What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-28 · 106 added, 99 removed, 169 unchanged (55% of the section changed)

8 unchanged sentences

NOV serves major-diversified, national, and independent service companies, contractors, and energy producers in 57 countries.

NOV operates under two segments, Energy Products and Services and Energy Equipment.

NOV operates under two segments, Energy Equipment and Energy Products and Services.

Results of operations are presented in accordance with GAAP.

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See “Non-GAAP Financial Measures and Reconciliations in Results of Operations” for an explanation of our use of non-GAAP financial measures and reconciliations to their corresponding measures calculated in accordance with GAAP.

Energy Products and Services

The Company’s Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling, intervention, completion, and production activities.

Products include drill bits, downhole tools, premium drill pipe, drilling fluids, integral and weld-on connectors for conductor strings and surface casing, completion tools, and artificial lift systems.

The segment also designs, manufactures, and delivers high-end composite pipe, tanks, and structures engineered to solve both corrosion and weight challenges in a wide variety of applications, including oil and gas, chemical, industrial, wastewater, fuel handling, marine and offshore, and rare earth mineral extraction.

In addition to product and equipment sales, the segment provides services, software, and digital solutions to improve drilling and completion operational performance.

Services include tubular inspection and coating, solids control, waste management.

Software and digital solutions offered include drilling and completion optimization and remote monitoring (via downhole and surface instrumentation), wired drill pipe services, software controls and applications, and data management and analytics services at the edge and in the cloud.

Energy Products and Services serves oil and gas companies, drilling contractors, oilfield service companies, oilfield equipment rental companies and developers of geothermal energy.

Demand for the segment’s products and services primarily depends on the level of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies.

Demand for the segment’s composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth.

Energy Equipment

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and other renewable energy markets, where it provides solutions that support wind power development, and carbon sequestration by applying its gas processing expertise.

Energy Products and Services

The Company’s Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling, intervention, completion, and production activities.

In addition to product and equipment sales, the segment provides services, software, and digital solutions to improve drilling and completion operational performance.

Services include tubular inspection and coating, solids control, waste management.

Energy Products and Services serves oil and gas companies, drilling contractors, oilfield service companies, oilfield equipment rental companies and developers of geothermal energy.

Demand for the segment’s products and services primarily depends on the level of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies.

Demand for the segment’s composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth.

Critical Accounting Policies and Estimates

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EXECUTIVE SUMMARY

For the first quarter ended March 31, 2026, the Company generated revenues of $2.05 billion, a decrease of two percent compared to the first quarter of 2025.

Net income decreased $54 million, or $0.14 per diluted share, year-over-year to $19 million.

The Company recorded $37 million within pre-tax Other Items during the first quarter of 2026 primarily related to a non-recurring stock-based compensation charge, severance and facility closures, and costs associated with streamlining our business operations.

Operating profit was $47 million and adjusted operating profit was $85 million, compared to operating profit of $152 million and adjusted operating profit of $163 million in the first quarter of 2025.

Adjusted EBITDA decreased $75 million year-over-year to $177 million, or 8.6 percent of sales.

For the second quarter ended June 30, 2026, the Company generated revenues of $2.13 billion, an increase of four percent sequentially and a decrease of two percent compared to the second quarter of 2025.

Net income increased $4 million, or $0.02 per diluted share, year-over-year to $112 million.

Operating profit was $193 million, or 9.0 percent of sales, an increase of 35 percent versus the second quarter of 2025.

Adjusted operating profit was $190 million, an increase of 15 percent versus the second quarter of 2025.

Adjusted EBITDA increased $31 million year-over-year to $283 million, or 13.3 percent of sales.

Second quarter 2026 Adjusted operating profit and Adjusted EBITDA include a benefit of approximately $40 million related to tariff refunds.

Segment Performance

Energy Products and Services

Energy Products and Services generated revenues of $897 million in the first quarter of 2026, a decrease of 10 percent from the first quarter of 2025.

Operating profit decreased $57 million from the prior year to $26 million, or 2.9 percent of sales, and included $8 million in pre-tax Other Items.

