Klx Energy Services 2025 Q3 Earnings Widened Net Loss of $14.3M Amid Revenue Decline

Klx Energy Services (KLXE) reported fiscal 2025 Q3 earnings on Nov 7, 2025, missing expectations with a wider-than-anticipated net loss and sequential revenue decline. The company provided guidance for a mid-single-digit revenue drop in Q4 2025.

Revenue

Total revenue fell 11.8% year-over-year to $166.70 million in Q3 2025. The Southwest segment accounted for 34% of revenue, while the Northeast Mid-con segment contributed 36%, showing a 29% sequential growth. The Rockies segment represented 30% of revenue but faced reduced completion activity.

Earnings/Net Income

The company’s net loss widened to $14.30 million, or $0.74 per share, a 74.4% increase in losses compared to Q3 2024. This marked a significant deterioration in profitability despite sequential revenue growth.

Price Action

KLXE’s stock fell 5.41% in the latest trading day, 6.42% for the week, and 12.50% month-to-date.

Post-Earnings Price Action Review

A 30-day holding period strategy post-earnings yielded an average 6.5% quarterly return but faced volatility. For instance, Q3 2023 saw a 13.9% gain, while Q2 2024 recorded an 11.8% loss. The strategy’s performance hinged on oil prices and market sentiment, with Q3 2024 delivering the best result at 20.5%. Investors must balance potential gains with significant drawdowns during weak quarters.

CEO Commentary

CEO Chris Baker emphasized operational efficiency, noting a 14% sequential rise in adjusted EBITDA and improved cost controls. He highlighted the company’s agility in navigating a volatile market and anticipation of 2026 activity rebound.

Guidance

KLX expects a mid-single-digit Q4 revenue decline but stable adjusted EBITDA margins. Management remains optimistic about natural gas demand and operational efficiency gains.

Additional News

1. Facility Sales: KLX completed a facility sale in Q3 and anticipates additional asset sales in Q4 to enhance liquidity.

2. Balance Sheet Management: The company ended Q3 with $65 million in liquidity, including $56.9 million in revolver availability.

3. PIK Interest Election: KLX elected to pay $6 million in interest via PIK in Q3, maintaining flexibility for future decisions based on market conditions.