Company Performance - KLX Energy Services reported a quarterly loss of $0.88 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.62, and compared to a loss of $0.4 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $159 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.75%, and down from $180.2 million in the same quarter last year [2] - Over the last four quarters, KLX Energy Services has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - KLX Energy Services shares have lost approximately 64.5% since the beginning of the year, contrasting sharply with the S&P 500's gain of 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.69 on revenues of $162.1 million, and for the current fiscal year, it is -$3.36 on revenues of $629.4 million [7] Industry Outlook - The Oil and Gas - Field Services industry, to which KLX Energy Services belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact KLX Energy Services' stock performance [5]

Executive Summary & Highlights [Second Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operational%20Highlights) KLX Energy Services reported solid Q2 2025 results with sequential revenue growth and significant Adjusted EBITDA margin expansion, despite a decline in US land rig count Q2 2025 Financial Highlights | Metric | Q2 2025 | Change from Q1 2025 | | :-------------------------- | :------ | :------------------ | | Revenue | $159 M | +3% | | Net Loss | $(20) M | | | Diluted Loss per Share | $(1.04) | | | Adjusted EBITDA | $19 M | +34% | | Net Loss Margin | (13)% | | | Adjusted EBITDA Margin | 12% | +30% | | Total Liquidity | $65 M | | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Chris Baker attributed solid Q2 2025 revenue and Adjusted EBITDA growth to operational initiatives, anticipating Q3 to be the strongest quarter - **Revenue increased by 3.2%** and **Adjusted EBITDA margin by 260 basis points** sequentially, despite a **7.3% decrease in US land rig count**[4](index=4&type=chunk) - Operational initiatives focused on **cost management**, **asset rotation**, **pricing stability**, and **higher-margin work**[5](index=5&type=chunk) - **Significant strength and sequential improvement** observed across **completions and production portfolios**[5](index=5&type=chunk) - Q3 expectations include **low to mid-single digit sequential revenue increase** and **continued margin expansion**, enhancing market volatility management[5](index=5&type=chunk)[7](index=7&type=chunk) Financial Results Overview [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) Q2 2025 saw sequential revenue increase, reduced net loss, and significant improvements in Adjusted EBITDA and its margin, driven by seasonal market activity Consolidated Financial Performance Summary (in millions, except percentage) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Sequential Change | | :------------------- | :----------- | :----------- | :---------------- | | Revenue | 159.0 | 154.0 | +3.2% | | Net Loss | (19.9) | (27.9) | Improved | | Adjusted Net Loss | (17.0) | (21.9) | Improved | | Adjusted EBITDA | 18.5 | 13.8 | +34.1% | | Adjusted EBITDA Margin | 11.6% | 9.0% | +2.6 pp | - **Revenue increase** reflects a **seasonal market activity increase**[8](index=8&type=chunk) Q2 2025 Revenue Contribution by Product Line | Product Line | Q2 2025 Revenue Contribution | | :------------- | :--------------------------- | | Drilling | 16% | | Completion | 56% | | Production | 18% | | Intervention | 10% | [Segment Results](index=2&type=section&id=Segment%20Results) KLX Energy Services operates three geographic segments, with Rocky Mountains and Northeast/Mid-Con showing sequential growth, while Southwest declined - The company reports revenue, operating (loss) income, and Adjusted EBITDA across **three geographic segments**: Rocky Mountains, Southwest, and Northeast/Mid-Con, plus Corporate and other[10](index=10&type=chunk) [Rocky Mountains Segment](index=2&type=section&id=Rocky%20Mountains%20Segment) Rocky Mountains segment showed strong Q2 2025 sequential growth in revenue and Adjusted EBITDA, driven by coiled tubing, pressure pumping, and tech services Rocky Mountains Segment Performance (in millions, except percentage) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Sequential Change | | :---------------- | :----------- | :----------- | :---------------- | | Revenue | 54.1 | 47.8 | +13.2% | | Operating Income | 3.3 | (0.2) | Improved | | Adjusted EBITDA | 10.4 | 6.7 | +55.2% | - **Growth driven by coiled tubing, pressure pumping, tech services**, and **higher utilization**[10](index=10&type=chunk) [Southwest Segment](index=2&type=section&id=Southwest%20Segment) Southwest segment saw a Q2 2025 sequential decline in revenue and Adjusted EBITDA, primarily due to lower Permian basin revenue and increased white space Southwest Segment Performance (in millions, except percentage) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Sequential Change | | :---------------- | :----------- | :----------- | :---------------- | | Revenue | 58.8 | 65.2 | (9.8)% | | Operating Loss | (1.7) | 3.0 | Declined | | Adjusted EBITDA | 7.2 | 11.7 | (38.5)% | - **Decline due to lower Permian basin revenue**, **mix shift**, and **increased white space**, reflecting the Permian's largest sequential activity decrease in seven quarters[10](index=10&type=chunk) [Northeast/Mid-Con Segment](index=2&type=section&id=Northeast%2FMid-Con%20Segment) Northeast/Mid-Con segment showed significant Q2 2025 sequential improvement in revenue and Adjusted EBITDA, driven by improved completions utilization and increased gas-focused activity Northeast/Mid-Con Segment Performance (in millions, except percentage) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Sequential Change | | :---------------- | :----------- | :----------- | :---------------- | | Revenue | 46.1 | 41.0 | +12.4% | | Operating Loss | (1.3) | (8.1) | Improved by 84.0% | | Adjusted EBITDA | 7.2 | 2.7 | +166.7% | - **Improvement due to improved KLX completions utilization**, **increased regional gas-focused activity**, and **decreased white space**[10](index=10&type=chunk) [Corporate and Other