Adjusted EBITDA decreased $49 million from the prior year to $96 million, or 10.7 percent of sales.

Disruptions in the Middle East and lower global drilling activity more than offset strong performance from the segment’s drill bit and digital services business.

Energy Equipment

Energy Equipment generated revenues of $1.19 billion in the first quarter of 2026, an increase of four percent when compared to the first quarter of 2025.

Operating profit decreased $41 million from the prior year to $93 million, or 7.8 percent of sales, and included $9 million in pre-tax Other Items.

Adjusted EBITDA decreased $34 million from the prior year to $131 million, or 11.0 percent of sales.

Strong execution on the segment’s backlog more than offset lower sales of aftermarket parts and services, which were impacted by war related disruptions in the Middle East.

A less favorable sales mix and higher costs from the Middle East disruptions contributed to lower profitability.

New orders booked during the quarter totaled $520 million, an increase of $83 million when compared to the $437 million of new orders booked during the first quarter of 2025.

Orders shipped from backlog were $650 million, representing a book-to-bill of 80 percent and an increase of $101 million when compared to the $549 million orders shipped and an 80 percent book-to-bill during the first quarter 2025.

As of March 31, 2026, backlog for capital equipment orders for Energy Equipment totaled $4.23 billion, a decrease of $184 million from the first quarter of 2025.

Energy Equipment generated revenues of $1.22 billion in the second quarter of 2026, an increase of one percent from the second quarter of 2025.

Operating profit increased $55 million from the prior year to $177 million, or 14.5 percent of sales, and included $2 million in pre-tax Other Items and a $7 million gain on sales of fixed assets.

Adjusted EBITDA increased $42 million from the prior year to $200 million, or 16.4 percent of sales, and includes a benefit of approximately $14 million related to tariff refunds.

Strong execution on offshore production projects nearing completion and a more favorable sales mix drove the improvement in revenue and profitability.

New orders booked during the quarter totaled $474 million, an increase of $54 million when compared to the $420 million of new orders booked during the second quarter of 2025.

Orders shipped from backlog were $638 million, representing a book-to-bill of 74 percent and an increase of $6 million when compared to the $632 million orders shipped and a 66 percent book-to-bill during the second quarter 2025.

As of June 30, 2026, backlog for capital equipment orders for Energy Equipment totaled $4.08 billion, a decrease of $220 million from June 30, 2025.

Energy Products and Services

Energy Products and Services generated revenues of $974 million in the second quarter of 2026, a decrease of five percent from the second quarter of 2025.

Operating profit increased $2 million from the prior year to $85 million, or 8.7 percent of sales, and included $9 million in pre-tax Other Items and a $13 million gain on sales of fixed assets.

Adjusted EBITDA decreased $2 million from the prior year to $144 million, or 14.8 percent of sales, and includes a benefit of approximately $26 million related to tariff refunds.

Market share gains by the segment’s drill bit and artificial lift operations and continued growth in digital services were more than offset by lower capital equipment sales, despite orders booked in the first half of 2026 that are expected to support higher shipments in the second half of the year.

Oil & Gas Equipment and Services Market and Outlook

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NOV remains focused on the development and commercialization of innovative products and services that lower the marginal cost and environmental footprint of energy production.

The Company also remains focused on improving operational efficiency, simplifying processes, and allocating capital to opportunities where it believes it has competitive advantages, technology differentiation, and attractive return potential.

Management believes this strategy will further strengthen the Company’s competitive position across market cycles.

Management believes this strategy will further strengthen the Company’s competitive position across market cycles and create value for shareholders.

Operating Environment Overview

The Company’s results are dependent on, among other things, the level of worldwide oil and gas drilling, well remediation activity, the prices of crude oil and natural gas, capital spending by exploration and production companies and drilling contractors, worldwide oil and gas inventory levels and, to a lesser degree, the level of investment in wind and geothermal energy projects.

