National Energy Services Reunited (NESR) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $303.1 million, up 2.1% year-over-year but down 11.8% sequentially, with NESR navigating oil market volatility and a full month impact of Ramadan.

• Net income for Q1 2025 was $10.4 million, a 4.1% increase year-over-year, but down 61.3% sequentially.

• MENA region remains a bright spot, with Saudi softness offset by growth in Kuwait, UAE, and North Africa.

• Strategic focus on right-sizing costs, reallocating resources, and leveraging contract wins and technology deployments.

• Countercyclical investment and differentiated technology platforms (ROIA, NEDA) underpin growth outlook.

Financial highlights

• Q1 2025 revenue was $303.1 million, up 2.1% year-over-year but down 11.7% sequentially.

• Adjusted EBITDA was $62.5 million (20.6% margin), down 2.7% year-over-year and 28.4% sequentially.

• Adjusted EPS was $0.14; diluted EPS was $0.11, up 10% year-over-year; charges and credits impacting adjusted EBITDA/EPS were $2.6 million.

• Cash flow from operations was $20.5 million; free cash flow was negative $9.6 million due to $30 million CapEx and seasonal working capital increases.

• Net debt at March 31, 2025, was $287.6 million; net debt/adjusted EBITDA at 0.93.

Outlook and guidance

• Q2 2025 revenues expected to grow sequentially, but moderate year-over-year; full-year 2025 revenue growth anticipated.

• Margins for Q2 2025 to slightly improve; full-year margins expected 100-200 bps below 2024, with a goal to return to 25% in 2026.

• CapEx for 2025 projected at $125 million, potentially higher if large tenders are won.

• Interest expense for 2025 expected around $30 million; effective tax rate in the mid-20% range.

• Management remains confident in growth prospects for 2025 and 2026, citing supportive MENA market conditions and recent contract wins.