Q4 2025 National Energy Services Reunited Corp Earnings Call

February 17, 2026

Speaker #1: Greetings. Welcome to National Energy Services Reunited Corp., fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

Operator: Greetings. Welcome to NESR Reports Q4 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to Blake Gendron, Vice President of Investor Relations. Thank you. You may begin.

Speaker #1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Blake Gendron, Vice President of Investor Relations.

Speaker #1: Thank you. You may begin.

Speaker #2: Thank you, Sherri. Hello and welcome to National Energy Services Reunited Corp.'s fourth quarter 2025 earnings call. With me today are Sherif Foda, Chairman and Chief Executive Officer of NESR, and Stefan Angeli, Chief Financial Officer.

Blake Gendron: Thank you, Sherif. Hello, and welcome to NESR's Q4 2025 earnings call. With me today are Sherif Foda, Chairman and Chief Executive Officer of NESR, and Stefan Angeli, Chief Financial Officer. On today's call, we will comment on our Q4 results and overall performance. After our prepared remarks, we will open up the call to questions. Before we begin, I'd like to remind our participants that some of the statements we'll be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I therefore refer you to our latest earnings release, filed earlier today and other SEC filings. Our comments today may also include non-GAAP financial measures. Additional details on reconciliations to the most directly comparable GAAP financial measures can be found in our press release, which is on our website.

Speaker #2: On today's call, we will comment on our fourth-quarter results and overall performance. After our prepared remarks, we will open up the call to questions.

Speaker #2: Before we begin, I’d like to remind our participants that some of the statements we’ll be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements.

Speaker #2: I therefore refer you to our latest earnings release filed earlier today and other SEC filings. Our comments today may also include non-GAAP financial measures.

Speaker #2: Additional details on reconciliation to the most directly comparable GAAP financial measures can be found in our press release, which is on our website. Finally, feel free to contact us after the call with any additional questions you may have.

Blake Gendron: Finally, feel free to contact us after the call with any additional questions you may have. Our investor relations contact information is available on our website. Now, I'll hand the call over to Sherif.

Speaker #2: Our investor relations contact information is available on our website. Now, I'll hand the call over to Sherif.

Speaker #3: Thanks, Blake. Ladies and gentlemen, good morning, and thank you for participating in this conference call. I'm pleased to report that we ended a tremendous 2025 with even stronger-than-expected results in the fourth quarter.

Sherif Foda: Thanks, Blake. Ladies and gentlemen, good morning, and thank you for participating in this conference call. I'm pleased to report that we ended a tremendous 2025 with even stronger than expected results in Q4. Most importantly, we safely and efficiently kicked off the largest unconventional frac program in sector history, effectively managed our cost, and achieved yet another record high for revenue and free cash flow. These results are a testament to our hardworking teams in the field, their dedication, and commitment. Thanks to our customers for their trust and unwavering support in the entire region. Reaching this stage of company growth was NESR's original national champion vision, and we now have our sights set on even much greater heights. On today's call, I'll start with an update on the Middle East macro and activity ties to key mega trends related to global energy, technology, and geopolitics.

Speaker #3: Most importantly, we safely and efficiently kicked off the largest unconventional frack program in sector history, effectively managed our costs, and achieved yet another record high for revenue and free cash flow.

Speaker #3: These results are a testament to our hard-working teams in the field, their dedication, and commitment. Thanks to our customers for their trust and unwavering support in the entire region.

Speaker #3: Reaching this stage of company growth was Nestlé's original national champion vision. And we now have our sights set on even much greater heights. On today's call, I'll start with an update on the Middle East macro, an activity tied to key megatrends related to global energy, technology, and geopolitics.

Speaker #3: Alongside the macro, I'll go into Nestlé's specific drivers by country, to outline key takeaways from an extremely busy industry conference season to start the year.

Sherif Foda: Alongside the macro, I'll go into NESR-specific drivers by country to outline key takeaways from an extremely busy industry conference season to start the year. This will hopefully clarify the ample growth runway that we have beyond our original $2 billion target. First, the macro. As previously discussed, overall, we see a baseline of steady activity growth across the MENA region, driven by oil capacity expansion and strategic domestic gas development. Additionally, what changed is the increased appetite of the IOC to enter into various MoU and exploration awards that are unprecedented in some countries like Iraq, Algeria, Libya, Kuwait, and even Syria. Countries like Kuwait continue to lead with robust investment programs, but perhaps the most notable aspect of the current cycle is that every single one of our anchor countries is either growing steadily or is stable at all-time high.

Speaker #3: This will hopefully clarify the ample growth runway that we have beyond our original $2 billion target. First, the macro. As previously discussed, overall we see a baseline of steady activity growth across the MENA region.

Speaker #3: Driven by oil capacity expansion and strategic domestic gas development. Additionally, what has changed is the increased appetite of the IOC to enter into various MOUs and exploration awards that are unprecedented in some countries, like Iraq, Algeria, Libya, Kuwait, and even Syria.

Speaker #3: Countries like Kuwait continue to lead with robust investment programs, but perhaps the most notable aspect of the current cycle is that every single one of our anchor countries is either growing steadily or is stable at all-time highs.

Speaker #3: Considering the negative consensus view around global growth and commodity prices, these trends are a stark reminder that there is truly a solid floor of activity on which the MENA service sector can continue to build, with any upside to the macro or commodity outlook.

Sherif Foda: Considering the negative consensus view around global growth and commodity prices, these trends are a stark reminder that there is truly a solid floor of activity on which the MENA service sector can continue to build with any upside to the macro or commodity outlook. There is no other region in the world like this one. For persistent upstream growth, capacity expansion, and strategic gas development, MENA trends are largely decoupled from oil and gas prices, and NESR is taking full advantage of it. Talking about Kuwait in more details, we recently conducted our board meeting following the impressive, successful COGS, Oil and Gas Show in Kuwait City. Our goal was to demonstrate our commitment to the highest level in the country, show our board firsthand the super cycle that is now entering its second year, in addition to the unique opportunities for NESR.

Speaker #3: There is no other region in the world like this one. For persistent upstream growth, capacity expansion, and strategic gas development, MENA trends are largely decoupled from oil and gas prices, and Nestlé is taking full advantage of it.

Speaker #3: Talking about Kuwait in more detail, we recently conducted our board meeting following the impressive, successful COGS Oil and Gas Show in Kuwait City. Our goal was to demonstrate our commitment to the highest level in the country, show our board firsthand the super cycle that is now entering its second year, and highlight the unique opportunities for Nestlé.

Speaker #3: As you recall, we started in Kuwait from nothing just a few years ago, and it will soon become our second largest country behind Saudi.

Sherif Foda: As you recall, we started in Kuwait from nothing just a few years ago, and it will soon become our second largest country behind Saudi. During COGS, country leadership reiterated their commitment of $8 to 10 billion per year in upstream spending through 2030, to expand oil capacity by an additional 1 million barrel to a total of 4 million barrel per day by 2035. Not only does this lock in continued growth for years to come, but also implies an even higher activity trajectory than previously anticipated. Additionally, for the first time, as publicly announced, His Highness, the Prime Minister, presided over several agreement and MOU signing during COGS with IOC, the likes of Total, BP, Shell, and several other international companies.

Speaker #3: During COGS, country leadership reiterated their commitment of $8 to $10 billion per year in upstream spending through 2030, to expand oil capacity by an additional 1 million barrels to a total of 4 million barrels per day by 2035.

Speaker #3: Not only does this lock in continued growth for years to come, but also implies an even higher activity trajectory than previously anticipated. Additionally, for the first time, as publicly announced, His Highness the Prime Minister presided over several agreements and MOUs signing during COGS with IOC.

Speaker #3: The likes of Total, BP, Shell, and several other international companies. The programming encompassed both oil and gas, spanned land and offshore, and will truly launch an activity renaissance in a country that has already achieved impressive levels of growth over the past year.

Sherif Foda: The program encompass both oil and gas, span land and offshore, and will truly launch an activity renaissance in a country that has already achieved impressive level of growth over the past year. For NESR, there is a huge upside in Kuwait. With all of our recent in-country investment, high-level engagement with customer and leadership, and with a proven track record of operational scale and open technology development, the evolution NESR Kuwait over the coming years will dovetail perfectly with the transformation of the Kuwait energy sector. We previously announced our Ahmadi Innovation Valley, or AIV initiative, which will give NESR first ever access to technology development in Kuwait. This project will supplement and enhance our core services, which are growing on the back of recent contract wins and upcoming tenders, and will also drive new frontier in the areas of decarbonization, water, and critical minerals.

Speaker #3: For Nestlé, there is a huge upside in Kuwait. With all of our recent in-country investment, high-level engagement with customers and leadership, and with a proven track record of operational scale and open technology development.

Speaker #3: The evolution Nestlé Kuwait over the coming years will dovetail perfectly with the transformation of the Kuwait energy sector. We previously announced our Ahmadi Innovation Valley, or AIV, initiative, which will give Nestlé first-ever access to technology development in Kuwait.

Speaker #3: These projects will supplement and enhance our core services, which are growing on the back of recent contract wins and upcoming tenders, and will also drive new frontiers in the areas of decarbonization, water, and critical minerals.

Speaker #3: Considering all of the plans, partnerships, and ambitious announcements at COGS, our leadership in AIV could not be more perfectly timed. In Abu Dhabi, activity continues to march above all-time highs.

Sherif Foda: Considering all of the plans and partnership and ambitions announced at COGS, our leadership in AIV could not be more perfectly timed. In Abu Dhabi, activity continues to march at above all-time high. As publicly announced, in late 2025, ADNOC approved a sweeping $150 billion oil and gas investment plan for the 2026 to 2030 time frame, which should keep the growth trajectory intact for years to come. North Africa remains a key growth pillar, led by a surge of activity in Libya, which headlined its recent summit in Tripoli with dual announcement with ConocoPhillips and Total. This collaboration captured $20 billion in investment over 25 years. An unprecedented commitment, not just in terms of magnitude, but also longevity, as country leadership has truly embraced foreign investment into its world-renowned resource base.

Speaker #3: As publicly announced, in late '25, ADNOC approved a sweeping $150 billion oil and gas investment plan for the 2026–2030 timeframe, which should keep the growth trajectory intact for years to come.

Speaker #3: North Africa remains a key growth pillar, led by a surge of activity in Libya, which headlined its recent summit in Tripoli with dual announcements with ConocoPhillips and Total. These collaborations captured $20 billion in investment over 25 years.