Key industry indicators for the first quarter of 2026 and 2025, and the fourth quarter of 2025 include the following:

Key industry indicators for the second quarter of 2026 and 2025, and the first quarter of 2026 include the following:

% increase (decrease)

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International

West Texas Intermediate

Crude Prices (per barrel)

West Texas Intermediate Crude Prices (per barrel)

Natural Gas Prices ($/mmbtu)

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See sources below.

The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate Crude Oil prices for the past nine quarters ended March 31, 2026, on a quarterly basis.

The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate Crude Oil prices for the past nine quarters ended June 30, 2026, on a quarterly basis.

Baker Hughes, Inc.

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US Department of Energy, Energy Information Administration (www.eia.doe.gov).

The worldwide quarterly average rig count increased 2 percent (from 1,799 to 1,832) in the first quarter of 2026 when compared to the fourth quarter of 2025.

The average per barrel price of West Texas Intermediate Crude Oil increased 21 percent (from $59.64 per barrel to $71.98 per barrel) and natural gas prices decreased 19 percent (from $3.75 per mmbtu to $3.04 per mmbtu) in the first quarter of 2026 compared to the fourth quarter of 2025.

On April 24, 2026, there were 674 rigs actively drilling in North America, comprised of U.S.

and Canada, which decreased 10 percent from the first quarter average of 749 rigs.

The price for West Texas Intermediate Crude Oil was $94.40 per barrel at April 24, 2026, an increase of 31 percent from the first quarter of 2026 average.

The price for natural gas was $2.52 per mmbtu at April 24, 2026, a decrease of 17 percent from the first quarter of 2026 average.

The worldwide quarterly average rig count decreased 4 percent (from 1,832 to 1,760) in the second quarter of 2026 when compared to the first quarter of 2026.

The average per barrel price of West Texas Intermediate Crude Oil increased 33 percent (from $71.98 per barrel to $95.75 per barrel) and natural gas prices decreased 38 percent (from $4.79 per mmbtu to $2.95 per mmbtu) in the second quarter of 2026 compared to the first quarter of 2026.

On July 24, 2026, there were 791 rigs actively drilling in North America, comprised of U.S.

and Canada, which increased 12 percent from the second quarter average of 704 rigs.

The price for West Texas Intermediate Crude Oil was $89.31 per barrel at July 24, 2026, a decrease of 7 percent from the second quarter of 2026 average.

The price for natural gas was $2.89 per mmbtu at July 24, 2026, a decrease of 2 percent from the second quarter of 2026 average.

Results of Operations

Financial results by operating segment are as follows (in millions):

Three Months Ended March 31,

Energy Products and Services

Three Months Ended June 30,

Six Months Ended June 30,

Energy Equipment

Energy Products and Services

Total revenue

Operating profit:

Energy Products and Services

Energy Equipment

Energy Products and Services

Eliminations and corporate costs

Total operating profit

Energy Products and Services

t hree months ended March 31, 2026 and 2025 .

Revenue from Energy Products and Services was $897 million for the three months ended March 31, 2026, compared to $992 million for the three months ended March 31, 2025, a decrease of $95 million or 10 percent.

Revenue was negatively impacted from the Middle East conflict, resulting in delayed deliveries of capital equipment, as well as a 7 percent reduction in North America rig count resulting in lower revenue in the region.

Operating profit from Energy Products and Services was $26 million for the three months ended March 31, 2026, compared to an operating profit of $83 million for the three months ended March 31, 2025, a decrease of $57 million.

Profitability was impacted by reduced deliveries of capital equipment due to the conflict in the Middle East and decreased product sales from overall drilling levels, as well as higher tariffs and inflationary pressures for certain raw materials.

Energy Equipment

t hree months ended March 31, 2026 and 2025 .

Revenue from Energy Equipment was $1,190 million for the three months ended March 31, 2026, compared to $1,146 million for the three months ended March 31, 2025, an increase of $44 million or 4 percent.

Strong execution on backlog for capital equipment more than offset a 12 percent decline in sales of aftermarket parts and services, which were negatively impacted by delivery delays resulting from logistics challenges in the Middle East.

