---
title: "KLX Q2 2026 Earnings: Higher Utilization Lifts Revenue and Margins"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/295447644.md"
description: "KLX Energy Services reported Q2 2026 revenue of $167.3 million, up 5.2% year-over-year, driven by higher utilization and a $6.5 million gain from the Wolf Pack acquisition. Diluted loss narrowed to $0.41 per share. Adjusted EBITDA rose to $18.7 million sequentially but remained flat year-over-year. The company expects Q3 revenue between $176 million and $188 million."
datetime: "2026-08-10T20:35:55.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/295447644.md)
  - [en](https://longbridge.com/en/news/295447644.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/295447644.md)
generator: "portal-rs"
---

# KLX Q2 2026 Earnings: Higher Utilization Lifts Revenue and Margins

KLX Energy Services (Nasdaq: KLXE) reported Q2 2026 revenue of $167.3 million, up 5.2% from $159.0 million a year earlier, while diluted loss narrowed to $0.41 per share from $1.04. For the quarter ended June 30, higher seasonal activity and utilization drove a stronger sequential result, although operating cash flow remained below the prior-year level.

## Core financial results

Revenue increased 15.6% from Q1, including $3.4 million from one month of Wolf Pack Rentals ownership. Excluding Wolf Pack, management said the base business grew more than 13% sequentially, supported by coiled tubing, directional drilling, technical services and accommodations.

Profitability also improved sharply from Q1: adjusted EBITDA rose from $11.1 million to $18.7 million, and the adjusted EBITDA margin increased from 7.7% to 11.2%. Year over year, however, adjusted EBITDA was almost unchanged and its margin declined slightly.

| Metric                  | Q2 2026        | Q2 2025         | Year-over-year change  |
| ----------------------- | -------------- | --------------- | ---------------------- |
| Revenue                 | $167.3 million | $159.0 million  | +5.2%                  |
| Operating income (loss) | $2.1 million   | $(8.7) million  | Turned profitable      |
| Net loss                | $(8.4) million | $(19.9) million | Loss narrowed 57.8%    |
| Diluted EPS             | $(0.41)        | $(1.04)         | Loss narrowed 60.6%    |
| Adjusted EBITDA         | $18.7 million  | $18.5 million   | +1.1%                  |
| Adjusted EBITDA margin  | 11.2%          | 11.6%           | -0.4 percentage points |
| Operating cash flow     | $10.5 million  | $19.1 million   | -45.0%                 |
| Levered free cash flow  | $4.1 million   | $8.0 million    | -48.8%                 |

Adjusted EBITDA and levered free cash flow are non-GAAP measures. Second-quarter levered free cash flow excludes cash sources and uses associated with the Wolf Pack acquisition.

## Business and segment performance

Completion services represented 52% of quarterly revenue, followed by drilling at 23%, production at 16% and intervention at 9%. Geographically, the Northeast/Mid-Con segment delivered the highest adjusted EBITDA and margin, while the Rocky Mountains produced the largest sequential revenue increase but remained below its prior-year results.

| Segment           | Q2 2026 revenue | YoY change | Adjusted EBITDA | Adjusted EBITDA margin |
| ----------------- | --------------- | ---------- | --------------- | ---------------------- |
| Rocky Mountains   | $50.8 million   | -6.1%      | $6.3 million    | 12.4%                  |
| Southwest         | $64.5 million   | +9.7%      | $7.6 million    | 11.8%                  |
| Northeast/Mid-Con | $52.0 million   | +12.8%     | $12.5 million   | 24.0%                  |

Rocky Mountains revenue rose 31.6% sequentially as coiled tubing, technical services and wireline activity increased. Higher utilization lifted adjusted EBITDA from $2.1 million in Q1 to $6.3 million, though that remained below $10.4 million a year earlier.

Southwest revenue increased 20.3% from Q1, driven by coiled tubing, directional drilling and accommodations. Northeast/Mid-Con revenue declined 1.0% sequentially because lower flowback activity offset gains in directional drilling and accommodations, but improved utilization and less idle time raised adjusted EBITDA 14.7% from Q1 and 73.6% year over year.

