Nabors Industries Ltd. (NBR) Cash Flow Statement

Operating cash flow has been consistently positive across the ten quarters shown while net income has been negative in most periods, producing OCF/NI ratios that swing between extremes and offer little stable signal. The consistent $155M to $175M quarterly D&A charge explains much of the gap, since heavy drilling equipment depreciation sits well above reported earnings. Investors should monitor whether this structural add-back remains sustainable, because cash generation here depends on continued fleet maintenance spending rather than on profitability that is currently visible in the income statement.

Free cash flow has oscillated between negative and positive territory, with only two of the most recent quarters delivering margins above 7%. The improvement in Q3 2026 coincided with a $93.6M working capital inflow, which suggests a meaningful portion of the recent FCF strength may be timing-related rather than recurring. Analysts should treat the latest quarter with caution until working capital reverses or stabilizes.

Capex intensity has stayed elevated relative to revenue, consistent with a fleet that requires continual reactivation, upgrade, and newbuild investment such as the SANAD program. Because D&A runs at roughly $160M per quarter and capex has frequently exceeded it, the company appears to be reinvesting above depreciation rather than harvesting the asset base. Investors should assess how much of this spend is growth versus maintenance, since the split materially affects the sustainable free cash flow available to equity holders.

The alternating sign of working capital movements suggests collections timing and payables management are major, unstable contributors to quarterly operating cash flow. A large inflow in Q4 2025 and Q3 2026 followed by outflows in early 2026 may reflect contract billing cycles rather than structural efficiency gains. Investors should monitor receivables aging and collection cycles to determine whether these inflows reverse, as that would materially reduce the quality of recent cash generation.

Summing the disclosed quarters shows operating cash flow substantially exceeding cumulative net income, which points to heavy non-cash charges rather than unusually strong underlying cash economics. The result is that the business has generated cash in aggregate while producing little accounting profit, a pattern common in asset-heavy services but one that makes valuation sensitive to whether fleet reinvestment is adequately covered. Warranting further investigation is whether maintenance capex has been understated relative to the depreciation being added back.