Operating profit from Energy Equipment was $93 million for the three months ended March 31, 2026, compared to an operating profit of $134 million for the three months ended March 31, 2025, a decrease of $41 million.

Profitability for the segment was impacted by a less favorable sales mix, rising freight costs, both primarily from the conflict in the Middle East.

t hree and six months ended June 30, 2026 and 2025 .

Revenue from Energy Equipment was $1,218 million for the three months ended June 30, 2026, compared to $1,207 million for the three months ended June 30, 2025, an increase of $11 million or 1 percent.

For the six months ended June 30, 2026, revenue was $2,408 million compared to $2,353 million for the six months ended June 30, 2025, an increase of $55 million or 2 percent.

Revenue remained relatively flat when compared to the prior year with higher sales of production related capital equipment, mostly offset by lower revenue from aftermarket parts and services.

Operating profit from Energy Equipment was $177 million for the three months ended June 30, 2026, compared to an operating profit of $122 million for the three months ended June 30, 2025, an increase of $55 million.

Strong execution on offshore production equipment projects nearing completion, a more favorable sales mix, and a benefit of approximately $14 million related to tariff refunds drove the improvement in profitability for the three months ended June 30, 2026 when compared to the same period of the prior year.

For the six months ended June 30, 2026, operating profit was $270 million compared to $256 million for the six months ended June 30, 2025, an increase of $14 million.

Strong execution on offshore production related equipment projects, partially offset by disruptions in the Middle East during the first quarter of 2026, led to improved profitability for the six months ended June 30, 2026 when compared to the same period of the prior year.

The Energy Equipment segment monitors its capital equipment backlog to plan its business.

New orders are added to backlog only when the Company receives a firm written order for major completion and production components or a contract related to a construction project.

The capital equipment backlog was $4.23 billion at March 31, 2026, a decrease of $184 million from backlog of $4.41 billion at March 31, 2025.

The capital equipment backlog was $4.08 billion at June 30, 2026, a decrease of $220 million from backlog of $4.30 billion at June 30, 2025.

Although numerous factors can affect the timing of revenue out of backlog (including, but not limited to, customer change orders, supplier accelerations or delays, and the current uncertainty and conflict in the Middle East), the Company reasonably expects approximately 29 percent of backlog to become revenue during the rest of 2026 and the remainder thereafter.

At March 31, 2026, approximately 58 percent of the capital equipment backlog was for offshore products and approximately 94 percent of the capital equipment backlog was destined for international markets.

At June 30, 2026, approximately 57 percent of the capital equipment backlog was for offshore products and approximately 94 percent of the capital equipment backlog was destined for international markets.

Energy Products and Services

t hree and six months ended June 30, 2026 and 2025 .

Revenue from Energy Products and Services was $974 million for the three months ended June 30, 2026, compared to $1,025 million for the three months ended June 30, 2025, a decrease of $51 million or 5 percent.

For the six months ended June 30, 2026, revenue was $1,871 million compared to $2,017 million for the six months ended June 30, 2025, a decrease of $146 million or 7 percent.

Revenue declines were primarily driven by a decrease in capital equipment sales which were impacted by the conflict in the Middle East, partially offset by market share gains from the segment’s drill bit and artificial lift operations, and continued growth in digital services.

Operating profit from Energy Products and Services was $85 million for the three months ended June 30, 2026, compared to an operating profit of $83 million for the three months ended June 30, 2025, an increase of $2 million.

For the six months ended June 30, 2026, operating profit was $111 million compared to $166 million for the six months ended June 30, 2025, a decrease of $55 million.

Lower net tariff costs, which includes a benefit of approximately $26 million related to tariff refunds in the current quarter, helped profitability remain relatively flat for the three months ended June 30, 2026 when compared to the prior year, while lower capital equipment sales reduced manufacturing plant absorption and impacted profitability for the six months ended June 30, 2026 when compared to the same period of the prior year.

Eliminations and corporate costs

Eliminations and corporate costs were $72 million for the three months ended March 31, 2026, compared to $65 million for the three months ended March 31, 2025.