## Profitability, cash flow and the balance sheet

The sequential improvement in adjusted EBITDA reflected better utilization and fixed-cost absorption. Depreciation and amortization declined to $20.8 million from $23.7 million a year earlier, but interest expense increased to $12.5 million from $11.0 million and remained larger than reported operating income.

Operating cash flow improved to $10.5 million from $0.3 million in Q1. Capital expenditures were $8.6 million, primarily for maintenance, and proceeds from asset sales totaled $2.2 million, resulting in $4.1 million of levered free cash flow.

KLX ended the quarter with $7.9 million of cash and $45.4 million of availability under its asset-based revolving facility, for total liquidity of $53.3 million. Net debt increased to $281.0 million from $270.2 million at March 31 and $252.6 million at the end of 2025.

Net working capital declined 15% sequentially to $46.0 million because of acquisition-related liabilities and payroll timing. Management expects another working-capital build in Q3 to support higher anticipated activity, which could use part of the company’s available cash and borrowing capacity.

## The Wolf Pack gain amplified GAAP improvement while adjusted earnings stayed near year-ago levels

KLX recorded a $6.5 million bargain purchase gain after closing the Wolf Pack acquisition on June 2. That gain contributed to the shift from an $8.7 million operating loss a year earlier to $2.1 million of operating income, but it is excluded from adjusted results.

After removing the acquisition gain and other adjustments, KLX recorded an adjusted operating loss of $2.7 million, compared with $5.8 million a year earlier. Adjusted EBITDA was only 1.1% higher year over year, showing that the headline improvement in GAAP earnings was larger than the change in underlying adjusted earnings.

The sequential comparison presents a different picture: adjusted EBITDA increased 68% and its margin expanded by 3.5 percentage points from Q1. This indicates that higher activity and utilization produced a meaningful operating improvement even after excluding the Wolf Pack accounting gain.

## Guidance

KLX expects Q3 revenue of $176 million to $188 million. The $182 million midpoint is approximately 8.8% above Q2 revenue, reflecting a full quarter of Wolf Pack ownership and expected mid-single-digit sequential growth in the base business when Wolf Pack is excluded from both periods. Management also expects margins to rise as activity improves fixed-cost absorption.

| Metric                                    | Latest outlook                     | Previous outlook | Change                              |
| ----------------------------------------- | ---------------------------------- | ---------------- | ----------------------------------- |
| Q3 2026 revenue                           | $176 million-$188 million          | Not provided     | Midpoint about 8.8% above Q2 actual |
| Base-business revenue excluding Wolf Pack | Mid-single-digit sequential growth | Not provided     | New Q3 outlook                      |
| Full-year Wolf Pack synergies             | Approximately $2.5 million         | Not disclosed    | Estimate increased                  |

Wolf Pack generated $3.4 million of revenue in June, which management said implies a current annual revenue run rate of approximately $41 million. The company also reported that integration and cross-selling had progressed quickly to date.

## Risks investors should watch

-   **Utilization remains central to margin improvement.** The Q3 outlook assumes activity will build and improve fixed-cost absorption, even as management cited broader expectations for flat industry activity.
-   **Leverage and interest costs remain substantial.** Net debt reached $281.0 million, while quarterly interest expense of $12.5 million exceeded operating income. KLX also had only $7.9 million of cash, despite total liquidity of $53.3 million.
-   **Working-capital requirements could limit cash generation.** Management expects an additional Q3 working-capital build, and Q2 operating cash flow remained 45% below the prior-year period despite higher revenue.
-   **Wolf Pack integration must support the outlook.** The Q3 revenue increase includes a full quarter of the acquired business, while the higher synergy estimate depends on continued integration and cross-selling execution.
-   **Regional results remain uneven.** Northeast/Mid-Con produced the strongest year-over-year profit growth, while Rocky Mountains revenue and adjusted EBITDA remained below Q2 2025 levels.

## Summary

KLX’s Q2 2026 results showed a clear sequential recovery as seasonal activity, higher utilization and one month of Wolf Pack revenue lifted sales and adjusted EBITDA. The year-over-year picture was more measured: revenue grew modestly, adjusted EBITDA was nearly flat, and the reported profit improvement benefited from a $6.5 million acquisition gain. Q3 activity, Wolf Pack integration, working-capital needs and the company’s leveraged balance sheet are the main areas to monitor.

Find out more

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**