National Energy Services Reunited (NESR) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $404.6 million, up 33.5% year-over-year and 1.6% sequentially, driven by strong activity in Saudi Arabia and new contract ramp-ups.

• Net income rose to $23.8 million, more than doubling sequentially and up 129.3% year-over-year, reflecting improved operating leverage and strong operational execution.

• Maintained uninterrupted operations and workforce safety despite significant geopolitical disruptions in the Middle East.

• Continued robust tender pipeline of $3 billion, with major awards in Kuwait and North Africa cementing leadership positions.

• Accelerated project execution, notably in the Jafurah field, with efficiency improvements and additional fleet deployments.

Financial highlights

• Adjusted EBITDA reached $76.7 million (19% margin), up 22.7% year-over-year, absorbing $4 million in extra freight/logistics costs due to regional disruptions.

• Gross profit for the quarter was $51.8 million (12.8% margin), up from $37.5 million a year ago.

• Net income was $23.8 million (EPS $0.24 basic, $0.23 diluted), with adjusted diluted EPS at $0.26.

• Operating cash flow was $30.7 million; free cash flow was negative $5.3 million, an improvement over Q1 2025.

• Cash and equivalents were $93.0 million at quarter-end; total debt was $287.4 million.

Outlook and guidance

• Q2 2026 expected to show continued robust year-over-year growth, sequential margin improvement, and cash flow rebound.

• Full-year CapEx guidance of $180 million, with free cash flow conversion targeted at 35%-40% of adjusted EBITDA.

• Margins expected to average 21.5% for the year, with Q4 as the strongest quarter.

• Interest expense projected at $6.5 million and tax rate at 22.5% for Q2.

• Management expects continued strong demand in MENA, but notes uncertainty due to geopolitical tensions and commodity price volatility.