Speaker #3: An unprecedented commitment, not just in terms of magnitude, but also longevity, as country leadership has truly embraced foreign investment into its world-renowned resource base.

Speaker #3: Additional blockbuster deals from Libya last week are the new exploration block awards to Chevron, Repsol, Mall, among others. While activity over the past year has already increased political cohesion in Libya, its highly successful bid round provides a roadmap to increase oil capacity from 1.4 million barrels per day today to 1.6 million by year-end, and 2 million by 2030.

Sherif Foda: Additional blockbuster deals from Libya last week are the new exploration block awards to Chevron, Repsol, MOL, among others. While activity over the past year has already increased political cohesion in Libya, and its highly successful bid round provide a roadmap to increase oil capacity from 1.4 million barrels per day today to 1.6 million by year-end and 2 million by 2030. Libya is yet another core NESR country that is planning over the multi-year horizon. Based on our recent meeting with Libya, NOC, and country leadership, NESR will play a key role in this visionary capacity expansion. Elsewhere in the region, we see stable, good activity levels in Algeria, Oman, Iraq, and Egypt. We see some strategic discussion that could supercharge the NESR story, primarily through new contract wins and an improving oil outlook over the medium term.

Speaker #3: Libya is yet another core Nestlé country that is planning over the multi-year horizon. Based on our recent meeting with Libya NOC and country leadership, Nestlé will play a key role in this visionary capacity expansion.

Speaker #3: Elsewhere in the region, we see stable, good activity levels in Algeria, Oman, Iraq, and Egypt. We see some strategic discussions that could supercharge the Nestlé story, primarily through new contract wins and an improving oil outlook over the medium term.

Speaker #3: Unsurprisingly, we've been as busy with recent tendering as we've been on the industry conference circuit. And no doubt, there is a connection between the two.

Sherif Foda: Unsurprisingly, we've been as busy with recent tendering as we've been on the industry conference circuit, and no doubt there is connection between the two. Adding up the budgetary commitment from our four largest GCC countries implies nearly $300 billion in general upstream spending through 2030. While not all of that budget is pure services, it's worth noting that the budget only captured a portion of our anchor countries and does not include the wave of IOC spending that is coming with the shifting geopolitical landscape. Beyond Jafurah, there is still a multi-billion tender opportunity for NESR, result from which could be announced soon. We are very excited and optimistic about NESR's position in these tenders, and our nimble operating model has proven effective in the face of fierce tender competition.

Speaker #3: Adding up the budgetary commitment from our four largest GCC countries implies nearly $300 billion in general upstream spending through 2030. While not all of that budget is pure services, it's worth noting that the budget only captured a portion of our anchor countries and does not include the wave of IOC spending that is coming with the shifting geopolitical landscape.

Speaker #3: Beyond Jafura, there is still a multi-billion-dollar opportunity for Nestlé, results from which could be announced soon. We are very excited and optimistic about Nestlé's position in these tenders.

Speaker #3: And our nimble operating model has proven effective in the face of fierce tender competition. These potential awards will keep NESR's growth engine running far beyond the timeframe that most investors view our stock or sector.

Sherif Foda: This potential award will keep NESR growth engine running far beyond the timeframe that most investors view our stock or sector. To conclude, and before passing on to Stefan, I'd like to discuss what is the most anticipated topic of this call, which of course is the startup of Jafurah Frac project. As previously discussed, we initiated operation on time in early November and have worked seamlessly with our highly supportive Aramco partners to ramp operations safely and effectively. HSE and service quality remain our top priority in everything we do, and especially in ramping a project with such a massive scale as Jafurah. All of our careful organization and planning of supply chain, logistic effort, which go all the way back to our initial frack in 2019, are paying off, and we are delivering stages as planned.

Speaker #3: To conclude, and before passing on to Stefan, I'd like to discuss what is the most anticipated topic of this call, which, of course, is the startup of the Jafura Frack Project.

Speaker #3: As previously discussed, we initiated operations on time in early November and have worked seamlessly with our highly supportive Aramco partners to ramp operations safely and effectively.

Speaker #3: HSE and service quality remain our top priority in everything we do, and especially in ramping a project with such a massive scale as Jafura.

Speaker #3: All of our careful organization and planning of supply chain logistic efforts, which go all the way back to our initial frack in 2019, are paying off.

Speaker #3: And we are delivering stages as planned. Cost control across both procurement and operations is evident in the fourth-quarter result. And there is much more optimization to achieve.

Sherif Foda: Cost control across both recruitment and operation is evident in the Q4 result, and there is much more optimization to achieve. Our entire process, from securing suppliers, hiring crews, moving materials, implementing the best technology from the US shale, maintaining best-in-class uptime and pumping hours, is on plan, even as we triple and aim to quadruple the footprint. Aramco is truly on another leadership level for world-class unconventional development, and we look forward to updating the market on future achievement in the quarters to come. With that, let me pass the call to Stefan to discuss our equally exciting result on the finance front.

Speaker #3: Our entire process, from securing suppliers, hiring crews, moving material, implementing the best technology from the US shale, maintaining best-in-class uptime, and pumping hours is on plan.

Speaker #3: Even as we triple and aim to quadruple the footprint. Aramco is truly on another leadership level for world-class unconventional development. And we look forward to updating the market on future achievements in the quarters to come.

Speaker #3: With that, let me pass the call to Stefan to discuss our equally exciting result on the finance front.

Speaker #2: Thank you, Sherif. Good morning to those joining us from the United States and good afternoon or good evening to our participants across the Middle East, North Africa, Asia, and Europe.

Stefan Angeli: Thank you, Sherif. Good morning to those joining us from the United States, and good afternoon or good evening to our participants across the Middle East, North Africa, Asia, and Europe. We appreciate you taking the time to be with us today. I'm extremely pleased to provide an update on our financial results for the Q4 and full year ended December 31, 2025, and to share our perspectives on the outlook for 2026. Let's start with our Q4 2025 performance. Our Q4 revenue was $398.3 million, an all-time high, representing an increase of 34.9% sequentially and 15.9% year-over-year. Sequential growth was driven primarily by the mobilization of the new Jafurah contract beginning November 1, along with strong activity increase in North Africa.

Speaker #2: We appreciate you taking the time to be with us today. I'm extremely pleased to provide an update on our financial results for the fourth quarter and full year ended December 31, 2025, and to share our perspectives on the outlook for 2026.

Speaker #2: Let's start with our fourth quarter 2025 performance. Our fourth quarter revenue was $398.3 million, an all-time high, representing an increase of 34.9% sequentially and 15.9% year over year.

Speaker #2: Sequential growth was driven primarily by the mobilization of the new Jafura contract beginning November 1, along with strong activity increasing in North Africa. On a year-over-year basis, revenue growth was supported by higher activity levels in Saudi Arabia, Kuwait, Iraq, Egypt, and Libya.

Stefan Angeli: On a year-over-year basis, revenue growth was supported by higher activity levels in Saudi Arabia, Kuwait, Iraq, Egypt, and Libya. Adjusted EBITDA for Q4 2025 was $84.4 million, representing a margin of 21.2%, broadly in line with the Q3 levels, despite higher revenues generated from competitively priced contract wins. Margins remained stable due to strong cost discipline, improved operational execution across our portfolio, and the continued benefit of our lean overhead structure. Adjusted EBITDA for Q4 includes $24.1 million of total charges and credits impacting adjusted EBITDA, primarily related to four items: one, $7.1 million of current expected credit loss provisions, primarily in Oman, which the company still feels confident that it will collect.

Speaker #2: Adjusted EBITDA for the fourth quarter of 2025 was $84.4 million, representing a margin of 21.2%. This was broadly in line with third quarter levels, despite higher revenues generated from competitively priced contract wins.

Speaker #2: Margins remain stable due to strong cost discipline, improved operational execution across our portfolio, and the continued benefit of our lean overhead structure. Adjusted EBITDA for the fourth quarter includes $24.1 million of total charges and credits, impacting adjusted EBITDA.

Speaker #2: Primarily related to four items. One, $7.1 million of current expected credit loss provisions, primarily in Oman, which the company still feels confident that it will collect.

Speaker #2: Two, 8.1 million of impairment charges, related to two small legacy technology investments, impacted by global change in market focus on ESG in the last year.

Stefan Angeli: 2, $8.1 million of impairment charges related to two small legacy technology investments impacted by global change in market focus on ESG in the last year. 3, $4.7 million of contract mobilization-related restructuring costs, all related to our recent contract win and the deployment of that contract in Oman. 4, $3.7 million of other write-offs, with $3.1 million related to property, plant, and equipment, particularly a provision recorded for a construction in-process prepayment in Saudi Arabia following a vendor bankruptcy. To reemphasize, these adjustments are predominantly one-time items, and we fully expect, going forward, charges and credits to be minimal. We do not expect any material contract mobilization-related restructuring costs in 2026. Interest expense for Q4 of 2025 was $7.5 million, while income tax expense was $7.2 million.

Speaker #2: Three, $4.7 million of contract mobilization-related restructuring cost, all related to our recent contract win and the deployment of that contract in Oman. Four, $3.7 million of other write-offs, with $3.1 million related to property, plant, and equipment, particularly a provision recorded for a construction-in-process prepayment in Saudi Arabia, following a vendor bankruptcy.

Speaker #2: To re-emphasize, these adjustments are predominantly one-time items, and we fully expect, going forward, charges and credits to be minimal. We do not expect any material contract mobilization-related restructuring costs in 2026.

Speaker #2: Interest expense for the fourth quarter of 2025 was $7.5 million, while income tax expense was $7.2 million. Adjusted diluted earnings per share for the fourth quarter of 2025 was $0.32.

Stefan Angeli: Adjusted diluted earnings per share for Q4 2025 was $0.32. Full year 2025 revenue totaled $1.324 billion, up 1.7% year-over-year. Growth was supported by higher activity levels across Kuwait, Iraq, Abu Dhabi, Libya, Egypt, and Algeria, partially offset by lower rig counts and contract transition in Saudi Arabia. Full year 2025 Adjusted EBITDA was $281.4 million, with margins of 21.3%, down approximately 250 basis points year-over-year, driven by country and segment mix, in addition to certain contract transitions. Full year 2025 interest expense was $32.5 million, down $7.4 million year-over-year, reflecting lower average debt levels.

Speaker #2: Full year 2025 revenue totaled $1.324 billion, up 1.7% year over year. Growth was supported by higher activity levels across Kuwait, Iraq, Abu Dhabi, Libya, Egypt, and Algeria.

