KLXE

This article first appeared on GuruFocus. Revenue: $167.3 million in Q2 2026, up 15.6% sequentially from $144.7 million in Q1 and up approximately 5% year-over-year. Adjusted EBITDA: $18.7 million, up 68% sequentially from $11.1 million in Q1. Adjusted EBITDA Margin: 11.2%, compared to 7.7% in the first quarter. Net Loss: $8 million, or $0.41 per share, compared to a net loss of $24 million, or $1.23 per share, in Q1. Segment Revenue (Rockies): $50.8 million, up 31.6% sequentially, with adjusted EBITDA margin of 12.4%. Segment Revenue (Southwest): $64.5 million, up approximately 20% sequentially, with adjusted EBITDA margin improving to 11.8%. Segment Revenue (Northeast Mid-Con): $52.0 million, essentially flat sequentially, with adjusted EBITDA margin improving to 24%. Capital Expenditures: $8.6 million in Q2, with net CapEx of $6.4 million after $2.2 million in asset sale proceeds. Cash Flow: Net cash provided by operating activities was $10.5 million; unlevered free cash flow was positive $6.6 million; levered free cash flow was positive $4.1 million. Total Debt: $288.9 million at quarter end. Liquidity: $53.3 million, including $7.9 million of cash and cash equivalents and $45.4 million of availability under the ABL. Wolfpack Acquisition Contribution: $3.4 million of revenue in June, implying an annual revenue run rate of approximately $41 million. Revenue per Average Operated Rig: Approximately $311,000 in Q2, up from $273,000 in Q1. Q3 2026 Revenue Guidance: Expected in the range of $176 million to $188 million, with a midpoint of $182 million. Warning! GuruFocus has detected 4 Warning Signs with KLXE. Is KLXE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. KLX Energy Services Holdings Inc (NASDAQ:KLXE) delivered strong sequential growth with revenue up 15.6% and adjusted EBITDA up 68% in Q2 2026, demonstrating significant operating leverage. The Wolfpack acquisition is integrating smoothly, contributing $3.4 million in revenue in June (annual run rate of ~$41 million) and exceeding initial expectations with increased synergy targets to $2.5 million. The company is executing a proactive balance sheet improvement strategy, including a $125 million backstop equity rights offering, which is expected to reduce net leverage to approximately 2.7 times and lower annual interest costs by $11-14 million. Excluding Wolfpack, the base business grew over 13% sequentially, outpacing the 5.8% increase in US land rig counts, indicating strong market share gains and execution. Management expects continued margin expansion in Q3 2026, with revenue guidance of $176-188 million and mid-single-digit growth in the base business despite a flat market outlook. The company is realizing cross-selling opportunities from Wolfpack, including new technologies and access to industrial end markets like data centers and lithium mining, diversifying revenue streams. KLX Energy Services Holdings Inc (NASDAQ:KLXE) continues to face a challenging pricing environment, with management noting that pricing is not sufficient to justify reactivation of equipment or material growth CapEx across most service lines. The company's revenue mix is still tilted toward lower-margin drilling services, which limited incremental margins in Q2 and is expected to continue pressuring profitability in Q3. Liquidity is expected to hit its low point in Q3 rather than Q2 due to working capital build from growth, potentially straining near-term cash flow. The company lost a specific customer in one product line in the Haynesville, contributing to a decline in natural gas revenue and highlighting customer concentration risks. The equity rights offering, while proactive, signals ongoing balance sheet stress and may dilute existing shareholders, reflecting the company's high debt levels and need for equitization. The company's net loss of $8 million in Q2, though improved, indicates continued profitability challenges, with operating losses still present when excluding non-recurring gains. Q: Why did KLX decide to proceed with the $125 million backstop equity rights offering now, given the improving operational results?A: Chris Baker (President and CEO) explained that the decision was proactive rather than reactive. The company did not intend to use the PIC (Payment-In-Kind) interest option at the level it has since the refinancing, which has led to continued debt build-up. Management and the Board believe that deleveraging now and creating additional cash liquidity provides materially greater financial resilience to navigate the highly volatile market cycle. The offering is designed to reduce debt, improve liquidity, and strengthen the capital structure, positioning KLX for greater financial flexibility and long-term growth. It is not a Chapter 11 filing or bankruptcy process, and it is equitably structured to benefit all shareholders. Q: How will the equity rights offering improve KLX's financial position and maneuverability in the current market dynamics?A: Chris Baker (President and CEO) stated that the structure guarantees at least $94 million of deleveraging or equitization, which reduces annual interest costs by over $11 million, potentially up to $14 million if the full $125 million offering is elected. This reduction in interest expense, combined with the expected roll-off of coil tubing leases at the end of the year (an $8.2 million annual burden), improves the company's free cash flow profile by approximately $20 million heading into 2027. The increased liquidity also affords the opportunity to pay down the ABL facility, which can be reloaded for growth initiatives or other M&A opportunities. Q: Can you elaborate on the regional performance differences, specifically the strength in the Southwest and the slight weakness in the Northeast Mid-Con?A: Chris Baker (President and CEO) noted that natural gas revenue as a percentage of total revenue rolled slightly to about 15% in Q2, driven by a decline in Haynesville revenue due to the loss of one specific customer in one product line. The team is working to backfill that work, and the Haynesville rig count is expected to fluctuate around 58-60 by year-end. Conversely, the Southwest team executed well, benefiting from expansion opportunities in the Eagleford and Permian basins. The company was a beneficiary of private operators pulling forward activity in the Permian as WTI prices ramped up. Q: Given the expected revenue growth in Q3, which is likely to be driven by lower-margin drilling activity, should we still expect margin expansion?A: Chris Baker (President and CEO) confirmed that the company expects continued margin growth in Q3. While the mix will be similar to Q2 (with drilling at ~23% of revenue), the margin expansion will be driven by operating leverage as revenue ramps up and fixed costs are better absorbed. The company forecasts revenue growth in every segment, and even excluding the full quarter of Wolfpack contribution, the base business is expected to grow in the mid-single digits. This compares favorably to the 12.7% adjusted EBITDA margin achieved in Q3 of 2025. Q: Is KLX starting to see any pricing power given the recent rise in activity?A: Chris Baker (President and CEO) stated that pricing across most of the industry is still not sufficient to justify reactivation of equipment or material growth CapEx. While KLX has been able to move price on select PSLs in certain basins, the pricing inflection has not been steep. The PSLs where pricing has moved the most are more asset-heavy, while personnel-dependent PSLs remain most sensitive to white space and continued pricing pressure. The company remains focused on moving price wherever possible. Q: Why was Wolfpack Rentals the right acquisition fit, and how is the integration progressing?A: Chris Baker (President and CEO) explained that Wolfpack added needed assets that offset some of KLX's CapEx for the year, as the legacy business was tapped out from a utilization standpoint. The accommodations product line, while flying under the radar, works exceptionally well for KLX and has sizable market share in certain basins. Wolfpack also brought new technologies, such as water filtration, and opened doors to other industrial end users, including data centers and lithium mining, creating new revenue streams. Integration has gone exceptionally well, with systems fully integrated as of July 1, and the company has increased its expected annual synergy target to approximately $2.5 million. Q: Can you provide more detail on the Q2 financial results and the drivers behind the sequential improvement?A: Geoffrey Stanford (Interim CFO) reported that Q2 revenue was $167.3 million, up 15.6% sequentially, and adjusted EBITDA increased 68% to $18.7 million, with margins expanding to 11.2%. The improvement was driven by the normalization of typical Q1 seasonal impacts, higher activity levels yielding improved utilization, better absorption of the cost structure, and one month of contribution from Wolfpack. The company also absorbed approximately $600,000 of bad debt write-offs. Net loss improved to $8 million, or $0.41 per share, from a net loss of $24 million in Q1, which included a $6.5 million bargain purchase gain from the Wolfpack acquisition. Q: What is the company's outlook for liquidity and capital expenditures for the remainder of the year?A: Geoffrey Stanford (Interim CFO) stated that Q3 is now expected to mark the low point for liquidity, rather than Q2, due to an expected working capital build to support meaningful sequential revenue growth. Capital expenditures in Q2 were $8.6 million, primarily maintenance-related. The company generated positive unlevered free cash flow of $6.6 million and levered free cash flow of $4.1 million in Q2. The company elected to PIC 100% of interest in Q2 and expects to do the same in Q3, with a 50-50 cash and PIC mix anticipated in Q4, subject to market conditions. Total debt at quarter end was $288.9 million, with total liquidity of $53.3 million. Q: How did the individual segments perform in Q2, and what is the outlook for Q3?A: Geoffrey Stanford (Interim CFO) detailed that the Rockies segment saw revenue rise 31.6% sequentially to $50.8 million, with adjusted EBITDA margin recovering to 12.4%. The Southwest segment revenue increased 20% to $64.5 million, with margins improving to 11.8%. The Northeast Mid-Con segment revenue was essentially flat at $52 million, but adjusted EBITDA margins improved to 24%. Chris Baker For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Second quarter revenue grew 15.6% sequentially to $167.3 million, driven by a normalization of seasonal impacts and improved utilization across the base business. Adjusted EBITDA increased 68% sequentially to $19 million, demonstrating significant operating leverage as activity levels improved and fixed costs were better absorbed. The base business grew 13% sequentially, notably outpacing the 5.8% increase in U.S. land rig count, reflecting solid execution in coiled tubing and directional drilling. The WolfPack acquisition, closed in June, contributed $3.4 million in its first month and is already realizing cross-selling opportunities and increased synergy targets. Management attributed the shift toward drilling-focused revenue (23% of total) to the inclusion of WolfPack and legacy accommodations, which limited incremental margins due to service mix. Regional performance was led by the Rockies and Southwest segments, while Mid-Con revenue remained flat but achieved margin expansion through cost discipline and PSL mix shifts. Q3 revenue is guided to $176-$188 million, implying mid-single-digit growth in the base business despite broader market expectations for flat activity. The $125 million backstopped equity rights offering is a proactive measure to reduce net leverage to approximately 2.7x and enhance financial resilience against market cycles. Management expects Q3 to be the low point for liquidity due to working capital builds required to support meaningful sequential revenue growth. The company anticipates a 50-50 cash and PIK interest mix for senior secured notes in Q4, moving away from the 100% PIK election used in Q2 and Q3. Strategic focus remains on integrating WolfPack, capturing synergy benefits, and converting higher activity levels into stronger cash generation. A $6.5 million non-recurring bargain purchase gain was recognized from the WolfPack acquisition, reflecting fair value of assets acquired above the purchase price. The equity rights offering is explicitly framed as a proactive capital structure improvement, not a response to operational failure or a bankruptcy process. Management flagged that current pricing across most service lines is insufficient to justify material growth CapEx or equipment reactivation. The expiration of coiled tubing leases at the end of 2026 is expected to improve the annual free cash flow profile by approximately $8.2 million starting in 2027. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated that relying solely on PIK interest was not a sustainable path to prosperity and that proactive deleveraging was necessary to avoid potential covenant breaches in 2027. The offering is intended to provide financial flexibility for future M&A and recapitalize the business to thrive in volatile market conditions. The transaction is expected to reduce annual interest costs by $11 million to $14 million depending on final uptake and interest rate assumptions. Combined with the roll-off of coiled tubing leases, the company targets a $20 million year-over-year improvement in its free cash flow profile by 2027. Pricing power remains limited; while some price movement has occurred in asset-intensive, people-light services, personnel-dependent lines remain under pressure. Management noted that current industry pricing generally does not support the reactivation of idle equipment. WolfPack provided necessary scale in accommodations that offset the need for legacy CapEx, as the company was reaching maximum utilization. The acquisition introduces new revenue streams from non-oilfield sectors, including data centers and lithium mining, through water filtration and accommodation technologies.