Segment](index=3&type=section&id=Corporate%20and%20Other%20Segment) Corporate and other segment reported reduced operating and Adjusted EBITDA losses in Q2 2025, primarily due to lower overhead and fixed costs Corporate and Other Segment Performance (in millions) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Sequential Change | | :-------------------- | :----------- | :----------- | :---------------- | | Operating Loss | (9.0) | (12.4) | Improved | | Adjusted EBITDA Loss | (6.3) | (7.3) | Improved | - **Operating loss decreased** due to **lower overhead and fixed costs**[11](index=11&type=chunk) Balance Sheet & Liquidity [Liquidity Position](index=3&type=section&id=Liquidity%20Position) As of June 30, 2025, total liquidity was **$65.4 million**, with expectations for lower cash balances and improving liquidity due to the new ABL Facility Total Liquidity as of June 30, 2025 (in millions) | Metric | As of June 30, 2025 ($M) | | :------------------------------------ | :----------------------- | | Cash and cash equivalents | 16.7 | | ABL Facility availability | 48.7 | | **Total Liquidity** | **65.4** | - The company expects to operate with a **lower cash balance** due to the **flexibility of the new ABL Facility**[14](index=14&type=chunk) - **Liquidity is expected to improve** throughout the remainder of the year[14](index=14&type=chunk) [Net Working Capital](index=3&type=section&id=Net%20Working%20Capital) Net Working Capital decreased **23%** sequentially to **$45.9 million** as of June 30, 2025, driven by increased days payable outstanding and non-recurring payrolls Net Working Capital Trend (in millions, except percentage) | Metric | As of June 30, 2025 ($M) | As of March 31, 2025 ($M) | Sequential Change | | :---------------- | :----------------------- | :------------------------ | :---------------- | | Net Working Capital | 45.9 | 59.4 | (23)% | - **Decrease driven by a 19% increase in days payable outstanding** and the **non-recurrence of two extra payrolls** from Q1[14](index=14&type=chunk) Other Financial Information [Capital Expenditures](index=4&type=section&id=Capital%20Expenditures) Q2 2025 capital expenditures decreased sequentially, primarily due to maintenance, but increased net of asset sales Capital Expenditures Summary (in millions, except percentage) | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Sequential Change | | :-------------------------------- | :----------- | :----------- | :---------------- | | Capital expenditures | 12.7 | 15.0 | (15)% | | Capital expenditures net of asset sales | 11.1 | 10.2 | +9% | - **Capital spending** in Q2 was primarily driven by **maintenance capital expenditures** across segments[15](index=15&type=chunk) [Assets Held for Sale](index=4&type=section&id=Assets%20Held%20for%20Sale) As of June 30, 2025, **$2.2 million** in assets were held for sale, comprising two facilities and equipment in Rocky Mountains and Southwest segments Assets Held for Sale as of June 30, 2025 (in millions) | Metric | As of June 30, 2025 ($M) | | :---------------- | :----------------------- | | Assets held for sale | 2.2 | - **Assets held for sale** relate to **two facilities and select equipment** in the Rocky Mountains and Southwest segments[16](index=16&type=chunk) Company Information & Forward-Looking Statements [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) KLX Energy Services scheduled its Q2 2025 conference call for August 7, 2025, at 10:00 a.m. ET, with dial-in and webcast access - **Conference call for Q2 2025 results** scheduled for **Thursday, August 7, 2025, at 10:00 a.m. Eastern Time**[17](index=17&type=chunk) - Access available via **dial-in (1-201-389-0867, passcode 13754590 for replay)** or **webcast (https://investor.klx.com/events-and-presentations/events)**[17](index=17&type=chunk) [About KLX Energy Services Holdings, Inc.](index=4&type=section&id=About%20KLX%20Energy%20Services%20Holdings%2C%20Inc.) KLX Energy Services is a growth-oriented provider of diversified oilfield services to onshore oil and natural gas E&P companies across major US basins - KLX is a **growth-oriented provider of diversified oilfield services** to onshore oil and natural gas exploration and production companies across all major US basins[18](index=18&type=chunk) - Services focus on **drilling, completion, production, and intervention activities** for technically demanding wells, supported by **over 60 service and support facilities**[18](index=18&type=chunk) - The company offers a **complementary suite of proprietary products and specialized services**, backed by **skilled personnel** and **innovative in-house manufacturing, repair, and maintenance capabilities**[18](index=18&type=chunk) [Forward-Looking Statements and Cautionary Statements](index=4&type=section&id=Forward-Looking%20Statements%20and%20Cautionary%20Statements) This report contains forward-looking statements subject to significant risks and uncertainties, and actual results may differ materially due to various factors - **Forward-looking statements** reflect current expectations and projections about future results, performance, and prospects, identified by specific keywords[19](index=19&type=chunk) - These statements are based on current expectations and assumptions but are **not assurances of future performance**, and **actual results could differ materially**[21](index=21&type=chunk) - **Material factors** causing actual results to differ include **service demand decline, industry volatility, commodity price volatility, inflation, interest rate increases, geopolitical events, supply chain issues**, and general economic conditions[21](index=21&type=chunk) Condensed Consolidated Financial Statements (GAAP) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations detail revenues, costs, and expenses, leading to net loss for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024 Condensed Consolidated Statements of Operations (in millions, except per share data) | | Three Months Ended | | | | :-------------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Revenues | $ 159.0 | $ 154.0 | $ 180.2 | | Costs and expenses: | | | | | Cost of sales | 125.6 | 123.8 | 136.0 | | Depreciation and amortization | 23.7 | 24.7 | 23.1 | | Selling, general and administrative | 18.0 | 21.6 | 19.3 | | Research and development costs | 0.4 | 0.4 | 0.3 | | Loss on debt extinguishment | — | 1.2 | — | | Impairment and other charges | — | — | 0.1 | | Operating (loss) income | (8.7) | (17.7) | 1.4 | | Non-operating expense: | | | | | Interest income | 0.0 | (0.3) | (0.6) | | Interest expense | 11.0 | 10.3 | 9.8 | | Net loss before income tax | (19.7) | (27.7) | (7.8) | | Income tax expense | 0.2 | 0.2 | 0.2 | | Net loss | $ (19.9) | $ (27.9) | $ (8.0) | | Net loss per common share: | | | | | Basic | $ (1.04) | $ (1.62) | $ (0.49) | | Diluted | $ (1.04) | $ (1.62) | $ (0.49) | | Weighted average common shares: | | | | | Basic | 19.2 | 17.2 | 16.2 | | Diluted | 19.2 | 17.2 | 16.2 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in millions) | | As of | | | :-------------------------------------------------- | :-------------- | :-------------- | | | June 30, 2025 | December 31, 2024 | | ASSETS | | | | Current assets: | | | | Cash and cash equivalents | $ 16.7 | $ 91.6 | | Restricted cash | 0.6 | — | | Accounts receivable–trade, net of allowance | 106.0 | 96.9 | | Inventories, net | 32.0 | 31.0 | | Prepaid expenses and other current assets | 17.4 | 13.5 | | Total current assets | 172.7 | 233.0 | | Property and equipment, net | 171.1 | 197.1 | | Operating lease assets | 18.1 | 19.6 | | Intangible assets, net | 1.3 | 1.5 | | Other assets | 6.3 | 5.1 | | Total assets | $ 369.5 | $ 456.3 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current liabilities: | | | | Accounts payable | $ 69.7 | $ 74.4 | | Accrued interest | 0.4 | 4.5 | | Accrued liabilities | 39.8 | 41.3 | | Current portion of long-term debt | 4.5 | — | | Current portion of operating lease obligations | 7.0 | 6.9 | | Current portion of finance lease obligations | 17.7 | 13.0 | | Total current liabilities | 139.1 | 140.1 | | Long-term debt | 254.2 | 285.1 | | Long-term operating lease obligations | 11.7 | 13.5 | | Long-term finance lease obligations | 10.6 | 26.4 | | Other non-current liabilities | 1.1 | 1.7 | | Stockholders' equity: | | | | Common stock | 0.2 | 0.2 | | Additional paid-in capital | 569.0 | 557.5 | | Treasury stock, at cost | (6.2) | (5.8) | | Accumulated deficit | (610.2) | (562.4) | | Total stockholders' deficit | (47.2) | (10.5) | | Total liabilities and stockholders' deficit | $ 369.5 | $ 456.3 | Non-GAAP Financial Measures & Reconciliations [Non-GAAP Definitions](index=8&type=section&id=Non-GAAP%20Definitions) This section defines key non-GAAP financial measures like Adjusted EBITDA, Adjusted Net Loss, Free Cash Flow, Net Working Capital, and Net Debt, used for performance and liquidity evaluation - **Adjusted EBITDA** is net loss before interest, taxes, depreciation, and amortization, adjusted for specific non-recurring or non-cash items[28](index=28&type=chunk) - **Adjusted Net Loss** is consolidated net loss adjusted for goodwill/asset impairment, restructuring charges, transaction/integration costs, and other non-recurring expenses[31](index=31&type=chunk) - **Unlevered Free Cash Flow** is operating cash flow less capital expenditures and asset sales proceeds plus cash interest expense; **Levered Free Cash Flow** excludes cash interest expense[33](index=33&type=chunk) - **Net Working Capital** is current assets (excluding cash) less current liabilities (excluding accrued interest and finance lease obligations); **Net Debt** is total debt less cash and cash equivalents and restricted cash[34](index=34&type=chunk) [Consolidated Non-GAAP Reconciliations](index=10&type=section&id=Consolidated%20Non-GAAP%20Reconciliations) This section reconciles key consolidated non-GAAP financial measures, including Adjusted EBITDA, Net Loss Margin, Adjusted Net Loss, Free Cash Flow, Net Working Capital, and Net Debt, to their GAAP equivalents [Adjusted EBITDA and Net Loss Margin](index=10&type=section&id=Adjusted%20EBITDA%20and%20Net%20Loss%20Margin) Reconciliations detail Adjusted EBITDA and Net Loss Margin calculations, adjusting consolidated net loss for non-cash and one-time items to clarify operational performance Adjusted EBITDA Reconciliation (in millions) | | Three Months Ended | | | | :-------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Consolidated net loss | $ (19.9) | $ (27.9) | $ (8.0) | | Income tax expense | 0.2 | 0.2 | 0.2 | | Interest expense, net | 11.0 | 10.0 | 9.2 | | Operating (loss) income | (8.7) | (17.7) | 1.4 | | Impairment and other charges | — | — | 0.1 | | One-time net costs | 2.9 | 6.0 | 1.4 | | Adjusted operating (loss) income | (5.8) | (11.7) | 2.9 | | Depreciation and amortization | 23.7 | 24.7 | 23.1 | | Non-cash compensation | 0.6 | 0.8 | 1.0 | | Adjusted EBITDA | $ 18.5 | $ 13.8 | $ 27.0 | Consolidated Net Loss Margin (in millions, except percentage) | | Three Months Ended | | | | :-------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Consolidated net loss | $ (19.9) | $ (27.9) | $ (8.0) | | Revenue | 159.0 | 154.0 | 180.2 | | Consolidated net loss margin percentage | (12.5)% | (18.1)% | (4.4)% | Adjusted EBITDA Margin (in millions, except percentage) | | Three Months Ended | | | | :-------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Adjusted EBITDA | $ 18.5 | $ 13.8 | $ 27.0 | | Revenue | 159.0 | 154.0 | 180.2 | | Adjusted EBITDA Margin Percentage | 11.6 % | 9.0 % | 15.0 % | [Adjusted Net Loss and Adjusted Diluted Loss per Share](index=15&type=section&id=Adjusted%20Net%20Loss%20and%20Adjusted%20Diluted%20Loss%20per%20Share) This reconciliation details adjustments to consolidated net loss to derive Adjusted Net Loss and Adjusted Diluted Loss per Share, excluding impairment and one-time costs Adjusted Net Loss and Adjusted Diluted Loss per Share Reconciliation (in millions, except per share data) | | Three Months Ended | | | | :------------------------------------ | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Consolidated net loss | $ (19.9) | $ (27.9) | $ (8.0) | | Impairment and other charges | — | — | 0.1 | | One-time costs | 2.9 | 6.0 | 1.4 | | Adjusted Net Loss | $ (17.0) | $ (21.9) | $ (6.5) | | Diluted