Speaker #2: Partially offset by lower rig counts and contract transition in Saudi Arabia. Full year 2025 adjusted EBITDA was $281.4 million, with margins of 21.3%. Down approximately 250 basis points year over year, driven by country and segment mix, in addition to certain contract transitions.

Speaker #2: Full year '25 interest expense was $32.5 million, down $7.4 million year over year, reflecting lower average debt levels. Full year '25 income tax expense was $9.3 million, or $18.4 million as adjusted for a one-time tax provision release in Q3 '25.

Stefan Angeli: Full year 2025 income tax expense was $9.3 million or $18.4 million, as adjusted for a one-time tax provision release in Q3 2025. Adjusted diluted earnings per share for the full year of 2025 was $0.81. Turning to cash flow and liquidity, which continues to be one of the clearest strengths of our model. Fourth quarter operating cash flow and free cash flow were exceptionally strong, driven by record fourth quarter collections and our lowest year-end DSO ever, reflecting disciplined working capital management across the organization. In line with our countercyclical investment strategy, we proactively deployed capital towards recent contract awards, accelerating operational ramp-up and rapidly positioning the business for the next phase of growth.

Speaker #2: Adjusted diluted earnings per share for the full year of '25 was $0.81. Turning to cash flow and liquidity, which continues to be one of the clearest strengths of our model.

Speaker #2: Fourth-quarter operating cash flow and free cash flow were exceptionally strong, driven by record fourth-quarter collections and our lowest year-end DSO ever—reflecting discipline and working capital management across the organization.

Speaker #2: In line with our countercyclical investment strategy, we proactively deployed capital towards recent contract awards. Accelerating operational ramp-up and rapidly positioning the business for the next phase of growth.

Speaker #2: For the full year 2025, cash flow from operations totaled $264.2 million, and free cash flow was $120.8 million, representing approximately 43% conversion from adjusted EBITDA.

Stefan Angeli: For full year 2025, cash flow from operations totaled $264.2 million, and free cash flow was $120.8 million, representing approximately 43% conversion from adjusted EBITDA, a level that underscores the quality of our earnings and the scalability of our platform. Total 2025 capital expenditures, including both cash and vendor-financed amounts, were $150.9 million, fully aligned with our previously communicated plans. Importantly, for the third consecutive year, the majority of our free cash flow was directed towards reducing bank debt, further strengthening our balance sheet and positioning the company for its next phase of growth. As of December 31, 2025, gross debt totaled $310 million, and net debt was $185.3 million.

Speaker #2: A level that underscores the quality of our earnings and the scalability of our platform. Total 25 capital expenditures, including both cash and vendor-financed amounts, were $150.9 million, fully aligned with our previously communicated plans.

Speaker #2: Importantly, for the third consecutive year, the majority of our free cash flow was directed towards reducing bank debt, further strengthening our balance sheet and positioning the company for its next phase of growth.

Speaker #2: As of December 31, 25, gross debt totaled 310 million, and net debt was 185.3 million. Our net debt to adjusted EBITDA ratio stood at 0.66, well below our target threshold of one-times.

Stefan Angeli: Our net debt to Adjusted EBITDA ratio stood at 0.66, well below our target threshold of 1x. On a trailing twelve-month basis, return on capital employed, or ROCE, was 10.2%, reflecting continued disciplined execution of our growth investment strategy and improving capital efficiency. Now looking ahead. For Q1 2026, we expect more muted seasonality than previous years due to the continued ramp of recent contract awards and resilient growth in places like Kuwait and North Africa, mainly offsetting the impact of Ramadan falling completely in the first quarter. Similarly, margins are always the weakest in Q1, then are expected to increase sequentially through the balance of the year on robust top-line growth and operating leverage. Overall, this year should be our best growth year ever, exceeding any previous indication.

Speaker #2: On a trailing 12-month basis, return on capital employed, or ROCE, was 10.2%, reflecting continued disciplined execution of our growth investment strategy and improving capital efficiency.

Speaker #2: Now, looking ahead. For the first quarter of 2026, we expect more muted seasonality than previous years, due to the continued ramp of recent contract awards and resilient growth in places like Kuwait and North Africa, mainly offsetting the impact of Ramadan falling completely in the first quarter.

Speaker #2: Similarly, margins are always the weakest in the first quarter, then are expected to increase sequentially through the balance of the year on robust top-line growth and operating leverage.

Speaker #2: Overall, this year should be our best growth year ever, exceeding any previous indication. As we highlighted last quarter, we continue to see a path to exit in '26 at an annualized revenue run rate of approximately $2 billion, underpinned by our growing contract portfolio and consistent operational delivery.

Stefan Angeli: As we highlighted last quarter, we continue to see a path to exiting 2026 at an annualized revenue run rate of approximately $2 billion, underpinned by our growing contract portfolio and consistent operational delivery. Full year 2026 EBITDA margins are expected to remain broadly consistent with 2025, supported by disciplined execution and cost control. As mentioned, we expect gradual sequential improvement in margins over the course of the year. For Q1 2026, interest expense is expected to be approximately $7.5 million, with full year 2026 interest, interest expense in the $22 million range. We continue to expect full year effective tax rate in the 22.5% range, consistent with prior levels. For the full year 2026, we expect capital expenditures of approximately $165 million, consistent with the expanding growth outlook we've outlined and supported by strong pipeline of recently awarded contracts.

Speaker #2: Full year 26 EBITDA margins are expected to remain broadly consistent with 25, supported by disciplined execution and cost control. As mentioned, we expect gradual sequential improvement in margins over the course of the year.

Speaker #2: For Q1 26, interest expense is expected to be approximately 7.5 million, with full year 26 interest expense in the 22 million dollar range. We continue expecting full year effective tax rate in the 22.5% range, consistent with prior levels.

Speaker #2: For the full year '26, we expect capital expenditures of approximately $165 million, consistent with the expanding growth outlook we've outlined and supported by a strong pipeline of recently awarded contracts.

Speaker #2: While our customers appreciate our standout countercyclical growth investment, it's worth noting to our shareholders that our CAPEX as a percentage of revenue will be down on a year-over-year basis.

Stefan Angeli: While our customers appreciate our standout countercyclical growth investment, it's worth noting to our shareholders that our CapEx as a percentage of revenue will be down on a year-over-year basis. We expect cash flow from operations in 2026 to remain strong. As a result, free cash flow for the full year 2026 is projected to comprise approximately 35 to 40% conversion from adjusted EBITDA, representing sector-leading free cash flow growth. Now on to housekeeping topics. As you can see, the company has entered a new phase of growth. Our contract base is strong, our balance sheet is solid, leverage remains low, and cash flow generation continues to be robust. As we highlighted on our previous call, we expect to provide an update on our formal capital allocation and shareholder return framework during our next earnings call.

Speaker #2: We expect cash flow from operations in ’26 to remain strong. As a result, free cash flow for the full year 2026 is projected to comprise approximately 35 to 40% conversion from adjusted EBITDA, representing sector-leading free cash flow growth.

Speaker #2: Now, on to housekeeping topics. As you can see, the company has entered a new phase of growth. Our contract base is strong, our balance sheet is solid, leverage remains low, and cash flow generation continues to be robust.

Speaker #2: As we highlighted on our previous call, we expected to provide—we're expecting to provide—an update on our formal capital allocation and shareholder return framework during our next earnings call.

Speaker #2: The outlook across the Middle East and North Africa remains constructive. We expect the region to lead the next wave of activity growth, underpinned by continued investment in oil capacity and accelerating gas development across our core markets.

Stefan Angeli: The outlook across the Middle East and North Africa remains constructive. We expect the region to lead the next wave of activity, activity growth, underpinned by continued investment in oil capacity and accelerating gas development across our core markets. NESR remains disciplined and focused on driving profitable growth, strengthening operational execution, expanding our technology capabilities, reducing leverage, and optimizing working capital, all of which position the company to deliver sustainable long-term value. On behalf of management, I want to sincerely thank our employees for their commitment and exceptional performance in delivering these results and advancing our strategic priorities. I also extend our prior appreciation to our shareholders and banking partners for their ongoing confidence in our strategy and execution. NESR is entering 2026 from a position of strength, supported by strong operational momentum, a growing contract base, and significant market opportunities ahead.

Speaker #2: NESA remains disciplined and focused on driving profitable growth, strengthening operational execution, expanding our technology capabilities, reducing leverage, and optimizing working capital—all of which position the company to deliver sustainable, long-term value.

Speaker #2: On behalf of management, I want to sincerely thank our employees for their commitment and exceptional performance in delivering these results and advancing our strategic priorities.

Speaker #2: I also extend our appreciation to our shareholders and banking partners for their ongoing confidence in our strategy and execution. NESA is entering 2026 from a position of strength, supported by strong operational momentum, a growing contract base, and significant market opportunities ahead.

Speaker #2: Now, I turn the call back to Sherif.

Stefan Angeli: Now I turn the call back to Sherif.

Speaker #1: Thanks, Stefan. Let me conclude. The fourth quarter represents a significant milestone for the company. Not just in terms of hitting ambitious growth targets, but also improving that we can do so profitably and with strong cash flow generation.

Sherif Foda: Thanks, Stefan. Let me conclude. The fourth quarter represents a significant milestone for the company, not just in terms of hitting ambitious growth targets, but also in proving that we can do so profitably and with strong cash flow generation. For NESR, growth, returns, and cash flow are not an either/or, but an all of the above feature of our strategic model that investors are increasingly recognizing. Which is why earlier this year, we updated and rolled out our internal strategy to double the size of the company over the next couple of years. Jafurah and our existing business are not a ceiling, but rather a foundation upon which to win more, commercialize new technologies, and evaluate strategic opportunities to enhance our regional position in MENA. This strategic flexibility starts with the unmatched quality of the MENA region and our customers.

Speaker #1: For NESA, growth, returns, and cash flow are not an either/or, but an all-of-the-above feature of our strategic model that investors are increasingly recognizing. Which is why, earlier this year, we updated and rolled out our internal strategy to double the size of the company over the next couple of years.

Speaker #1: Jafura and our existing business are not a ceiling, but rather a foundation, upon which to win more, commercialize new technologies, and evaluate strategic opportunities to enhance our regional position in MENA.

Speaker #1: This strategic flexibility starts with the unmatched quality of the MENA region and our customers. The Middle East represents the lowest-cost hydrocarbon production, and its re-establishment as the swing producer in oil combined with secular growth tailwinds in gas and the renewed entry of IOC gives the current cycle multi-year durability.