HOUSTON, Aug. 10, 2026 /PRNewswire/ -- KLX Energy Services Holdings, Inc. (Nasdaq: KLXE) ("KLX", the "Company", "we", "us" or "our") today reported financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial and Operational Highlights Revenue of $167 million, a 16% increase over first quarter 2026 Net loss of $(8) million and diluted loss per share of $(0.41), improved 65% and 67% over first quarter 2026, respectively Adjusted EBITDA of $19 million, a 68% increase over first quarter 2026 Net loss margin of (5)%, an improvement of 70% over first quarter 2026 Adjusted EBITDA margin of 11%, a 46% increase over first quarter 2026 Total liquidity of $53 million, consisting of approximately $8 million of cash and cash equivalents On June 2, 2026, closed the acquisition of Wolf Pack Rentals, LLC (the "Wolf Pack Acquisition") and recorded a related bargain purchase gain of $6.5 million See "Non-GAAP Financial Measures" at the end of this release for a discussion of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Loss, Adjusted Diluted Loss per share, Unlevered and Levered Free Cash Flow, Net Working Capital, Net Debt and their reconciliations to the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We have not provided reconciliations of our future expectations as to Adjusted EBITDA or Adjusted EBITDA margin as such reconciliations are not available without unreasonable efforts. Chris Baker, KLX President and Chief Executive Officer, stated, "Our second quarter results were in line with our expectations. Revenue was $167 million, essentially at the midpoint of our guidance and up $23 million, or 16%, from the first quarter, inclusive of one month of contribution from the Wolf Pack Acquisition. Adjusted EBITDA was $19 million, up 68% sequentially, with margins improving to 11%. That step-up was driven by higher activity levels and better absorption of our cost structure, and Adjusted EBITDA also tracked with what we expected coming into the quarter. "Wolf Pack contributed $3.4 million of revenue in June, implying a current annual revenue run-rate of $41 million, comparing favorably to their full year 2025 result. Integration has proceeded swiftly and seamlessly to date with numerous cross-selling opportunities driven by the combined team being realized. Our full-year synergy estimate has now increased to approximately $2.5 million. Excluding Wolf Pack, the base business grew more than 13% sequentially, outpacing the 5.8% increase in U.S. Land Rig Count, which reflects steady demand and solid execution across the portfolio led by sequential revenue growth in coiled tubing, directional drilling, technical services and accommodations. "Looking ahead to the third quarter, we expect revenue in the range of $176 to $188 million, with a midpoint of $182 million, which is $15 million higher than the second quarter. Excluding Wolf Pack from both periods, the midpoint implies mid-single-digit sequential growth in the base business at a time when broader expectations are for flat activity. We expect margins to continue to increase as activity builds, driving better fixed cost absorption," concluded Baker. Second Quarter 2026 Financial Results Revenue for the second quarter of 2026 totaled $167.3 million, an increase of 15.6% compared to the first quarter of 2026 revenue of $144.7 million. The increase in revenue reflects a seasonal market activity increase. On a product line basis, completion, drilling, production and intervention services contributed approximately 52%, 23%, 16% and 9%, respectively, to revenue for the second quarter of 2026. Net loss for the second quarter of 2026 was $(8.4) million, compared to the first quarter of 2026 net loss of $(24.0) million. Adjusted net loss for the second quarter of 2026 was $(13.2) million, compared to the first quarter of 2026 adjusted net loss of $(23.0) million. Adjusted EBITDA for the second quarter of 2026 was $18.7 million, compared to the first quarter of 2026 Adjusted EBITDA of $11.1 million. Adjusted EBITDA margin for the second quarter of 2026 was 11.2%, compared to the first quarter of 2026 Adjusted EBITDA margin of 7.7%. Second Quarter 2026 Segment Results The Company reports revenue, operating (loss) income and Adjusted EBITDA through three geographic business segments: Rocky Mountains, Southwest and Northeast/Mid-Con. The Company reports operating activities not attributable to an individual geographic business segment through the Corporate and other segment. Segment results are reported after inter-segment eliminations. Rocky Mountains: Revenue, operating income and Adjusted EBITDA for the Rocky Mountains segment was $50.8 million, $0.3 million and $6.3 million, respectively, for the second quarter of 2026. Second quarter revenue represents a 31.6% sequential increase over the first quarter of 2026, driven by coiled tubing, tech services and wireline. Segment operating income increased sequentially and segment Adjusted EBITDA increased 200.0% sequentially. This quarter-over-quarter improvement in income and margin was a function of higher utilization in the second quarter of 2026 as compared to the first quarter of 2026. Southwest: Revenue, operating income and Adjusted EBITDA for the Southwest segment, which includes the Permian and South Texas, was $64.5 million, $0.1 million and $7.6 million, respectively, for the second quarter of 2026. Second quarter revenue represents a 20.3% sequential increase over the first quarter of 2026, driven by coiled tubing, directional drilling and accommodations. Segment operating income increased sequentially and segment Adjusted EBITDA increased 65.2% sequentially due to higher utilization in the second quarter of 2026 as compared to the first quarter of 2026. Northeast/Mid-Con: Revenue, operating income and Adjusted EBITDA for the Northeast/Mid-Con segment was $52.0 million, $5.1 million and $12.5 million, respectively, for the second quarter of 2026. Second quarter revenue represents a 1.0% sequential decrease over the first quarter of 2026, driven by a decrease in flowback, offset by increases in directional drilling and accommodations. Segment operating income increased by 70.0% and segment Adjusted EBITDA increased 14.7% as compared to the first quarter of 2026 due to improved utilization and decreased white space. Corporate and other: Operating loss and Adjusted EBITDA loss for the Corporate and other segment were $(3.4) million and $(7.7) million, respectively, for the second quarter of 2026. Segment operating loss decreased due to the $6.5 bargain purchase gain recognized in relation to the Wolf Pack Acquisition, and Adjusted EBITDA loss increased slightly to include higher fixed costs in the current quarter. The following is a tabular summary of revenue, operating income (loss) and Adjusted EBITDA (loss) for the second quarter ended June 30, 2026, the first quarter ended March 31, 2026 and the second quarter ended June 30, 2025 ($ in millions). Balance Sheet and Liquidity As of June 30, 2026, cash and cash equivalents totaled $7.9 million and the Company had availability of $45.4 million under the asset-based revolving credit facility (the "ABL Facility") borrowing base certificate, including availability on an undrawn first-in-last-out facility, resulting in a total liquidity position of $53.3 million. Net Working Capital as of June 30, 2026 was $46.0 million, a (15)% decrease from March 31, 2026 driven by additional liabilities included on the balance sheet as part of the Wolf Pack Acquisition, as well as timing of payrolls. We expect to operate with a lower cash balance than in prior years due to the flexibility provided by the new ABL Facility, a management strategy of minimizing interest expense, and we expect to incur an additional working capital build to support an expected increase in activity in the third quarter of 2026. Other Financial Information Capital expenditures were $8.6 million during the second quarter of 2026, a decrease of $0.1 million or (1)% compared to capital expenditures of $8.7 million in the first quarter of 2026. Capital expenditures net of asset sales were $6.4 million during the second quarter of 2026, an increase of $1.1 million or 21% compared to capital expenditures net of asset sales of $5.3 million in the first quarter of 2026. Capital spending during the second quarter was driven primarily by maintenance capital expenditures across our segments. As of June 30, 2026, we had $1.0 million of assets held for sale related to one facility and other equipment. Conference Call Information KLX will conduct its second quarter 2026 conference call, which can be accessed via dial-in or webcast, on Tuesday, August 11, 2026 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 1-201-389-0867 and asking for the KLX conference call at least 10 minutes prior to the start time, or by logging onto the webcast at https://investor.klx.com/events-and-presentations/events. For those who cannot listen to the live call, a replay will be available through August 25, 2026, and may be accessed by dialing 1-201-612-7415 and using passcode 13761897#. Also, an archive of the webcast will be available shortly after the call at https://investor.klx.com/events-and-presentations/events for 90 days. Please submit any questions for management prior to the call via email to [email protected]. Management intends to discuss the previously announced $125 million backstopped rights offering (the "Rights Offering") during the second quarter 2026 conference call. An investor presentation, including information regarding the Rights Offering, will be available in advance of the conference call at https://investor.klx.com/events-and-presentations/events. About KLX Energy Services Holdings, Inc. KLX is a growth-oriented provider of diversified oilfield services to leading onshore oil and natural gas exploration and production companies operating in both conventional and unconventional plays in all of the active major basins throughout the United States. The Company delivers mission critical oilfield services focused on drilling, completion, production, and intervention activities for technically demanding wells from over 60 service and support facilities located throughout the United States. KLX's complementary suite of proprietary products and specialized services is supported by technically skilled personnel and a broad portfolio of innovative in-house manufacturing, repair and maintenance capabilities. More information is available at www.klx.com. Forward-Looking Statements and Cautionary Statements The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information to investors. This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) includes forward-looking statements that reflect our current expectations and projections about our future results, performance and prospects. Forward-looking statements include all statements that are not historical in nature and are not current facts. When used in this news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein), the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "might," "should," "could," "will" or