Eliminations and corporate costs were $69 million and $141 million for the three and six months ended June 30, 2026, compared to $62 million and $127 million for the three and six months ended June 30, 2025.

Sales from one segment to another generally are priced at estimated equivalent commercial selling prices;

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Intrasegment transactions are eliminated within each segment.

Eliminations decreased 15 percent when compared to the first quarter of 2025 due to lower activity, while corporate costs increased 22 percent.

Corporate costs included $20 million in pre-tax Other Items for the three months ended March 31, 2026, compared to $5 million for the three months ended March 31, 2025.

Pre-tax Other Items in the current year primarily related to a non-recurring charge related to stock-based compensation and other restructuring costs.

Eliminations increased 21 percent when compared to the second quarter of 2025 due to higher activity, and remained relatively flat on a year-to-date basis.

Corporate costs remained relatively flat compared to the second quarter of 2025, while corporate costs increased 14 percent on a year-to-date basis primarily due to a non-recurring charge related to stock-based compensation during the first quarter of 2026 and other restructuring costs.

Interest and financial costs and Interest income

Interest and financial costs were $22 million for each of the three months ended March 31, 2026 and 2025, remaining consistent year-over-year.

Interest income was $11 million for each of the three months ended March 31, 2026 and 2025, remaining consistent year-over-year.

Equity loss in unconsolidated affiliates

Equity loss in unconsolidated affiliates was $3 million and zero for the three months ended March 31, 2026, and 2025, respectively.

Sales for our largest investment in unconsolidated affiliates declined 15 percent for the first quarter of 2026 when compared to the first quarter of 2025.

Interest and financial costs were $21 million and $43 million for the three and six months ended June 30, 2026, compared to $22 million and $44 million for the three and six months ended June 30, 2025, remaining relatively consistent year-over-year.

Interest income was $8 million and $19 million for the three and six months ended June 30, 2026, compared to $10 million and $21 million for the three and six months ended June 30, 2025, remaining relatively consistent year-over-year.

Equity income (loss) in unconsolidated affiliates

Equity income (loss) in unconsolidated affiliates was $(5) million and $(8) million for the three and six months ended June 30, 2026, compared to $1 million for each of the three and six months ended June 30, 2025.

Sales for our largest investment in unconsolidated affiliates declined 29 percent for the second quarter of 2026 when compared to the second quarter of 2025.

For the six months ended June 30, 2026, sales declined 22 percent year-over-year.

The decline in sales is primarily due to pricing pressures for oil country tubular goods which led to lower profitability year-over-year.

Other income (expense), net

Other income (expense), net was $2 million for the three months ended March 31, 2026, compared to $(20) million for three months ended March 31, 2025.

Other expense, net

Other expense, net was $18 million and $16 million for the three and six months ended June 30, 2026, compared to $17 million and $37 million for three and six months ended June 30, 2025.

The change in expense was primarily due to larger foreign currency fluctuations in the prior year, particularly with the devaluation of the U.S.

Provision for income taxes

The effective tax rate was 42.9% and 38.8% for the three months ended March 31, 2026, and 2025, respectively, as compared to the U.S.

statutory tax rate of 21% for both periods.

The effective tax rate for the three months ended March 31, 2026 was negatively impacted by a mix of earnings in higher tax rate jurisdictions and a shortfall related to previously recognized stock compensation deductibility.

The effective tax rate for the three months ended March 31, 2025 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, unfavorable adjustments related to changes in certain foreign currency exchange rates, a shortfall related to previously recognized stock compensation deductibility, and adjustments to the carrying value of deferred tax assets, partially offset by a benefit from withholding tax refunds received.

The effective tax rate for the three and six months ended June 30, 2026 was 26.1% and 29.2%, respectively, compared to 0.9% and 20.3% for the same period of 2025.

statutory tax rate was 21% for all periods.

The effective tax rate for the three months ended June 30, 2026 was negatively impacted by a mix of earnings in higher tax rate jurisdictions, partially offset by the release of previously recorded reserves for unrecognized tax benefits and adjustments to prior year taxes.