Sherif Foda: The Middle East represents the lowest cost hydrocarbon production, and its reestablishment as the swing producer in oil, combined with secular growth tailwinds in gas, and the renewed entry of IOC, give the current cycle multi-year durability. In our view, the first step to maximizing shareholder value is to align our strategy and countercyclical investment with this multi-year view of our NOC and IOC customers. We appreciate our long-term shareholders for their patience in letting this story play out... and we welcome all of the newcomers that recognize the multiyear runway in front of us. With that, we are ready to take your questions. Sherry, please open the floor for your questions.

Speaker #1: In our view, the first step to maximizing shareholder value is to align our strategy and countercyclical investment with this multi-year view of our NOC and IOC customers.

Speaker #1: We appreciate our long-term shareholders for their patience in letting this story play out, and we welcome all of the newcomers that recognize the multi-year runway in front of us.

Speaker #1: With that, we are ready to take your question, Sherri, please open the floor for your question.

Speaker #2: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue, and for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from David Anderson with Barclays. Please proceed.

Speaker #2: You may press star two if you would like to remove your question from the queue, and for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #2: Our first question is from David Anderson with Barclays. Please proceed.

Speaker #3: Thank you. Good morning. Nice to hear another good quarter here, Sherif. I really want to ask you about your foreign—kind of where we are today.

J. David Anderson: Thank you. Good morning. Nice to hear another good quarter here, Sherif. I really want to ask you about Jubail and kind of where we are today. Obviously, it's the sort of setting the stage going forward. But in terms of Jubail, I think you've talked about getting to about 500,000 horsepower of pressure pumping equipment there. Where are we today in that? And can you kind of walk us through kind of how you kind of get to kind of a full steady state of getting to that kind of $2 billion a year run rate? What needs to get there? Kind of where are we today in terms of the ramp-up at Jubail?

David Anderson: Thank you. Good morning. Nice to hear another good quarter here, Sherif. I really want to ask you about Jubail and kind of where we are today. Obviously, it's the sort of setting the stage going forward. But in terms of Jubail, I think you've talked about getting to about 500,000 horsepower of pressure pumping equipment there. Where are we today in that? And can you kind of walk us through kind of how you kind of get to kind of a full steady state of getting to that kind of $2 billion a year run rate? What needs to get there? Kind of where are we today in terms of the ramp-up at Jubail?

Speaker #3: Obviously, this is sort of setting the stage going forward. But in terms of Jafura, I think you've talked about getting to about 500,000 horsepower pressure pumping equipment there.

Speaker #3: Where are we today in that, and can you kind of walk us through kind of how you kind of get to kind of a full steady state of getting to that kind of $2 billion a year run rate?

Speaker #3: What needs to get there? Kind of where are we today in terms of the ramp-up at Jafura?

Speaker #4: Thanks, Dave. So we already, as we try to explain, we started on time, November 1st. We had the first fleet, second fleet, third fleet.

Sherif Foda: Thanks, Dave. So we already, as we tried to explain, we started on time. 1 November, we had the first fleet, second fleet, third fleet, and as we are ramping up, in very close coordination with our customer for additional, one or two fleet, depending on their program. But what we said before, we are the countercyclical style. We buy equipment ahead of what they need, right? So whenever they need something, or if Aramco decides to add more fleets or to add more stages, we are ready. So if I answer your question more directly, I would say, by Q2, I think we would be in that kind of steady state, and then we might add another fleet in Q3, Q4, and the run rate for our stages per quarter should be seen very clearly in Q3.

Speaker #4: And as we are ramping up, in very close coordination with our customer, for additional one or two fleets, depending on their program. But what we said before, we are the countercyclical style.

Speaker #4: We buy equipment ahead of what they need, right? So whenever they need something, or if Aramco decides to add more fleets or to add more stages, we are ready.

Speaker #4: So if I answer your question more directly, I would say by Q2, I think we would be in that kind of steady state, and then we might add another fleet in Q3, Q4.

Speaker #4: And the run rate for our stages per quarter should be seen very clearly in Q3.

Speaker #3: So I was just curious about some of the supply chain concerns you see here. And maybe you just answered the question of just sort of staying in front of the customer, of what they need, but that was one of the keys to you unlocking Jafura initially, was sort of solving some of these supply chain concerns.

J. David Anderson: So I was just curious about some of the supply chain concerns you see here. Maybe you just answered the question of just sort of staying in front of the customer of what they need, but that was one of the keys to you unlocking Jubail initially was sort of solving some of these supply chain concerns. What are some of the things that you're really focused on right now, and kind of how do you navigate those?

David Anderson: So I was just curious about some of the supply chain concerns you see here. Maybe you just answered the question of just sort of staying in front of the customer of what they need, but that was one of the keys to you unlocking Jubail initially was sort of solving some of these supply chain concerns. What are some of the things that you're really focused on right now, and kind of how do you navigate those?

Speaker #3: What are some of the things that you're really focused on right now, and kind of how do you navigate those?

Speaker #4: Okay. I mean, obviously, without giving away some of the competitive stuff, right? But we planned it from the very early beginning to ensure that we have local sand, adequate supplies of trees, plugs, etc., etc.

Sherif Foda: Okay. I mean, obviously, I mean, without giving away some of the competitive stuff, right? But, we planned it from very early beginning to ensure that we have local sand, adequate supplies of, you know, trees, plugs, et cetera, et cetera, wireline, perforation, et cetera. So all this, we aligned with partners, with people here from the US, some people locally, and we ensured that we play what we call frac on paper, that all this is ready on time and without any block, if you like, on logistics or anything to be delivered on time. So all this is basically solved, and that's why I keep saying it, it's just we are at Aramco, our client, whenever they ask for additional stuff, we just require a couple of weeks to be ready.

Speaker #4: Wireline, perforation, etc. So all this we aligned with partners, with people here from the US, some people locally, and we ensured that we play what we call 'frack on paper,' that all this is ready on time.

Speaker #4: And without any block, if you like, on logistics or anything to be delivered on time. So all this is basically solved, and that's why I keep saying it's just we are at Aramco, our client.

Speaker #4: Whenever they ask for additional stuff, we just require a couple of weeks to be ready. And that's how ready we are with all our partners.

Sherif Foda: And that's how ready we are with all our partners and, and obviously with the cost control, so everybody play ball with, with that strategy that, you know, this is the, the new paradigm. There is a lot of stages to be executed, and everybody is aligned with us. So, I think I'm trying not to give away any of the competitive advantage as I can, but, we solved all the issues of any kind of blockade from, you know, tariffs, supply chain, logistics, whatever. And that's why we feel very confident that we will be able to deliver the stages that Aramco wants with the same profitability that we, we have in Q4.

Speaker #4: And, obviously, with the cost control, so everybody plays ball with that strategy—that this is the new paradigm. There are a lot of stages to be executed, and everybody is aligned with us.

Speaker #4: So, I think I'm trying not to give away any of the competitive advantage as I can, but we solved all the issues of any kind of blockade from tariffs, supply chain, logistics, whatever.

Speaker #4: And that's why we feel very confident that we will be able to deliver the stages that Aramco wants with the same profitability that we had in Q4.

Speaker #3: It sounds like staying in front of the customer is really crucial here—kind of one of the steps. If I could just squeeze in one last question: you talked about your sites are on much higher activity levels.

J. David Anderson: It sounds like staying in front of the customer is really crucial here, kind of one of the steps. If I could just squeeze in one last question. You talked about your sites are on much higher activity levels. You talked about moving beyond the $2 billion target. Could you just expand a little bit more on that, of maybe kind of the key areas where you think it's gonna feed into that greater than $2 billion number? You mentioned a number of tenders coming out in Saudi. I'm sure that's part of it. I know Kuwait, but if you could just sort of expand a little bit more on kind of your medium-term targets and your medium-term outlook, please. Thank you, Sherif.

David Anderson: It sounds like staying in front of the customer is really crucial here, kind of one of the steps. If I could just squeeze in one last question. You talked about your sites are on much higher activity levels. You talked about moving beyond the $2 billion target. Could you just expand a little bit more on that, of maybe kind of the key areas where you think it's gonna feed into that greater than $2 billion number? You mentioned a number of tenders coming out in Saudi. I'm sure that's part of it. I know Kuwait, but if you could just sort of expand a little bit more on kind of your medium-term targets and your medium-term outlook, please. Thank you, Sherif.

Speaker #3: You talked about moving beyond the $2 billion target. Could you just expand a little bit more on that—of maybe kind of the key areas where you think there's going to feed into that greater than $2 billion number?

Speaker #3: You mentioned a number of tenders coming out in Saudi. I'm sure that's part of it. I know Kuwait. But if you could just sort of expand a little bit more on your medium-term targets and your medium-term outlook, please.

Speaker #3: Thank you, Sharif.

Speaker #4: Thank you, sir. So, obviously, if I go back to people that are following the story from the beginning, we had originally said our target is to become $2 billion revenue, and we're very happy with that.

Sherif Foda: Thank you, sir. So obviously, if I, if I go back to people that are following the story from the beginning, we had originally said our target is to become $2 billion revenue, and we're very happy with that. Obviously, now it's done, so you cannot have a target that is like, next, you know, very simple to achieve. So we looked at all the backlog, the contracts, where we want to be, the investment profile, and we see very easily we can double the company from where it is today in a couple of years. So, with the contract that we have tendering today, we tender, you know, almost $2-3 billion of tenders across the region. Most of it is submitted. Now we are waiting for the results from the customer.

Speaker #4: Obviously, now it's done. So, you cannot have a target that is, like, next—very simple to achieve. So we looked at all the backlog, the contracts, where we want to be, the investment profile, and we see very easily we can double the company from where it is today in a couple of years.

Speaker #4: So with the contracts that we have tendering, today we tender almost $2, $3 billion of tenders. Across the region, most of it is submitted now.

Speaker #4: We are waiting for the results from the customer. The majority of it is, I would say, outside Saudi—the lion's share. So all this, when you don't have the business, then it becomes additional to us.

Sherif Foda: The majority of it is, I would say, outside Saudi, the lion's share. So all this, when you don't have the business, then it becomes additional to us. If, if you have the contract and you are continuing, that's basically what we call must-have, which is basically you continue to have the same backlog that you have. And the additional work, which is the majority of the tenders that we bid for, is we are waiting on the results. And, as I said, I'm extremely optimistic that we're gonna win more than our fair share, and that's gonna make sure that we're gonna reach the double the company size in a couple of years.