the negative of these terms or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events with respect to, among other things: our operating cash flows; the availability of capital and our liquidity; our future revenue, income and operating performance; our ability to sustain and improve our utilization, revenue and margins; our ability to maintain acceptable pricing for our services; future capital expenditures; our ability to finance equipment, working capital and capital expenditures; our ability to execute our long-term growth strategy and to integrate our acquisitions; our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements; and the timing and success of strategic initiatives and special projects. Forward-looking statements are not assurances of future performance and actual results could differ materially from our historical experience and our present expectations or projections. These forward-looking statements are based on management's current expectations and beliefs, forecasts for our existing operations, experience, expectations and perception of historical trends, current conditions, anticipated future developments and their effect on us and other factors believed to be appropriate. Although management believes the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Our forward-looking statements involve significant risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks associated with the following: a decline in demand for our services, including due to overcapacity and other competitive factors affecting our industry; the cyclical nature and volatility of the oil and gas industry, which impacts the level of exploration, production and development activity and spending patterns by oil and natural gas exploration and production companies; a decline in, or substantial volatility of, crude oil and gas commodity prices, which generally leads to decreased spending by our customers and negatively impacts drilling, completion and production activity; inflation; changes in interest rates; the ongoing war in Ukraine and its continuing effects on global trade; the ongoing conflict and tensions in the Middle East, including the conflict with Iran; supply chain issues; general economic, financial and political conditions, including market volatility and the impact of the imposition of increased, new and retaliatory tariffs; and other risks and uncertainties listed in our filings with the U.S. Securities and Exchange Commission, including our Current Reports on Form 8-K that we file from time to time, Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law. KLX Energy Services Holdings, Inc.Additional Selected Operating Data(Unaudited) Non-GAAP Financial Measures This release includes Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Loss, Adjusted Diluted Loss per share, Unlevered and Levered Free Cash Flow, Net Working Capital and Net Debt measures. Each of the metrics are "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net earnings or cash flows as determined by GAAP. We define Adjusted EBITDA as net loss before interest, taxes, depreciation and amortization, further adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) stock-based compensation expense, (iii) restructuring charges, (iv) transaction and integration costs related to acquisitions and (v) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. Adjusted EBITDA is used to calculate the Company's leverage ratio, consistent with the terms of the Company's ABL Facility. We believe Adjusted EBITDA is useful because it allows us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA margin is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA margin is not a measure of net earnings or cash flows as determined by GAAP. Adjusted EBITDA margin is defined as the quotient of Adjusted EBITDA and total revenue. We believe Adjusted EBITDA margin is useful because it allows us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure, as a percentage of revenues. We define Consolidated Net Loss margin as the quotient of consolidated net loss and total revenue. We define Segment operating income (loss) margin as the quotient of segment operating income (loss) and segment revenue. We believe that Consolidated Net Loss margin and Segment operating income (loss) margin provide useful information to investors to understand and evaluate core operating performance and trends across fiscal periods. We define Adjusted Net Loss as consolidated net loss adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions and (iv) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Net Loss is useful because it allows us to exclude non-recurring items in evaluating our operating performance. We define Adjusted Diluted Loss per share as the quotient of Adjusted Net Loss and diluted weighted average common shares. We believe that Adjusted Diluted Loss per share provides useful information to investors because it allows us to exclude non-recurring items in evaluating our operating performance on a diluted per share basis. We define Unlevered Free Cash Flow as net cash provided by operating activities less capital expenditures and proceeds from sale of property and equipment plus cash interest expense. We define Levered Free Cash Flow as net cash provided by operating activities less capital expenditures and proceeds from sale of property and equipment. Our management uses Unlevered and Levered Free Cash Flow to assess the Company's liquidity and ability to repay maturing debt, fund operations and make additional investments. We believe that each of Unlevered and Levered Free Cash Flow provide useful information to investors because it is an important indicator of the Company's liquidity, including our ability to reduce Net Debt and make strategic investments. Net Working Capital is calculated as current assets, excluding cash, less current liabilities, excluding current portion of long-term debt, accrued interest, operating lease obligations and finance lease obligations. We believe that Net Working Capital provides useful information to investors because it is an important indicator of the Company's liquidity. We define Net Debt as total debt less cash and cash equivalents and restricted cash. We believe that Net Debt provides useful information to investors because it is an important indicator of the Company's indebtedness. The following tables present a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures for the periods indicated: Contacts: KLX Energy Services Holdings, Inc.Geoffrey C. Stanford, SVP, Interim CFO & [email protected] Dennard Lascar Investor RelationsKen Dennard / Natalie [email protected] View original content:https://www.prnewswire.com/news-releases/klx-energy-services-holdings-inc-reports-second-quarter-2026-results-302847482.html

Shareholders of KLX Energy Services Holdings, Inc. (NASDAQ:KLXE) will be pleased this week, given that the stock price is up 16% to US$3.92 following its latest quarterly results. The results look positive overall; while revenues of US$145m were in line with analyst predictions, statutory losses were 3.1% smaller than expected, with KLX Energy Services Holdings losing US$1.23 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Taking into account the latest results, the consensus forecast from KLX Energy Services Holdings' single analyst is for revenues of US$647.5m in 2026. This reflects a satisfactory 3.2% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 14% from last year to US$3.23. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$648.4m and losses of US$3.21 per share in 2026. Check out our latest analysis for KLX Energy Services Holdings The consensus price target rose 25% to US$5.00, with the analyst increasing their valuations as the business executes in line with forecasts. Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that KLX Energy Services Holdings' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 4.3% growth on an annualised basis. This is compared to a historical growth rate of 8.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that KLX Energy Services Holdings is also expected to grow slower than other industry participants. The most important thing to take away is that the analyst reconfirmed their loss per share estimates for next year. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that KLX Energy Services Holdings' revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time. With that in mind, we wouldn't be too quick to come to a conclusion on KLX Energy Services Holdings. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here. It is also worth noting that we have found 5 warning signs for KLX Energy Services Holdings (1 makes us a bit uncomfortable!) that you need to take into consideration. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Interested in KLX Energy Services Holdings, Inc.? Here are five stocks we like better. KLX Energy Services said Q1 2026 was likely the low point of the year, with revenue of $145 million and adjusted EBITDA of $11.1 million hurt by seasonality, weather disruptions and customer delays. The company also reported a net loss of about $24 million. The Northeast Mid-Con was the standout segment, with revenue up 28% year over year to $52.5 million and adjusted EBITDA margin expanding to about 21%. By contrast, the Rocky Mountain and Southwest segments posted weaker results due to winter impacts and lower oil-directed activity. Management expects a Q2 rebound, guiding for revenue of $162 million to $172 million and margin expansion as activity improves across all segments. KLX also said the second half of 2026 should be stronger, while liquidity stood at $48 million at quarter-end. KLX Energy Services (NASDAQ:KLXE) reported first-quarter 2026 revenue of $145 million and adjusted EBITDA of $11.1 million, with management describing the period as the likely low point for the fiscal year due to seasonal headwinds, weather disruptions and customer delays. President and Chief Executive Officer Chris Baker said the quarter followed the company’s typical first-quarter pattern, including customer budget resets and the restart of completion programs after the holidays. He also cited Winter Storm Fern and customer drilling issues that delayed completion jobs late in March. