Executive Summary

Q3 2025 delivered sequential improvement: revenue rose 5% to $166.7M and Adjusted EBITDA rose 14% to $21.1M, with Adjusted EBITDA margin at 12.7% vs 11.6% in Q2; year-over-year revenue declined 12% and margins trailed Q3 2024 .
Against Wall Street consensus, KLX posted a revenue beat (~$2.1M, ~~1.3%), an EBITDA beat (~~$1.7M, ~8.8%), and EPS essentially in line (miss by $0.02); consensus coverage was thin (one estimate) *.
Q4 2025 guidance calls for a mid-single-digit revenue decline and “continued stable” Adjusted EBITDA margins, a less pronounced seasonal drop than last year, supported by mix, cost discipline, and project awards .
Segment mix shifted: Northeast/Mid-Con strength (revenues +29% q/q; EBITDA +101% q/q) offset softness in Southwest (Permian) and Rockies; product mix remained completion-heavy (60% in Q3) .
Liquidity remained ~$65M (cash ~$8M; ABL availability ~$57M); total debt was ~$259M and net debt ~$251M; CapEx fell q/q and net CapEx dropped 30% .

What Went Well and What Went Wrong

What Went Well

Northeast/Mid-Con outpaced expectations: revenue +29% q/q to $59.3M; segment EBITDA +101% to $14.5M, driven by completions utilization and reduced white space . CEO: “Our completion-oriented product lines… contributed meaningfully to this quarter’s top-line strength” .
SG&A efficiency: SG&A fell to $15.6M; adjusted SG&A down y/y and q/q, aided by overhead controls and recovery of a legal claim . CFO: adjusted SG&A expected at 9–10% of revenue for the year .
Cash generation discipline: Q3 levered FCF $5.7M; unlevered FCF $10.8M; Q4 set up for stronger FCF with working capital unwind and minimal net CapEx .

What Went Wrong

Year-over-year contraction: revenue fell from $188.9M to $166.7M and Adjusted EBITDA from $27.8M to $21.1M; consolidated net loss widened to $(14.3)M vs $(8.2)M in Q3 2024 .
Southwest (Permian) softness: revenue down 4% q/q; EBITDA -29% q/q due to mix shift, white space, and lower pricing amid rig/frac spread declines .
Rockies utilization challenges: revenue down 6% q/q; EBITDA -22% q/q; episodic completion programs and refrac declines pressured margins .

Financial Results

Consolidated P&L and Margins

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$188.9	$159.0	$166.7
Net Loss ($USD Millions)	$(8.2)	$(19.9)	$(14.3)
Diluted EPS ($)	$(0.51)	$(1.04)	$(0.74)
Adjusted EBITDA ($USD Millions)	$27.8	$18.5	$21.1
Adjusted EBITDA Margin %	14.7%	11.6%	12.7%
Consolidated Net Loss Margin %	(4.3)%	(12.5)%	(8.6)%

Note: Narrative references “Adjusted EBITDA margin of 13%” round the reconciled 12.7% figure .

Segment Revenue and Adjusted EBITDA

Segment	Q3 2024 Revenue ($M)	Q2 2025 Revenue ($M)	Q3 2025 Revenue ($M)
Rockies	$67.9	$54.1	$50.8
Southwest	$68.6	$58.8	$56.6
Northeast/Mid-Con	$52.4	$46.1	$59.3
Total	$188.9	$159.0	$166.7

Segment	Q3 2024 Adj. EBITDA ($M)	Q2 2025 Adj. EBITDA ($M)	Q3 2025 Adj. EBITDA ($M)
Rockies	$16.6	$10.4	$8.1
Southwest	$8.7	$7.2	$5.1
Northeast/Mid-Con	$10.9	$7.2	$14.5
Corporate & Other	$(8.4)	$(6.3)	$(6.6)
Total	$27.8	$18.5	$21.1

Segment Adjusted EBITDA Margins

Segment	Q3 2024	Q2 2025	Q3 2025
Rockies	24.4%	19.2%	15.9%
Southwest	12.7%	12.2%	9.0%
Northeast/Mid-Con	20.8%	15.6%	24.5%

KPIs and Balance Sheet

KPI	Q2 2025	Q3 2025
Liquidity ($MM)	$65.4	$65.2
Cash & Equivalents ($MM)	$16.7	$8.3
ABL Availability ($MM)	$48.7	$56.9
Total Debt ($MM)	$258.7	$259.2
Net Debt ($MM)	$241.4	$250.8
Net Working Capital ($MM)	$45.9	$50.1
CapEx ($MM)	$12.7	$12.0
Net CapEx (after proceeds) ($MM)	$11.1	$7.8
Levered FCF ($MM)	$8.0	$5.7
Unlevered FCF ($MM)	$11.9	$10.8
SG&A ($MM)	$18.0	$15.6

Product Line Mix

Mix (% of Revenue)	Q2 2025	Q3 2025
Drilling	16%	15%
Completion	56%	60%
Production	18%	16%
Intervention	10%	9%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q4 2025	—	Mid-single-digit decline vs Q3	New/Directional
Adjusted EBITDA Margin	Q4 2025	—	Continued stable (vs Q3)	Maintained/Stabilizing
Net CapEx	Q4 2025	—	Minimal net CapEx; gross down, offset by asset sales	Lower
Free Cash Flow	Q4 2025	—	Stronger q/q on working capital unwind and no extra payroll	Improved

