- Core Laboratories (CLB, Financial) reported a 5% year-over-year decline in Q1 2025 revenue to $123.6 million.
- Free cash flow increased by over 50% year-over-year to $3.9 million.
- Net debt was reduced by $4.9 million, achieving a leverage ratio of 1.31, the lowest in eight years.
Core Laboratories Inc. (CLB) announced its first quarter 2025 financial results, reporting a revenue dip of 5% year-over-year to $123.6 million. The company's operating income, excluding items, fell by 21% year-over-year to $11.8 million, resulting in operating margins of 10%. The diluted earnings per share, excluding items, dropped to $0.14, marking a 25% decrease from the previous year.
Despite the decline in revenue, Core Laboratories demonstrated financial discipline, notably with a significant improvement in free cash flow, which surged past 50% year-over-year to $3.9 million. The firm also reduced its net debt by $4.9 million, holding its leverage ratio at a low of 1.31. The company repurchased 131,598 shares, valued at $2.0 million, during the quarter.
The company's Reservoir Description segment, which accounts for 65% of total revenue, faced a decrease of 7% sequentially to $80.9 million, alongside compressed operating margins of 10%. Meanwhile, the Production Enhancement segment maintained flat sequential revenue of $42.7 million, with a notable improvement in operating margin by 450 basis points to 8%.
Looking ahead, Core Laboratories provided guidance for the second quarter of 2025, projecting revenue between $128 million and $134 million. The company expects operating income of $13.1 million to $15.7 million and operating margins around 11%. The anticipated earnings per share for Q2 are expected to be in the range of $0.17 to $0.21, indicating a sequential improvement.
Performance in the first quarter was adversely affected by seasonal declines, geopolitical conflicts, expanded sanctions, and pending tariffs, which created operational inefficiencies and volatility in commodity prices, impacting demand for laboratory services.