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? Baker said more than $5 million of revenue was pushed into the second quarter across multiple districts because of those disruptions. Revenue declined sequentially in every product service line except tech services and accommodations, resulting in a less favorable service mix, with drilling services contributing more revenue relative to completion services. “We expect Q1 to be the low point for the 2026 fiscal year, as it has been in prior fiscal years,” Baker said. → MercadoLibre Boldly Invests in Growth: Discount Deepens Interim Chief Financial Officer Geoff Stanford said first-quarter revenue declined about 6% from the year-earlier period, compared with an estimated 12% decline in the average U.S. rig count. Adjusted EBITDA margin was approximately 8%, which Stanford said was broadly consistent with the mid- to high-single-digit margin range KLX has delivered in prior first quarters. The company reported a net loss of approximately $24 million, or $1.23 per share. Selling, general and administrative expenses were $15.4 million, down about 29% from the prior year, reflecting cost actions taken over recent quarters. → MP Materials Is Quietly Building a Rare Earth Powerhouse Stanford said management is reviewing costs closely and is aiming for full-year SG&A to come in below 2025 levels if possible. He noted that SG&A totaled $68.5 million in 2025 and $79.6 million in 2024. KLX’s Northeast Mid-Con segment was the strongest performer in the quarter, supported by gas-focused activity. Segment revenue increased 28% year over year to $52.5 million, while adjusted EBITDA rose to $10.9 million. Stanford said segment adjusted EBITDA margin expanded to approximately 21% from roughly 7% in the prior-year period. Baker said dry gas revenue was up approximately 45% year over year, although it declined about 4% sequentially, its first sequential decline in five quarters. He attributed the decline primarily to weather delays in the Haynesville. The Rocky Mountain segment posted revenue of $38.6 million, an operating loss of about $3.8 million and adjusted EBITDA of approximately $2.1 million. Revenue declined about 19% year over year, reflecting lower activity across product lines and typical winter impacts. The Southwest segment recorded revenue of $53.6 million, an operating loss of $3.4 million and adjusted EBITDA of $4.6 million. Revenue fell about 18% from the prior year, which Stanford attributed to reduced oil-directed activity in the Permian that began in the second quarter of 2025. In response to an analyst question, Baker said Southwest margins were compressed by a mix shift away from completion activity and by staffing for completion work that slipped later into the quarter. He said internal April results showed a “material improvement” in segment-level margin compared with the first quarter. KLX forecast second-quarter revenue of $162 million to $172 million, with a midpoint of $167 million. That midpoint would be $22 million higher than the first quarter and 5% above the second quarter of 2025. Baker said the company expects revenue to increase in all three segments and in nearly every product service line during the second quarter. He said the Rockies should benefit from a seasonal rebound as winter impacts ease, while the Southwest is expected to improve gradually as Permian activity stabilizes. The Northeast Mid-Con is expected to continue contributing solid results. Management also expects adjusted EBITDA margin to expand sequentially due to higher activity and better overhead absorption. Baker said revenue per average operating rig is expected to rise above $310,000 in the second quarter, depending on the average rig count, compared with $273,000 in the first quarter. Looking beyond the second quarter, Baker said KLX’s historical pattern is for the third quarter to be its strongest period of the year. He said operator commentary points to a robust second half, especially as smaller independent and private operators increase activity. Baker described the macro environment as “highly volatile but constructive.” He said commodity prices continue to trade in a wide range amid the ongoing Middle East conflict and macroeconomic developments. On the oil side, Baker said KLX has seen larger operators accelerating drilled but uncompleted wells, or DUCs, and independent operators pulling forward activity in response to elevated spot prices. He said the second half of the year appears likely to be stronger than the first half based on operator discussions, public commentary and macro tailwinds. On the natural gas side, Baker said the forward strip remains supportive, though some operators in the Haynesville have become more cautious as natural gas prices move near the mid-$2 range. He said some customers are considering shifting incremental programs into the second half of the year. During the question-and-answer session, Baker said he expects second-quarter incremental revenue growth to come primarily from the Rockies, with the Southwest and Mid-Con also contributing. In the second half, he said the rate of change may shift back toward oilier basins, particularly the Permian, while also citing South Texas, the Bakken and the Uinta as areas with incremental opportunity. KLX reported first-quarter capital expenditures of approximately $8.7 million, with net capital expenditures of about $5.3 million after $3.4 million of asset sale proceeds. Stanford said spending was primarily maintenance-oriented and focused on rentals, coiled tubing, through-tubing and pressure pumping assets. The company previously guided to roughly $40 million of gross capital expenditures and $30 million to $35 million of net capital expenditures for 2026. Stanford said spending is currently tracking below that original framework, though management expects to refine the range at midyear based on market conditions and potential incremental activity. KLX generated approximately $300,000 of net cash from operating activities in the first quarter. Unlevered free cash flow was negative $1.4 million, and leveraged free cash flow was negative $5 million. Stanford said working capital was a use of cash, consistent with the company’s typical first-quarter pattern. At quarter-end, total debt was approximately $275.8 million, and total liquidity was $48 million, including about $6 million of cash and cash equivalents and approximately $42 million of availability under the company’s March 2026 asset-based lending facility, including undrawn FILO capacity. Stanford said KLX expects a slight reduction in liquidity at the end of the second quarter because of working capital needs tied to higher activity. He said liquidity and cash generation should improve through the year as receivables convert to cash. Regarding the company’s notes, Stanford said KLX paid 25% of interest in cash and 75% in payment-in-kind, or PIK, for the first two months of the quarter, then elected to PIK 100% in March. He said the company expects to PIK 100% of interest for the second and third quarters of 2026 before moving to a 50/50 cash and PIK mix in the fourth quarter, subject to market conditions, leverage and liquidity. KLX Energy Services is a provider of completion tools and pumping equipment for the upstream oil and gas sector, offering high-pressure pumping systems, pressure control equipment, solids control services and downhole rental tools. The company supports well completion and stimulation operations by supplying, installing and maintaining critical equipment used in hydraulic fracturing, coiled tubing interventions and associated wellsite activities. The firm's product portfolio includes deck-mounted and portable fracturing pumps, high-pressure manifolds, flowback and well testing units, filtration and separation systems, and wellsite automation solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "KLX Energy Services Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management identified Q1 as the fiscal year's low point, attributed to the typical reset of customer budgets and post-holiday completion program restarts. Performance was hindered by approximately $5 million in revenue slippage into Q2 due to Winter Storm Firm and specific customer drilling delays in late March. The Northeast/Mid-Con segment significantly outperformed, with revenue up 28% year-over-year driven by a strategic shift toward gas-directed activity and high execution efficiency. A negative shift in the service mix occurred as higher-margin completion services slowed relative to drilling services, particularly in the Southwest region. The company is successfully gaining traction with blue-chip operators who require higher-specification equipment and more stringent safety certifications. Management noted that while the Permian rig count declined in Q1, operator sentiment is shifting rapidly toward accelerating DUC (drilled uncompleted) wells in response to constructive oil pricing. Revenue per average operating rig increased year-over-year to $273 thousand, demonstrating improved asset utilization despite the broader market rig count decline. Q2 revenue is forecasted between $162 million and $172 million, representing a 22 million sequential increase at the midpoint driven by a seasonal rebound in the Rockies. Management expects adjusted EBITDA margins to expand in Q2 due to higher activity levels and improved overhead absorption across all three operating segments. The company anticipates a robust second half of 2026, assuming smaller independent and private operators will increase activity to capitalize on elevated spot prices. Guidance for Q2 assumes a reversal of the unfavorable service mix seen in Q1, with completion activity expected to trend back toward historical norms. Full-year capital expenditure is currently tracking below the original $40 million gross framework, though management plans to refine this range at midyear based on incremental activity. Structural cost actions resulted in a 29% year-over-year reduction in SG&A, with management aiming to keep full-year costs below 2025 levels. The company elected to pay 100% of interest in-kind (PIK) for March and expects to continue 100% PIK for Q2 to preserve liquidity during a period of working capital expansion. Management highlighted potential labor shortages as a primary risk to any rapid industry-wide activity ramp in the second half of the year. The Haynesville segment faces potential short-term headwinds as some operators 'feather the clutch' on activity due to natural gas prices flirting with the mid-$2 range. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management estimated a total revenue loss of approximately $5 million from Winter Storm Firm and customer-specific drilling delays. While the Rockies saw typical seasonal impacts, North Dakota and Wyoming were more severely affected by high winds than in the previous year. The Q1 margin dip was caused by a shift toward drilling services and being overstaffed for completion work that ultimately slipped into later periods. Internal April data already shows a material improvement in Southwest segment margins as the service mix begins to normalize. Management characterized current industry pricing as 'anemic' and not yet high enough to justify significant capacity reactivations. KLX has selectively pushed price increases in specific product lines and is signaling that further capacity additions will require higher pricing to offset labor costs. Growth is expected to shift back toward oil-weighted basins like the Permian and Bakken as operators respond to WTI prices remaining above $70. Smaller independent operators are expected to drive incremental demand by pulling forward completion activity and using more intensive techniques like dual coiled tubing units per pad.