weighted average common shares | 19.2 | 17.2 | 16.2 | | Adjusted Diluted Loss per share | $ (0.88) | $ (1.27) | $ (0.40) | [Free Cash Flow](index=15&type=section&id=Free%20Cash%20Flow) Free Cash Flow reconciliation shows the impact of capital expenditures, asset sales, and cash interest expense on the company's liquidity Free Cash Flow Reconciliation (in millions) | | Three Months Ended | | | | :-------------------------------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Net cash flow provided by (used in) operating activities | $ 19.1 | $ (37.6) | $ 22.2 | | Capital expenditures | (12.7) | (15.0) | (15.3) | | Proceeds from sale of property and equipment | 1.6 | 4.8 | 3.3 | | Levered Free Cash Flow | 8.0 | (47.8) | 10.2 | | Add: Cash interest expense, net | 3.9 | 10.0 | 9.2 | | Unlevered Free Cash Flow | $ 11.9 | $ (37.8) | $ 19.4 | [Net Working Capital](index=16&type=section&id=Net%20Working%20Capital) This reconciliation details Net Working Capital calculation by adjusting current assets and liabilities for cash, restricted cash, debt, accrued interest, and lease obligations Net Working Capital Reconciliation (in millions) | | As of | | | | :-------------------------------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | December 31, 2024 | | Current assets | $ 172.7 | $ 167.9 | $ 233.0 | | Less: Cash and cash equivalents and restricted cash | 17.3 | 22.7 | 91.6 | | Net current assets | 155.4 | 145.2 | 141.4 | | Current liabilities | 139.1 | 111.3 | 140.1 | | Less: Current portion of long-term debt | 4.5 | 4.3 | — | | Less: Accrued interest | 0.4 | 1.9 | 4.5 | | Less: Operating lease obligations | 7.0 | 7.0 | 6.9 | | Less: Finance lease obligations | 17.7 | 12.3 | 13.0 | | Net current liabilities | 109.5 | 85.8 | 115.7 | | Net Working Capital | $ 45.9 | $ 59.4 | $ 25.7 | [Net Debt](index=16&type=section&id=Net%20Debt) Net Debt reconciliation shows total debt adjusted for cash, cash equivalents, and restricted cash, indicating the company's indebtedness Net Debt Reconciliation (in millions) | | As of | | | | :------------------------------------ | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | December 31, 2024 | | Total Debt | $ 258.7 | $ 261.0 | $ 285.1 | | Cash and cash equivalents and restricted cash | 17.3 | 22.7 | 91.6 | | Net Debt | $ 241.4 | $ 238.3 | $ 193.5 | [Segment Non-GAAP Reconciliations](index=11&type=section&id=Segment%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations of segment operating income (loss) to Adjusted EBITDA and segment Adjusted EBITDA margin for each geographic business segment [Rocky Mountains Segment](index=11&type=section&id=Rocky%20Mountains%20Segment) Rocky Mountains segment reconciliation shows Adjusted EBITDA calculation from operating income and its margin, adjusting for one-time costs, depreciation, amortization, and non-cash compensation Rocky Mountains Segment Adjusted EBITDA Reconciliation (in millions) | | Three Months Ended | | | | :------------------------------------ | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Rocky Mountains operating income (loss) | $ 3.3 | $ (0.2) | $ 10.5 | | One-time costs | 0.5 | — | — | | Adjusted operating income (loss) | 3.8 | (0.2) | 10.5 | | Depreciation and amortization expense | 6.5 | 6.8 | 6.7 | | Non-cash compensation | 0.1 | 0.1 | — | | Rocky Mountains Adjusted EBITDA | $ 10.4 | $ 6.7 | $ 17.2 | Rocky Mountains Segment Adjusted EBITDA Margin (in millions, except percentage) | | Three Months Ended | | | | :-------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Rocky Mountains Adjusted EBITDA | $ 10.4 | $ 6.7 | $ 17.2 | | Revenue | 54.1 | 47.8 | 61.4 | | Adjusted EBITDA Margin Percentage | 19.2 % | 14.0 % | 28.0 % | [Southwest Segment](index=12&type=section&id=Southwest%20Segment) Southwest segment reconciliation details Adjusted EBITDA calculation from operating loss and its margin, including adjustments for one-time costs, depreciation, amortization, and non-cash compensation Southwest Segment Adjusted EBITDA Reconciliation (in millions) | | Three Months Ended | | | | :------------------------------------ | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Southwest operating (loss) income | $ (1.7) | $ 3.0 | $ 2.6 | | One-time costs | 0.5 | 0.3 | 0.4 | | Adjusted operating (loss) income | (1.2) | 3.3 | 3.0 | | Depreciation and amortization expense | 8.4 | 8.3 | 7.4 | | Non-cash compensation | — | 0.1 | — | | Southwest Adjusted EBITDA | $ 7.2 | $ 11.7 | $ 10.4 | Southwest Segment Adjusted EBITDA Margin (in millions, except percentage) | | Three Months Ended | | | | :-------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Southwest Adjusted EBITDA | $ 7.2 | $ 11.7 | $ 10.4 | | Revenue | 58.8 | 65.2 | 69.9 | | Adjusted EBITDA Margin Percentage | 12.2 % | 17.9 % | 14.9 % | [Northeast/Mid-Con Segment](index=12&type=section&id=Northeast%2FMid-Con%20Segment) Northeast/Mid-Con segment reconciliation illustrates Adjusted EBITDA calculation from operating loss and its margin, with adjustments for one-time costs, depreciation, amortization, and non-cash compensation Northeast/Mid-Con Segment Adjusted EBITDA Reconciliation (in millions) | | Three Months Ended | | | | :------------------------------------ | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Northeast/Mid-Con operating loss | $ (1.3) | $ (8.1) | $ (2.5) | | One-time costs | 0.1 | 1.8 | 0.2 | | Adjusted operating loss | (1.2) | (6.3) | (2.3) | | Depreciation and amortization expense | 8.4 | 9.0 | 8.6 | | Non-cash compensation | — | — | 0.1 | | Northeast/Mid-Con Adjusted EBITDA | $ 7.2 | $ 2.7 | $ 6.4 | Northeast/Mid-Con Segment Adjusted EBITDA Margin (in millions, except percentage) | | Three Months Ended | | | | :-------------------------- | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Northeast/Mid-Con Adjusted EBITDA | $ 7.2 | $ 2.7 | $ 6.4 | | Revenue | 46.1 | 41.0 | 48.9 | | Adjusted EBITDA Margin Percentage | 15.6 % | 6.6 % | 13.1 % | [Corporate and Other Segment](index=13&type=section&id=Corporate%20and%20Other%20Segment) Corporate and other segment reconciliation shows Adjusted EBITDA loss from operating loss, including adjustments for impairment, one-time costs, depreciation, amortization, and non-cash compensation Corporate and Other Segment Adjusted EBITDA Reconciliation (in millions) | | Three Months Ended | | | | :------------------------------------ | :---------------- | :---------------- | :---------------- | | | June 30, 2025 | March 31, 2025 | June 30, 2024 | | Corporate and other operating loss | $ (9.0) | $ (12.4) | $ (9.2) | | Impairment and other charges | — | — | 0.1 | | One-time costs | 1.8 | 3.9 | 0.8 | | Adjusted operating loss | (7.2) | (8.5) | (8.3) | | Depreciation and amortization expense | 0.4 | 0.6 | 0.4 | | Non-cash compensation | 0.5 | 0.6 | 0.9 | | Corporate and other Adjusted EBITDA loss | $ (6.3) | $ (7.3) | $ (7.0) |

