National Energy Services 2025 Q2 Earnings Sustained Profitability Amid Revenue Growth

National Energy Services (NESR) reported its fiscal 2025 Q2 earnings on August 20, 2025. The company delivered a modest revenue increase but saw a decline in earnings per share. Despite this, NESR has maintained profitability for six consecutive years, reflecting resilient business operations. Management provided positive guidance for the remainder of 2025, with revenue and EBITDA expected to remain stable and improve by year-end.

National Energy Services (NESR) reported a 0.7% increase in total revenue to $327.37 million for 2025 Q2, compared to $324.97 million in the same period in 2024. Production Services contributed the largest share with $205.06 million, while Drilling and Evaluation Services added $122.31 million. Together, these segments accounted for the full external revenue, underscoring the company’s core strength in energy services.

National Energy Services’s earnings per share (EPS) declined 20.0% to $0.16 in 2025 Q2, down from $0.20 in 2024 Q2. Net income also fell to $15.20 million, a 19.5% decrease from $18.87 million in the prior year. Despite these declines, the company has maintained consistent profitability over the past six years, a sign of operational resilience in a volatile industry. The EPS performance reflects a challenging operating environment, which impacted profitability despite steady revenue growth.

The stock price of National Energy Services has shown a strong upward trend in recent weeks, climbing 5.32% on the latest trading day, surging 17.04% during the most recent full trading week, and rising 36.68% month-to-date. However, a historical analysis of the stock’s performance following a revenue increase revealed that a buy-and-hold strategy initiated on the earnings report date and held for 30 days has underperformed. Over the past three years, such a strategy yielded a -36.96% return, significantly below the 8.87% benchmark. While the strategy did not experience a maximum drawdown of any magnitude, it also failed to capture any gains, resulting in a CAGR of -46.66%. The high volatility of 49.58% and a negative Sharpe ratio of -0.94 indicate a risky profile, with the underperformance primarily attributed to missed opportunities rather than direct losses.

Sherif Foda, Chairman and CEO, highlighted NESR’s strong Q2 performance, driven by contract awards and consistent execution. He noted the company’s $300 million in free cash flow over 10 quarters and emphasized the MENA region as a durable growth market, particularly in Kuwait, Saudi Arabia, and North Africa. Foda expressed optimism about unconventional gas development and expansion in rig activity, while underscoring NESR’s commitment to innovation in decarbonization, especially in water treatment and mineral recovery. He reiterated confidence in achieving $2 billion in revenue and emphasized the company’s long-term alignment with energy demand trends.

Stefan Angeli, CFO, provided guidance for the remainder of 2025. He expects Q3 revenue and EBITDA to remain in line with Q2 levels, with an improvement expected in Q4. Full-year 2025 revenue is projected to exceed 2024 levels, supported by new contract wins and technology deployments. EBITDA margins are anticipated to stay around 22%, with potential for a slight increase to 23%-24% in Q4. CapEx for 2025 is estimated at $125 million, with room for an additional $20 million. Free cash flow for the year is forecasted to reach approximately $100 million. The company aims to complete debt refinancing by year-end and will consider stock buybacks or shareholder returns after finalizing capital allocation decisions.

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