This article first appeared on GuruFocus. Release Date: May 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. KLX Energy Services Holdings Inc (NASDAQ:KLXE) expects Q1 2026 to be the low point for the fiscal year, with improvements anticipated in subsequent quarters. Revenue per average operating rig increased year-over-year, indicating improved efficiency. The Northeast Midtime segment showed strong performance with a 28% revenue increase year-over-year and a significant rise in adjusted EBITDA. KLX Energy Services Holdings Inc (NASDAQ:KLXE) is gaining traction with larger blue-chip operators, positioning itself well for future demand. The company forecasts a sequential revenue increase in Q2 2026, with expected improvements across all segments and product service lines. First quarter revenue was at the lower end of the estimated range due to weather disruptions and customer delays. Adjusted EBITDA margin was about 8%, reflecting typical Q1 headwinds and seasonality. The company reported a net loss of approximately $24 million for the quarter. Revenue declined in the Rockies and Southwest segments due to lower activity levels and typical winter seasonality. Liquidity is expected to slightly reduce in Q2 2026 due to increased working capital needs to support higher activity. Warning! GuruFocus has detected 6 Warning Signs with KLXE. Is KLXE fairly valued? Test your thesis with our free DCF calculator. Q: Chris, can you elaborate on the significant sequential improvement guide for Q2 and the impact of weather on Q1 results? A: Chris Baker, CEO: The weather impact was region-specific. The Rockies experienced typical seasonal winter weather, with non-operational days due to high winds, especially in North Dakota. In the Mid-Con and Haynesville, we saw two to five days of revenue loss across various PSLs due to weather and drilling delays, resulting in approximately $5 million of total revenue loss. Q: Can you explain the sequential revenue improvement in the Southwest despite lower margins? A: Chris Baker, CEO: The improvement was due to a PSL mix shift, with drilling activity holding steady while completion activity slowed. We were also staffed up for completions work that slipped later into the quarter, compressing margins. We expect margins to expand in Q2 as the mix shift improves. Q: What are your expectations for SG&A trends this year after a strong Q1 performance? A: Jeff Stanford, Interim CFO: We aim to keep SG&A costs low without sacrificing quality. Our goal is to reduce SG&A below the 2025 level, which was $68.5 million, compared to $79.6 million in 2024. We are reviewing every dollar spent to achieve this. Q: How do you view growth prospects in the Haynesville and oil basins given current natural gas prices? A: Chris Baker, CEO: The Haynesville has seen significant growth, but some operators are delaying programs due to current gas prices. We expect activity to pick up in the second half of the year. In oil basins, despite high prices, rig counts haven't increased significantly yet, but we anticipate stronger activity in the second half based on macroeconomic indicators. Q: Are smaller independents and private operators driving activity, and what are you seeing in this area? A: Chris Baker, CEO: While there are fewer small independents due to consolidation, some are increasing activity, especially in the Permian. We've seen smaller operators accelerate completion activity, which is pulling forward our existing revenue base. The question is how much incremental capital they will allocate to increase drilling and completion expenditures. Q: How do you see pricing evolving over the year, and will it be region or product line driven? A: Chris Baker, CEO: Pricing in most PSLs was anemic in 2025, but we've started to push prices selectively in certain basins. We expect to see price movements, especially in people-intensive PSLs like coil tubing and wireline, as we add capacity. Q: What supply chain risks are you monitoring, and how might they impact activity in the lower 48? A: Chris Baker, CEO: The biggest issue post-COVID has been people, not equipment. While some sensor and board issues persist, most tariff-related issues have been resolved. We're watching the OTCG market closely as pricing on tubulars has stabilized. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

KLX Energy Services Hldgs (NASDAQ:KLXE) released first-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more. View the webcast at https://app.webinar.net/pO8GkXJ7BR1 KLX Energy Services Holdings Inc reported Q1 2026 revenue of $145 million, at the lower end of the estimated range due to Winter Storm Fern and customer delays. Adjusted EBITDA was $11.1 million with an 8% margin, reflecting typical Q1 headwinds and seasonality. The Northeast Midcon segment showed strong performance, with a revenue increase of 28% year over year and adjusted EBITDA quadrupling from Q1 2025. The company forecasts Q2 2026 revenue between $162 to $172 million, expecting a rebound in the Rockies and Southwest regions. Management is cautious about potential impacts from commodity price fluctuations and expects a robust second half of 2026 driven by smaller independents and private operators. SG&A expenses were notably lower, reflecting ongoing cost optimization efforts. The company maintains $275.8 million in total debt and $48 million in total liquidity, with expectations for liquidity improvements throughout the year. OPERATOR Greetings and welcome to the KKLX Energy Services first quarter 2026 conference call. this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Denard, Investor Relations. Thank you sir. You may begin. Ken Denard (Investor Relations) Thank you Operator and good morning everyone. We appreciate you joining us for the KLX Energy Services conference call and Webcast to review first quarter 2026 results. With me today are Chris Baker, President and Chief Executive Officer, and Jeff Stanford, Interim Chief Financial Officer. Following my remarks, management will provide commentary on its quarterly financial results and outlook. Before opening the call for your questions, there will be a replay of today's call that will be available by webcast on the company's website at www.klx.com and there will also be a telephonic recorded replay available until May 27, 2026. More information on how to access these replay features was included in yesterday's earnings release. Please note that the information reported on this call speaks only as of today, May 13, 2026 and therefore you are advised that time sensitive information may no longer be accurate as of the time of any replay listening or transcript reading. Also, comments on this call will contain forward looking statements within the meaning of the United States Federal securities Laws. These forward looking statements reflect the current views of KLX management. However, various risks and uncertainties and contingencies could cause actual results, performance or achievements to differ materially from those expressed in the statements made by management. The listener or reader is encouraged to read the Annual report on Form 10K, quarterly reports on Form 10Q and current reports on Form 8K to understand those certain risks, uncertainties and contingencies. The comments today will also include certain non GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in the quarterly press release which can be found on the KLX website. And now with that behind me, I'd like to turn the call over to Chris Baker. Chris Baker (President and Chief Executive Officer) Chris thank you Ken and good morning everyone. I'll start with a brief overview of our first quarter results and recent trends across the portfolio. Then later in the call I'll discuss the current market backdrop and how we're thinking about the rest of 2026. Before getting into the numbers, I want to again recognize the men and women of the U.S. military who remain deployed in the Middle East While the situation has evolved since our last call, it is far from resolved and many service members and their families are still living with significant uncertainty. Nearly 100 KLX employees are veterans and many more across our industry share that connection. On behalf of all of us at KLX, thank you for your service and sacrifice and we continue to pray for your safe return home. Turning to the quarter, we expect Q1 to be the low point for the 2026 fiscal year as it has been in prior fiscal years. The Q1 softness reflects the yearly pattern of customer budget resets and post holiday restarts of completion programs combined with specific schedule disruptions caused by customer drilling issues, delaying completion jobs, and disruptions of approximately four to five days from Winter Storm Fern. Revenue was down sequentially in every product, service line or PSL except for our tech services and accommodations businesses which led to a negative shift in service offering on a relative basis with higher revenue contribution from drilling services relative to completion services. First quarter revenue was $145 million within our estimated revenue range, albeit at the lower end primarily due to the previously mentioned Winter Storm Fern and customer delays in the last two weeks of March that pushed over $5 million of revenue into Q2 across multiple districts. Adjusted EBITDA for the quarter was $11.1 million with an adjusted EBITDA margin of about 8% in line with the mid to high single digit range historically delivered in Q1 and consistent with the context provided on our Q4 call. As in past years, margin reflected typical Q1 headwinds, seasonality, weather related white space and the payroll cost reset. Segment performance continues to reflect the shift in our portfolio towards gas directed activity. Chris Baker (President and Chief Executive Officer) The Northeast Mid con segment again led the way with revenue up 28% year over year and adjusted EBITDA of $10.9 million almost four times the first quarter of 2025 adjusted EBITDA our dry gas revenue was up approximately 45% year over year even though we did see a modest sequential decline of about 4%. The first sequential decline in five quarters primarily tied to weather delays in the Haynesville, the Rockies and Southwest segments reflected a softer activity environment. Chris Baker (President and Chief Executive Officer) The Rockies were pressured by typical winter seasonality and lower activity levels across several PSLs. We expect a meaningful sequential improvement in Q2 as we exit the worst of the winter impacts and currently forecast sequential improvements in all PSLs in the Rockies. In the Southwest, activity levels remained soft as the Permian rig count continued its decline in Q1 and operators slowed startup of some completion programs. Permian activity has shifted heading into Q2 with a sentiment shift around completions and DUCs in particular. Chris Baker (President and Chief Executive Officer) Additionally, we see positive indicators for South Texas, which, along with expected activity rebounds in the Permian show should drive the Southwest. We continue to gain traction with larger blue chip operators and are well positioned as these operators increasingly demand certified higher spec equipment and stringent safety requirements. At the same time, we expect the second half of 2026 activity to benefit from smaller independent and private operators driving incremental activity. Revenue per average operating rig was favorable year over year, landing at $273,000 in Q1 2026 compared to $269,000 in Q1 of 2025. The previously mentioned shift in revenues, however, contributed to a reduction in EBITDA per average operated rig of approximately 13%. Looking forward and based on our current Q2 revenue forecast, this metric will increase to above $310,000 in Q2 depending on Q2 average rig count, which is a level that has historically driven strong margins. Chris Baker (President and Chief Executive Officer) With that, I'll hand the call over to Jeff to review our financial results in greater detail and I will return later in the call to discuss our outlook. Jeff Stanford (Interim Chief Financial Officer) Jeff thanks Chris Good morning everybody. Consistent with Chris's remarks, given the seasonality in our first quarter, particularly within the Rockies, the most useful analysis is a year over year comparison rather than a sequential comparison, so I'll discuss that accordingly. First quarter revenue was $145 million, down about 6% versus Q1 of 2025, compared with an estimated 12% decline in the average U.S. rig count. Adjusted EBITDA was $11.1 million, or approximately an 8% adjusted EBITDA margin, broadly consistent with the mid to high single digit margin range we have delivered on prior first quarters. Jeff Stanford (Interim Chief Financial Officer) Net loss for the quarter was approximately 24 million, or a loss of $1.23 per share. SGA for the quarter was 15.4 million, down about 29% versus the prior year, reflecting the structural