The effective tax rate for the six months ended June 30, 2026 was negatively impacted by a mix of earnings in higher tax rate jurisdictions and a shortfall related to previously recognized stock compensation deductibility, partially offset by the release of previously recorded reserves for unrecognized tax benefits and adjustments to prior year taxes.

The effective tax rate for the six months ended June 30, 2025 was positively impacted by the release of previously recorded reserves for unrecognized tax benefits of $58 million, partially offset by an increase to reserves for unrecognized tax benefits of $23 million, unfavorable adjustments related to the carrying value of deferred tax assets of $14 million, changes in certain foreign currency exchange rates of $4 million, and a mix of earnings in higher tax rate jurisdictions.

Non-GAAP Financial Measures and Reconciliations

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Three Months Ended

Six Months Ended

Operating profit:

Energy Products and Services

Energy Equipment

Energy Products and Services

Eliminations and corporate costs

1 unchanged sentence

Operating profit %:

Energy Products and Services

Energy Equipment

Energy Products and Services

Eliminations and corporate costs

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Pre-tax Other Items, net:

Energy Products and Services

Energy Equipment

Energy Products and Services

Total pre-tax Other Items

(Gain) loss on sales of fixed assets:

Energy Products and Services

Energy Equipment

Energy Products and Services

Total (gain) loss on sales of fixed assets

Adjusted operating profit:

Energy Products and Services

Energy Equipment

Energy Products and Services

Eliminations and corporate costs

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Depreciation & amortization:

Energy Products and Services

Energy Equipment

Energy Products and Services

Total depreciation & amortization

Adjusted EBITDA:

Energy Products and Services

Energy Equipment

Energy Products and Services

Eliminations and corporate costs

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Adjusted EBITDA %:

Energy Products and Services

Energy Equipment

Energy Products and Services

Eliminations and corporate costs

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Three Months Ended

Six Months Ended

Reconciliation of Adjusted operating profit and Adjusted EBITDA:

GAAP net income (loss) attributable to Company

GAAP net income attributable to Company

Noncontrolling interests

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Interest income

Equity loss in unconsolidated affiliates

Equity (income) loss in unconsolidated affiliates

Other (income) expense, net

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Liquidity and Capital Resources

At March 31, 2026, the Company had cash and cash equivalents of $1,342 million and total debt of $1,715 million.

At June 30, 2026, the Company had cash and cash equivalents of $1,164 million and total debt of $1,706 million.

At December 31, 2025, cash and cash equivalents were $1,552 million and total debt was $1,718 million.

As of March 31, 2026, approximately $839 million of the $1,342 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash could be subject to foreign withholding taxes and incremental U.S.

As of June 30, 2026, approximately $747 million of the $1,164 million of cash and cash equivalents was held by our foreign subsidiaries and the earnings associated with this cash could be subject to foreign withholding taxes and incremental U.S.

taxation if transferred among countries or repatriated to the U.S.

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are greater than available cash balances that are not subject to income tax, rather than repatriating cash, the Company may choose to borrow against its revolving credit facility.

On March 17, 2026, the Company extended the maturity date of the revolving credit facility by one additional year to September 12, 2030.

The revolving credit facility has a borrowing capacity of $1.5 billion through September 12, 2030.

The Company has a revolving credit facility with a borrowing capacity of $1.5 billion through September 12, 2030.

The Company has the right to increase the aggregate commitments under this agreement to an aggregate amount of up to $2.5 billion upon the consent of only those lenders holding any such increase.

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The credit facility contains a financial covenant establishing a maximum debt-to-capitalization ratio of 60%.

As of March 31, 2026, the Company was in compliance with a debt-to-capitalization ratio of 24.0% and had no borrowings or letters of credits issued under the facility, resulting in $1.5 billion of available funds.

As of June 30, 2026, the Company was in compliance with a debt-to-capitalization ratio of 23.9% and had no borrowings or letters of credit issued under the facility, resulting in $1.5 billion of available funds.

A consolidated joint venture of the Company borrowed $120 million against a $150 million bank line of credit, payable by June 2032, for the construction of a facility in Saudi Arabia.

