Core Insights - Npk International reported strong earnings results for Q2 2025, with GAAP revenue of $68.2 million and GAAP EPS of $0.10, surpassing analyst estimates [1][2] - The company experienced a significant 34% increase in rental income, contributing to a record high in rental revenues [5][6] - Despite revenue growth, operating margin from continuing operations decreased to 17.0%, attributed to rising SG&A costs [6][10] Financial Performance - GAAP revenue reached $68.2 million, exceeding the consensus estimate of $59.6 million, while diluted non-GAAP EPS was $0.11, beating the expectation of $0.09 [1][2] - Adjusted EBITDA from continuing operations was $18.8 million, reflecting a 5% year-over-year increase [2][6] - Free cash flow (non-GAAP) fell by 48.6% year-over-year to $11.2 million, influenced by increased capital expenditures and SG&A costs [2][8] Business Overview - Npk International focuses on providing composite matting systems primarily through rentals to utility, construction, and infrastructure sectors [3] - The company aims to expand its rental fleet and geographic reach, targeting high-return markets such as power transmission [4] Growth Drivers and Challenges - The rental segment's growth was driven by steady demand from utility and infrastructure projects, particularly in the U.S. [5] - Service revenue increased by 15% year-over-year, while product sales revenue declined by 28% year-over-year to $21.9 million [7][8] Strategic Outlook - Management raised full-year FY2025 revenue guidance to $250 million to $260 million and adjusted EBITDA guidance to $68 million to $74 million [9] - The company plans to maintain capital expenditures between $35 million and $40 million for FY2025 [9] - Focus will be on reducing SG&A as a percentage of revenue and monitoring trends in gross and operating margins [10]