cost actions over the past several quarters. Turning to segment results, in the Rocky Mountain segment, first quarter revenue was 38.6 million, with an operating loss of about 3.8 million and an adjusted EBITDA of roughly 2.1 million. Revenue declined approximately 19% year over year, reflecting lower activity across our product lines and typical winter impacts. Jeff Stanford (Interim Chief Financial Officer) As Chris previously mentioned, we expect Rockies revenue and profitability to improve sequentially in Q2 as seasonal conditions normalize. In the Southwest region, first quarter revenue was 53.6 million, operating loss was 3.4 million and adjusted EBITDA was $4.6 million. Revenue declined roughly 18% versus the prior year quarter driven by reduced oil directed activity in the Permian that began at the beginning of Q2 of 2025. In the Northeast Midcon segment, first quarter revenue was $52.5 million, operating income was about $3 million and adjusted EBITDA was $10.9 million. Jeff Stanford (Interim Chief Financial Officer) Revenue increased 28% year over year and adjusted EBITDA quadrupled compared to Q1 of 2025 with segment adjusted EBITDA margin expanding to approximately 21% from roughly 7% in the prior year period. This performance was driven by sustained gas focused activity particularly in our Haynesville and other Northeast mid con operations as well as strong execution and limited white space at corporate and other adjusted EBITDA loss was approximately 6.5 million in Q1, an improvement of about 11% year over year reflecting ongoing G and A right sizing and our focus on returning corporate costs towards 2021 and 2022 levels. Jeff Stanford (Interim Chief Financial Officer) Turning to capital allocation and cash flow, Capital expenditures in Q1 2026 were approximately 8.7 million with net CAPEX of roughly 5.3 million after about 3.4 million of asset sale proceeds. Spending was predominantly maintenance oriented focused on sustaining rentals, coil tubing through tubing, pressure pumping assets for the full year. We previously guided to approximately 40 million of gross capex and 30 to 35 million of net capex based on the current purchase order logs and deployment schedules, our full year capex is tracking below that original framework. However, given the market backdrop and potential incremental activity, we expect to refine this range at mid year. Net cash provided by operating activities was approximately 300,000 in the quarter. Unlevered free cash flow was negative 1.4 million and leveraged free cash flow was a negative 5 million. As is typical for us, working capital was a use of cash in the first quarter reflecting two additional payroll cycles in the period, an increase in days sales outstanding and lower accrued. liabilities. We expect cash generation and liquidity to improve throughout the year consistent with our historical seasonal pattern. Turning to the balance sheet at quarter end, total debt was approximately $275.8 million and total liquidity was $48 million, consisting of roughly $6 million of cash and cash equivalents and about $42 million of available availability under our March 2026 ABL facility. Including undrawn phylo capacity, net working capital at quarter end was approximately $54 million. Given the significant revenue increase forecasted in the second quarter, we expect a slight reduction in liquidity at QTIP to close as working capital increases to support higher activity, with working capital levels expected to normalize over the second half of the year as receivables convert to cash and operations are funded from ongoing cash flow. With respect to our notes, consistent with the commentary we Provided in our Q4 call, we paid 25% of interest in cash and 75% PIK for the first two months of the quarter and we elected to pick 100% in March. Looking forward, we expect to pick interest 100% for Q2 and Q3 of 2026 and then go to a 50:50 ratio for Q4. We will continue to evaluate this mix based on market conditions, leverage and liquidity. We remain well within our leverage covenants providing us with incremental flexibility to fund capex, potential MA and other capital needs. With that, I'll hand it back over to Chris to discuss our outlook. Chris Baker (President and Chief Executive Officer) Thanks Jeff. From a macro standpoint, we continue to operate in a highly volatile but constructive environment. By all accounts, this is the largest energy shock in history. Commodity prices continue to be volatile and trade in a wide yet constructive band for activity. Due to the ongoing Middle east conflict and macroeconomic news, we're discussing customer reactions and expected incremental activity in real time, particularly in the Permian and other oil weighted basins. I'd note despite the recent declines in prompt month WTI pricing, the forward curve for the balance of 2026 is still constructive and operator sentiment seems to be shifting quickly. We have already seen larger operators accelerating DUCs and independent operators pulling forward activity in the face of elevated spot prices on the gas side. The forward strip remains supportive though, as natural gas prices flirt with the mid $2 range. We have seen some operators feather the clutch a bit on activity, specifically in the Haynesville, with some considering pushing incremental programs to the second half of the year. We continue to believe that KLX's gas weighted basins have longer term strength and KLX has meaningful exposure exposure, particularly in the Northeast, Midcon and Haynesville to drive incremental revenue as activity increases. Looking forward, we are forecasting Q2 revenue of 162 to $172 million with a midpoint of 167 million, 5% higher than Q2 of 2025 and 22 million higher than Q1 of 26. We expect solid contributions from the Northeast Mid Con and a seasonal rebound in the Rockies with the Southwest gradually improving off of current levels as Permian activity stabilizes. In short, we forecast revenue to increase in all three segments in Q2 along with nearly every single PSL. The mix of drilling versus completion versus production and intervention services will still lean unfavorable on a historical basis, but is definitely trending back to normal. We expect adjusted EBITDA margin to expand sequentially, driven by higher activity and better overhead absorption. Looking beyond Q2, our historic pattern has been for Q3 to be our strongest quarter of the year, and current operator commentary suggest a robust second half, particularly as smaller independents and private operators increase activity. Those customers have historically been a core customer base for klx and we look forward to seeing them increase their activity in 2H26. That said, we want to see how margins translate at higher revenue levels, including any impact from pricing and mix, before providing additional color on 2H26 and updating our full year 2026 framework. In closing, I would like to thank our team of hardworking employees for their continued commitment and resilience, particularly given the challenges that always come with the first quarter in our business. I'd also like to thank our customers and shareholders for their ongoing support of klx. We remain confident in our ability to execute our strategy and navigate what continues to be a dynamic and fast moving market. With that, we'll now take your questions. Operator thank you. OPERATOR We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you. Our first question comes from the line of Steve Varizzani with Sidoti. Please proceed with your question. Steve Varizzani (Equity Analyst) Morning Chris. Morning Jeff. Appreciate the detail on the call Chris. When I think about the pretty significant sequential improvement guide you have in Q2, certainly it's much higher than we've seen the previous two years. I'm just trying to get a better sense of how severe the weather impact was to you on Q1 and how much that's leading towards the much stronger guide to Q2. Chris Baker (President and Chief Executive Officer) Yeah, it's a great question. I think it very much depends on the region. Look, the rocky felt typical seasonal winter weather as we always do and we had a lot of non operational days due to high wind, especially in North Dakota. We candidly don't and didn't quantify those days just due to the fact that this is a very typical seasonal pattern up there. I would say our gut feel is North Dakota and Wyoming this year were probably more impacted than last year when you shift to the midcon and Haynesville. We definitely, as we said in the prepared remarks, so anywhere from two to five days of revenue loss across various PSLs. And so when you think about, you know, the combination collectively between FERN plus the drilling delays that we mentioned that pushed some completion programs out, we estimate approximately 5 million of total revenue loss. And as you well know, unfortunately we still incur all the fixed costs and candidly on short term notice, a lot of the variable cost in those instances. Right, okay, that's helpful. Steve Varizzani (Equity Analyst) I was actually surprised at the sequential revenue improvement in the Southwest given what activity has looked like there in Q1, but it was at a much lower margin. Can you sort of explain that? Chris Baker (President and Chief Executive Officer) Yeah, sure. And it's a great question. I think it was largely due to what we talked about in the prepared remarks where we had a PSL mix shift that we referenced in the call with some completion activity, slowing down, drilling activity holding in pretty well. And so that puts and takes kind of of across the board. I think we were also staffed up for some completions, work that slipped later into the quarter. So that compressed margins as well. What I would say is we expect margins to expand in Q2 and we, I think we'll continue and we've already seen this in April we'll continue to see the mix shift improve as we'll see a reversal of what we saw in Q1. And so you know, on that point, just solely based off of internal April numbers, we've already seen, you know, material one, it's a one month proxy, but we've seen a material improvement in segment level margin in the southwest relative to Q1. Steve Varizzani (Equity Analyst) Got it. Excellent. You mentioned, both of you mentioned in your remarks, typically it's the extra one or two payroll cycles in Q1. Usually that's been your highest SGA quarter. I was surprised how low SGNA was this quarter. Does it. What are you thinking about trends this year on SGNA after a very strong performance in Q1 in terms of how low it was. Jeff Stanford (Interim Chief Financial Officer) Yeah. Good morning Steve, this is Jeff. I'll take that one. It was a good quarter for SGA and we are looking obviously at every single dollar. We have a great team, we're looking at every single dollar. So we're trying to keep those costs as low as possible without loss of quality. But we're looking, you know, for if you look at the full year, if you look at, you know, 2025, we did 68.5 million, 2024, 79.6 so, you know, our goal is to kind of get it in the kind of if we can get lower than 2025 for the full year we're heading. So we're looking at it hard. It is, it is a process going through it all. But we're definitely, you know, reviewing everything and going through that process. But if you want to think about SG&A for the full year, kind of think about it kind of the 2025, maybe less than 2025 rate. Steve Varizzani (Equity Analyst) Excellent. That's helpful. Thanks, Jeff. You touched on this a little bit in your closing remarks, Chris. Obviously, when we look at rig count, the one place we've continued to see growth was in the Haynesville. But obviously we know lower natural gas prices could pressure there. And obviously just even with the weather impact, still incredibly strong margin in that geographical region. Sounds like you're a little bit more cautious about growth moving forward. Where you think the pickup maybe is in the oil basins for obvious reasons in the second half. Can you just walk through the different pieces there? Chris Baker (President and Chief Executive Officer) Yes, it's definitely a multifaceted question. I think if you think about the pure mid con, it's holding steady. The Haynesville has been the story of the year. It's what, 8 rigs year to date and 25 rigs year over year. As we stated in our prepared remarks, we've seen a number of operators kind of feather the clutch, talk about holding back or delaying programs. Natural gas prices are still pretty robust if you look at the forward strip this morning. And so it's not but a couple months out where you start to see a three handle and then $4 later this year. And so I would say the second half of the year in the Haynesville kind of gets back on track from what I think is going to be a little bit of a slow spell, if you will, in kind of the shoulder month of Q2, then Q3, Q4 step up. Same thing for the Marcellus Utica. They're up two rigs