Group 1 - KLX Energy Services Holdings, Inc. will report its 2025 second quarter financial results on August 7, 2025, at 10:00 a.m. Eastern Time [1] - The conference call can be accessed via phone or live webcast, with a replay available until August 21, 2025 [1] - Questions for management can be submitted via email prior to the call [1] Group 2 - KLX is a growth-oriented provider of diversified oilfield services to leading onshore oil and natural gas exploration and production companies [2] - The company operates over 60 service and support facilities across the United States, focusing on drilling, completion, production, and intervention activities [2] - KLX's services are supported by technically skilled personnel and a broad portfolio of innovative in-house manufacturing, repair, and maintenance capabilities [2]

Revenue Performance - For the three months ended March 31, 2025, total revenue was $154.0 million, a decrease of $20.7 million or 11.8% compared to the same period in 2024[103]. - Revenue from the Rocky Mountains segment increased by $2.2 million or 4.8%, driven entirely by an increase in weighted average volume[103]. - The Southwest segment revenue decreased by $4.2 million or 6.1%, attributed solely to a decrease in weighted average volume[103]. - The Northeast/Mid-Con segment revenue decreased by $18.7 million or 31.3%, with lower weighted average price contributing approximately 13% and lower weighted average volume contributing approximately 87% to the decline[103]. Pricing and Market Conditions - The average daily price of West Texas Intermediate (WTI) increased by approximately 1.4% to $71.78 per barrel during the three months ended March 31, 2025, compared to $70.81 per barrel in the previous quarter[94]. - The company anticipates that customers will continue to cautiously allocate capital and operating expenses due to volatile commodity prices[96]. Financial Performance - For the quarter ended March 31, 2025, cost of sales was $123.8 million, representing 80.4% of sales, a decrease from 82.4% in the prior year period[104]. - Selling, general and administrative expenses (SG&A) were $21.6 million, or 14.0% of revenues, up from 12.4% in the prior year, due to lower revenues[105]. - The total operating loss for the quarter was $17.7 million, compared to a loss of $13.1 million in the prior year, reflecting reduced activity and pricing[107]. - The net loss for the quarter was $27.9 million, an increase from a net loss of $22.2 million in the prior year, primarily due to lower revenues[110]. Liquidity and Capital Structure - As of March 31, 2025, the company had $14.6 million in cash and cash equivalents, with total liquidity of $58.1 million[111]. - The company completed a refinancing on March 12, 2025, issuing approximately $232.2 million in 2030 Senior Notes and exchanging $143.6 million of 2025 Senior Notes[115][126]. - The New ABL Facility has a commitment of $125.0 million and includes a first-in-last-out asset-based credit facility with a $10.0 million commitment[119]. - The effective interest rate under the New ABL Facility was approximately 9.06% as of March 31, 2025[122]. - The company is required to redeem 2.00% per annum of all 2030 Senior Notes outstanding starting March 31, 2025[128]. - The 2030 Senior Notes Indenture includes a maximum total net leverage ratio of not greater than 4.50 to 1.0 for specified test periods[129]. - As of March 31, 2025, the principal amount outstanding under the 2030 Senior Notes was $231.0 million, with total debt related to these notes at $206.0 million after adjustments[132]. - The effective interest rate for the 2030 Senior Notes was approximately 12.83% as of March 31, 2025[132]. Capital Expenditures and Cash Flow - Capital expenditures for the three months ended March 31, 2025, were $15.0 million, an increase from $13.5 million in the same period of 2024, with expectations of total capital expenditures between $40.0 million and $50.0 million for the year ending December 31, 2025[137]. - Cash flows used in operating activities for the three months ended March 31, 2025, were approximately $37.6 million, compared to $10.8 million for the same period in 2024[143]. - The company had $14.6 million in cash and cash equivalents and $8.1 million in restricted cash as of March 31, 2025, reflecting a decrease of $68.9 million in cash on hand[144]. - Net cash used in financing activities was $21.1 million for the three months ended March 31, 2025, compared to $6.6 million for the same period in 2024, influenced by refinancing activities[148]. - The company sold 142,769 shares of common stock during the three months ended March 31, 2025, generating gross proceeds of approximately $0.5 million[141]. - The company expects to incur additional pari passu indebtedness of up to $150.0 million within twelve months of refinancing, subject to certain conditions[131]. - Total letters of credit outstanding under the New ABL Facility were $6.4 million as of March 31, 2025[133]. Strategic Initiatives - The company expects to continue pursuing strategic, accretive acquisitions to strengthen competitive positioning and drive efficiencies[85]. - The company has developed tools covered by 37 patents and 7 pending patent applications, enhancing its competitive edge in the market[90]. - The company is focused on maintaining a solid balance sheet and sufficient operating liquidity while managing capital expenditures prudently[101].

