Core Laboratories Inc. reported first quarter 2025 revenue of $123.6 million, a 7% sequential decrease and 4% year-over-year decline. Operating income, ex-items, was $11.8 million, yielding operating margins of 10%. Diluted earnings per share, ex-items, stood at $0.14, while GAAP EPS was $0.00, impacted by approximately $6.9 million in adjustments for employee severance, facility consolidation, and stock compensation.
The Reservoir Description segment's revenue was $80.9 million, down 7% sequentially, affected by seasonal patterns, geopolitical conflicts, expanded sanctions, and pending tariffs. The Production Enhancement segment's revenue was $42.7 million, flat sequentially, despite an estimated 10% decrease in the U.S. land frac spread, driven by increased demand for diagnostic services.
Core Lab continued to reduce its net debt by $4.9 million during the quarter, bringing it to $103.9 million. The company's leverage ratio remained at 1.31, its lowest level in eight years. Free cash flow for the quarter was $3.9 million, impacted by an increase in working capital due to higher sales at quarter-end.
The company engaged with a leading National Oil Company in the Middle East for a multi-well study using its proprietary PRISM™ workflow and Nuclear Magnetic Resonance technologies. Core Lab's Production Enhancement segment also engineered a ballistic solution using its DCST™ drill collar severing tool for an offshore Middle East project. Additionally, HT Profiler™ extreme high temperature water tracers were deployed in a U.S. geothermal well injection program, demonstrating stability at over 570˚F.
For the second quarter of 2025, Core Lab projects revenue between $128.0 million and $134.0 million, with diluted EPS expected to range from $0.17 to $0.21. The company believes the vast majority of its service revenue (over 75%) and approximately 50% of its U.S.-manufactured product sales are not subject to new tariffs.
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