National Energy Services Reunited (NESR) Financials

National Energy Services Reunited Corp. (NASDAQ:NESR) reported a strong second quarter of 2026, with improvements in revenue, profitability, operating cash flow and liquidity compared with both the first quarter of 2026 and the second quarter of 2025.

• Revenue growth accelerated: Q2 revenue reached $514.8 million, up 28.9% from Q1 2026 and 61.0% from Q2 2025. Other non-interest income accounted for $520.8 million, making it the primary contributor to reported revenue.
• Profitability improved substantially: Net income increased to $44.0 million from $23.8 million in Q1 and $15.2 million in Q2 2025. Net income was therefore up approximately 85.0% sequentially and 189.6% year over year.
• Earnings per share more than doubled year over year: Diluted EPS rose to $0.43 from $0.23 in Q1 and $0.16 in Q2 2025. The increase occurred despite diluted weighted-average shares rising to 103.2 million from 97.6 million a year earlier.
• Operating cash flow strengthened: Cash flow from operating activities was $174.0 million in Q2, compared with $30.7 million in Q1 and $98.5 million in Q2 2025. The improvement was supported by an $88.6 million contribution from changes in operating assets and liabilities, reversing the working-capital outflow recorded in both prior-year quarters.
• Liquidity improved during the quarter: Cash and equivalents increased to $175.0 million at June 30, 2026, from $93.0 million at March 31. The company generated $82.6 million of net cash during Q2 after producing $30.7 million of net cash outflow in Q1.
• Debt declined modestly on a sequential basis: Short- and long-term debt totaled approximately $327.7 million at quarter-end, down from $333.4 million in Q1. NESR repaid $38.4 million of debt during Q2 while issuing $22.7 million, resulting in a net debt repayment of approximately $16.7 million.
• Asset and equity bases expanded: Total assets increased 9.0% sequentially to $2.10 billion, while total common equity rose 4.7% to $1.04 billion. Retained earnings increased to $132.8 million from $88.8 million in Q1, reflecting the quarter’s earnings.

Several items warrant additional monitoring. Total non-interest expense rose to $455.9 million in Q2 from $368.6 million in Q1 and $300.3 million in Q2 2025. Although revenue growth outpaced expense growth year over year, the company’s operating-cost base remains large relative to reported revenue. In addition, Q2 investing cash outflow increased to $73.1 million, primarily because purchases of investment securities rose to $74.6 million.

• Working-capital cash flow was a major swing factor: The $88.6 million Q2 inflow from operating assets and liabilities materially boosted operating cash flow. Investors should determine whether this benefit reflects sustainable business growth or the timing of collections, payables and other working-capital movements.
• The balance sheet contains significant goodwill and other assets: Goodwill was $645.1 million, or roughly 31% of total assets, while other assets totaled $708.4 million. These balances may increase sensitivity to future impairments or changes in asset quality.

• Interest expense remains a meaningful burden: Q2 interest expense increased sequentially to $7.0 million from $6.5 million, even though it was below the $8.6 million reported in Q2 2025. Higher financing costs could limit earnings growth if borrowing rates or debt balances increase.
• Liabilities grew faster than equity during Q2: Total liabilities rose 13.6% sequentially to $1.06 billion, compared with a 4.7% increase in equity. Other short-term payables increased to $632.2 million from $500.5 million, requiring continued monitoring of near-term obligations and liquidity.
• Reported revenue is highly concentrated: Other non-interest income represented more than 100% of total revenue before the offsetting interest expense, while service-charge income was only $1.1 million. This concentration may make results more volatile and complicates assessment of recurring operating performance.

Overall, Q2 2026 showed clear momentum in earnings, cash generation and liquidity. However, investors should assess the sustainability of the large working-capital benefit, the concentration of revenue in other non-interest income, elevated payables and the company’s substantial goodwill balance.