KLX Energy Services Tightens Third Quarter Guidance as Its $125 Million Rights Offering Heads to Closing

KLX Energy Services Holdings, Inc. (NASDAQ: KLXE), the Houston-based provider of onshore oilfield services for drilling, completion, production and intervention, updated its third quarter guidance on September 25, 2026, narrowing its revenue range to $180 million to $185 million and setting an adjusted EBITDA margin range of 13% to 14%. The same day, the company reported preliminary results of its $125 million rights offering, which it expects to reduce the principal of its 2030 notes by $94.0 million.

The Updated Guidance

The new revenue range sits inside the $176 million to $188 million range KLX gave in August, which had a midpoint of $182 million. At the revised midpoint, the company expects revenue to rise approximately 9% from the second quarter. It also expects adjusted EBITDA to improve by approximately 30% at the midpoint, with margin up approximately 200 basis points from the second quarter’s 11.2%.

“Based on our quarter to date internal financials, we are very pleased with our performance thus far in the third quarter,” said Chris Baker, President and Chief Executive Officer. The third quarter also includes a full quarter of contribution from the Wolf Pack acquisition, and Baker said the company remains on track to achieve its $2.5 million annual synergy target.

The release notes that closing procedures for the quarter are not complete and that the ranges reflect management’s estimates. KLX did not provide a dollar figure for adjusted EBITDA and plans a detailed operational and financial update on its third quarter earnings call in November 2026.

Rights Offering and Debt Reduction

Stockholders could buy shares at $1.49 each in the rights offering, which expired on September 23. According to the preliminary results, holders subscribed for 24,975,001 shares, including 168,902 shares through the over-subscription privilege, for gross proceeds of $37.2 million. KLX expects to use $31.0 million for general corporate purposes, including fees and expenses, and $6.2 million to redeem its Senior Secured Floating Rate Cash/PIK Notes due 2030.

The offering was backstopped by holders of those 2030 notes, who committed $94.0 million. That commitment was reduced to $87.8 million after the $6.2 million redemption, and the backstop parties will exchange 2030 notes for common stock at the subscription price, subject to a 30% individual ownership limit. Together, the redemption and the exchange reduce the notes’ principal by $94.0 million. KLX expects approximately 105.7 million shares outstanding afterward, with shares and proceeds distributed on or about September 29, 2026, subject to customary closing conditions.

Baker called the offering “a transformational step in the Company’s strategy to delever.” For context, total debt was $288.9 million at June 30, 2026, against cash and restricted cash of $7.9 million and total liquidity of $53.3 million. Separately, on September 23 the board adopted a limited-duration stockholder rights plan with a 10% ownership trigger, which it said was in response to the rapid accumulation of the company’s common stock by a single investor. The plan expires on September 23, 2027.

Second Quarter Results and the Wolf Pack Acquisition

Second quarter revenue was $167.3 million, up 16% from the first quarter and inclusive of one month of Wolf Pack contribution. The net loss narrowed to $8.4 million from $24.0 million in the first quarter, a figure that included a $6.5 million bargain purchase gain tied to the acquisition; the adjusted net loss was $13.2 million. Adjusted EBITDA was $18.7 million, and adjusted EBITDA margin improved to 11.2% from 7.7%.

By segment, the Rocky Mountains generated revenue of $50.8 million, the Southwest $64.5 million and the Northeast/Mid-Con $52.0 million. The Northeast/Mid-Con contributed the most adjusted EBITDA, at $12.5 million.

KLX acquired the assets of Wolfpack Rentals, LLC on June 2, 2026 for $17 million: $14 million at closing plus two deferred payments of $1.5 million each at six and twelve months, payable in cash or stock. Wolfpack provides surface rental solutions to oil and gas operators and reported 2025 revenue of $38.2 million and adjusted EBITDA of $5.8 million. KLX initially guided to more than $2 million in annual synergies and raised that estimate to approximately $2.5 million in August.

Strategic Investment Summary

• Guidance Narrowed: KLX Energy Services Holdings, Inc. (NASDAQ: KLXE) narrowed third quarter revenue guidance to $180 million to $185 million from $176 million to $188 million, about 9% above the second quarter at the midpoint.
• Margin Outlook: Adjusted EBITDA margin is guided at 13% to 14%, approximately 200 basis points above the second quarter, with adjusted EBITDA expected to rise about 30% at the midpoint; no dollar figure was given.
• Rights Offering Results: Preliminary results show 24,975,001 shares subscribed at $1.49 for gross proceeds of $37.2 million, with closing expected on or about September 29, 2026.
• Debt Reduction: A $6.2 million redemption and a backstop exchange by noteholders are expected to cut 2030 notes principal by $94.0 million, against total debt of $288.9 million at June 30.
• Share Count: KLX expects approximately 105.7 million shares outstanding after the rights offering and backstop exchange.
• Rights Plan: The board adopted a one-year stockholder rights plan with a 10% trigger on September 23, citing the rapid accumulation of its stock by a single investor.

Find out more about the latest corporate developments and financial reports at the KLX Energy Services investor portal.