A global maker of energy equipment and technology, NOV supplies drill bits, downhole tools, drilling rigs, and digital platforms used by oil and gas service companies and producers in dozens of countries, and it also reaches into wind, geothermal, and carbon-capture markets. Its roots stretch back to 1862 with the founding of Oilwell Supply, and the modern company emerged from the 2005 merger of National Oilwell and Varco International. The name "Varco" itself comes from the initials of its three founders—Vuilleumier, Abegg, and Reinhold—and the firm later renamed itself simply NOV Inc. in 2021.
Q2 2026 operating profit rose 35% to $193M on $40M tariff refunds despite a 2.4% revenue decline
rose 35% even as declined. Revenue fell 2.4% to $2.05B and narrowed 2.8 points to 18.5%, but operating profit climbed to $47M from $143M a year earlier on $40M of tariff refunds and offshore execution. The quarter shows profit holding through cost and trade benefits while the top line softens.
Key takeaways
rose 35% to $193M as approximately $40M in tariff refunds and strong offshore project execution lifted results, with up $31M to $283M (13.3% of sales).
fell 2.4% to $2.05B and dropped 9.9% sequentially from $2.19B, with down 5% to $974M on lower capital equipment sales partly offset by drill bit and artificial lift share gains.
rose 1% to $1.22B and its increased $55M to $177M, driven by offshore production projects nearing completion and a $14M .
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue fell 2% YoY to $2.13B, but operating profit rose 35% to $193M, aided by tariff refunds and strong offshore execution.
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rose 1% to $1.22B, with up $55M to $177M, driven by strong execution on offshore production projects nearing completion and a $14M tariff refund benefit.
edged up $2M to $85M as a $26M and market share gains offset the decline.
was a $9M use for the first half of 2026 with $130M in share repurchases and $97M in dividends, leaving $1.16B cash and a $1.5B undrawn .
was $19M, down 74% from $73M a year earlier, with of $0.05 versus $0.19.
What changed
Q2 2026 did not reverse the Q1 use: H1 2026 operating cash flow was a $9M use versus $354M positive in H1 2025, after Q1's $26M use and the table's Q2 operating cash flow of -$26M.
conversion continued but at a lower base: Q1 guided $4.23B with ~40% to 2026; Q2 rose 1% to $1.22B on execution, though the table shows Q2 revenue down 9.9% sequentially from Q1's $2.19B to $2.05B.
profit stabilized after Middle East-driven Q1 weakness: was $85M in Q2 versus $26M in Q1, aided by $26M .
Shareholder returns continued under the at-least-50%-of-excess pledge: $130M repurchased and $97M dividends in H1 2026, versus $285M returned in H1 2025.
Risk factors were restated with no new disclosures beyond the 2025 10-K, including the $1.8B exposure previously flagged.
What to watch
Q3 2026 to see if the H1 $9M use reverses toward the positive 2024-2025 runs.
conversion from the Q1 $4.23B level into H2 2026 as aftermarket declines persist.
next quarter after the $26M benefit drops out.
Excess returned to shareholders in H2 2026 against the $227M paid in H1.
fell 5% to $974M, but edged up $2M to $85M, as market share gains in drill bits and artificial lift and a $26M tariff refund benefit offset lower capital equipment sales.
Total increased $31M to $283M (13.3% of sales), including an approximate $40M benefit from tariff refunds.
Cash used in operating activities was $9M for the first half of 2026, with $146M in , $97M in dividends, and $130M in share repurchases; liquidity remains strong with $1.16B in cash and a $1.5B undrawn .
Management expects increased demand for equipment and technology due to tightened oil and gas fundamentals from Middle East conflict and years of underinvestment, with a focus on energy security and supply diversification.
Quantitative and Qualitative Disclosures About Market Risk
NOV reports foreign exchange and interest rate exposures, with a $47M net income sensitivity to a 10% currency move and $1.7B in fixed-rate notes.
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Foreign exchange loss narrowed to $11M in H1 2026 from $31M a year earlier, driven by monetary assets/liabilities in non-functional currencies and hedge adjustments.
Transactional currency exposures totaled $592M and translational exposures $430M as of June 30, 2026; a hypothetical 10% adverse move could reduce by $47M and by $43M.
The company uses foreign currency forward contracts to align and cost currencies, not for speculation, and monitors counterparty credit risk from major financial institutions.
Debt at June 30, 2026 included $1,092M of 3.95% Senior Notes, $497M of 3.60% Senior Notes, and $117M of other debt, with no borrowings under the $1.5B .
A joint venture has $78M outstanding under a $150M bank line for a Saudi Arabia facility, with interest at plus 1.40%; the company may fix rates on borrowings for 1–6 months.
As of the date of this filing, the Company and its operations continue to be subject to the risk factors previously disclosed in Part I, Item 1A “Risk Factors” in our 2025 Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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As of the date of this filing, the Company and its operations continue to be subject to the risk factors previously disclosed in Part I, Item 1A “Risk Factors” in our 2025 Annual Report on Form 10-K for the fiscal year ended December 31, 2025.