaining $23 million of tariff refunds recorded as receivables but not yet received.
- Working Capital Trends: Investigate the drivers behind the $111 million increase in receivables and $170 million increase in inventories, which caused negative operating cash flow.
- Legal Litigation Status: Monitor the appeal process regarding the royalty litigation against drill bit manufacturers, which could impact future revenue recognition of the $140 million receivable.
- Backlog Conversion: Track the conversion rate of the $4.08 billion backlog, particularly given the 29% revenue expectation for the remainder of 2026.
- Dividend Sustainability: Assess the sustainability of the dividend policy given the negative operating cash flow in the first half of the year.