KLX Energy Services Posts Strong Q2 Revenue Growth Amid Market Challenges

KLX Energy Services Holdings reported a 3% increase in revenue to $159 million for Q2 2025, outperforming expectations. Adjusted EBITDA rose 34% to $19 million, with a 260-basis-point improvement in EBITDA margin to 12%. The company experienced growth in the Rockies and Northeast Midcon segments, offsetting declines in the Southwest. KLXE demonstrated strong cost discipline, reducing SG&A expenses by 12% compared to the previous year. Despite challenges in the Southwest and gas markets, the company remains focused on achieving consistent growth and profitability.

KLX Energy Services Holdings, Inc. (Nasdaq: KLXE) reported a 3% increase in revenue to $159 million for the second quarter ended June 30, 2025, outperforming market expectations. The company's adjusted EBITDA rose 34% to $19 million, with a significant 260-basis-point improvement in EBITDA margin to 12% [1].

The revenue growth was driven by a 3.2% increase compared to the first quarter of 2025. The company's drilling, completion, production, and intervention services contributed approximately 16%, 56%, 18%, and 10% to revenue, respectively. Despite a 7.3% sequential decrease in the US land rig count, KLX managed to achieve this growth [1].

The company's financial performance was bolstered by strong cost discipline. KLX reduced SG&A expenses by 12% compared to the previous year, contributing to its improved financial flexibility. The company's total liquidity position stood at $65 million, with $17 million in cash and cash equivalents and $49 million in available borrowing capacity under its asset-based revolving credit facility [1].

KLX's operational initiatives, including cost management, asset rotation, and a focus on higher-margin work, have shown sequential improvement across its completions and production portfolios. The company expects the third quarter to be the strongest quarter of the year, targeting a sequential quarterly revenue increase of low to mid-single digits on a percentage basis, with continued margin expansion [1].

Segment-wise, the Rocky Mountains and Northeast/Mid-Con segments reported growth, offsetting declines in the Southwest segment. The Rocky Mountains segment saw a 13.2% sequential increase in revenue, driven by coiled tubing, pressure pumping, and tech services. The Northeast/Mid-Con segment reported a 12.4% sequential increase in revenue due to improved KLX completions utilization and increased regional gas-focused activity [1].

The company's strong financial performance is a testament to its strategic positioning, operational excellence, and improved financial flexibility. Despite challenges in the Southwest and gas markets, KLX remains focused on achieving consistent growth and profitability.

References:
[1] https://investor.klx.com/news-releases/news-release-details/klx-energy-services-holdings-inc-reports-second-quarter-2025