Speaker #4: If you have the contract and you are continuing, that's basically what we call must-have, which is basically you continue to have the same backlog that you have.

Speaker #4: And the additional work, which is the majority of the tenders that we bid for, is—we are waiting on the results. And as I said, I'm extremely optimistic that we're going to win more than our fair share.

Speaker #4: And that's going to make sure that we're going to reach double the company size in a couple of years.

Speaker #3: Appreciate it. Thank you, Sharif.

Saurabh Pant: Appreciate it. Thank you, Sherif.

Speaker #1: Our next question is from Surabhant with Bank of America. Please proceed.

Operator: Our next question is from Saurabh Pant with Bank of America. Please proceed.

Speaker #5: Hi. Good morning, Sharif and Stefan.

Saurabh Pant: Hi, good morning, guys, Sherif and Stefan.

Speaker #4: Good morning.

Sherif Foda: Good morning.

Saurabh Pant: Just a quick follow-up, Sherif, if you don't mind, on Jafurah, like, like Dave was asking. I think in your prepared remarks, you were talking about much more optimization to be achieved. I know you can't disclose everything that you're doing, but to the extent you can, Sherif, just maybe talk to what you are doing as the project ramps up. Where are those incremental efficiencies, optimization gonna come from, and how should we think about just the margin profile on Jafurah as it fully ramps up, normalizes relative to the rest of your business? Just some color on that.

Speaker #5: Just a quick follow-up, Sharif, if you don't mind, on Jafura. Dave was asking, I think, in your prepared remarks, you were talking about much more optimization to be achieved.

Speaker #5: I know you can't disclose everything that you're doing, but to the extent you can, Sherif, just maybe talk to what you are doing as the project ramps up. Where are those incremental efficiencies and optimization going to come from, and how should we think about just the margin profile on Jafura?

Speaker #5: Is it fully ramped up, normalized, relative to the rest of your business? Just some color on that.

Speaker #3: Thanks. So look, I mean, if you look at the evolution, the best example I think for people to understand is the Permian and the U.S. shale, and what happened on some of the cost initiatives, and some happened as well with some of the technology advancement.

Sherif Foda: Thanks. So, look, I mean, if you look at the evolution of the best example, I think, for people to understand is the Permian and the US Shale, and what happened on some of the cost initiative and some happened with, well, with some of the technology advancement. So today, we have a lot of that already in country, but we know that there are more to be done. I'm trying to answer without, again, giving away a lot of what we are doing, for more-

Speaker #3: So today, we have a lot of that already in country, but we know that there are more to be done. I'm trying to answer without, again, giving away a lot of what we are doing for my competitive edge.

Saurabh Pant: Right

Sherif Foda: ... competitive edge. But we believe that we can do more stages per day, and we believe as well we can optimize some of what I call the rig up, some of the perforation, some of the trees, some of the between stages, et cetera, et cetera. And if we do that, that means that you can get another 20% efficiency, and which is basically will definitely have an impact on our margins, right? So what we want to have, what I call a cruise control mechanism on that Jafurah, where you have this huge infrastructure today, we are building our new base in SPARK, and this will have a lot of bells and whistles. I don't wanna get with buzzwords, but we're gonna have a lot of AI into the maintenance, into the reliability, changing engines.

Speaker #3: But we believe that we can do more stages, per day, and we believe as well we can optimize some of what I call the rig up, some of the perforation, some of the trees, some of the between stages, etc., etc.

Speaker #3: And if we do that, that means that you can get another 20% efficiency which is basically will definitely have an impact on our margins, right?

Speaker #3: So what we want to have at what I call a cruise control mechanism on that Jafura well, you have this huge infrastructure today. We are building our new base in Spark, and this will have a lot of bells and whistles.

Speaker #3: I don't want to get with buzzwords, but we're going to have a lot of AI into the maintenance, into the reliability, changing engines, once you have that scale and you know you are going to do 80 to 100,000 stages over five years, and you have inside the Jafura in the facility itself that state-of-the-art facility, all our partners as well, we're going to host them into that facility.

Sherif Foda: You know, once you have that scale and you know you are gonna do 80 to 100,000 stages over 5 years, and you have inside the Jafurah, in the facility itself, that state-of-the-art facility. All our partners as well, we're gonna host them into that facility. And that basically gives, you know, and if you are in the US and you know that you have a 3, 4 years contract, you can develop some of the leading reliability and efficiency and maintenance to ensure that you can shave some of these cost items. And if you do that, eventually it will come to your margin. So we are at the beginning of that journey. I think we will have our facility ready by Q3.

Speaker #3: And that basically gives if you are in the US and you know that you have a three, four years contract, you can develop some of the leading reliability and efficiency and maintenance to ensure that you can shave some of this cost items.

Speaker #3: And if you do that, eventually, it will come to your margins. So we are at the beginning of that journey. I think we will have our facility ready by Q3.

Speaker #3: And once we have our full fleets running all the time, then you start to have this cruise control, and that will eventually do the margins as well.

Sherif Foda: Once we have our full fleets running all the time, then you start to have this cruise control, and that will eventually do the margins as well.

Speaker #5: Interesting. Okay. No, Sherif, thank you for that. And then the second one for me, Sherif, is on the Kuwait side of things. I know you talked about that in your prepared remarks, and COGS—it looks like it was a great success for the industry as a whole.

Saurabh Pant: Interesting. Okay. No, Sherif, so thank you for that. And then, the second one for me, Sherif, is on the Kuwait side of things. I know you talked about that in your prepared remarks, and COGS, it looks like, was a great success for the industry as a whole. Of the $8 to 10 billion upstream spending that you mentioned, obviously, is the official target. How critical is that? I know this was a country that was pretty small for you. You just entered the country, but now it's set to become the second largest. How quickly can Kuwait ramp up for NESR in particular? And then the tenders we are talking about, what's the line of sight to those being awarded, and how quickly can that move the needle for NESR?

Speaker #5: The 8 to 10 billion upstream spending that you mentioned, obviously, is the official target. How critical is that? I know this was a country that was pretty small for you.

Speaker #5: You just entered the country, but now it's said to become the second largest. How quickly can Kuwait ramp up for necessary in particular? And then the tenders we are talking about, what's the line of sight to those being awarded?

Speaker #5: And how quickly can that move the needle for NASA?

Speaker #3: So the spend is already done, right? I mean, this is something that the leadership in KPC and KOC announced, and they are doing it.

Sherif Foda: So the spend is already done, right? I mean, this is something that is the leadership in KPC and KOC announced, and they are doing it. I mean, it's- there is no more wait and see. The rigs are there. We are above 200 rigs in Kuwait today, and the activity is running. Now, for us, why it's so exciting, because our scale. We were nothing. We are okay now, but we can easily double the size of our business in Kuwait. Now, the key in Kuwait, you need to win contracts because you cannot work-

Speaker #3: I mean, there is no more wait and see. The rigs are there. We are above 200 rigs in Kuwait today, and the activity is running.

Speaker #3: Now, for us, why it's so exciting? Because our scale. We were nothing we are okay now. But we can easily double the size of our business in Kuwait.

Speaker #3: Now, the key in Kuwait, you need to win contracts because you cannot work without contracts. So we won already a couple of contracts that we announced.

Saurabh Pant: Sure.

Sherif Foda: - without contracts. So, we won already a couple of contracts that we announced. We tendered, and we are waiting for the results to be announced, and we are re-tendering another two. Everything will be awarded this year. So some of it-

Speaker #3: We tendered and we are waiting for the results to be announced. And we are tendering another two. Everything will be awarded this year. So some of it will be awarded in, I would say, end of Q1.

Saurabh Pant: Okay.

Sherif Foda: will be awarded in, I would say, end of Q1, some will be in Q2, and some will be Q3. So everything will be known in 2026, and this contract will be for 5 to 7 years. So as soon as you have the contract, and again, depending on how fast you mobilize, and you know our style, we got... Well, I keep calling it countercyclical, meaning that we kind of prepare equipment before we know if we feel that we're gonna win, so that therefore, we don't have to wait 6 to 8 months to mobilize. We mobilize in much faster timeframe.

Speaker #3: Some will be in Q2, and some will be Q3. So everything will be known in 2026. And these contracts will be for five to seven years.

Speaker #3: So as soon as you have the contract and again, depending on how fast you mobilize, and you know our style, we well, I keep calling it countercyclical, meaning that we kind of prepare equipment before we know if we feel that we're going to win.

Speaker #3: So therefore, we don't have to wait six to eight months to mobilize. We mobilize in much faster timeframe.

Speaker #5: Right. Right. Okay. So it sounds like it's going to be a key part of your doubling ambition, right? Which makes sense. Okay, Sherif, I will stay tuned on that.

Saurabh Pant: Right. Right. Okay, so it sounds like it's gonna be a key part of your doubling ambition, right? Which makes sense. Okay, Sherif, I will stay tuned on that. Thank you. Thank you very much.

Speaker #5: Thank you. Thank you very much.

Speaker #3: Thanks.

Sherif Foda: Thanks.

Speaker #1: Our next question is from Josh Silverstein with UBS. Please proceed.

Operator: Our next question is from Josh Silverstein with UBS. Please proceed.

Speaker #4: Yeah, thanks. Good morning, everybody. It's clear there's a lot of growth potential for any of our operations across the region. Can you talk about what level of investments you might need to make to support these higher activity levels?

Josh Silverstein: ... Yeah, yeah, thanks. Good morning, everybody. It's clear there's a lot of growth potential for NESR across the region. Can you talk about what level of investments you might need to make to support these higher activity levels? You mentioned what the CapEx would be this year, but does this have to keep ramping going forward? Are there new technologies you have to develop? And maybe how do acquisitions play into the strategy? Thanks.

Speaker #4: You mentioned what the CapEx would be this year, but does this have to keep ramping going forward? Are there new technologies you have to develop?

Speaker #4: And maybe, how do acquisitions play into the strategy? Thanks.

Speaker #3: So look, I mean, CapEx, as we planned it, is—we have, as Stefan mentioned in detail, a $150–180 million CapEx timeframe. So that's what we plan.

Sherif Foda: So look, I mean, CapEx, as we planned it, is we have, as Stefan mentioned, detailed $150 to $180 million CapEx timeframe. So that's what we plan, and I think we're gonna be within that range over the next couple of years, right? So if we win, like, you know, much more than what we even think we're gonna win, we might get this to $200 million, let's say, right? So we're very confident that the growth story, we can fuel it with the taking full advantage of what's happening in the world, right?

