Core Laboratories Inc. reported second quarter 2025 revenue of $130.2 million, a 5% sequential increase and flat year-over-year performance. Operating income, ex-items, reached $14.5 million, yielding operating margins of 11%, a 160 basis point sequential expansion. Diluted earnings per share, ex-items, rose 33% sequentially to $0.19.
The Reservoir Description segment's revenue grew 7% sequentially to $86.3 million, with operating margins of 13%, expanding 300 basis points sequentially. This was driven by increased demand for laboratory instrumentation and stabilized crude assay work. The Production Enhancement segment saw revenue increase 3% sequentially to $43.9 million, with operating margins improving to 9%, reflecting strong demand for diagnostic services.
Core Lab continued its financial discipline, reducing net debt by $9.1 million during the quarter to $94.8 million. This brought the company's leverage ratio to 1.27 as of June 30, 2025, marking its lowest level in eight years. The company also repurchased 237,632 shares for $2.7 million in Q2 2025.
On July 22, 2025, Core Lab renewed and extended its credit agreement, securing a $150 million aggregate borrowing commitment, including a $100 million revolving credit facility and a $50 million delayed draw term loan. This DDTL is earmarked to retire $45 million of private placement notes maturing in January 2026, extending the maturity to July 22, 2029.
Operational highlights included the successful completion of a complex deepwater Plug and Abandonment (P&A) operation in the North Sea using the proprietary PAC™ system, saving the client an estimated $4 million. The company also deployed its 3AB™ diagnostic tracer technology in West Texas to evaluate a new proppant design, enabling rapid, data-driven decisions for improved production.
For the third quarter of 2025, Core Lab projects total revenue between $127.5 million and $134.5 million, with diluted EPS expected to range from $0.18 to $0.22. Reservoir Description revenue is projected to be flat sequentially, while Production Enhancement revenue is estimated to range from $43.5 million to $46.5 million.
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