Financial Data and Key Metrics Changes - The overall fourth quarter revenue reached a record $343.7 million, up 2.2% sequentially and 11.8% year over year, with full year revenue at $1.3 billion, up 13.6% year over year [24][25] - Adjusted EBITDA for Q4 was a record $87.2 million with margins of 25.4%, up 157 basis points sequentially; full year adjusted EBITDA was $310.1 million, up 18.2% year over year, with margins at 23.8% [25][26] - Earnings per share (EPS) for Q4 was $0.30, and $1.04 for the full year, reflecting a 96% year-over-year increase [25][26] - Free cash flow for the full year was $124 million, with a conversion rate on adjusted EBITDA of 40.1% [26][27] Business Line Data and Key Metrics Changes - The company secured new contracts and enhanced its core business, particularly in unconventional gas development, which is expected to drive future growth [8][12] - The Roia Direction Drilling Platform and NEDA decarbonization portfolio were highlighted as key technological advancements contributing to operational efficiency and revenue quality [19][20] Market Data and Key Metrics Changes - The MENA region's total rig count is at historical highs, surpassing North America for the first time, indicating robust activity growth despite global commodity price fluctuations [12][13] - Saudi Arabia is experiencing a shift towards unconventional gas development, with significant investments planned to increase gas power generation [14][15] Company Strategy and Development Direction - The company aims to capitalize on growth opportunities in the MENA region, particularly in Saudi Arabia, Kuwait, and Libya, while maintaining a focus on technology expansion and operational efficiency [8][12][32] - The strategic positioning in gas development and the introduction of innovative technologies like the Roia platform are expected to drive future growth [19][20][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustained activity growth in core countries, despite a moderate growth outlook for 2025 compared to previous years [12][32] - The company is well-positioned to outperform the market due to its strategic exposure to gas development projects and its innovative technology portfolio [32][34] Other Important Information - The company has made significant progress in remediating internal control weaknesses and enhancing operational processes, contributing to improved working capital efficiency [28][29] - The company is exploring potential M&A opportunities but is primarily focused on internal growth and technology enhancement [50][51] Q&A Session Summary Question: Overview of regional spending patterns and growth expectations - Management anticipates moderate growth in the MENA region for 2025, with single-digit growth expected overall, while specific countries like Kuwait may see double-digit growth [36][37] Question: Changes in product mix and exposure in Saudi Arabia - The company noted a shift towards unconventional gas projects in Saudi Arabia, with ongoing involvement in the Jafura project expected to drive future growth [40][41] Question: Capital allocation strategy and potential M&A - The company plans to focus on internal growth and technology development rather than geographical expansion, with potential for M&A in technology partnerships [50][51] Question: Margin performance and sustainability - Management expressed confidence that margins in 2025 will track closely with 2024 levels, despite increased competition [54][55] Question: Developments in Kuwait and offshore discoveries - Kuwait is experiencing strong activity with significant offshore discoveries, and the company is well-positioned to capitalize on these developments [56][58]

Financial Data and Key Metrics Changes - The overall third quarter revenue reached a record $336.2 million, up 3.5% sequentially and 12% year-over-year [20] - Adjusted EBITDA for Q3 2024 was also a record at $80 million, with margins of 23.8%, remaining flat sequentially [21] - Earnings per share (EPS) excluding charges and credits was $0.31 for Q3 2024, representing a 164% year-over-year increase [22] - Cash flow from operations for Q3 2024 was strong at $70.8 million, contributing to a year-to-date total of $183.1 million [23] - Net debt to trailing 12 months adjusted EBITDA fell to 0.96, below the target of 1, compared to 2.8 at the end of 2022 [23] Business Line Data and Key Metrics Changes - The core business continues to outperform, with significant growth in direction drilling and hydraulic fracturing segments [12][13] - The ROYA direction drilling platform is expected to drive future outperformance, with a market size exceeding $2 billion annually [13] - The company announced an investment in SALTTECH BV for technology aimed at recovering minerals from produced water, indicating a new market