National Energy Services Reunited Corp. NESR entered the second half of 2026 with a much larger revenue base after the Jafurah ramp-up lifted second-quarter revenues to a record $520.8 million. Revenues increased 28.7% sequentially and 59.1% year over year.
The next test is durability. Jafurah remains the central growth driver, but new awards across Kuwait, the UAE and North Africa are expanding the pipeline while higher capital needs and uneven working-capital timing complicate the cash-flow picture.
NESR’s Jafurah Ramp-Up Reshapes Growth
Four hydraulic fracturing fleets operated throughout the second quarter on the Jafurah contract, making Saudi Arabia the main source of sequential growth. Conventional Saudi operations also expanded, while Oman and Egypt added to the quarter-over-quarter improvement.
The ramp has materially changed NESR’s scale. Management now views $2 billion of revenues as a minimum objective for 2026 after reaching its previously targeted fourth-quarter annualized exit rate two quarters early. Continued year-over-year growth in the third quarter is expected to be supported by Jafurah and recently awarded work.
National Energy Converts Scale Into Profit
Higher activity is translating into stronger profitability. Adjusted EBITDA reached a record $106.2 million in the second quarter, up 50.5% year over year, with a 20.4% margin. Adjusted net income climbed 125.9% to $45.5 million.
Better operating execution, activity efficiencies and cost absorption supported the improvement even as regional disruption added roughly $4 million of freight and logistics costs, or about 80 basis points of margin pressure. Management expects full-year adjusted EBITDA margins to remain broadly in line with 2025.
NESR Broadens Growth Beyond Saudi Arabia
The growth pipeline is becoming less dependent on a single project. Recent Kuwait awards add $300 million of multi-year services and technology work, while awards in the UAE and North Africa are expected to support upcoming revenue growth. The Ahmadi Innovation Valley agreement also gives NESR a framework to move successful technologies into multi-year commercial applications.
That regional opportunity is attracting other major service providers. Halliburton Company HAL received a multi-year Aramco contract for integrated stimulation and completion services tied to Saudi unconventional gas development. SLB SLB also holds a five-year Aramco stimulation-services contract for unconventional gas fields, underscoring the scale of activity around the Kingdom’s gas program.
National Energy Must Fund the Next Expansion
Expansion carries a meaningful funding requirement. NESR, which jumped 155% over the past year, expects 2026 capital expenditures of $210 million to $215 million as it deploys equipment for awarded contracts and its longer-term 3B3 growth strategy. First-half capital spending totaled $110.1 million.
Second-quarter free cash flow was $99.9 million, but about $40 million reflected temporary quarter-end timing in accounts payable and accrued expenses. Normalized free cash flow was roughly $60 million. Inventory also rose as the company secured critical materials, making collections, working-capital normalization and capital discipline important to future cash conversion.
NESR’s Scores Reflect Rising Earnings Momentum
The operating setup supports continued growth, but sustaining record revenue momentum will depend on Jafurah execution, the conversion of new awards into activity and disciplined funding of expansion. Regional logistics costs and working-capital swings remain offsets as NESR scales.
NESR currently carries a Zacks Rank #1 (Strong Buy), with a Growth Score of A, Momentum Score of A and VGM Score of A. Its Value Score is B. The combination points to favorable earnings-revision momentum and growth characteristics, while the Value Score provides a separate view of valuation attributes. These indicators complement the Zacks Rank rather than eliminating execution and cash-conversion risks. You can see the complete list of today’s Zacks #1 Rank stocks here.
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