Financial Data and Key Metrics Changes - Q1 2025 revenue was $154 million, a 7% sequential decline and 12% lower than Q1 2024 [12] - Consolidated adjusted EBITDA was $13.8 million with a 9% margin, down from 13.7% in Q4 2024 but up from 7% in Q1 2024 [12] - Adjusted EBITDA margin increased by 208 basis points year-over-year despite a 125% decline in revenue and rig count [6] Business Line Data and Key Metrics Changes - Southwest segment revenue was $65.2 million, with adjusted EBITDA at its highest level since Q3 2023, reflecting a shift towards higher-margin product service lines [15][16] - Rockies segment revenue was $47.8 million, with adjusted EBITDA higher by 524% year-over-year despite a 13% decline in rig count [14] - Northeast Mid Con segment revenue was $41 million, with a sequential decrease of 18% primarily due to operational issues [16] Market Data and Key Metrics Changes - The Southwest represented 42% of Q1 revenue, up from 37% in Q4, while the Northeast Mid Con was 27%, down from 30% [9] - Drilling, completion, and production intervention services contributed approximately 20%, 51%, and 29% of Q1 revenue, respectively [9] Company Strategy and Development Direction - The company is focused on maintaining financial flexibility and navigating market volatility through operational discipline and improved balance sheet flexibility [21] - There is an emphasis on strategic M&A opportunities that align with growth and deleveraging goals, particularly in fragmented markets [24][52] - The company is optimistic about the US natural gas market and its implications for service providers, anticipating increased activity in gas-focused basins [23] Management Comments on Operating Environment and Future Outlook - Management noted that Q1 is typically the toughest quarter, but they delivered improved adjusted EBITDA and margin despite a lower rig count [5] - The macro environment remains volatile, influenced by OPEC+ production increases and US tariff policies, but there are signs of recovery in certain areas [6][21] - The company expects modest sequential revenue growth in Q2, driven by a recovery in the Rockies and the Northeast Mid Con [21][22] Other Important Information - The company ended Q1 with $58.1 million in liquidity, including $14.6 million in cash and $43.5 million available on its revolving credit facility [17] - CapEx for Q1 was $15 million gross, with expectations to reduce full-year CapEx estimates to $40 million to $50 million [19] - The company has implemented cost structure changes that are expected to continue benefiting operations throughout 2025 [13] Q&A Session Summary Question: About the Q2 guidance and recovery in the Rockies - Management acknowledged the uncertainty in providing a full-year guide and indicated that Q2 revenue is expected to increase low to mid single digits [28] Question: Impact of lower oil prices on operations - Management noted that smaller operators are more exposed to commodity price fluctuations and may delay projects, impacting revenue [32] Question: Flexibility of the PIK option and capital allocation - Management explained that the PIK option provides flexibility to manage cash flow, especially during uncertain market conditions [36][38] Question: Positioning for potential gas market improvements - Management confirmed that they are monitoring gas market trends and are well-positioned to relocate assets if necessary [44] Question: M&A opportunities and geographic strategy - Management stated that they are being opportunistic regarding M&A, focusing on deleveraging transactions rather than specific geographic areas [52]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $154 million, a 7% sequential decline and 12% lower than Q1 2024 [12] - Consolidated adjusted EBITDA was $13.8 million with a 9% margin, down from 13.7% in Q4 2024 but up from 7% in Q1 2024 [12] - Adjusted EBITDA margin increased by 208 basis points year-over-year despite a 125% decline in revenue and rig count [6] Business Line Data and Key Metrics Changes - Southwest segment revenue was $65.2 million, with adjusted EBITDA at its highest level since Q3 2023, reflecting a 6% sequential increase [14][16] - Rockies segment revenue was $47.8 million, with adjusted EBITDA up 524% year-over-year despite a 13% decline in rig count [14] - Northeast Mid Con segment revenue was $41 million, with a sequential decrease of 18% primarily due to operational issues [16] Market Data and Key Metrics Changes - The Southwest represented 42% of Q1 revenue, up from 37% in Q4, while the Northeast Mid Con was 27%, down from 30% [9] - Drilling, completion, and production services contributed approximately 20%, 51%, and 29% of Q1 revenue, respectively [9] Company Strategy and Development Direction - The company is focused on cost controls and has implemented changes to its cost structure, expecting lower SG&A levels to continue [13] - KLX is developing a second-generation version of its Oracle SRT tool, which is gaining market acceptance [7] - The company is exploring strategic M&A opportunities to align with growth and deleveraging goals, despite market challenges [24] Management Comments on Operating Environment and Future Outlook - Management noted the macro environment remains volatile due to OPEC+ production increases and tariff policies impacting commodity prices [6] - For Q2 2025, the company anticipates modest revenue growth and margin expansion, particularly in the Southwest segment [21] - The company remains optimistic about the US natural gas market and its implications for service providers [22] Other Important Information - The company ended Q1 with $58.1 million in liquidity, including $14.6 million in cash and $43.5 million available on its revolving credit facility [17] - CapEx for Q1 was $15 million gross, with expectations to reduce full-year CapEx estimates to $40 million to $50 million [19] Q&A Session Summary Question: About the Q2 guidance and recovery in the Rockies - Management indicated that while the guidance may seem conservative, it is based on current forecasts and the unpredictable nature of the market [28] Question: Impact of lower oil prices on rig count - Management noted that smaller operators are more sensitive to commodity prices and may delay projects, impacting overall activity [32] Question: Flexibility of the PIK option and capital allocation - Management explained that the PIK option provides flexibility to manage cash flow, especially during uncertain market conditions [36] Question: Positioning for gas plays and asset relocation - Management confirmed that they are well-positioned for gas plays and can relocate assets if necessary [42] Question: M&A opportunities and geographic strategy - Management stated that they are being opportunistic regarding M&A and are not geographically focused, but rather looking for deleveraging opportunities [52]

Core Viewpoint - KLX Energy Services reported a quarterly loss of $1.27 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.86, indicating a significant earnings surprise of -47.67% [1] Financial Performance - The company posted revenues of $154 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.23%, and down from $174.7 million in the same quarter last year [2] - Over the last four quarters, KLX Energy Services has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - KLX Energy Services shares have declined approximately 60.4% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.46 on revenues of $177.1 million, and for the current fiscal year, it is -$2.31 on revenues of $696.9 million [7] Industry Outlook - The Oil and Gas - Field Services industry, to which KLX Energy Services belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting a challenging environment for the company [8]

