KLX Energy Services Holdings, Inc. Q3 FY2024 earnings call

• Chris Baker noted strong Q3 results, with revenue of $189 million, adjusted EBITDA $28 million, and 15% adjusted EBITDA margins, outperforming market trends. • Keefer Lehner discussed financial details, segment results, balance sheet, cash flow, and CapEx, including full-year 2024 CapEx expected to be $55-$60 million with 80% for maintenance. • Emphasized geographic diversification, strong customer relationships, and operational execution.

Rocky Mountain segment: Q3 2024 revenue $67.9 million, operating income $9.7 million, adjusted EBITDA $16.6 million, 10.6% sequential revenue increase. Southwest segment: Q3 2024 revenue $68.6 million, operating income $700,000, adjusted EBITDA $8.7 million, 2% sequential revenue decrease. Northeast Mid-Con segment: Q3 2024 revenue $52.4 million, operating income $2 million, adjusted EBITDA $11 million, 7% sequential revenue increase.

• Q4 expected sequential revenue decline of approximately 10%-14%, adjusted EBITDAI margin 9%-13%. • Optimism for 2025 based on customer feedback, potential growth, but vigilant on macro market volatility like geopolitical tensions and commodity price volatility. • Anticipates 2025 revenue to be up 5%-10% minimum, with Q2 and Q3 combined adjusted EBITDA annualized at ~$110 million.

• Macro market volatility, including ongoing geopolitical tensions. • Commodity price volatility. • Corresponding shifts in customer spending patterns.

Q: Steve Ferazani asked about the strength in Northeast Mid-Con and sustainability, and Rockies mix shift.

A: Chris Baker said Northeast Mid-Con revenue up 7% driven by pressure pumping, etc., and Rockies mix shift was due to lower margin product lines but tech services and rentals held in.

Q: Blake McLean asked about D&C efficiency gains, consolidation, and M&A opportunities.

A: Chris Baker discussed D&C efficiency gains and being well-positioned, mentioned being named service provider of choice for a major due to safety and equipment, and talked about approaching M&A deals focusing on strategic fit, synergy value, and aligning with equity for counterparties.