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NESR's Q3 revenues surged 70.9% y/y to $504.7M, driven by Jafurah and higher regional activity.
NESR targets $2B in 2026 revenues, with the EBITDA margin near 20% and stronger Q4 cash generation.
NESR advances a $200M lithium contract and targets $3B in annual revenues by the end of 2028.
National Energy Services Reunited Corp. (NESR - Free Report) emphasized operational resilience, continued investment and opportunities tied to a potential recovery in Middle Eastern energy activity during its third-quarter 2026 earnings call.
Management reaffirmed its multi-year growth strategy despite geopolitical disruptions, highlighting expansion in Saudi Arabia, improving regional opportunities and the commercialization of new technologies. Executives also outlined expectations for stronger fourth-quarter performance and cash generation.
NESR Targets 2026 Revenues of $2B
Chief financial officer Stefan Angeli said that National Energy targets $2 billion in 2026 revenues, supported by expanding operations and recently awarded contracts.
Management expects an adjusted EBITDA margin of 20%, capital expenditure of $220-$225 million and free cash flow conversion of 30-35% of adjusted EBITDA.
During the analyst discussion, UBS questioned the anticipated fourth-quarter acceleration. Executive chairman and CEO Sherif Foda expressed confidence in achieving the annual revenue target, citing secured projects and activity scheduled to increase during the quarter.
National Energy's Regional Operations Withstand Disruptions
Angeli attributed third-quarter revenue growth primarily to the Jafurah contract and increased activity in Kuwait, Oman, Abu Dhabi and Algeria. Revenues reached $504.7 million, increasing 70.9% year over year but declining 3.1% sequentially. Revenues surpassed the Zacks Consensus Estimate of $497.7 million.
Adjusted earnings of $0.38 per share beat the Zacks Consensus Estimate of $0.36.
Geopolitical disruptions affected September activity and operations in Iraq. Incremental freight and logistics expenses totaled $5.5 million, reducing the adjusted EBITDA margin by roughly 110 basis points to 19%. Excluding these costs, margins would have reached 20.1%.
National Energy Services Reunited Price, Consensus and EPS Surprise
Foda identified two potential growth phases following regional stabilization — restarting suspended production activities and expanding energy infrastructure investments.
During questions from BMO Capital Markets, management explained that intervention, completions and workover services should recover before new drilling activity. NESR's existing equipment and personnel presence positions it to respond to customer requirements.
Responding to Barclays, Foda said that regional upstream spending could remain broadly flat in 2027 under current geopolitical conditions. Nevertheless, he expects NESR to grow through existing projects and market-share gains, with additional opportunities emerging if disruptions ease.
National Energy Advances Jafurah & New Technology Projects
NESR maintained four active hydraulic fracturing fleets at Saudi Arabia's Jafurah development during the quarter. Foda confirmed that a fifth fleet had arrived in Saudi Arabia, although deployment depends on Saudi Aramco's decision.
Management also highlighted opportunities to improve operating efficiency through artificial intelligence applications designed to reduce non-productive time and increase completed fracturing stages.
Beyond conventional oilfield services, National Energy secured a $200-million direct lithium extraction contract. Foda outlined plans to deliver 2,000 tons of lithium by December 2027 and identified a potential $1-billion opportunity for the business over five years.
NESR Focuses on Cash Flow & Financial Flexibility
Angeli acknowledged third-quarter free cash flow of negative $45.9 million, reflecting working capital requirements, delayed collections and investment in inventory buffers.
Management expects stronger fourth-quarter cash generation as collections normalize. National Energy also completed refinancing arrangements providing approximately $747 million in aggregate facilities, strengthening its financing capacity.
The company declared its first quarterly cash dividend of $0.10 per share. Management expects continued quarterly payments, subject to board approval and financial considerations.
National Energy Maintains Multi-Year Growth Ambitions
Foda reaffirmed the company's 3B3 strategy, targeting $3 billion in annual revenues by the end of 2028. Opportunities include additional service contracts, technology commercialization and expansion across existing markets.
Management maintained a confident outlook while acknowledging geopolitical uncertainty, customer pricing pressure and the timing of contract awards. Operational execution and disciplined capital allocation remain central priorities.
What NESR's Zacks Rank & Style Scores Indicate
National Energy currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term outlook under the Zacks ranking framework. Its Value Score of A and Growth Score of A reflect favorable valuation and growth characteristics, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock also holds a Momentum Score of C and a VGM Score of A. The strong composite score highlights its combined investment-style characteristics, although its rank of 3 warrants a measured interpretation. The Zacks Rank can change as analysts revise earnings estimates following the recently reported results.