Speaker #3: And I think we're going to be within that range over the next couple of years, right? So if we win much more than what we even think we're going to win, we might get this to $200 million, let's say, right?

Speaker #3: So we're very confident that the growth story we can fuel it with taking full advantage of what's happening in the world, right? So as we did with the FRAC, you can buy equipment at much lower price.

Sherif Foda: So as we did with the frack, you can buy equipment at much lower price, you can ship the stuff, we capitalize on our local presence and making sure that we have the lowest cost equipment and supplies. On the other part of your question?

Speaker #3: You can ship the stuff. We can capitalize on our local presence and make sure that we have the lowest cost equipment and supplies.

Speaker #3: On the other part of your question, the small investment, this is key. And I think what we do in our philosophy since we formed the company is we have the partnership with well-established companies.

Stefan Angeli: The small investment.

Sherif Foda: The small investment. That is key. And I think what we do and our philosophy since we formed the company is we have the partnership with well-established companies, and we have the VC style, which is basically an equivalent to our, let's say, our R&D, right? So the way we like to do it is we look at all the technology that exists, and to start up with very bright and brilliant people, and we become a shareholder. We take place on the board. Sometimes we direct how to invest and how to do things, and then we commercialize those equipment or those tools, right?

Speaker #3: And we have the VC style, which is basically an equivalent to our let's say, our R&D, right? So the way we like to do it is we look at all the technology that exists and the startup with a very bright and brilliant people.

Speaker #3: And we become a shareholder. We take place on the board. We sometimes we direct how to invest and how to do things. And then we commercialize those equipment or those tools, right?

Speaker #3: So part of our doubling the company, I think, is mainly contract wins. It's to get to the 3 billion dollar kind of target. Ambition.

Sherif Foda: So part of our doubling the company, I think, is mainly contract wins, is to get to, like, the $3 billion kind of target, ambition. Then definitely, like, the ROUYA platform has to work, which is our directional drilling. Our NEDA portfolio, which is a lot of the decarbonization, has to work. We have to unlock it, we have to get some big projects. And all this is something that we are worked very hardly on. And, as soon as we commercialize, we're gonna announce that. And definitely, the pie, if you get a piece of the pie, it's huge. And directional drilling today is $2 billion. We have almost nothing. So if you get a piece of that, that adds to your growth story.

Speaker #3: Then definitely the ROIA platform has to work, which is our direction drilling. Our NetApp portfolio, which is a lot of the decarbonization, has to work.

Speaker #3: We have to unlock it. We have to get some big projects. And all this is something that we are working very hard on. And as soon as we commercialize, we're going to announce that.

Speaker #3: And definitely the pie if you get a piece of the pie, it's huge. And direction drilling today is 2 billion dollar. We are we have almost nothing.

Speaker #3: So if you get a piece of that, that adds to your growth story.

Speaker #4: Yeah, got it. Thanks for that. And then I know you provide some additional balance sheet details in the next quarter, but clearly Net Debt continues to be worked out and out below $200 million.

Josh Silverstein: Yeah, got it. Thanks for that. And then I know you provide some additional balance sheet details in the next quarter, but, look, clearly, net debt continues to be worked down and now below $200 million. What, what's the, the right level of, of leverage for, for the company? And, you know, as you're potentially thinking about maybe a shift in some free cash flow allocation to shareholder returns, thoughts on, on preference of, of buybacks versus dividends. Thanks.

Speaker #4: What's the right level of leverage for the company? And as you're potentially thinking about maybe a shift in some free cash flow allocation to shareholder returns, thoughts on preference of buybacks versus dividends?

Speaker #4: Thanks.

Speaker #3: So our stated goal is one. So I would say, from our perspective, having one or less is probably the right leverage, right? Right now, we're way below the one, right?

Stefan Angeli: So, our stated goal is 1. So I would, from our perspective, having 1 or less is probably the right leverage, right? Right now, we're way, we're way below the 1, right? We said last quarter, we're doing a plan right now to work out what the best, best returns are for shareholder, and we'll announce it next quarter, but everything's on the table, right? Dividends, stock buybacks, et cetera, et cetera, right? But we'll announce this formally next quarter in the earnings call.

Speaker #3: We said last quarter that we're doing a plan right now to work out what the best returns are for shareholders. And we'll announce it next quarter.

Speaker #3: But everything's on the table, right? Dividends, stock buybacks, etc., etc., right? But we'll announce this formally next quarter in the earnings call.

Speaker #1: Our next question is from Derek Patheser with Piper Sandler. Please proceed.

Operator: Our next question is from Derek Podhaizer with Piper Sandler. Please proceed.

Speaker #5: Hey. Good morning. Appreciate all the details, which are for obviously very exciting. But maybe Sharif, if you take some time to provide some color just around the state of the union in Saudi, maybe outside of G4, just more of your legacy business, maybe some of the growth drivers there, or the return to work that we've been hearing from a lot of your peers over the last couple of weeks, just maybe some thoughts and color around how we can think about the shape of 2026 in Saudi, ex-G4.

Derek Podhaizer: Hey, good morning. Appreciate all the details, which are for obviously very exciting. But maybe, Sherif, take some, some time to provide some color just around the state of the industry in Saudi, maybe outside of Jafurah, just more of your legacy business, maybe some of the growth drivers there, or the return to work that we've been hearing from a lot of your peers over the last couple of weeks. Just maybe some thoughts and, and color around how we can think about the shape of 2026 in Saudi, ex-Jafurah.

Speaker #3: Yeah, I mean, I think the commentary from our friends and our partners, or our competitors—if you like, our peers—is all spot on, right?

Sherif Foda: Yeah, I mean, I think the commentary from our friends and our partners or our competitors, if you like, our peers, is all spot on, right? So, Saudi is ramping up activity, so whatever the trough was Q4 2025, and now the Aramco is adding rigs. All the... I'm sure you read this from all the rig contractors. There is a lot of bidding and activity is ramping up. And we will take our share, basically, based on that market share. So, I think the Aramco is gonna definitely provide some more color and maybe their earnings. But at the end of the day, rigs are ramping up, rigs are coming back.

Speaker #3: So Saudi, it's ramping up activity. So whatever the trough was Q4, 25, and now the Aramco is adding rigs. The I'm sure you read this from all the rig contractors.

Speaker #3: There is a lot of bidding. And activity is ramping up. And we will take our share basically based on that market share. So I think the Aramco is going to definitely provide some more color and maybe their earning.

Speaker #3: But at the end of the day, rigs are ramping up. Rigs are coming back. There is anyway between people talking about from 40 to 60 rigs in 2026.

Sherif Foda: There is anywhere between people talking about from 40 to 60 rigs in 2026, and it's something that, obviously, our clients will decide how and when to do that. The rig availability is there, so I don't think there is a problem with people activating rigs. It's all gonna be timing from Aramco's side. And then, obviously, there is a huge tender backlog on what we call LSTK, lump sum turn key, that Aramco is doing. So that takes part as well on that growth story because there is bigger scope for that in the coming cycle in 2026. So we as people, I'm sure a lot of people understand Saudi well. We, you have multi-service companies, and multi-contract and multi-segment.

Speaker #3: And it's something that obviously our client will decide how and when to do that. The rig availability is there, so I don't think there is a problem with people activating rigs.

Speaker #3: It's all going to be timing for Aramco side. And then obviously, there is a huge tender backlog on what we call LSDK, lump sum turnkey.

Speaker #3: That Aramco is doing. So that takes part as well on that growth story because there is bigger scope for that in the coming cycle on the 26th.

Speaker #3: So we as people, I'm sure a lot of people understand Saudi well. You have a multi-service companies and multi-contract and multi-segment. So let's say if you are in cementing, and your market share is 10%, they add another five rigs.

Sherif Foda: So let's say, if you are in cementing and your market share is 10%, they add another 5 rigs, you're expecting to get the same 10% on the additional rigs. You might get less, you might get more, depending on your quality and your price, but that's more or less what it is. So we are forecasting the same market growth that whatever, rig count increase will happen.

Speaker #3: You're expecting to get the same 10% on the additional rigs. You might get less. You might get more depending on your quality and your price.

Speaker #3: But that's more or less what it is. So, we are forecasting the same market growth that whatever rig count increase will happen.

Speaker #5: Great. Very helpful. Appreciate that. And then maybe Stefan Swebi for you, but somebody put a finer point on the 1Q guidance and maybe the margin progression.

Derek Podhaizer: Great, very helpful. Appreciate that. And then maybe Stefan, this might be for you, but so I'm gonna put a finer point on the Q1 guidance and maybe the margin progression through the year. You talked about more muted seasonality. First quarter margins would represent a bottom and then work higher for the remainder of the year. Sounded like equaling similar year-over-year. But if you could help put some guardrails around that, how we should think about the sequential contraction and then how we should think about the progression upwards as we move through the year.

Speaker #5: Through the year, you talked about more muted seasonality first quarter, margins would represent a bottom. And then work higher for the remainder of the year.

Speaker #5: Sounded like, equally, similar year over year. But if you can help put some guardrails around that, how should we think about the sequential contraction?

Speaker #5: And then how we should think about the progression upwards as we move through the year?

Stefan Angeli: So we don't actually give formal guidance, right? But we've given a lot of directions, as you've seen, today, right? The Q4 to Q1 revenue decrease due to the normal seasonality, it'll just be smaller. We use the word muted, but smaller than the usual amounts, right? And probably smaller than what our peers said in their calls, right? So that's where we stand on Q1, right? And then we said that the full year margin, full year margins for us in 2026 will be similar to 2025, and it will just start at the lower level in Q1 and work its way up to a higher level at the end of the year.

Speaker #3: So we don't actually give formal guidance, right? But we've given a lot of directions, as you've seen today, right? The Q4 to Q1 revenue decrease due to the normal seasonality will just be smaller we use the word muted, but smaller than the usual amount, right?

Speaker #3: And probably smaller than what our peers said in their calls, right? So that's where we stand on Q1, right? And then we said that the full-year margins for us in '26 will be similar to '25.

Speaker #3: And it will just start at the lower level in Q1 and work its way up to a higher level at the end of the year.

Speaker #3: So if we were 21.3% for the full year, it'll probably be a percentage of so lower at the start and a percentage or so higher at the end.

Stefan Angeli: So if we were 21.3%, for the full year, it'll probably be a percentage or so lower at the start and a percentage or so higher at the end.

Speaker #5: Perfect. Great. Appreciate the color. I'll turn it back.

Derek Podhaizer: Perfect. Great. Appreciate the color. I'll turn it back.