year to date, kind of the same year over year. Q1 was seasonally very strong for us. So when you think about all the components of the Northeast midconnection, the Northeast in that segment was very strong year over year. And I think the business there and the team continue to perform at an elevated and kind of steady pace is the way I frame it. And so from a macro standpoint, there's no doubt DNC activity in that segment seems steady with, you know, some people talking about picking up rigs. The second portion of your question is, you know, what Happens to oil demand and oil rig count the second half of the year. Look, it's a great question. This is the longest we've seen prices this elevated without a material inflection in rig count, typically 60 to 90 days after major moves in WTI, you'll see the market respond. That really hasn't been the case. And depending on if you're looking at Baker or Inverness rig counts, one kind of shows rig count year to date, the Permian almost flat, the other showing it slightly up. I think there's very nuanced reasons for, you know, and part of that is the constant overhang of a Middle east deal and thoughts that prices would crash back to the $60 range on WTI. I think everybody's finally coming to terms that even with some conclusion to the Middle east situation, WTI is not heading back below 70 anytime soon. And in fact, the Ford strip still has prices in the 80s in Q1 of next year as of this morning. So in short, it looks like based off of all indicators, operator discussions, public commentary by operators, the second half should tend to be stronger than the first half based off a number of macro tailwinds. Steve Varizzani (Equity Analyst) It sounded in your prepared remarks you were talking about the smaller independents and private operators potentially being the driver. Are you seeing any of that right now? Chris Baker (President and Chief Executive Officer) Well, unfortunately, there are not as many of them around as there used to be right from a sponsor back entity standpoint, just due to the wave of consolidation. But we have seen some of those former teams pick up some acreage around the margin and we've seen some operators on the independent side do some pretty interesting acreage deals. So we've definitely seen in the Permian and other basins, some of the smaller operators kind of pull forward activity, especially completion activity, and accelerate the pace of drill outs, putting two coil units per pad multiple. A lot of the smaller operators don't do that in the same way the larger operators typically do. So we've seen more and more of that as we enter Q2. That basically just pulling forward our existing baseload of revenue anyway. So the question becomes how much incremental capital do they allocate on the year to increase drilling and completion expenditures? And you have to think they're salivating at molecules at $90 a barrel, right? Steve Varizzani (Equity Analyst) Thanks, Chris. Thanks, Jeff. Yeah, appreciate it, Steve. OPERATOR Our next question comes from the line of Josh Jain with Daniel Energy Partners. Please proceed with your question. Josh Jain (Equity Analyst) Thanks. Good morning. First one, you talked through the different geographies, but in light of the commodity price moves year to date, maybe you could just Talk about different sense of urgencies around different product lines and how you see demand in the back half of the year across your different business lines. Chris Baker (President and Chief Executive Officer) First yeah, it's a great question. Of course we're geographically and product line diverse. When you think about the business of klx. And I think your question kind of Josh, first of all, good morning. That ties into what Steve was just asking. If you think about our guide for Q2, we typically don't provide granular detail around the market movement. But you know, from a segment perspective, I think we're going to see the highest rebound in Q2 in the Rockies. But that's really due to the performance in Q1. Right. And I would estimate of the incremental upside revenue, probably 50% of that's coming from the Rockies ballpark, followed by the Southwest which is probably 30% and then the midcons, the balance. And so I think those numbers are skewed due to KLX's diversity second half of the year, I think the rate of change of those probably shifts back to the oiler basins. Specifically in the Permian, we've seen South Texas ramp a lot of activity of late. We're also having a lot of conversations with operators and seeing incremental opportunity sets in the Bakken, the Uinta, et cetera. And so I think all of those basins in the second half of the year probably drive on a relative basis, drive any outside kind of market performance relative to the gas basins because the gas basins are already seeing a lot of the leg up. And while I think there's tailwinds there, I don't think you see the order of magnitude and the growth in those basins. Josh Jain (Equity Analyst) Okay, thanks. And then thoughts on pricing, how you see it evolving over the balance of this year, do you think it'll be more region driven or will it be more product line driven? And maybe just any anecdotes you could Chris Baker (President and Chief Executive Officer) give would be helpful. Yeah, great question. I'll start with saying what we said most of the second half of 2025 and pricing in most PSLs across the industry I think is pretty anemic. And you saw a lot of the frac guys, rig guys, etc. All said that pricing didn't justify reactivations. Right. So I think that that sentiment's pretty consistent. So I think as we entered 2026, the floor was basically established and there was kind of only one direction to go. We candidly it selectively started to push price on certain PSLs, specifically in the basins that we talked about that ramped earlier late Q4 and into Q1 of 2026. And I think that was a very specific and targeted set of PSLs. When we drove, we drove and we were able to drive some incremental pricing there from a go forward perspective. You know, look, we've pushed through I think just like most people have the standard fuel surcharges of late, but we have definitely started having conversations that in order to add capacity on PSLs, especially the people intensive PSLs, that is not rentals and things of that nature, but more people intensive PSLs like coil, tubing, wireline, etc. We need to see price move and so we'll see how the market develops. But I think that's, that's kind of the macro theme as we think about our portfolio. Josh Jain (Equity Analyst) Thanks for that. And then last one for me, just still a lot going on with tariffs, global logistics being disrupted. Maybe you could just talk through anything you're seeing today and how that may impact, you know, an activity ramp coming in the lower 48 and steps you're taking to help mitigate supply chain risk moving forward. Chris Baker (President and Chief Executive Officer) Yeah, that's a great question. I think, you know, if you go back to the 2016 or 2020 Covid cycle, what we saw coming out of both of those cycles was the biggest issue were people. And I think, you know, seeing what John has forecasted for the second half of the year on rig count, there are not a lot of hot stacked rigs available in the market. And if you think about pulling ducks forward and adding completion activity or adding refrac activity at the same time as trying to ramp rig count, I think people could be the biggest stumbling block we haven't, you know, from a tariff perspective it feels like most of those issues have been alleviated over the last couple of years. There are some sensors and boards on the directional and downhole module side, et cetera that still have issues at times. And I think everybody's watching the OTC G good market just to see if things start to get tighter there again pricing on tubulars had come down over the last call it 18 months and I think they've kind of found the floor but we're definitely watching that market real time. Josh Jain (Equity Analyst) Understood. Thanks for taking my questions. Chris Baker (President and Chief Executive Officer) Appreciate it. Yeah, appreciate it Josh. OPERATOR Thank you. Mr. Baker, I'd like to turn the floor back over to you for closing comments. Chris Baker (President and Chief Executive Officer) Thank you once again for joining us on this call and for your continued interest in klx. We look forward to speaking with you again next quarter. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice. UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga: KLX ENERGY SERVICES HLDGS (KLXE): Free Stock Analysis Report This article KLX Energy Services Hldgs Reports Q1 2026 Results: Full Earnings Call Transcript originally appeared on Benzinga.com ﾩ 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

HOUSTON, May 12, 2026 /PRNewswire/ -- KLX Energy Services Holdings, Inc. (Nasdaq: KLXE) ("KLX", the "Company", "we", "us" or "our") today reported financial results for the first quarter ended March 31, 2026. First Quarter 2026 Financial and Operational Highlights Revenue of $145 million Net loss of $(24) million and diluted loss per share of $(1.23) Adjusted EBITDA of $11.1 million Net loss margin of (17)% Adjusted EBITDA margin of 8% Total liquidity of $48 million, consisting of approximately $6 million of cash and cash equivalents, and approximately $42 million of available borrowing capacity under the March 2026 asset-based revolving credit facility (the "ABL Facility") borrowing base certificate, inclusive of the undrawn first-in-last-out ("FILO") capacity See "Non-GAAP Financial Measures" at the end of this release for a discussion of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Operating Loss, Adjusted Net Loss, Adjusted Diluted Loss per share, Unlevered and Levered Free Cash Flow, Net Working Capital, Net Debt and their reconciliations to the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We have not provided reconciliations of our future expectations as to Adjusted EBITDA or Adjusted EBITDA margin as such reconciliations are not available without unreasonable efforts. Chris Baker, KLX President and Chief Executive Officer, stated, "First quarter revenue was $145 million, within our estimated revenue range albeit at the lower end primarily due to winter storm Fern and customer delays in the last two weeks of March that pushed over $5 million of revenue into the second quarter of 2026 across multiple districts. "From a macro standpoint, we continue to operate in a highly volatile but constructive environment. By all accounts this is the largest energy shock in history," continued Baker. "Commodity prices continue to be volatile and trade in a wide yet constructive band for activity due to the ongoing Middle East conflict and macro-economic news. We are discussing customer reactions and expected incremental activity in real time, particularly in the Permian and other oil-weighted basins. "Looking forward, we continue to see good traction with our larger, blue-chip operators, who are increasingly demanding certified, higher-specification equipment — an area where KLX is well positioned. We are forecasting second quarter 2026 revenue of $162 to $172 million, with a midpoint of $167 million, 5% higher than the second quarter of 2025, and $22 million higher than the first quarter of 2026. We expect solid contributions from the Northeast/Mid-Con and a seasonal rebound in the Rockies, with Southwest gradually improving off of current levels as Permian activity stabilizes. In short, we expect revenue to increase in all three segments, as well as nearly every product service line, in the second quarter of 2026. The mix of Drilling vs. Completion vs. Production & Intervention services will still lean unfavorable on a historical basis but is trending back to normal. We expect Adjusted EBITDA margin to expand sequentially, driven by higher activity and better overhead absorption," concluded Baker. First Quarter 2026 Financial Results Revenue for the first quarter of 2026 totaled $144.7 million, down 6% from last year's first quarter despite the average U.S. rig count being down approximately 12% over the same period. Adjusted EBITDA was approximately $11.1 million, with an Adjusted EBITDA margin of about 8%, broadly consistent with the mid-to-high single-digit first quarter margin range we have delivered in recent years. On a product line basis, drilling, completion, production and intervention services contributed approximately 20%, 54%, 16% and 10%, respectively, to revenue for the first quarter of 2026. Net loss for the first quarter of 2026 was $(24.0) million, compared to the first quarter of 2025 net loss of $(27.9) million. Adjusted net loss for the first quarter of 2026 was $(23.0) million, compared to the first quarter of 2025 adjusted net loss of $(21.9) million. Adjusted EBITDA for the first quarter of 2026 was $11.1 million, compared to the first quarter of 2025 Adjusted EBITDA