View the Zacks #1 Rank List
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NESR Q3 Earnings Call Highlights Growth & Recovery Plans
Key Takeaways
National Energy Services Reunited Corp. (NESR - Free Report) emphasized operational resilience, continued investment and opportunities tied to a potential recovery in Middle Eastern energy activity during its third-quarter 2026 earnings call.
Management reaffirmed its multi-year growth strategy despite geopolitical disruptions, highlighting expansion in Saudi Arabia, improving regional opportunities and the commercialization of new technologies. Executives also outlined expectations for stronger fourth-quarter performance and cash generation.
NESR Targets 2026 Revenues of $2B
Chief financial officer Stefan Angeli said that National Energy targets $2 billion in 2026 revenues, supported by expanding operations and recently awarded contracts.
Management expects an adjusted EBITDA margin of 20%, capital expenditure of $220-$225 million and free cash flow conversion of 30-35% of adjusted EBITDA.
During the analyst discussion, UBS questioned the anticipated fourth-quarter acceleration. Executive chairman and CEO Sherif Foda expressed confidence in achieving the annual revenue target, citing secured projects and activity scheduled to increase during the quarter.
National Energy's Regional Operations Withstand Disruptions
Angeli attributed third-quarter revenue growth primarily to the Jafurah contract and increased activity in Kuwait, Oman, Abu Dhabi and Algeria. Revenues reached $504.7 million, increasing 70.9% year over year but declining 3.1% sequentially. Revenues surpassed the Zacks Consensus Estimate of $497.7 million.
Adjusted earnings of $0.38 per share beat the Zacks Consensus Estimate of $0.36.
Geopolitical disruptions affected September activity and operations in Iraq. Incremental freight and logistics expenses totaled $5.5 million, reducing the adjusted EBITDA margin by roughly 110 basis points to 19%. Excluding these costs, margins would have reached 20.1%.
National Energy Services Reunited Price, Consensus and EPS Surprise
National Energy Services Reunited price-consensus-eps-surprise-chart | National Energy Services Reunited Quote
NESR Sees Opportunities in Post-Conflict Recovery
Foda identified two potential growth phases following regional stabilization — restarting suspended production activities and expanding energy infrastructure investments.
During questions from BMO Capital Markets, management explained that intervention, completions and workover services should recover before new drilling activity. NESR's existing equipment and personnel presence positions it to respond to customer requirements.
Responding to Barclays, Foda said that regional upstream spending could remain broadly flat in 2027 under current geopolitical conditions. Nevertheless, he expects NESR to grow through existing projects and market-share gains, with additional opportunities emerging if disruptions ease.
National Energy Advances Jafurah & New Technology Projects
NESR maintained four active hydraulic fracturing fleets at Saudi Arabia's Jafurah development during the quarter. Foda confirmed that a fifth fleet had arrived in Saudi Arabia, although deployment depends on Saudi Aramco's decision.
Management also highlighted opportunities to improve operating efficiency through artificial intelligence applications designed to reduce non-productive time and increase completed fracturing stages.
Beyond conventional oilfield services, National Energy secured a $200-million direct lithium extraction contract. Foda outlined plans to deliver 2,000 tons of lithium by December 2027 and identified a potential $1-billion opportunity for the business over five years.
NESR Focuses on Cash Flow & Financial Flexibility
Angeli acknowledged third-quarter free cash flow of negative $45.9 million, reflecting working capital requirements, delayed collections and investment in inventory buffers.
Management expects stronger fourth-quarter cash generation as collections normalize. National Energy also completed refinancing arrangements providing approximately $747 million in aggregate facilities, strengthening its financing capacity.
The company declared its first quarterly cash dividend of $0.10 per share. Management expects continued quarterly payments, subject to board approval and financial considerations.
National Energy Maintains Multi-Year Growth Ambitions
Foda reaffirmed the company's 3B3 strategy, targeting $3 billion in annual revenues by the end of 2028. Opportunities include additional service contracts, technology commercialization and expansion across existing markets.
Management maintained a confident outlook while acknowledging geopolitical uncertainty, customer pricing pressure and the timing of contract awards. Operational execution and disciplined capital allocation remain central priorities.
What NESR's Zacks Rank & Style Scores Indicate
National Energy currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term outlook under the Zacks ranking framework. Its Value Score of A and Growth Score of A reflect favorable valuation and growth characteristics, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock also holds a Momentum Score of C and a VGM Score of A. The strong composite score highlights its combined investment-style characteristics, although its rank of 3 warrants a measured interpretation. The Zacks Rank can change as analysts revise earnings estimates following the recently reported results.