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The bank line of credit contains a financial covenant regarding maximum debt-to-equity ratio of 75%.

As of March 31, 2026, the joint venture was in compliance and will not have future borrowings on the line of credit.

As of March 31, 2026, the Company had $84 million in borrowings related to this line of credit.

As of June 30, 2026, the joint venture was in compliance and will not have future borrowings on the line of credit.

As of June 30, 2026, the Company had $78 million in borrowings related to this line of credit.

The Company has $12 million in payments related to this line of credit due in the next twelve months.

The Company can repay the entire outstanding facility balance without penalty at its sole discretion.

Other debt at March 31, 2026 included $42 million of amounts owed to current and former minority interest partners of NOV consolidated joint ventures, of which $16 million is due in the next twelve months.

The Company’s outstanding debt at March 31, 2026 also consisted of $1,092 million in 3.95% Senior Notes, maturing on December 1, 2042, and $497 million in 3.60% Senior Notes, maturing on December 1, 2029.

The Company was in compliance with all covenants at March 31, 2026.

Long-term lease liabilities totaled $524 million at March 31, 2026.

The Company had $1,040 million of outstanding letters of credit at March 31, 2026, primarily in Norway and the United States, that are under various bilateral letter of credit facilities.

Other debt at June 30, 2026 included $38 million of amounts owed to current minority interest partners of NOV consolidated joint ventures, of which $2 million is due in the next twelve months.

The Company’s outstanding debt at June 30, 2026 also consisted of $1,092 million in 3.95% Senior Notes, maturing on December 1, 2042, and $497 million in 3.60% Senior Notes, maturing on December 1, 2029.

The Company was in compliance with all covenants at June 30, 2026.

Long-term lease liabilities totaled $520 million at June 30, 2026.

The Company had $909 million of outstanding letters of credit at June 30, 2026, primarily in Norway and the United States, that are under various bilateral letter of credit facilities.

Letters of credit are issued as bid bonds, advanced payment bonds and performance bonds.

The following table summarizes our net cash provided by (used in) continuing operating activities, continuing investing activities and continuing financing activities for the periods presented (in millions):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash provided by (used in) operating activities

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Net cash used in financing activities

Significant uses of cash during the first three months of 2026

Significant uses of cash during the first six months of 2026

• Cash flows used in operating activities were $9 million, primarily driven by changes in the primary components of our working capital (receivables, inventories, accounts payable, and accrued liabilities).

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• Share repurchases were $130 million.

The effect of the change in exchange rates on cash flows was a decrease of $5 million for the first three months of 2026, and an increase of $8 million for the first three months of 2025.

The effect of the change in exchange rates on cash flows was a decrease of $2 million for the first six months of 2026, and an increase of $19 million for the first six months of 2025.

We believe that cash on hand, cash generated from operations and amounts available under our credit facilities and from other sources of debt will be sufficient to fund operations, lease payments, working capital needs, capital expenditure requirements, dividends and financing obligations.

During the three months ended March 31, 2026, the Company repurchased approximately 3.5 million shares of common stock under its share repurchase program for an aggregate amount of $67 million.

During the three months ended March 31, 2025, the Company repurchased 5.4 million shares of common stock under the program for an aggregate amount of $81 million.

During the three and six months ended June 30, 2026, the Company repurchased approximately 3.2 million shares of common stock under the program for an aggregate amount of $63 million and 6.7 million shares of common stock under the program for an aggregate amount of $130 million, respectively.

During the three and six months ended June 30, 2025, the Company repurchased approximately 5.5 million shares of common stock under the program for an aggregate amount of $69 million, and 10.9 million shares of common stock under the program for an aggregate amount of $150 million, respectively.

The Company expects to return at least 50% of Excess Free Cash Flow (defined as cash flow from operations less capital expenditures and other investments, including acquisitions and divestitures), through a combination of quarterly base dividends, opportunistic stock buybacks, and an annual supplemental dividend to true-up returns to shareholders on an annual basis.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis