National Energy Services Reunited Corp. Ordinary Shares 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- NESR reported second quarter 2026 revenue of $520.8 million, up 28.7% sequentially and 59.1% year over year, driven primarily by Saudi Arabia and strong growth in Oman and Egypt, partially offset by lower activity in Iraq due to regional disruptions.
- Adjusted EBITDA reached a record $106.2 million with a margin of 20.4%, impacted by approximately $4 million in incremental freight logistics costs related to geopolitical disruptions.
- Adjusted net income was a record $45.5 million, increasing 70.1% sequentially and 125.9% year over year, with adjusted diluted EPS of $0.44.
- Operating cash flow increased to $174 million, with free cash flow of $99.9 million during the quarter, reflecting strong working capital execution and proactive inventory management.
- Gross debt decreased to $274.6 million and net debt declined to $99.6 million, resulting in a net debt to adjusted EBITDA ratio of 0.3 times, well below the target of one times.
- Trailing 12 months return on capital employed increased to approximately 13.5%.
- NESR announced a change in auditors from Grant Thornton Dubai to PricewaterhouseCoopers Dubai effective for the 2027 audit, following a competitive tender process.
- Management emphasized NESR's resilience during regional conflict, maintaining uninterrupted operations and supply chain reliability through proactive contingency planning and local workforce retention.
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Transcript
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Greetings. Welcome to the NESR Report second quarter 2026 financial results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Blake Gendron, Vice President of Investor Relations. Thank you, sir. You may begin.
Thanks, Maria. Hello. Welcome to NESR's second quarter 2026 earnings call. With me today are Sherif Foda, Chairman and Chief Executive Officer of NESR, and Stefan Angeli, Chief Financial Officer. On today's call, we will comment on our second quarter results and overall performance. After our prepared remarks, we will open up the call to questions. Before we begin, I'd like to remind our participants that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I therefore refer you to our latest earnings release filed earlier today and other SEC filings. Our comments today may also include non-GAAP financial measures. Additional details on reconciliations to the most directly comparable GAAP financial measures can be found in our press release, which is on our website.
Feel free to contact us after the call with any additional questions you may have. Our investor relations contact information is available on our website. I will hand the call over to Sherif.
Thanks, Blake. Ladies and gentlemen, good morning. Thank you for participating in this conference call. I could not be prouder of the nearly 8,000 men and women of NESR, who not only rose to the challenge in the second quarter, but exceeded all expectations and stood by our customer when needed most. I also have immense gratitude to all our clients that proved to the world that it will take more than a geopolitical disruption to change the strategic inertia of the region. Our differentiated, record-setting results reflect the resilience of our customers, our unique project exposure, and the responsiveness of our local team that consistently and repeatedly turned crisis into opportunity. As stated in the beginning of the conflict on our last conference call, we were first to rally to our customers.
We remained by their side. We nimbly reoriented our 30/60/90 supply chain strategy to ensure 100% reliability with zero interruption. This response showed up clearly in our fantastic result, just as we had planned and communicated. Throughout the conflict, we've stayed true to our founding ethos. NESR began with the vision of creating a MENA energy service company built for local content leadership, supply chain resilience, fit-for-purpose technology, and to empower our 100% in-country workforce to set new standards for safety, quality, and reliability as a true national leader. The strategy was simple. Attract capital globally to cultivate locally what our customer could consider the national champion. If we could simultaneously match or even exceed the service delivery standard to the global peers, the growth, profitability, and cash flow would naturally follow. We would also be the go-to partner in times of crisis.
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