Q4 record revenue: NESR reported fourth-quarter revenue of $398.3 million, up 34.9% sequentially, driven by the Jafurah contract ramp and stronger North Africa activity, with adjusted EBITDA of $84.4 million (21.2% margin).
Ambitious 2026 outlook: Management expects 2026 to be “our best growth year ever” and aims to exit 2026 at an annualized revenue run rate of about $2 billion, with full-year EBITDA margins broadly similar to 2025 and ~ $165 million in capex.
Strong cash generation and deleveraging: Full-year free cash flow was $120.8 million and net debt stood at $185.3 million (net debt/EBITDA 0.66), and management will provide a formal capital allocation/shareholder return plan next quarter with dividends and buybacks “on the table.”
National Energy Services Reunited (NASDAQ:NESR) closed out 2025 with what management described as “even stronger than expected” fourth-quarter results, supported by a major contract ramp in Saudi Arabia and rising activity across North Africa. On the company’s fourth-quarter 2025 earnings call, executives also pointed to a multi-year tender cycle across the Middle East and North Africa (MENA) and said they see a path to exiting 2026 at an annualized revenue run rate of about $2 billion.
Chief Financial Officer Stefan Angeli said fourth-quarter revenue rose to an all-time high of $398.3 million, up 34.9% sequentially and 15.9% year-over-year. Angeli attributed sequential growth primarily to the mobilization of the Jafurah contract beginning November 1, along with a “strong activity increase in North Africa.” Year-over-year growth was driven by higher activity in Saudi Arabia, Kuwait, Iraq, Egypt, and Libya.
Adjusted EBITDA for the quarter was $84.4 million, representing a 21.2% margin, which Angeli said was broadly in line with third-quarter levels despite higher revenue from “competitively priced contract wins.” He said stable margins reflected cost discipline, stronger operational execution, and the company’s “lean overhead structure.”
Angeli also detailed $24.1 million of charges and credits impacting adjusted EBITDA, including expected credit loss provisions primarily in Oman, impairment charges tied to two legacy technology investments, contract mobilization-related restructuring costs in Oman, and other write-offs including a provision for a construction-in-process prepayment in Saudi Arabia following a vendor bankruptcy. He said the adjustments were “predominantly one-time items” and that the company does not expect material contract mobilization-related restructuring costs in 2026.
For full-year 2025, Angeli said revenue totaled $1.324 billion, up 1.7% year-over-year. Growth across Kuwait, Iraq, Abu Dhabi, Libya, Egypt, and Algeria was partially offset by lower rig counts and contract transition in Saudi Arabia. Full-year adjusted EBITDA was $281.4 million, with a 21.3% margin, down about 250 basis points year-over-year due to country and segment mix and contract transitions.
Angeli said full-year interest expense fell to $32.5 million, down $7.4 million year-over-year, reflecting lower average debt levels. Adjusted diluted earnings per share for the full year was $0.81.
Management emphasized cash flow generation as a key strength. Angeli said full-year cash flow from operations was $264.2 million and free cash flow was $120.8 million, representing about 43% conversion from adjusted EBITDA. Capital expenditures for 2025 totaled $150.9 million, including both cash and vendor-financed amounts, which he said aligned with prior plans.
Angeli said the company directed the majority of free cash flow for the third consecutive year toward reducing bank debt. As of December 31, 2025, gross debt was $310 million and net debt was $185.3 million, with net debt to adjusted EBITDA at 0.66, below the company’s 1x target threshold. On a trailing twelve-month basis, return on capital employed was 10.2%.
In the Q&A, management said it plans to provide a formal update on its capital allocation and shareholder return framework on the next earnings call. Asked about leverage and shareholder returns, the company said its stated leverage goal is “one or less,” and that dividends and buybacks are “on the table,” with a formal announcement expected next quarter.
Looking ahead, Angeli said the company expects “more muted seasonality” in the first quarter of 2026 versus prior years due to continued ramp of recent contract awards and resilient growth in areas such as Kuwait and North Africa, offsetting the impact of Ramadan falling fully in the first quarter. He added that first-quarter margins are typically the weakest and are expected to improve sequentially through the year on “robust top-line growth and operating leverage.”
Angeli said 2026 “should be our best growth year ever,” and reiterated the company’s view that it can exit 2026 at an annualized revenue run rate of approximately $2 billion. Full-year 2026 EBITDA margins are expected to remain broadly consistent with 2025. He also provided several financial expectations, including interest expense of about $7.5 million in Q1 2026 and around $22 million for the full year, an effective tax rate around 22.5%, and capital expenditures of approximately $165 million in 2026.
The company expects free cash flow conversion in 2026 of approximately 35% to 40% of adjusted EBITDA, which Angeli described as “sector-leading free cash flow growth.”
Chairman and CEO Sherif Foda highlighted the startup of the Jafurah frac project, calling it the “largest unconventional frack program in sector history.” He said operations began on time in early November and that the company has been ramping safely and effectively with Aramco, with HSE and service quality as top priorities. In response to analyst questions, Foda said the project should reach a “steady state” by the second quarter, with the potential to add another fleet in the second half of the year. He said stage run-rate should be clear in the third quarter.
Foda also said the company is working on efficiency improvements as Jafurah scales, including higher stages per day and optimization around rig-up and between-stage operations. He discussed building a new base in SPARK and described plans to incorporate AI into maintenance and reliability processes as activity scales over a multi-year program.
Beyond Saudi Arabia, management pointed to strong regional activity and a large tender environment. Foda said all of the company’s “anchor countries” are growing steadily or stable at all-time highs, and described MENA upstream growth as “largely decoupled from oil and gas prices.” He cited Kuwait’s continued investment plans and said tenders there are expected to be awarded through 2026, with contract durations of five to seven years. He also discussed increased activity and IOC engagement in North Africa, including Libya, and said the company is planning to expand its presence there.
On the tender pipeline, Foda said the company has bid on roughly $2 billion to $3 billion of tenders across the region and is awaiting customer results, with the “lion’s share” outside Saudi Arabia. He said awards are expected during 2026, with some revenue impacts beginning in the second half depending on contract start dates. Management also said it expects Saudi Arabia to ramp activity outside Jafurah, citing rig additions and a large backlog of lump-sum turnkey (LSTK) tenders.
Foda closed by saying the fourth quarter marked a milestone in demonstrating the company can grow “profitably and with strong cash flow generation,” and reiterated that management has rolled out an internal strategy aimed at doubling the size of the company over the next couple of years.
National Energy Services Reunited Corp (NASDAQ: NESR) is a publicly traded oilfield services company formed in 2021 through a business combination that brought together complementary drilling and production service providers. The company’s mission is to deliver integrated solutions across the upstream oil and gas value chain, combining regional expertise with global operational standards.
NESR’s service portfolio spans drilling, completion and production, offering products and capabilities such as cementing, coiled tubing, hydraulic fracturing, well stimulation, pumping services and intervention solutions.
