NOV 2025 Q2 Earnings Misses Targets as Net Income Falls 48.9%

NOV(NOV) reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. The company fell short of market expectations, reporting a 1.3% decrease in total revenue and a significant drop in net income. Despite facing these challenges, NOV reaffirmed its full-year revenue guidance, maintaining a steady outlook. The company expects adjusted EBITDA to be flat to up $10 million, driven by strong product rollouts and strategic partnerships. This guidance is in line with previous expectations, pointing towards growth potential in the latter half of the year.

Revenue
The total revenue of NOV decreased by 1.3% to $2.19 billion in 2025 Q2, down from $2.22 billion in 2024 Q2, and was distributed among its segments. The Energy Products and Services segment generated $1.02 billion, while the Energy Equipment segment contributed $1.21 billion. Additionally, eliminations accounted for a reduction of $44 million, culminating in the total revenue of $2.19 billion for the quarter.

Earnings/Net Income
NOV's EPS declined 49.1% to $0.29 in 2025 Q2 from $0.57 in 2024 Q2. Meanwhile, the company's net income fell to $114 million in 2025 Q2, down 48.9% from $223 million reported in 2024 Q2. The EPS figures indicate challenging financial performance this quarter.

Price Action
The stock price of NOV has edged down 1.40% during the latest trading day, has edged up 0.08% during the most recent full trading week, and has edged up 0.23% month-to-date.

Post-Earnings Price Action Review
Over the past three years, the strategy of purchasing NOV shares on the date of its revenue increase announcement and holding them for 30 days has yielded a cumulative return of 17.5%. This equates to an average annual return of 5.5%, suggesting a solid medium-term investment strategy despite the volatility within the energy sector. This approach reflects NOV's resilience and potential for growth, aligning with market trends and investor expectations. The consistent performance indicates NOV's ability to navigate sector challenges, making it a favorable option for investors seeking stability amidst market fluctuations.

CEO Commentary
Robert DeMartini - CEO & Director
In Q2, we experienced a 12.6% revenue decline year-over-year, yet we improved sequentially from Q1, reaching $105 million. Demand for Rejuvenate 2.0 exceeded expectations, and our Mattress Firm expansion drove early shipments. We anticipate positive adjusted EBITDA in the latter half of the year, backed by strong sales momentum and successful product rollouts. Despite facing tariff pressures impacting our gross margin, we expect to exit 2025 with a rate above 40%. Our focus remains on innovation, strategic partnerships, and enhancing our premium sleep offerings, positioning us for sustainable growth and profitability.

Guidance
We reaffirm our full-year revenue guidance between $465 million and $485 million, expecting adjusted EBITDA to be flat to up $10 million. We anticipate continued growth in the second half, primarily driven by the rollout of Rejuvenate 2.0 and Mattress Firm expansion, with gross margin projected to exceed 40% by year-end.

Additional News
In recent weeks, NOV has been actively exploring merger and acquisition opportunities to bolster its market position and expand its product offerings. Additionally, the company announced a dividend payout strategy aimed at rewarding shareholders while maintaining capital for strategic investments. Furthermore, NOV has seen significant changes at the executive level, with new appointments designed to strengthen leadership and drive future growth. These developments highlight NOV's commitment to enhancing shareholder value and adapting to evolving market dynamics.