[Financial and Operational Overview](index=1&type=section&id=First%20Quarter%202025%20Financial%20and%20Operational%20Highlights) [Q1 2025 Key Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20and%20Operational%20Highlights) In Q1 2025, KLX Energy Services reported revenue of $154 million and a net loss of $(28) million, while increasing Adjusted EBITDA by 15% to $14 million and improving its Adjusted EBITDA margin by 208 basis points due to effective cost controls, with total liquidity at $58 million Q1 2025 Key Financial Highlights | Financial Metric | Q1 2025 | Change vs Q1 2024 | | :--- | :--- | :--- | | Revenue | $154 million | -12% (YoY) | | Net Loss | $(28) million | - | | Diluted Loss per Share | $(1.62) | - | | Adjusted EBITDA | $14 million | +15% (YoY) | | Adjusted EBITDA Margin | 9% | +30% (YoY) | | Total Liquidity | $58 million | - | - The company successfully increased its **Adjusted EBITDA margin by 208 basis points** compared to Q1 2024, primarily due to a company-wide focus on cost controls, which offset the impact of lower revenue and rig count[4](index=4&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management highlighted the successful completion of refinancing in March, enhancing financial flexibility and reactivating a share repurchase program with approximately $49 million remaining, while cautiously targeting a modest low to mid-single-digit sequential revenue increase and margin expansion for the remainder of 2025, prudently evaluating share and debt buybacks - The company is targeting a modest sequential revenue increase in the **low to mid-single digits** on a percentage basis, accompanied by margin expansion, based on current schedules[5](index=5&type=chunk) - Following a March refinancing, the company has access to its 2019 share repurchase program, which has approximately **$49 million** of availability remaining, with both share and debt buybacks being considered as capital deployment opportunities[7](index=7&type=chunk) - Management believes the company's strategic positioning, operational excellence, and improved financial flexibility position it to manage market volatility effectively[8](index=8&type=chunk) [Detailed Financial Results](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results) [Consolidated Financial Performance](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results) Q1 2025 revenue was $154.0 million, a 6.9% decrease from Q4 2024, primarily due to a seasonal market slowdown and reduced activity in Mid-Con completions and directional drilling, resulting in a net loss of $(27.9) million and an Adjusted EBITDA of $13.8 million, with completion services contributing 51% of revenue Consolidated Financial Performance Metrics | Metric | Q1 2025 | Q4 2024 | Change (QoQ) | | :--- | :--- | :--- | :--- | | Revenue | $154.0 M | $165.5 M | -6.9% | | Net Loss | $(27.9) M | $(14.7) M | Increased Loss | | Adjusted Net Loss | $(21.9) M | $(13.1) M | Increased Loss | | Adjusted EBITDA | $13.8 M | $22.7 M | -39.2% | | Adjusted EBITDA Margin | 9.0% | 13.7% | -470 bps | - Revenue contribution by product line for Q1 2025 was approximately: **drilling (20%)**, **completion (51%)**, **production (18%)**, and **intervention (11%)**[9](index=9&type=chunk) [Segment Performance Analysis](index=2&type=section&id=First%20Quarter%202025%20Segment%20Results) The Southwest segment showed sequential growth in revenue (6.2%) and Adjusted EBITDA (21.9%), achieving a record-high margin, while the Rocky Mountains segment experienced a seasonal sequential decline but improved year-over-year, and the Northeast/Mid-Con segment saw a significant drop in both revenue (-18.2%) and Adjusted EBITDA (-72.4%) due to reduced activity and a non-recurring operational issue Q1 2025 Segment Performance Summary | Segment | Revenue (Q1 2025) | Adjusted EBITDA (Q1 2025) | | :--- | :--- | :--- | | Rocky Mountains | $47.8 M | $6.7 M | | Southwest | $65.2 M | $11.7 M | | Northeast/Mid-Con | $41.0 M | $2.7 M | | **Segment Total** | **$154.0 M** | **$21.1 M** | [Rocky Mountains](index=2&type=section&id=Rocky%20Mountains) The Rocky Mountains segment reported Q1 revenue of $47.8 million, a seasonal 11.5% decrease sequentially but a 5% increase year-over-year, with Adjusted EBITDA at $6.7 million, down 43.2% sequentially but up 24% from Q1 2024, driven by increased activity in directional drilling and wireline services Rocky Mountains Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $47.8 M | $54.0 M | $45.6 M | | Operating Loss | $(0.2) M | $4.7 M | $(1.2) M | | Adjusted EBITDA | $6.7 M | $11.8 M | $5.4 M | - Year-over-year revenue improved by **5%** due to increased activity in directional drilling and wireline product offerings[11](index=11&type=chunk) [Southwest](index=2&type=section&id=Southwest) The Southwest segment delivered strong results with revenue of $65.2 million, a 6.2% sequential increase driven by market share gains in the Permian, and Adjusted EBITDA grew 21.9% sequentially to $11.7 million, with its margin reaching the highest level since the 2020 merger, expected to be the "new normal" for the segment Southwest Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $65.2 M | $61.4 M | $69.4 M | | Operating Income | $3.0 M | $1.1 M | $(0.7) M | | Adjusted EBITDA | $11.7 M | $9.6 M | $6.7 M | - The Q1 2025 Adjusted EBITDA margin was the **highest** in the company's recent history (post-2020 merger), driven by a shifting revenue mix[12](index=12&type=chunk) [Northeast/Mid-Con](index=3&type=section&id=Northeast%2FMid-Con) The Northeast/Mid-Con segment's performance declined significantly, with revenue falling 18.2% sequentially to $41.0 million and Adjusted EBITDA plummeting 72.4% to $2.7 million, primarily caused by reduced gas-focused activity and a non-recurring operational challenge within its completions business Northeast/Mid-Con Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $41.0 M | $50.1 M | $59.7 M | | Operating Loss | $(8.1) M | $0.3 M | $2.4 M | | Adjusted EBITDA | $2.7 M | $9.8 M | $10.2 M | - The sharp decline was attributed to reduced regional gas-focused activity and a non-recurring operational issue that created excessive white space during the quarter[15](index=15&type=chunk) [Corporate and Other](index=3&type=section&id=Corporate%20and%20other) The Corporate and other segment reported an operating loss of $(12.4) million and an Adjusted EBITDA loss of $(7.3) million for Q1 2025, with the Adjusted EBITDA loss showing sequential improvement from $(8.5) million in Q4 2024 Corporate and Other Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Operating Loss | $(12.4) M | $(11.1) M | $(13.6) M | | Adjusted EBITDA Loss | $(7.3) M | $(8.5) M | $(10.3) M | [Balance Sheet and Liquidity](index=4&type=section&id=Balance%20Sheet%20and%20Liquidity) As of March 31, 2025, KLX had total liquidity of $58.1 million, comprising $14.6 million in cash and $43.5 million in available credit facilities, while Net Working Capital increased substantially by 131% to $59.4 million from the prior quarter, and the company raised approximately $0.5 million in gross proceeds from its at-the-market stock offering program - Total liquidity as of March 31, 2025 was **$58.1 million**, composed of **$14.6 million** in cash, **$38.6 million** available on the ABL Facility, and **$4.9 million** on an undrawn FILO facility[16](index=16&type=chunk) - Net Working Capital increased by **131%** to **$59.4 million** from December 31, 2024, driven by changes in days sales outstanding, days payable outstanding, and accrued liabilities[17](index=17&type=chunk) - In Q1 2025, the company sold **142,769 shares** of common stock for gross proceeds of approximately **$0.5 million** under its at-the-market offering program[18](index=18&type=chunk) [Capital Expenditures and Other Financials](index=4&type=section&id=Other%20Financial%20Information) Capital expenditures for Q1 2025 were $15.0 million, a slight decrease from the previous quarter, primarily directed towards maintenance, with net capital expenditures after asset sales totaling $10.2 million, and the company held $2.3 million in assets for sale at quarter-end - Capital expenditures were **$15.0 million** in Q1 2025, down **2%** from Q4 2024, with net capital expenditures after asset sales at **$10.2 million**[19](index=19&type=chunk) - As of March 31, 2025, the company had **$2.3 million** of assets held for sale, related to a facility and equipment in the Rocky Mountains and Southwest segments[20](index=20&type=chunk) [Financial Statements and Non-GAAP Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliations) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported revenues of $154.0 million for Q1 2025, down from $174.7 million in Q1 2024, resulting in an operating loss of $(17.7) million and a net loss of $(27.9) million, or $(1.62) per diluted share, compared to a net loss of $(22.2) million, or $(1.38) per diluted share, in the same period last year Condensed Consolidated Statements of Operations | (In millions, except per share data) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenues | $154.0 | $165.5 | $174.7 | | Operating loss | $(17.7) | $(5.0) | $(13.1) | | Net loss | $(27.9) | $(14.7) | $(22.2) | | Diluted loss per share | $(1.62) | $(0.90) | $(1.38) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, the company's balance sheet showed total assets of $379.1 million, a decrease from $456.3 million at year-end 2024, with cash and cash equivalents decreasing to $14.6 million from $91.6 million, total liabilities at $405.7 million, and a total stockholders' deficit of $(26.6) million Condensed Consolidated Balance Sheets | (In millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $14.6 | $91.6 | | Total current assets | $167.9 | $233.0 | | Total assets | $379.1 | $456.3 | | **Liabilities & Equity** | | | | Total current liabilities | $111.3 | $140.1 | | Long-term debt | $256.7 | $285.1 | | Total stockholders' deficit | $(26.6) | $(10.5) | [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations for key non-GAAP metrics used by management, showing Q1 2025 Adjusted EBITDA reconciled to $13.8 million from a consolidated net loss of $(27.9) million, Levered Free Cash Flow as a usage of $(47.8) million, and Net Debt increasing to $238.3 million from $193.5 million at the end of 2024 Reconciliation of Net Loss to Adjusted EBITDA (Q1 2025) | (In millions) | Amount | | :--- | :--- | | Consolidated net loss | $(27.9) | | Interest expense, net | $10.0 | | Income tax expense | $0.2 | | Depreciation and amortization | $24.7 | | One-time net costs | $6.0 | | Non-cash compensation | $0.8 | | **Adjusted EBITDA** | **$13.8** | Free Cash Flow Reconciliation (Q1 2025) | (In millions) | Amount | | :--- | :--- | | Net cash flow used in operating activities | $(37.6) | | Capital expenditures | $(15.0) | | Proceeds from sale of property | $4.8 | | **Levered Free Cash Flow** | **$(47.8)** | Net Debt Reconciliation | (In millions) | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Debt | $261.0 | $285.1 | | Less: Cash & restricted cash | $22.7 | $91.6 | | **Net Debt** | **$238.3** | **$193.5** |

Company Overview - KLX Energy Services Holdings, Inc. is a growth-oriented provider of diversified oilfield services to leading onshore oil and natural gas exploration and production companies in the United States [2] - The company operates in both conventional and unconventional plays across all major active basins [2] - KLX delivers mission-critical oilfield services focused on drilling, completion, production, and intervention activities for technically demanding wells [2] - The company has over 50 service and support facilities located throughout the United States [2] - KLX's offerings include a complementary suite of proprietary products and specialized services supported by technically skilled personnel [2] Upcoming Financial Results - KLX will report its 2025 first quarter financial results on May 9, 2025, prior to a live conference call [1] - The conference call will be accessible via phone or webcast at 10:00 a.m. Eastern Time [1] - A replay of the call will be available until May 23, 2025, and an archive of the webcast will be accessible for 90 days [1]

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $166 million, a 15% decrease compared to the prior year, but adjusted EBITDA margin improved to 13.7% from 11.8% in Q4 2023 [11][22][23] - Full year 2024 revenue totaled $709 million, with adjusted EBITDA of $90 million and an adjusted EBITDA margin of approximately 13% [18][22] - The company achieved a significant margin improvement due to cost-cutting efforts and a favorable mix shift in product service lines (PSLs) [12][18] Business Line Data and Key Metrics Changes - For Q4 2024, revenue contributions from drilling, completion, and production intervention services were approximately 22%, 52%, and 26%, respectively [15] - The Southwest segment generated $61.4 million in revenue, a decrease of 11% sequentially, while the Rockies segment saw a 20% sequential decrease in revenue to $54 million [25][26] - The Northeast/Mid-Con segment reported revenue of $50.1 million, a 4.4% sequential decrease, primarily due to reduced completion activity [27] Market Data and Key Metrics Changes - Geographically, the Southwest represented 37% of revenue in Q4, up from 36% in Q3, while the Northeast/Mid-Con and Rockies represented 30% and 33%, respectively [13][14] - The company noted strong completion and production activity in the Southwest and Rockies, contributing to revenue stability despite overall market challenges [14] Company Strategy and Development Direction - The company successfully refinanced its 2025 notes and asset-based lending (ABL), extending maturities to 2030 and 2028, respectively, which positions it for continued execution of its strategy [10][29] - The focus remains on capturing market share through operational excellence and differentiated assets, with a commitment to generating free cash flow and reducing leverage [38][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, expecting revenue to be flat to slightly up while anticipating expanded adjusted EBITDA margins between 13% to 15% [40] - The company is closely monitoring increased gas-directed completion activity driven by LNG export demand, particularly in the Haynesville region [43][44] Other Important Information - The company achieved a total recordable incident rate (TRIR) of 0.63% and a lost time incident rate (LTIR) of 0.22%, significantly below industry averages [16][17] - Capital expenditures for Q4 were $15.3 million, a decrease of 27% from Q3, with expectations for 2025 CapEx in the range of $45 million to $55 million [34][37] Q&A Session Summary Question: Can you walk through the significant margin improvement across all three regions year-over-year despite the decline in drilling and completions activity? - Management highlighted that margin improvement was driven by a mix shift towards higher-margin product lines and effective cost controls implemented earlier in the year [50][51][56] Question: What can drive further margin improvement on flat revenue in 2025? - Management indicated that known customer wins in higher-margin PSLs and a favorable pricing structure would contribute to margin expansion [57][60] Question: How do you think about cash flow for '25 and uses of cash? - Management noted that reduced CapEx and a focus on free cash flow generation would support deleveraging efforts, with a significant portion of free cash flow directed towards reducing debt [64][74] Question: How does Q1 set up this year versus last year? - Management expects Q1 to be soft relative to Q4 but better than Q1 of the previous year, contingent on avoiding severe weather impacts and other disruptions [75][78] Question: How is the E&P consolidation influencing your M&A strategy? - Management stated that the focus is on accretive deleveraging transactions that provide scale in existing product lines rather than stepping outside current offerings [88][90]