0001738827-26-000013
SEC filingKLX Energy Services Holdings, Inc. reported a net loss of $77.1 million for fiscal year 2025, a significant deterioration from a $53.0 million net loss in 2024. Revenue declined 10.2% year-over-year to $636.6 million from $709.3 million, driven by decreased activity across all operating segments. The company generated positive operating cash flow of $7.5 million, though this was substantially lower than the $54.2 million generated in 2024. Key challenges included a $30.3 million operating loss, high interest expense of $45.2 million, and a substantial stockholders' deficit of $74.2 million. The company completed a major refinancing in March 2025, issuing $232.2 million in 2030 Senior Notes and establishing a new $160 million ABL facility to address maturing debt.
KLX Energy Services reported deteriorating financial results for fiscal year 2025, with revenue declining 10.2% to $636.6 million from $709.3 million in 2024. The net loss expanded significantly to $77.1 million from $53.0 million in the prior year, representing a 45.5% worsening. Operating loss increased to $30.3 million from $15.5 million in 2024. The company generated $7.5 million in operating cash flow, a substantial decrease from $54.2 million in 2024. Basic and diluted loss per share was $4.12 compared to $3.27 in 2024. The balance sheet shows total assets of $340.3 million, with stockholders' deficit expanding to $74.2 million from $10.5 million at the end of 2024.
The company experienced revenue declines across all operating segments, though specific segment-level data is not provided in the available document sections. The 10.2% overall revenue decline from $709.3 million to $636.6 million reflects decreased activity levels in the oilfield services sector. The company operates in drilling, completion, production and intervention services across major U.S. basins, with no single customer accounting for more than 10% of revenues in either 2025 or 2024. Revenue recognition follows ASC Topic 606, with service revenues recorded over time and product sales recognized upon delivery. Accrued revenue was $16.4 million as of December 31, 2025.
Gross margin declined to 21.2% in 2025 from 22.5% in 2024, with cost of sales representing 78.8% of revenue. Operating margin was negative 4.8%, deteriorating from negative 2.2% in the prior year. Selling, general and administrative expenses decreased to $68.5 million from $79.6 million, representing 10.8% of revenue compared to 11.2% in 2024. Depreciation and amortization expense increased slightly to $95.2 million from $94.0 million. Research and development costs were $1.7 million, up from $1.4 million. Interest expense increased to $45.2 million from $39.4 million, reflecting higher debt levels and refinancing activities.
Operating cash flow declined 86% to $7.5 million from $54.2 million in 2024. Investing activities used $32.9 million, primarily for $49.1 million in property and equipment purchases offset by $16.2 million in asset sale proceeds. Financing activities used $60.5 million, driven by the March 2025 refinancing that included $225.2 million in 2030 Senior Notes issuance and $139.0 million in ABL facility borrowings. Total debt outstanding was $280.1 million, with $253.9 million classified as long-term. Cash and equivalents decreased to $5.7 million from $91.6 million. Net working capital improved to $49.5 million from $25.7 million, primarily due to decreased current liabilities.
The company expects to incur approximately $40.0 million in capital expenditures for 2026, down from $49.1 million in 2025. Management cites significant financial and operating restrictions in the 2030 Senior Notes Indenture and 2028 ABL Facility that may adversely affect business operations. The 2030 Senior Notes contain financial covenants including maximum total net leverage ratios stepping down from 4.50:1 in 2025 to 2.50:1 in later periods. The company was in compliance with all debt covenants as of December 31, 2025. Risk factors include potential acceleration of debt if covenants are breached, with cross-acceleration provisions for indebtedness exceeding $7.5 million. The company maintains an equity distribution agreement for up to $57.8 million in common stock sales for general corporate purposes.