KLX Energy Services (KLXE) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $144.7 million, down 6% year-over-year, at the lower end of guidance due to weather disruptions, customer delays, and lower activity and pricing; Northeast/Mid-Con grew while Rockies and Southwest declined.

• Net loss for Q1 was $24.0 million, or $1.23 per share, improved from $27.9 million in Q1 2025, primarily due to lower operating costs.

• Adjusted EBITDA was $11.1 million, with a margin of 7.7–8%.

• Cash flows from operations turned positive at $0.3 million, compared to a $37.6 million outflow in the prior year period.

Financial highlights

• SG&A expenses fell 29% year-over-year to $15.4 million, reflecting ongoing cost control.

• Capital expenditures were $8.7 million, down from $15.0 million in Q1 2025; net capital expenditures after asset sales were $5.3 million.

• Net working capital at quarter end was $54–$54.4 million, up 10% sequentially.

• Total liquidity stood at $47.7–$48 million, including $5.6 million in cash and $42 million in available borrowing capacity.

• Net cash from operations was $0.3 million; unlevered free cash flow was -$1.4 million, and leveraged free cash flow was -$5 million.

Outlook and guidance

• Q2 2026 revenue is forecast at $162–$172 million, a 5% year-over-year increase and $22 million above Q1; margin expansion is expected as activity normalizes and deferred revenue is realized.

• Adjusted EBITDA margin expected to expand sequentially in Q2, with all segments and most product lines improving.

• Management expects continued volatility in oil and gas prices due to geopolitical conflicts and economic uncertainty.

• Customers are anticipated to cautiously allocate capital and operating expenses for the remainder of 2026.

• Q3 is anticipated to be the strongest quarter, with robust second-half activity, especially from independents and private operators.