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q1 2025)	Current Period (Q3 2025)	Trend
Macro/rig counts	US land rig count down ~7.3% q/q; managing volatility	Caution on 2025 outlook; cost controls	Rig count -6% q/q; frac spreads -12%; OPEC+ supply growth noted	Challenging but stabilizing
Northeast/Mid-Con	Rev +12% q/q; EBITDA +166.7% q/q; utilization improving	Operational issue drove white space; EBITDA down	Standout performance; margins highest in ~3 years; base-loaded utilization	Strengthening
Southwest (Permian)	Largest activity decrease in 7 quarters; EBITDA -38.5% q/q	Strong q/q; margin highs post-merger	Revenue -4% q/q; margin pressure on mix/white space/pricing	Soft
Rockies	Strong Q2; Rev +13% q/q	Seasonal softness	Episodic completions; refrac declines; negative operating leverage	Mixed/Soft
Cost & SG&A	Initiatives in 2024; margin expansion	Cost controls lifted margins	SG&A down; adjusted SG&A 9–10% of revenue; legal claim recovery	Improving
Liquidity/PIK	Liquidity ~$65M; ABL flexibility	Refinancing complete; buyback capacity	Liquidity ~$65M; PIK $6M in Q3; latest election 100% cash pay	Stable; tactical
Gas/LNG/data centers	“Green shoots” in gassy basins	—	Dry gas revenue +15% q/q; LNG expansions ~11 Bcf/d over 5 years; data centers supportive	Positive

Management Commentary

CEO: “Our completion-oriented product lines… notably in our Mid-Con/Northeast region, contributed meaningfully to this quarter’s top-line strength… We expect a mid-single-digit revenue decline… with continued stable Adjusted EBITDA margins, supported by new project awards… regional activity mix and ongoing cost discipline” .
CFO: “Adjusted SG&A… came to $14.8 million… a 30% reduction from the same period last year and an 18% improvement sequentially… adjusted SG&A is expected to remain in the 9%–10% of revenue range for the year” .
CEO on outlook: “KLX stands to benefit as natural gas demand accelerates, underpinned by new LNG export capacity and increased data center activity… signals a less pronounced Q4 reduction than in years past” .

Q&A Highlights

Northeast/Mid-Con performance: Analysts highlighted margin highs; management attributed to accommodations/flowback gains in Haynesville, reduced white space, and base-loaded efficiency; market share gains in select lines acknowledged .
Rockies: Episodic completions and refrac declines created negative operating leverage due to fixed cost structure and last-minute program delays .
Q4 cadence vs last year: Expected mid-single-digit decline vs 13% decline last year; October revenue flat vs September (last year 7% decline), margins to hold via cost controls, accrual unwinds, and fleet turnover .
Balance sheet/PIK: PIK ~$6M in Q3; most recent election 100% cash pay; Q4 FCF supported by working capital unwind and minimal net CapEx; DSO ~61 days, DPO ~50 days .

Estimates Context

Q3 2025 vs consensus: Revenue $166.7M vs $164.6M* (beat), Adjusted EBITDA $21.1M vs $19.4M* (beat), EPS $(0.74) vs $(0.72)* (in line to slight miss); consensus counts: revenue 1*, EPS 1* *.
Implications: Consensus will likely lift near-term EBITDA/Margin expectations for Northeast/Mid-Con, but Southwest and Rockies trends keep consolidated margin recovery measured.
Values retrieved from S&P Global.*

Actual vs Consensus

Metric	Actual	Consensus*
Revenue ($USD)	$166,700,000	$164,600,000*
Adjusted EBITDA ($USD)	$21,100,000	$19,400,000*
Primary EPS ($)	$(0.74)	$(0.72)*
Revenue - # of Estimates	—	1*
EPS - # of Estimates	—	1*

Key Takeaways for Investors

Northeast/Mid-Con momentum and completion-heavy mix drove margin expansion; watch for continued gas basin tailwinds into Q4 and 2026 .
Permian softness and Rockies episodic activity are headwinds; consolidation-driven white space and pricing pressure weigh on Southwest margins near term .
Liquidity (~$65M) and ABL flexibility support operations; leverage is high (net debt ~$251M) and interest strategy (PIK vs cash pay) is an ongoing variable for equity risk/reward .
Q4 guide implies a smaller seasonal decline vs 2024 with stable margins; cost discipline (SG&A, accrual unwinds, asset sales) is a key lever to protect EBITDA .
Non-GAAP adjustments were modest ($0.3M one-time costs); Adjusted EBITDA margin reported at 12.7% (rounded to 13% in narrative) .
Product mix remains 60% completion; continued allocation of crews/equipment by basin is central to utilization and margin outcomes .
Trading lens: Near-term catalysts include Q4 seasonality proving less severe, LNG-linked gas activity, and evidence of Southwest stabilization; risks include further Permian softness, integration-driven customer white space, and debt overhang .

Additional Data Points

Average US land rig count -6% q/q; average frac spread count -12% q/q, yet KLX delivered sequential growth—indicative of outperformance vs activity levels .
Liquidity composition: cash ~$8.3M and ABL availability ~$56.9M; total debt $259.2M; net debt $250.8M .
Free cash flow: Q3 unlevered $10.8M; levered $5.7M; Q4 expected stronger on working capital dynamics .

All figures above are sourced from KLX’s Q3 2025 8-K press release and exhibits, earnings call transcript, and prior-quarter releases, with explicit citations for each data point.

KLX Energy Services Holdings, Inc. (KLXE)·Q3 2025 Earnings Summary