NOV Inc.

Good day, and thank you for standing by. Welcome to NOV third quarter 2025 earnings conference call. At this time, all participants in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you need to press star 11 on your telephone. You will then hear an automated message advising your handage rate. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Amy Ambrosio, Director of Investor Relations. Please go ahead.

Welcome, everyone, to NOV's third quarter 2025 earnings conference call. With me today are Clay Williams, our Chairman and CEO, Jose Bayardo, our President and COO, and Rodney Reed, our Senior Vice President and CFO. Before we begin, I would like to remind you that some of today's comments are forward-looking statements within the meaning of the federal securities laws. They involve risks and uncertainty, and actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or later in the year. For a more detailed discussion of the major risk factors affecting our business, please refer to our latest forms, 10-K and 10-Q, filed with the Securities and Exchange Commission. Our comments also include non-GAAP measures. Reconciliations to the nearest corresponding GAAP measures are in our earnings release available on our website. On a U.S. GAAP basis for the third quarter of 2025, NOV reported revenues of $2.18 billion and a net income of $42 million or 11 cents per fully diluted share. Our use of the term EBITDA throughout this morning's call corresponds with the term adjusted EBITDA as defined in our earnings release. Later in the call, we will host a question and answer session Please limit yourself to one question and one follow-up to permit more participation. Now, let me turn the call over to Clay.

