Core Laboratories Q2 Earnings Call Highlights

Core Laboratories’ Q2 revenue rose 2% sequentially to $124.6 million , although it fell 4% year over year as geopolitical conflicts disrupted Reservoir Description services. Production Enhancement revenue grew 15% sequentially, supported by stronger completion-product sales and improved margins. Adjusted EPS increased to $0.11 from $0.06 in the prior quarter, while free cash flow reached $3.1 million. The company repurchased $2.7 million of shares and ended the quarter with $93.6 million in net debt. Management forecast Q3 revenue of $128.5 million to $135.5 million and adjusted diluted EPS of $0.12 to $0.20, with growth expected from Africa, Brazil, Asia-Pacific, Europe and modestly improving U.S. completion activity despite ongoing geopolitical risks.

Core Laboratories NYSE: CLB reported second-quarter 2026 revenue of $124.6 million, up more than 2% from the prior quarter but down 4% from a year earlier, as stronger completion-product sales partly offset disruptions to its service business from conflicts in the Middle East and Russia-Ukraine. Chief Executive Officer Larry Bruno said the company continued to invest in technologies aimed at solving client problems and expanding its market opportunities, despite project delays, logistical disruptions and reduced activity in affected regions. Reservoir Description, the segment most exposed to field operations, crude transportation and sample acquisition, faced the greatest effects from the conflicts and the closure of the Strait of Hormuz.

“Operating conditions improved in several other geographic markets during the second quarter, and client engagement strengthened outside the Middle East,” Bruno said. He added that Production Enhancement was comparatively less affected, with energetic product sales improving as operators adopted the company’s completion technologies in U.S. and international markets.

Core Lab’s service revenue was $94.3 million, flat sequentially and down 2% from the second quarter of 2025. Chief Financial Officer Chris Hill said crude assay services and regional studies remained affected by geopolitical disruptions, though growth in other regions offset part of the decline. The company also cited improving demand for reservoir rock and fluid analytical programs in international exploration markets and continued strength in U.S. completion diagnostic services.

Product sales totaled $30.3 million, rising 10% from the first quarter but declining 11% year over year. Hill said both U.S. and international completion product sales increased from the prior quarter. The year-over-year comparison reflected a large laboratory instrumentation sale in the prior-year quarter that did not recur, partially offset by stronger perforating-product sales.

EBIT excluding items was $9.4 million, compared with $6.6 million in the first quarter, producing an approximately 8% margin. Net income excluding items was $5.1 million, up from $2.7 million sequentially but down from $8.8 million a year earlier. Adjusted diluted earnings per share were $0.11, compared with $0.06 in the first quarter and $0.19 a year earlier. On a GAAP basis, net income was $6 million and diluted EPS was $0.13.

Reservoir Description generated $79 million in second-quarter revenue, down 4% sequentially, with operating income excluding items of $3.7 million and a 5% operating margin. Bruno said disruptions to cargo movements through the Strait of Hormuz, delayed project execution and reduced activity across the Middle East weighed on assay work and margins. Expanded sanctions and military action affecting oil and gas infrastructure in Russia and Ukrai...