Klx Energy Services 2025 Q2 Earnings Losses Widen Despite Sequential Revenue Growth

Klx Energy Services reported mixed second-quarter results for 2025, with wider-than-expected losses despite sequential revenue and margin improvements. The company missed on profitability metrics, with no guidance adjustments provided for earnings or margins, though it expects stronger revenue performance in Q3.

Revenue

Total revenue for Klx Energy Services declined by 11.8% year-over-year to $159 million in 2025 Q2, a decrease from $180.20 million in the same period the previous year. The Drilling segment generated $25.80 million, while the Completion segment contributed the largest portion at $88.50 million. Production revenue amounted to $28.30 million, and the Intervention segment reported $16.40 million.

Earnings/Net Income

Klx Energy Services posted a significant loss in the second quarter, with net income dropping to -$19.90 million, representing a 148.8% increase in the deficit compared to a $-8 million loss in the prior-year period. On a per-share basis, the loss widened to $1.04, a 112.2% deterioration from the $0.49 loss in 2024 Q2, indicating a sharp deterioration in profitability.

Price Action

KLXE’s stock price has continued to decline, with a 7.83% drop during the latest trading day, a 14.53% fall over the past week, and a 21.94% drop month-to-date, reflecting investor disappointment.

Post Earnings Price Action Review

A strategy of buying KLXE after the earnings report and selling after 30 days resulted in a -59.84% return, underperforming the benchmark by 140.34%. The approach had a maximum drawdown of 0%, indicating a low-risk profile, yet delivered poor absolute and risk-adjusted returns, as highlighted by a Sharpe ratio of -0.51.

CEO Commentary

Chris Baker, KLX President and Chief Executive Officer, noted sequential improvements in revenue and Adjusted EBITDA, driven by cost management, asset rotation, and a focus on higher-margin work. While the U.S. land rig count fell by 7.3%, the company achieved a 3.2% revenue increase and a 260 basis point improvement in Adjusted EBITDA margin. Baker cited “green shoots” in gassy basins and expressed confidence that the third quarter will be the strongest of the year.

Guidance

Klx Energy Services expects low to mid-single-digit sequential revenue growth in Q3, with continued margin expansion. The company anticipates the third quarter to be its strongest of the year but did not provide forward-looking Adjusted EBITDA or EBITDA margin targets, citing impracticability of reconciliation under GAAP.

Additional News

On August 8, 2025, Klx Energy Services held its 2025 Q2 earnings call, where it reiterated concerns over earnings performance, noting that losses had widened. No new financial metrics were disclosed, and details of the call remained limited due to technical restrictions on the platform. The event marked a key point for investor sentiment, as the company seeks to regain momentum in a challenging market environment.