opportunity [16][17] Market Data and Key Metrics Changes - The MENA market remains stable, with growth expected in countries like Kuwait, which is anticipated to lead MENA growth in the coming years [10][11] - North Africa is also showing steady growth, particularly in Libya and Algeria, with NESR positioned to capitalize on potential opportunities [11] Company Strategy and Development Direction - The company aims to continue outperforming the broader MENA market, focusing on core business expansion and technological advancements [29] - Strategic investments in decarbonization and water recovery technologies are being pursued to align with sustainability goals [15][29] - The company is committed to leveraging partnerships with North American technology providers to enhance service offerings in the MENA region [64][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the MENA market despite global uncertainties, with a positive outlook for NESR's core business and new technology rollouts [6][9] - The company anticipates continued growth in 2025, outpacing the market growth rate, driven by successful deployment of new technologies [50][56] Other Important Information - NESR was re-listed on NASDAQ on October 22, 2024, marking a significant milestone for the company [25] - The company has undergone substantial internal control improvements and is optimistic about demonstrating remediation of past weaknesses [26] Q&A Session Summary Question: Overview of Saudi Arabia's market activity - Management noted that Saudi Arabia has adjusted its oil production plans, focusing on gas and unconventional projects, particularly the Jafurah project, which remains a priority [33][36] Question: Future activity levels in Saudi Arabia - Management expects overall activity to remain stable, with growth in gas projects offsetting any declines in oil drilling [38][39] Question: Growth expectations in MENA and ROYA platform - Management anticipates MENA market growth of 5-6% in 2025, with NESR aiming to double that growth through the ROYA platform and other technologies [50] Question: Impact of potential OPEC production increases - Management believes that any increase in OPEC production would depend on market conditions, but NESR is positioned to grow regardless [55] Question: CAPEX investment cycle and equipment capacity - Management indicated that CAPEX for 2024 is expected to be around $120 million, with a focus on supporting growth in the ROYA platform [61]

Financial Performance - Total revenues for the three-month period ended September 30, 2024, increased to $336,205 thousand, up from $300,084 thousand in the same period last year, representing an increase of 12%[11] - Gross profit for the nine-month period ended September 30, 2024, was $149,492 thousand, compared to $104,235 thousand for the same period in 2023, reflecting a growth of 43%[11] - Net income for the three-month period ended September 30, 2024, was $20,618 thousand, compared to $14,731 thousand for the same period in 2023, marking an increase of 40%[11] - Operating income for the nine-month period ended September 30, 2024, was $94,122 thousand, compared to $53,138 thousand for the same period in 2023, reflecting a substantial increase of 77%[11] - Net income for the nine-month period ended September 30, 2024, was $49.473 million, a significant increase from $10.319 million in the same period of 2023, representing a growth of approximately 380%[19] - Net cash provided by operating activities increased to $183.069 million for the nine-month period ended September 30, 2024, compared to $140.439 million for the same period in 2023, reflecting a growth of about 30%[19] - Revenue for Q3 2024 was $336.2 million, up from $300.1 million in Q3 2023, representing an increase of 12.7%[94] - For the nine-month period ended September 30, 2024, revenue reached $958.0 million, compared to $838.4 million for the same period in 2023, reflecting a growth of 14.3%[94] - Production Services revenue for the three-month period ended September 30, 2024, was $230.521 million, compared to $208.890 million for the same period in 2023, reflecting an increase of about 10.3%[61] - Drilling and Evaluation Services revenue for the nine-month period ended September 30, 2024, reached $313.402 million, up from $261.996 million in the prior year, marking a growth of approximately 19.6%[61] Assets and Liabilities - Total current assets as of September 30, 2024, amounted to $577,154 thousand, an increase from $541,715 thousand as of December 31, 2023, representing a growth of 7%[8] - Total liabilities decreased to $929,300 thousand as of September 30, 2024, down from $976,246 thousand as of December 31, 2023, indicating a reduction of 5%[8] - The total equity of the company rose to $873,548 thousand as of September 30, 2024, compared