KLX Energy Services Reports Mixed Q2 2025 Results with Revenue Growth and Net Loss Improvement

KLX Energy Services reported a 3.2% revenue increase to $159 million in Q2 2025, despite a 7.3% decline in US land rig count. The net loss improved to $(19.9) million, and Adjusted EBITDA rose 34% to $19 million. The Rocky Mountains segment saw a 13.2% revenue increase, while the Southwest segment experienced a 9.8% decline. Management projects Q3 2025 to be the strongest quarter of the year with low to mid-single-digit sequential revenue growth and continued margin expansion.

KLX Energy Services Holdings Inc (KLXE) reported a mixed performance for the second quarter of 2025, with revenue increasing by 3.2% to $159 million despite a 7.3% decline in US land rig count. The company reported a net loss of $(19.9) million, an improvement from the previous quarter, and Adjusted EBITDA rose 34% to $19 million [1].

The Rocky Mountains segment saw a 13.2% revenue increase, while the Southwest segment experienced a 9.8% decline. Management projects Q3 2025 to be the strongest quarter of the year with low to mid-single-digit sequential revenue growth and continued margin expansion [1].

The company's stock price dropped by 3.4% following the earnings announcement, closing at $1.58. The stock's current price is near its 52-week low of $1.46, far from the high of $7.66, indicating a challenging period for the company [1].

Despite these challenges, KLXE remains optimistic about the upcoming quarter. The company expects a low to mid-single-digit sequential revenue increase and continued margin expansion. Full-year net capital expenditures are anticipated to be between $30 million and $40 million [1].

Executive Commentary CEO Chris Baker emphasized the company’s strategic execution, stating, "Our performance was driven by the execution of our operational initiatives." He also expressed optimism about the natural gas market, noting, "We remain optimistic about the long-term fundamentals for US natural gas." Additionally, Baker highlighted the company’s valuation, saying, "We continue to view our business as fundamentally undervalued" [1].

Risks and Challenges Commodity price volatility continues to pose a risk to revenue stability. Decreasing US land rig and frac spread counts could impact future service demand. Macroeconomic pressures, including OPEC+ production increases, may affect market dynamics. High total debt levels could constrain financial flexibility. Operational risks associated with managing headcount and reducing SG&A expenses [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-klxe-q2-2025-reveals-wider-eps-loss-stock-dips-93CH-4178040