Q3 2025 KLX Energy Services Holdings Inc Earnings Call Transcript
Key Points
- KLX Energy Services Holdings Inc (KLXE) reported a 5% increase in revenue to $167 million and a 14% increase in adjusted EBITDA to $21 million from Q2, surpassing prior guidance.
- The Northeast Midcon segment experienced a significant 29% revenue increase, offsetting softer activity in other regions.
- KLXE achieved a 100 basis point improvement in adjusted EBITDA margin to 13%, despite a decline in US land rig count and frac spread count.
- The company demonstrated strong operational efficiency, with completion-oriented product lines and a rebound in accommodations and flowback businesses contributing to top-line strength.
- KLXE maintained a disciplined cost structure, reducing SG&A expenses by 30% year-over-year and 18% sequentially, reflecting successful cost structure initiatives.
- Overall revenue was 12% lower compared to Q3 2024, indicating challenges in maintaining year-over-year growth.
- The Rockies segment faced a 6% decrease in revenue and a 22% decrease in adjusted EBITDA due to reduced completion activity.
- The Southwest segment experienced a 4% decline in revenue and a 29% drop in EBITDA, driven by lower activity in directional drilling, flowback, and rentals.
- KLXE anticipates a mid-single-digit revenue decline in Q4 due to typical seasonality and budget exhaustion.
- The company faces ongoing market challenges, including commodity price volatility and a softer OFS activity environment, impacting near-term visibility.
Good morning ladies and gentlemen, and thank you for standing by. Welcome to the KLX Energy Services third quarter earnings conference call. (Operator Instructions)
I will now turn the conference over to your host Ken Dennard.
Thank you. You may begin.
Good morning, everyone. We appreciate you joining us for the KLX Energy Services conference call and webcast to review third quarter 2025 results.
With me today are Chris Baker, President and Chief Executive Officer, and Keefer Lehner, Executive Vice President and Chief Financial Officer. Following my remarks, management will provide commentary on its quarterly financial results and outlook before opening the call for your questions.
There will be a replay of today's call and it'll be available by webcast by going to the company's website at KLX.com. There will also be a telephonic recorded replay available until November 20th, 2025.
For more information on how to access these replay features, go to yesterday's
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