Speaker #1: Our next question is from Sharif Al-Maghabi with BTIG. Please proceed.

Operator: Our next question is from Sherif Elmaghrabi with BTIG. Please proceed.

Speaker #4: Hey. Good morning. Thanks for taking my questions. So I think we've talked a lot about Saudi and Kuwait. So maybe a couple of questions on the rest of the market.

Sherif Elmaghrabi: Hey, good morning. Thanks for taking my questions. So I think we've talked a lot about Saudi and Kuwait, so maybe a couple of questions on the rest of the market. There was not even $5 million of mobilization costs in Oman. Historically, that's one of your core countries. So I'm wondering if you're moving equipment out of the country and how you see opportunities there versus some of its neighbors.

Speaker #4: There was not even 5 million of mobilization costs in Amman. Historically, that's one of your core countries. So I'm wondering if you're moving equipment out of the country and how you see opportunities there versus some of its neighbors.

Speaker #3: Okay. You're talking about the structure cost. So, without obviously going into—this is a contract we won, which we never had. At the beginning of that contract, there was some legacy—the previous owner or the previous contract holder of that contract had some, due to what I call the legality or system in Amman. You had to carry over that, take it over.

Sherif Foda: Okay, you're talking about the structure cost.

Sherif Elmaghrabi: Yes.

Sherif Foda: So, without obviously going to... This is a contract we won, which we never had. At the beginning of that contract, there was some legacy, the previous owner or the previous contract holder of that contract had some, due to the, what I call the legality or, system in Oman, you had to carry over that, take it over. It was part of the condition, and then basically the stuff, most of it, you cannot use. So we just took a one-time write-off of all the stuff. So it is not really, that's the majority of the cost, but the equipment, everything had to be taken from outside because that was a scope we never had.

Speaker #3: It was part of the condition. And then, basically, most of the stuff you cannot use. So we just took a one-time write-off of all the stuff.

Speaker #3: So, it is not really that that's the majority of the cost. But the equipment—everything—had to be taken from outside, because that was a scope we never had.

Speaker #3: So it's a scope of business or a segment we never had in Amman, or even—and the company that we bought, the original company, Gulf Energy, in Amman never had that contract either, right?

Sherif Foda: So it's a scope of business or a segment we never had in Oman. And the company that we bought, the original company, the Gulf Energy in Oman, never had that contract either, right? So this is something if you look back and this company started in 1996, so, or 2006, sorry, then this is something brand new for us. So this is a one time, and that's it.

Speaker #3: So this is something if you look back and this company started in 1996. So or 2006, sorry. Then it is something brand new for us.

Speaker #3: So this is a one-time and that's it.

Speaker #4: Got it. And then you also mentioned Syria, which was different. Are there any markets outside of that existing footprint that we could see the company tender into this year, or even over the next few years?

Sherif Elmaghrabi: Got it. And then, you, you also mentioned Syria, which was different. Any markets outside of the existing footprint that we could see the company tender into this year or even over the next few years?

Speaker #3: Yeah. Syria, I think you all saw the announcement with Chevron and other people. And the Saudis. So, something we monitor very closely. We are invited to go.

Sherif Foda: Yeah, Syria, I think you all saw the announcement with the Chevron and other people and the Saudis. So, something we monitor very closely. We are invited to go, some of us, obviously, again, we pride ourselves of being regional champion or national champion. So we know Syria. We have more than 75 Syrian people working with us in different countries. So we are today in discussion with the leadership, and as soon as we feel it is secure from payment and how we are going to set up, I think it's gonna set up first with some revitalization of Deir ez-Zor, which was originally, people they might know that it used to produce 500 to 600,000 barrels per day.

Speaker #3: Some of us obviously, again, we pride ourselves of being regional champion or national champion. So we know Syria. We have more than 75 Syrian people working with us in different countries.

Speaker #3: So, we are today in discussion with the leadership. And as soon as we feel it is secure from payment, and how we are going to set up, I think it's going to set up first with some revitalization of their resort, which was originally people that might know that.

Speaker #3: It used to produce 500 to 600 thousand ballots per day. Today is less than 100,000. And usually, like Libya, all the when you start in a country where it had some production but due to geopolitics, war, damages, etc., the start is kind of easy, meaning usually you go and to this kind of brown fields, you fix the wells, you have workover, cold tubing, slick line.

Sherif Foda: Today, it's less than 100,000. And usually, like Libya, all the when you start in a country where it had some production, but due to geopolitics, war, damages, et cetera, the start is kind of easy. Meaning, usually you go and to with this kind brown fields, you fix the wells, you have work over, coiled tubing, slickline, and try to fix the wells to try to get them back to produce. A lot of it is like a stolen cable, damaged wellhead. So depending on the scope, we will start. It's not something in our forecast, but it's something that definitely will be very good for us. And again, we know the country, we know the place, the sanction is lifted, so definitely we will be with, like, our peers entering Syria.

Speaker #3: And try to fix the wells to try to get them back to produce. A lot of it is like a stolen cable, damaged wellhead.

Speaker #3: So depending on the scope, we will start. And it's not something in our forecast, but it's something that definitely will be a very good for us.

Speaker #3: And again, we know the country. We know the place. The sanction is lifted. So definitely, we will be with our peers entering Syria. Libya is very exciting.

Sherif Foda: Libya is very exciting. I mentioned it. Again, it's all public news. They signed with Total, they signed the $25 billion. The bid round last week was announced. The very stellar IOCs all signed the new EPSA or the new PSA agreement, which means there will be a lot of influx of Libya. I was there myself for a week with the minister, the NOC chairman, et cetera, and there is a huge plan, and we are part of that plan. We are revitalizing our base. We have a frack fleet already there. We are doing a lot of work, and we, you know, for us to triple the company or the size of NESR, Libya, is not a big deal, right?

Speaker #3: I mentioned it. Again, it's all public news. They signed with Total. They signed a 25 billion. The bid round last week was announced. Very stellar IOCs, all signed the new EPSA or the new PSA agreement, which means there will be a lot of influx of Libya.

Speaker #3: I was there myself for a week, with the minister, the NOC chairman, etc. And there is a huge plant, and we are part of that plan.

Speaker #3: We are revitalizing our base. We have a frac fleet already there. We are doing a lot of work. And for us to triple the company or the size of Nasrin Libya is not a big deal, right?

Speaker #3: So, it is something that we are planning to do, and very close with the leadership there to ensure that we can get to the 2 million barrel, which is their target.

Sherif Foda: So it is something that we are planning to do, and very close with the leadership there to ensure that we can get to the 2 million barrel, which is their target. If you add all this, you know, each one has the capacity expansion. And I think that's part of something that people don't sometimes understand in the US. It is not they are doing this because they're gonna produce this tomorrow, but they need to be ready with that capacity, so whenever it's needed, they can open and produce that. So Libya is not in the OPEC quota, so they are exonerated from it, so which means that they are going to go full on to try to get to the 2 million barrel.

Speaker #3: If you add all this, each one has the capacity expansion. And I think that's part of something that people don't sometimes understand in the US.

Speaker #3: It is not they are doing this because they're going to produce this tomorrow. But they need to be ready with that capacity. So whenever it's needed, they can open and produce that.

Speaker #3: So Libya is not in the OPEC quota. So they are exonerated from it. So which means that they are going to go full on to try to get to the 2 million barrel.

Speaker #4: That's great. Thanks, Sharif.

Sherif Elmaghrabi: That's great. Thanks, Sherif.

Speaker #1: Our next question is from Tate Sullivan with Maxim Group. Please proceed.

Operator: Our next question is from Tate Sullivan with Maxim Group. Please proceed.

Speaker #5: Hi. Thank you. Just a bigger picture question for Saudi Arabia. The capital market authority recently eased restrictions on foreign investment. What are the pros and cons of this change for your business, please?

Tate Sullivan: Hi, thank you. Just a bigger picture question for Saudi Arabia. The Capital Market Authority recently eased restrictions on foreign investment. What are the pros and cons of this change for your business, please?

Speaker #3: Well, absolutely nothing. I would say we are not on the Saudi Tadawul today. So the people that trade over our stock, they trade it on the Nasdaq.

Sherif Foda: Well, absolutely nothing. I would say, we are not on the Saudi Tadawul today, so the people that trade with our stock, they trade it, you know, on the Nasdaq, obviously. It opens up for a lot of the Saudi companies that you have, a lot of foreigners that would love to buy into the market there. The market is extremely, well, versatile in Saudi. A lot of people want to participate on Tadawul. A lot of people want to buy into the Saudi companies easily, and definitely, as people see, the leadership in Saudi is like on another level on professionalism and scale, and they more and more invite a lot of people. You see BlackRock is always there.

Speaker #3: Obviously, it opens up for a lot of the Saudi companies, and you have a lot of foreigners that would love to buy into the market there.

Speaker #3: The market is extremely well versatile in Saudi. A lot of people want to participate on Tadawul. A lot of people want to buy into the Saudi companies easily.

Speaker #3: And definitely, as people see, the leadership in Saudi is on another level on professionalism and scale. And they more and more invite a lot of people.

Speaker #3: You see BlackRock is always there. You see their FII. They're going to have an FII in Miami. In March. So I mean, it's just a very open culture and structure with a lot of investment outside.

Sherif Foda: You see their FII. They're gonna have an FII in Miami in March. So, I mean, it's just a very open culture and structure with a lot of investment outside. So for us, it's, I would say there is no difference, but we are extremely happy with our position in Saudi, and I think it's gonna be more and more stronger and better.

Speaker #3: So for us, it's I would say there is no difference. But we are extremely happy with our position in Saudi. And I think it's going to be more and more stronger and better.

Speaker #5: Thank you. And then the last one for me is, you did, in your prepared remarks—I heard you mention critical minerals, and there’s a lot of news out of Saudi Arabia and their area about developing critical minerals.

Tate Sullivan: Thank you. And then last one for me is that you did in your prepared remarks, I heard you mention critical minerals in a lot of news out of Saudi Arabia and their area about developing critical minerals. Do you have opportunities in that sector? Can you expand from OFS to that sector? Can you comment on that a little bit, please?

Speaker #5: Do you have opportunities in that sector? Can you expand from OFS to that sector? Can you comment on that for a bit, please?

Speaker #3: Thanks. We are already in it. So our NEDA, which is our decarbonization and application—for example, during the Future Minerals Forum, and with His Royal Highness in January—we were very proud that the lithium that was put on display was Nasr lithium.

