More hydraulic fracturing stages and well-testing work in Saudi Arabia pushed NESR’s revenue up by $116.2 million in the three months ended June 30. The bigger surprise was what happened to the profit lines: gross margin expanded to 15.6% from 12.8%, while operating margin reached 12.5% from 8.9%.
That is the clean reading. NESR is doing more work and keeping more of each dollar. Production Services revenue rose to $329.7 million from $205.1 million, and Drilling and Evaluation Services reached $191.0 million from $122.3 million.
The less tidy part is the capital required to make that growth happen. Inventory increased 31.4%, faster than revenue, and capex jumped 205.8%. Free-cash-flow margin still reached 10.2%, up 11.5 percentage points, but the operating footprint is expanding faster than the sales line alone suggests.
Management tied the revenue increase directly to activity in Saudi Arabia:
"The change in revenue was primarily due to increased hydraulic fracturing stages in Saudi Arabia."
NESR, Form 10-Q, Aug. 10, 2026
The same disclosure says well testing, and to a lesser extent wireline logging, drove the increase in the other operating line. In plain English, the growth came from more field work, not from a vague corporate-weather report.
Management also described why the income statement moved faster than revenue:
"The change in supplemental segment operating income was primarily due to increased hydraulic fracturing stages in Saudi Arabia with a significant portion of incremental revenue translating into segment operating income."
NESR, Form 10-Q, Aug. 10, 2026
That is the three-month period’s operating leverage in one sentence. Revenue rose 28.7%, operating income rose 79.9%, and net income rose 84.7% to $44.0 million. The incremental Saudi revenue carried a larger share of profit than the comparable period’s revenue did.
Cash also improved sharply, reaching $175.0 million from $93.0 million. Accounts receivable fell 8.4% to $208.8 million, while NESR said higher net income and tighter payment timing helped cash generation. The company does not present the cash increase as purely an earnings story: capex was materially higher, and inventory absorbed more capital.
That distinction matters because the annual record has not been a straight line. Revenue was $1.3B in 2025, up only 1.7%, while operating margin fell to 7.4% from 10.6% in 2024. The latest three months therefore show increased activity and higher margins against a more uneven recent backdrop, with the supporting investment now visible on the balance sheet.
The capital structure adds another item to the checklist. NESR said its Working Capital Facility decreased by $41.2 million during the six-month period ended June 30 because one tranche expired, partly offset by new commitments. That is separate from the three-month operating comparison, but it puts a boundary around the cash-and-inventory story.
At the latest close, NESR’s shares were $29.12, and the company carried a trailing P/E of 56.4x. That makes the durability of the 12.5% operating margin more consequential than the headline revenue growth alone. NESR’s next quarterly report will add the next comparable read on inventory and capex, the two balance-sheet footprints of this Saudi expansion.
More work, wider margins, heavier equipment bill. Oilfield growth rarely travels light.
Source: NESR Form 10-Q filed Aug. 10, 2026.