NOV 10-Q: Q3 Net Income Doubles to $90M, but Nine-Month Operating Cash Flow Collapses to $32M
NOV sits 37% above its 52-week low of $14.3.
Summary
NOV's Q3 10-Q confirms the already-reported $2.23 billion revenue and $281 million Adjusted EBITDA, but shows nine-month operating cash flow of just $32 million versus $678 million a year ago as working capital swelled. Backlog fell to $3.98 billion and the drill-bit royalty litigation remains on appeal.
Key Events · Earnings and Guidance · NOV
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Q3 Profit Roughly Doubles
Net income attributable to the company was $90 million, or $0.25 per diluted share, versus $42 million ($0.11) a year earlier; operating profit rose to $142 million from $107 million on revenue of $2,226 million.
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Operating Cash Flow Collapses
Nine-month operating cash flow was $32 million versus $678 million a year earlier, as inventories rose $205 million, contract assets $140 million and receivables $135 million; cash fell to $1,058 million from $1,552 million at December 31, 2025.
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Backlog Slips Year-Over-Year
Energy Equipment capital equipment backlog was $3.98 billion versus $4.56 billion a year earlier; Q3 orders of $577 million against $632 million shipped gave a 91% book-to-bill.
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Royalty Litigation on Appeal
A district court ruled NOV cannot collect drill-bit royalties after licensees stopped paying; NOV is appealing to the Federal Circuit, with $144 million of royalty receivables carried net of $78 million of reserves.
Analysis · NOV · Energy & Transportation
The headline numbers were already out, but the full 10-Q reveals what the press release did not: operating cash flow for the first nine months fell to $32 million from $678 million a year earlier as working capital absorbed cash — inventories up $205 million, contract assets up $140 million and receivables up $135 million. Cash on hand dropped to $1,058 million from $1,552 million at year-end. Against that, profitability improved (Q3 net income $90 million vs $42 million; operating profit $142 million vs $107 million) and the balance sheet remains comfortable with $1.5 billion undrawn on the revolver and a 23.7% debt-to-capitalization ratio. The other item buried in the footnotes is the drill-bit royalty litigation: a district court ruled NOV cannot collect royalties after licensees stopped paying, and NOV is appealing to the Federal Circuit with $144 million of royalty receivables on the books net of $78 million of reserves. Backlog also slipped to $3.98 billion from $4.56 billion a year ago, with Q3 book-to-bill at 91%.
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At the time of this filing, NOV was trading at $19.53 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $7B. The 52-week trading range was $14.30 to $21.93. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.