National Energy Services Reunited: 3Q26 First Take – ALERT

NESR delivered 3Q26 EBITDA of $96mm (vs. JPMe/STe of $96mm/$95mm), which declined by -10% from $106mm in 2Q26 given the well-documented security challenges in the Middle East. 3Q revenue and EBITDA declined by -3.1% and -9.7% sequentially given reduced activity levels amid the ongoing conflict. The decremental margins of 64% were impacted by NESR's decision to maintain its full operating presence (i.e., full cost structure) across the region. The company printed a negative FCF of -$45.9mm (vs. JPMe $0.04mm) largely associated with working capital headwinds as accounts receivable and inventory balances rose $54mm and $22mm sequentially. That said, the balance sheet remains strong with net debt of $160.5mm (2026 net leverage ratio of 0.36x). Last week, NESR entered into a new credit facility, which provides greater liquidity and financing flexibility to pursue strategic opportunities across its core markets in the Middle East. The new syndicated facility agreement totals $747.1mm, includ