Thanks, Amy, and good morning. NOV executed well in the third quarter. Revenues of $2.2 billion were down just slightly, less than 1% year-over-year and sequentially, despite a challenging macro environment and softening oil field activity. EBITDA was $258 million, or 11.9% of revenue, up sequentially despite rising tariff and inflationary headwinds. Cost control and strong project execution allowed NOD to lift margins sequentially while increasing free cash flow to $245 million. Energy equipment saw strong demand for its growing production-related portfolio, leading to higher backlogs and record revenues from our subsea flexible pipe and our gas-focused process systems businesses. These businesses, as well as our marine construction, and production and midstream units all achieved their highest EBITDA in five years, expanding segment year-over-year margins for the 13th consecutive quarter. Our drilling activity-driven energy products and services segment once again outperformed the underlying global rig count declines of 8% year-over-year, aided by our growing share of efficiency-enhancing downhole technologies and strong demand for drill pipe, including NOV's proprietary wire drill pipe data telemetry system. But generally, activity continued to soften, In North America, EMPs once again trim short cycle oil activity, which is likely to slow further seasonally in the fourth quarter. Internationally, the Saudi rig suspensions appear to be behind us, and while spending there remains low, expectations are building for a few more rigs to go back to work in 2026. Elsewhere in the Middle East, demand from the UAE, Qatar, and Kuwait remain healthy as customers continue to invest to meet production goals. Many are pursuing unconventional shale developments. Argentina, Saudi Arabia, and the UAE are leading the way, but interest is emerging elsewhere around the globe, as I'll speak to in a moment. Offshore, our customers expect a meaningful exploration and development drilling ramp to begin in late 2026. Offshore FIDs are expected to pick up over the next few years following a lull in 2025, and our discussions with customers around deepwater feed studies support this view. Bookings tied to offshore development are already up double digits year over year. Further out, NOV's prospects through the next decade are extraordinarily bright. Why? Step back from the near-term noise created by OPEC quota unwinding, oil oversupply, commodity price pressures, tariffs, inflation, and geopolitical uncertainty, and you will see two major structural shifts that are setting up a powerful decade of opportunity for our company. First, the globalization of unconventional shale development. Oil and gas are commodities, and the winners and losers in all commodity industries live and die based on costs, development costs and marginal production costs. The clear winner in the race to lower marginal production costs since about 2012 or so has been North American unconventional shale, which has arguably provided more than 80% of global supply growth since then. It's been the winner of the horse race to lower costs, and as the winner, it has attracted the most capital. Technology, capital, and ingenuity led marginal costs for the shale juggernaut lower and lower, outpacing the marginal cost reduction secured for offshore and other sources of oil and gas. And these competing sources saw capital investment fall sharply through the same period. But as North American shale producers have chipped away at Tier 1 inventory locations, production growth is flattening here and may well be peaking now. And as the mix of lower quality tier two locations rises, marginal cost per barrel for North American unconventional shales is creeping up, as comments from producers in a past few Dallas Fed surveys note. After 20 plus years of refining the technology to enable North American shale revolution, these same technologies are now being deployed at scale internationally because international EMPs see opportunity to develop lower marginal cost sources of oil and gas elsewhere. The advantage international shales have at this point is that they will benefit from decades of advancement and several hundred thousand shale wells that have been drilled and experimented with and continuously optimized here in North America. And these learnings will now be applied to new virgin international rock. The near-term challenge they have is they lack the necessary tools and equipment. That's where NOV comes in. Since prosecuting a successful unconventional shale plate requires pretty much everything NOV makes, we're pretty excited about this. Recall that the U.S. shale miracle started with a complete retooling of its land rig fleet and the build-out of a lot of frac, coil tubing, wireline completion, and production equipment. These tools and technologies are squarely in our wheelhouse, and we see the emerging build-out of infrastructure to support international shale development is driving demand for us for years to come. Second, the reemergence of deepwater and offshore development. After years of second-place finishes in the marginal cost horse race, deepwater is back to winning. Deepwater has quietly but steadily gotten better since 2012. NOV-supplied offshore drilling rigs are drilling more efficiently. Higher hook load capacities are enabling more cost-effective casing programs. The standardization of subsea production kit and FPSO designs have all served to steadily reduce the marginal cost of deepwater barrels and make its economics more compelling. Simply put, we believe that deepwater broadly has brought marginal cost below North American shales, and it is now winning the marginal cost horse race. This is a big deal. We believe this inflection, this leadership change, will drive many more investment dollars into deep water in the coming decade to satisfy growing global energy demand. Evidence of this is apparent in exploration success stories in new basins in Guyana, Suriname, Namibia, Senegal, the Eastern Mediterranean, the Pelagian, and the Gulf of America. Industry forecasts call for offshore oil output to rise to roughly 13 million barrels a day by 2026, making deep water the leading source of incremental supply growth. The pivot and spin is further helped by the emergence of profitable floating LNG, which adds natural gas as another viable target for offshore EMPs. NOV's technology portfolio from subsea flexible pipe and process systems to mooring solutions and rig aftermarket and automation is critical to enabling this expansion. Customer performance expectations favor selection of NOV technology, providing NOV a strong competitive advantage in deepwater operations. Finally, I'll stress that this 166-year-old horse race is never over. Innovative North American shale operators have an amazing track record of honing costs to improve competitiveness. But honestly, all operators in all basins do, and they have to, given the business they're in. But right now, we see Deepwater pulling into the lead and international shales entering the race as a serious contender. We believe these two will define the next decade-plus of oil and gas development, and both depend on the tools, equipment, and technology that NOB delivers. Back to the near term, however, as I said, we expect market conditions to remain soft through the next few quarters. Tariffs and inflation uncertainty will continue to weigh on margins in the near term, and global drilling activity is likely to drift lower. But looking further ahead, we see the back half of 2026 and beyond as a period of strengthening demand across both offshore and international land markets. As deepwater projects ramp and unconventional development expands globally, NOV's technology leadership and global platform will enable us to capture the growth efficiently and profitably. And that's why I'm so excited about NOV's future. To my NOV teammates listening this morning, thank you for all that you do to strengthen and improve and lower the marginal costs of the operations of all of our customers globally. You've helped build NOV to perform through cycles and to lead in the next phase of global energy development. And I'm grateful for the way that you get up every day, put your boots on, and make this industry better. Now, let me turn it over to Rodney. Thank you, Clay.