Sherif Foda: Thanks. We are already in it. So our NEDA, which is our decarbonization and application. So, and during the Future Mineral Forum in, by His Royal Highness in January, we were very proud that the lithium that was put on the display was a NESR lithium. So the first lithium that was out was ours. So, we're very happy that we were part of the pilot. So today, we run 2 pilots with Aramco, and we run more. We have plans to do more stuff on the bromine, magnesium, et cetera. Between Aramco and Ma'aden, which is the mega mineral company in, in Saudi, there is a lot of things going on.

Speaker #3: So the first lithium that was out was ours. So we're very happy that we were part of the pilot. So today, we run two pilots with Aramco and we run more we have plans to do more stuff on the bromine, magnesium, etc.

Speaker #3: Between Aramco and Ma’aden, which is the mega mineral company in Saudi, there is a lot of things going on. They announced this publicly. So I always go with every public thing they announce.

Sherif Foda: They announced this publicly, so I always go whatever publicly they announce, and we are very happy to take part of that journey. It's one of the pillars of the company since four years now. I am personally very excited about it. Obviously, ESG is taking kind of a backseat. However, the mineral part is extremely exciting, and as you mentioned, Saudi announced a huge ambition on lithium, critical minerals, and they do this with from aquifer and from produced water. So we are part of both. We have our water strategy that is working on the on the produced water. So just imagine if you get the produced water and you are able to extract not only water, but you extract all the minerals from it.

Speaker #3: And we are very happy to take part of that journey. It's one of the pillars of the company since four years now. I am personally very excited about it.

Speaker #3: Obviously, ESG is taking kind of a backseat. However, the mineral part is extremely exciting. And as you mentioned, Saudi announced a huge ambition on lithium, critical minerals, and they do this from Aquifer and from produced water.

Speaker #3: So, we are part of both. We have our water strategy that is working on the produced water. So just imagine if you get the produced water and you are able to extract not only water, but you extract all the minerals from it.

Speaker #3: It pays off from a lot of the energy that you need to produce that water. So it's a three birds with one stone, actually, right?

Sherif Foda: It pays off from a lot of the energy that you need to produce that water. So it's a three birds with one stone, actually, right? So, super excited about it. And again, first mover in, with, in that, business. So, I still believe that this is gonna be a huge part of our business going forward.

Speaker #3: So super excited about it. And again, first mover in with that business. So I still believe that this is going to be a huge part of our business going forward.

Speaker #5: Thank you very much.

Tate Sullivan: Thank you very much.

Speaker #1: As a reminder, this is Star One on your telephone keypad. If you would like to ask a question, our next question is from Jeff Robertson with Water Tower Research.

Operator: As a reminder, it is star one on your telephone keypad, if you would like to ask a question. Our next question is from Jeff Robertson with Water Tower Research. Please proceed.

Speaker #1: Please proceed.

Speaker #6: Thank you. Good morning. Sherif, can you share any color on the margin profile of the pipeline tender that you referenced? I think you said you have about $2 to $3 billion worth of tenders outstanding.

Jeff Robertson: Thank you. Good morning. Sherif, can you share any color on the margin profile of the pipeline tender that you referenced? I think you said you have about $2 to 3 billion worth of tenders outstanding.

Speaker #3: We don’t obviously say that. I would say the best example is the company will remain with the same margin level that it is today.

Sherif Foda: We don't, obviously, say that. I would say the best example is the company will remain with the same margin level that it is today.

Jeff Robertson: ... And would most of those awards be 2027, 2028, and beyond? Or would you expect to see much of an impact in 2026?

Speaker #6: And would most of those awards be 2027, 2028, and beyond? Or would you see would you expect to see much of an impact in 2026?

Speaker #3: All the awards will be '26. So everything will be awarded this year. So some of these contracts I mean, as I said, most of those pipelines have been the price has already submitted.

Sherif Foda: All the awards will be 26. So everything will be awarded this year. I, so some of these contracts, I mean, as I said, most of those pipelines have been, with the prices already submitted. So we are waiting for the customer to announce the results. The customer in Middle East are, like, they're super professional, extremely, extremely, thorough in their evaluation model. They look at the technical part. They put score on the technical, how you perform. They know the capacity of each company. So if somebody like, what they call lowball, the, the price or do something, not, you know, not realistic, they kind of take this into account. They look at how many awards they're gonna do. I mean, all these contracts are multi-award, meaning, again, I repeat that.

Speaker #3: So we are waiting for the customer to announce the results. The customer in the Middle East are like the super professional, extremely, extremely thorough in their evaluation model.

Speaker #3: They look at the technical part. They put scores on the technical—how you perform. They know the capacity of each company. So if somebody, like what they call 'low ball'—the price—or does something not realistic, they kind of take this into account.

Speaker #3: They look at how many awards they're going to do. I mean, all these contracts are multi-award, meaning—again, I repeat that. So you have a, let's say, cementing contract in UAE.

Sherif Foda: So you have a, let's say, cementing contract in UAE. So they're gonna award 4 or 5 winners, and there are 15 bidders. So 4 of those will be taken, and based on the price, the ICV, which is in-country value, your score, your technical, your quality, then they will award a percentage. So your – the number one might get 25, number two get 20, and number three get 15, et cetera, et cetera, and the rest leave. So you have to be within that 5 winners, otherwise, you don't have business for 5 years in that particular segment. That's how all the contracts are awarded. Definitely, the local position makes a huge difference. Your local investment makes a huge difference.

Speaker #3: So they're going to award four or five winners. And there is 15 bidders. So four of those will be taken. And based on the price, the ICV, which is in-country value, your score, your technical, your quality, then they will award a percentage.

Speaker #3: So the number one might get 25, number two gets 20, and number three gets 15, etc., etc. And the rest leave. So you have to be within that five winners.

Speaker #3: Otherwise, you don't have business for five years in that particular segment. That's how all the contracts are awarded. Definitely, the local position makes a huge difference.

Speaker #3: Your local investment makes a huge difference. And how you are committed to ensure that you play that long-term view, not like what I call hit and run.

Sherif Foda: And how you are committed to ensure that you play that long-term view, not like what they call hit and run. So most of these contracts will be awarded in, in, I would say, Q1, Q2, and some would be Q3, Q4. So which means that some of the business will start in effect in the second half. You will see the effect of the revenue, and some of the effect, if it's awarded Q3, Q4, you will see the effect in Q4 or Q1, 2027. That's why when I call the multi-year growth, for us, it's very evident, and that's why I said we should be able to double the company by 2027, for example.

Speaker #3: So most of these contracts will be awarded in, I would say, Q1, Q2, and some will be Q3, Q4. So which means that some of the business will start, in effect, in the second half; you will see the effect on the revenue.

Speaker #3: And some of the effect, if it's awarded Q3, Q4, you will see the effect in Q4 or Q1 2027. That's why when I call the multi-year growth for us, it is very evident.

Speaker #3: And that's why I said we should be able to double the company by '27, for example. We should be able to because if you win these contracts and you start them, then you will be able to exit with a much higher run rate than previously anticipated.

Sherif Foda: We should be able to, because if you win these contracts and you start them, then you would be able to exit with a much higher run rate than previously anticipated.

Speaker #6: In light of your comments about spending across the region to support production capacity goals, do you see the pipeline, or maybe the tender volume, increasing from where it is today over the next several years?

Jeff Robertson: In light of your comments about spending across the region to support production capacity goals, do you see the pipeline or maybe the tender volume, increasing from where it is today over the next several years?

Speaker #3: Yeah, I would say '25 and '26 would be one of the highest tender value ever in the Middle East. And again, the way most of the clients and I repeat, the NOC are very smart clients.

Sherif Foda: Yeah, I would say, I would say 25 and 26 would be one of the highest tender value ever in the Middle East. And again, the way most of the clients, and I repeat, the NOC are very smart clients. So the way they do it is they want to secure their capacity, and they know they take advantage of what's happening. So 25 was soft in the US. They tendered a lot of stuff, so they know that they're gonna get a much better price, and they lock this for 5 years, right? So most of the contract that we got in 25 are for 5 years, so they are into 2030. The contract that we bid and we are going to get awarded or, and the others as well, in 26 will be for 5 to 7 years.

Speaker #3: So the way they do it is they want to secure their capacity, and they know they take advantage of what's happening. So '25 was soft in the US.

Speaker #3: They tendered a lot of stuff, so they know that they're going to get a much better price. And they lock this for five years, right?

Speaker #3: So most of the contract that we got in '25 are for five years. So they are into 2030. The contract that we bid and we are going to get awarded and the others as well in '26 will be for five to seven years.

Sherif Foda: So meaning that we see, we know where we're gonna be until 2030, 2051. There is no doubt there. The backlog is there. If you get the backlog properly, you get that. And again, the clients are very smart. Why wouldn't you bid when you know that the service industry is soft? You get a better price, you get the capacity that you want, and you get the work that you need, right? You don't bid when the whole market is in the upside mood. So I think the Middle East is taking full advantage, and they're smart about it, and we're very happy to be there, and I think all the peers as well, the same. So the pipeline will be solid until, I would say, 2031, 2032.

Speaker #3: So meaning that we see we know where we're going to be until 2030, 2031. There is no doubt there. The backlog is there. If you get the backlog properly, you get that.

Speaker #3: And again, the clients are very smart. Why wouldn't you bid when you know that the service industry is soft? You get a better price.

Speaker #3: You get the capacity that you want, and you get the work that you need, right? You don't bid when the whole market is in the upside mood.

Speaker #3: So I think the Middle East is taking full advantage. And they're smart about it. And we're very happy to be there. And I think all the peers as well, the same.

Speaker #3: So the pipeline will be solid until, I would say, 2031, 2032.

Speaker #6: Thank you for taking my questions.

Jeff Robertson: Thank you for taking my questions.

Operator: This will now conclude our question and answer session. I would like to turn the floor back over to Sherif for closing remarks.

Speaker #1: Our question and answer session has concluded. I would like to turn the floor back over to Sherif for closing remarks.

Speaker #3: Thank you very much. Thanks for everybody for listening. Very excited time. As Stefan said, '26 will be the best year ever from a growth and from numbers.

Sherif Foda: Thank you very much. Thanks for everybody for listening. Very excited time. As Stefan said, 2026 will be the best year ever, from a growth and from numbers, so we're extremely, extremely happy to be there. Thank you so much for listening. Thank you.

Speaker #3: So we're extremely, extremely happy to be there. Thank you so much for listening. Thank you.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

Q4 2025 National Energy Services Reunited Corp Earnings Call

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