NESR surges on earnings beat, Saudi contract growth
Q4 revenue jumps 36% above estimates as energy services firm cuts debt and expands Jafurah operations
National Energy Services Reunited Corp. shares rose in early trading Tuesday after the Houston-based energy services company reported fourth-quarter earnings that blew past analyst expectations, bolstered by a strategic debt reduction and expanding operations in Saudi Arabia's unconventional gas sector.
The company reported adjusted earnings per share of $0.32, more than doubling the $0.15 consensus estimate, while revenue climbed to $398.3 million compared to the $292.5 million analysts had projected. The results mark a significant turnaround from the same period a year earlier, when revenue declined amid challenging market conditions.
Adjusted EBITDA jumped 32% sequentially to $84.4 million, with margins expanding to 21.2% from 19.4% in the prior quarter. The reported net income of $7.8 million was affected by $24.1 million in discrete charges, though adjusted net income more than doubled sequentially to $31.9 million.
Chief Executive Sherif Foda said the company is "shifting to a totally different gear and scale" and is now "operating from a position of strength" as it executes on its growth strategy. The strong performance comes as NESR has reduced net debt by $90 million year-over-year to $185 million, strengthening its balance sheet ahead of planned expansion.
The earnings beat reflects momentum from a multi-billion dollar, five-year contract with Saudi Aramco for completion services in the Jafurah unconventional gas project, announced in October 2025. The agreement covers the 2025-2026 period and establishes NESR as a key partner in what represents one of the world's largest unconventional gas developments.
NESR has been active in the Jafurah field since 2019, providing large-scale hydraulic fracturing capabilities. The expanded contract scope positions the company to benefit from Saudi Arabia's Vision 2030 initiative, which aims to diversify the kingdom's energy mix and increase natural gas production. The project's scope is expected to expand in line with increased drilling and completion activities to meet ambitious production targets.
Analysts remain broadly positive on the stock heading into Tuesday's results, with a consensus "Buy" rating and a median price target of $21.00. According to current data, four analysts rate NESR a Strong Buy and one recommends Buy, with no Hold, Sell, or Strong Sell ratings. The stock's 52-week range spans $5.20 to $21.60, with Tuesday's session trading between $20.71 and $21.60.
The strong quarterly performance builds on NESR's strategic positioning in the Middle East energy services market. Revenue growth of 34.9% sequentially and 15.9% year-over-year suggests accelerating demand as energy producers in the region ramp up activity following a period of consolidation.
Looking ahead, investors will focus on execution of the Jafurah contract and the company's ability to maintain margin expansion as it scales operations. The debt reduction to $185 million provides flexibility for potential acquisitions or further investment in capacity, factors that could support continued outperformance if operational momentum persists through 2026.