to $821,494 thousand as of December 31, 2023, showing an increase of 6%[8] - The company’s accounts receivable, net, decreased to $132,549 thousand as of September 30, 2024, from $171,269 thousand as of December 31, 2023, indicating a decline of 23%[8] - Trade receivables decreased to $146.058 million as of September 30, 2024, from $180.989 million as of December 31, 2023, indicating a reduction of approximately 19%[31] - Long-lived assets as of September 30, 2024, totaled $425.133 million, a decrease from $442.666 million as of December 31, 2023[63] Cash Flow and Capital Expenditures - Cash and cash equivalents increased to $118,169 thousand as of September 30, 2024, up from $67,821 thousand as of December 31, 2023, representing a significant increase of 74%[8] - Capital expenditures for the nine-month period ended September 30, 2024, were $80.053 million, up from $65.824 million in the same period of 2023, representing an increase of approximately 21%[19] - The company anticipates increased capital expenditure and financing needs due to upcoming gas field developments in the MENA region[75] - Capital expenditure commitments were $64.4 million as of September 30, 2024, significantly higher than $15.4 million at the end of 2023[44] Earnings Per Share - The company reported a basic earnings per share of $0.22 for the three-month period ended September 30, 2024, compared to $0.16 for the same period in 2023, reflecting a growth of 38%[11] - The company reported a diluted EPS of $0.52 for the nine-month period ended September 30, 2024, compared to $0.11 for the same period in 2023, representing a significant increase of approximately 372.7%[54] Debt and Financing - As of September 30, 2024, the company's long-term debt, net of unamortized debt issuance costs, was $284.2 million, a decrease of 14.3% from $331.6 million as of December 31, 2023[34] - The company had total loans and borrowings of $354.7 million as of September 30, 2024, down from $403.3 million at the end of 2023, reflecting a reduction of 12.0%[34] - The net cash used in financing activities decreased to $48.563 million for the nine-month period ended September 30, 2024, compared to $75.494 million in the same period of 2023, indicating a reduction of approximately 36%[19] - Outstanding borrowings decreased to $409.3 million as of September 30, 2024, from $452.2 million as of December 31, 2023[107] Tax and Compliance - The effective tax rate for the quarter ended September 30, 2024, was 20.4%, compared to 15.7% for the same quarter in 2023, reflecting an increase of 4.7 percentage points[42] - The company recorded an income tax expense of $5.3 million for the quarter ended September 30, 2024, up from $2.7 million for the same quarter in 2023, representing a 96.3% increase[42] - The company was in compliance with all financial and non-financial covenants under the 2021 Secured Facilities Agreement as of September 30, 2024[38] Operational Insights - The company operates primarily in the MENA region, with total revenue from this area amounting to $949.884 million for the nine-month period ended September 30, 2024, compared to $830.338 million in 2023, reflecting an increase of approximately 14.4%[62] - The company has two reportable segments: Production Services and Drilling and Evaluation Services, with segment operating income for Production Services increasing to $104.205 million for the nine-month period ended September 30, 2024, from $77.327 million in 2023[62] - Production Services accounted for 69% of total revenue in Q3 2024, with revenue of $230.5 million, compared to $208.9 million in Q3 2023[89] - Drilling and Evaluation Services revenue increased to $105.7 million in Q3 2024 from $91.2 million in Q3 2023, marking a growth of 15.7%[97] Internal Controls and Governance - The company identified material weaknesses in its internal control over financial reporting as of December 31, 2023, which could result in future material misstatements if unremediated[135] - The company has implemented remedial steps to address identified material weaknesses, including appointing a Director of Internal Audit and engaging a third party for interim internal audit functions[139] - The company is in the process of remediating material weaknesses and must do so by August 28, 2025, to avoid an additional civil monetary penalty of $1.2 million from the SEC[148] - The company is committed to improving its internal control environment and has begun testing redesigned controls, expecting them to be fully effective by Q4 2024 or Q1 2025[139] Market Risks - The company is exposed to market risks primarily from changes in interest rates on borrowings, which have significantly increased since the end of 2021[131] - The company has not used derivatives for trading purposes or speculative activities[133]