Yahoo Finance

• Fourth Quarter Revenue: $2.31 billion.

• Fourth Quarter Net Income: $160 million or $0.41 per fully diluted share.

• Fourth Quarter EBITDA: $302 million or 13.1% of sales.

• Full Year 2024 Revenue: $8.87 billion.

• Full Year 2024 Net Income: $635 million or $1.60 per fully diluted share.

• Full Year 2024 EBITDA: $1.1 billion or 12.5% of sales.

• Free Cash Flow for 2024: $953 million.

• Book-to-Bill Ratio: 121% for the fourth quarter.

• Energy Equipment Segment Revenue Growth: 5% for 2024.

• Energy Products & Services Segment Margin Decline: 120 basis points year-over-year.

• Cash Flow from Operations (Q4 2024): $591 million.

• Capital Expenditures (2024): $351 million.

• Share Buybacks (Q4 2024): 7.5 million shares for $112 million.

• Dividend Paid (Q4 2024): $29 million.

• Backlog at Year-End 2024: $4.43 billion, up 7% from year-end 2023.

• Warning! GuruFocus has detected 5 Warning Sign with NOV.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NOV Inc (NYSE:NOV) reported strong financial performance for 2024, with revenues of $8.87 billion and a net income of $635 million.

• The company achieved a book-to-bill ratio greater than 1:1 in 10 of the last 12 quarters, indicating strong demand and backlog growth.

• NOV's Energy Equipment segment led revenue growth with a 5% increase and expanded segment margins by 250 basis points.

• The company generated exceptionally strong free cash flow of $953 million, representing 86% of EBITDA.

• NOV's digital services, including the MAX data platform, saw significant traction, more than doubling user adoption in 2024.

Negative Points

• The Energy Products & Services segment experienced a decline in margins by 120 basis points due to reduced drill pipe demand.

• North American activity is expected to remain subdued, with weak demand for pressure pumping and stimulation equipment.

• Offshore drilling customers are facing temporary gaps in utilization due to delayed production plans, impacting rig aftermarket activity.

• The company anticipates a decline in Energy Equipment revenue by low single digits in 2025 due to offshore drilling support challenges.

• Macroeconomic and geopolitical uncertainties pose potential headwinds for NOV's operations and market conditions in 2025.

Q & A Highlights

Q: Clay, you mentioned a flat revenue outlook for 2025 but expect margin improvements. Can you elaborate on the expected magnitude of margin increase and the factors contributing to it? A: Clay Williams, CEO: Despite some emerging headwinds, we are optimistic about margin improvements in 2025. Energy Equipment margins improved over 300 basis points year-on-year, and we expect further improvements as we complete margin-challenged projects. Energy Products & Services face challenges, particularly in North America, but we are working on cost improvements and introducing higher-margin products. Overall, we anticipate a 50 to 150 basis point margin improvement, though this is not official guidance.