of $13.8 million. Adjusted EBITDA margin for the first quarter of 2026 was 7.7%, compared to the first quarter of 2025 Adjusted EBITDA margin of 9.0%. First Quarter 2026 Segment Results The Company reports revenue, operating (loss) income and Adjusted EBITDA through three geographic business segments: Rocky Mountains, Southwest and Northeast/Mid-Con. The Company reports operating activities not attributable to an individual geographic business segment through the Corporate and other segment. Segment results are reported after inter-segment eliminations. Due to annual seasonality affecting large portions of our operations, first quarter of 2026 results are reported compared to the first quarter of 2025. Rocky Mountains: Revenue, operating loss and Adjusted EBITDA for the Rocky Mountains segment was $38.6 million, $(3.8) million and $2.1 million, respectively, for the first quarter of 2026. First quarter revenue represents a (19.2)% decrease relative to the first quarter of 2025. In this segment, we have experienced lower activity in our product offerings. Relative to the first quarter of 2025, segment operating loss increased (1800)% and Adjusted EBITDA decreased (68.7)%, respectively. These comparative decreases were a function of the lower activity experienced in the first quarter of 2026 as compared to the first quarter of 2025. Southwest: Revenue, operating loss and Adjusted EBITDA for the Southwest segment, which includes the Permian and South Texas, was $53.6 million, $(3.4) million and $4.6 million, respectively, for the first quarter of 2026. First quarter revenue represents a (17.8)% decrease over the first quarter of 2025 largely due to the overall slowdown in activity that occurred in the Permian in the middle and second half of 2025. Segment operating income and Adjusted EBITDA decreased (213.3)% and (60.7)%, respectively, due to increased operating costs in this basin in the first quarter of 2026 as compared to the first quarter of 2025. Northeast/Mid-Con: Revenue, operating income and Adjusted EBITDA for the Northeast/Mid-Con segment was $52.5 million, $3.0 million and $10.9 million, respectively, for the first quarter of 2026. First quarter revenue represents a 28.0% increase over the first quarter of 2025 due to increased regional gas-focused activity. Segment operating income increased by 137.0% and segment Adjusted EBITDA increased 303.7%, largely due to the aforementioned increase in activity. Corporate and other: Operating loss and Adjusted EBITDA loss for the Corporate and other segment were $(7.9) million and $(6.5) million, respectively, for the first quarter of 2026. Segment operating loss improved by 36.3% and Adjusted EBITDA loss improved by 11.0% as compared to the first quarter of 2025. The following is a tabular summary of revenue, operating (loss) income and Adjusted EBITDA (loss) for the first quarter ended March 31, 2026, the fourth quarter ended December 31, 2025 and the first quarter ended March 31, 2025 ($ in millions). Balance Sheet and Liquidity As of March 31, 2026, cash and cash equivalents totaled $5.6 million and the Company had availability of $36.3 million on the March 2026 ABL Facility borrowing base certificate and $5.8 million of availability on an undrawn FILO facility, resulting in a total liquidity position of $47.7 million. Net Working Capital as of March 31, 2026 was $54.4 million, a 10% increase from December 31, 2025 driven by an 11% increase in days sales outstanding and a 6% decrease in accrued liabilities, including two extra payrolls being paid in the first quarter of 2026, compared to the fourth quarter of 2025. We expect to build cash and liquidity as we navigate the remainder of the year. Other Financial Information Capital expenditures were $8.7 million during the first quarter of 2026, a decrease of $(0.7) million or (7)% compared to capital expenditures of $9.4 million in the fourth quarter of 2025. Capital expenditures net of asset sales were $5.3 million during the first quarter of 2026, an increase of $1.5 million or 39% compared to capital expenditures net of asset sales of $3.8 in the fourth quarter of 2025. Capital spending during the first quarter was driven primarily by maintenance capital expenditures across our segments. Conference Call Information KLX will conduct its first quarter 2026 conference call, which can be accessed via dial-in or webcast, on Wednesday, May 13, 2026 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 1-201-389-0867 and asking for the KLX conference call at least 10 minutes prior to the start time, or by logging onto the webcast at https://investor.klx.com/events-and-presentations/events. For those who cannot listen to the live call, a replay will be available through May 27, 2026, and may be accessed by dialing 1-201-612-7415 and using passcode 13759558#. Also, an archive of the webcast will be available shortly after the call at https://investor.klx.com/events-and-presentations/events for 90 days. Please submit any questions for management prior to the call via email to [email protected]. About KLX Energy Services Holdings, Inc. KLX is a growth-oriented provider of diversified oilfield services to leading onshore oil and natural gas exploration and production companies operating in both conventional and unconventional plays in all of the active major basins throughout the United States. The Company delivers mission critical oilfield services focused on drilling, completion, production, and intervention activities for technically demanding wells from over 60 service and support facilities located throughout the United States. KLX's complementary suite of proprietary products and specialized services is supported by technically skilled personnel and a broad portfolio of innovative in-house manufacturing, repair and maintenance capabilities. More information is available at www.klx.com. Forward-Looking Statements and Cautionary Statements The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information to investors. This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) includes forward-looking statements that reflect our current expectations and projections about our future results, performance and prospects. Forward-looking statements include all statements that are not historical in nature and are not current facts. When used in this news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein), the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "might," "should," "could," "will" or the negative of these terms or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events with respect to, among other things: our operating cash flows; the availability of capital and our liquidity; our future revenue, income and operating performance; our ability to sustain and improve our utilization, revenue and margins; our ability to maintain acceptable pricing for our services; future capital expenditures; our ability to finance equipment, working capital and capital expenditures; our ability to execute our long-term growth strategy and to integrate our acquisitions; our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements; and the timing and success of strategic initiatives and special projects. Forward-looking statements are not assurances of future performance and actual results could differ materially from our historical experience and our present expectations or projections. These forward-looking statements are based on management's current expectations and beliefs, forecasts for our existing operations, experience, expectations and perception of historical trends, current conditions, anticipated future developments and their effect on us and other factors believed to be appropriate. Although management believes the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Our forward-looking statements involve significant risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks associated with the following: a decline in demand for our services, including due to overcapacity and other competitive factors affecting our industry; the cyclical nature and volatility of the oil and gas industry, which impacts the level of exploration, production and development activity and spending patterns by oil and natural gas exploration and production companies; a decline in, or substantial volatility of, crude oil and gas commodity prices, which generally leads to decreased spending by our customers and negatively impacts drilling, completion and production activity; inflation; changes in interest rates; the ongoing war in Ukraine and its continuing effects on global trade; the ongoing conflict and tensions in the Middle East, including the conflict with Iran; supply chain issues; general economic, financial and political conditions, including market volatility and the impact of the imposition of increased, new and retaliatory tariffs; and other risks and uncertainties listed in our filings with the U.S. Securities and Exchange Commission, including our Current Reports on Form 8-K that we file from time to time, Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law. KLX Energy Services Holdings, Inc. Additional Selected Operating Data (Unaudited) Non-GAAP Financial Measures This release includes Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Loss, Adjusted Diluted Loss per share, Unlevered and Levered Free Cash Flow, Net Working Capital and Net Debt measures. Each of the metrics are "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net earnings or cash flows as determined by GAAP. We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization, further adjusted for (i) long-lived asset impairment charges, (ii) stock-based compensation expense, (iii) restructuring charges, (iv) transaction and integration costs related to acquisitions, and (v) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. Adjusted EBITDA is used to calculate the Company's leverage ratio, consistent with the terms of the Company's ABL Facility. We believe Adjusted EBITDA is useful because it allows us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA margin is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA margin is not a measure of net earnings or cash flows as determined by GAAP. Adjusted EBITDA margin is defined as the quotient of Adjusted EBITDA and total revenue. We believe Adjusted EBITDA margin is useful because it allows us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure, as a percentage of revenues. We define Adjusted Operating Income (Loss) as operating income (loss) adjusted for (i) long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions, and (iv) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Operating Income (Loss) is useful because it allows us to exclude non-recurring items in evaluating our operating performance. We define Adjusted Net Loss as consolidated net loss adjusted for (i) long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions, and (iv) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Net Loss is useful because it allows us to exclude non-recurring items in evaluating our operating performance. We define Adjusted Diluted Loss per share as the quotient of Adjusted Net Loss and diluted weighted average common shares. We believe that Adjusted Diluted Loss per share provides useful information to investors because it allows us to exclude non-recurring items in evaluating our operating performance on a diluted per share basis. We define Unlevered Free Cash Flow as net cash provided by operating activities less capital expenditures and proceeds from sale of property and equipment and other proceeds plus cash interest expense. We define Levered Free Cash Flow as net cash provided by operating activities less capital expenditures and proceeds from sale of property and equipment and other proceeds. Our management uses Unlevered and Levered Free Cash Flow to assess the Company's liquidity and ability to repay maturing debt, fund operations and make additional investments. We believe that each of Unlevered and Levered Free Cash Flow provide useful information to investors because it is an important indicator of the Company's liquidity, including our ability to reduce Net Debt and make strategic investments. Net Working Capital is calculated as current assets, excluding cash, less current liabilities, excluding accrued interest, current portion of long-term debt, operating lease obligations and finance lease obligations. We believe that Net Working Capital provides useful information to investors because it is an important indicator of the Company's liquidity. We define Net Debt as total debt less cash and cash equivalents. We believe that Net Debt provides useful information to investors because it is an important indicator of the Company's indebtedness. The following tables present a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures for the periods indicated: View original content:https://www.prnewswire.com/news-releases/klx-energy-services-holdings-inc-reports-first-quarter-2026-results-302770051.html