Core Laboratories Inc. /DE/
For the period ended Jun 30, 2025. Filed Jul 25, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 25, 2025
CLB$8.84-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-28.
0000950170-25-058900
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-25.
0000950170-25-098473
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 89 previous paragraphs and 96 current paragraphs.
46 unchanged; 32 reworded; 15 added; 11 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 8 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
For the six months ended June 30, 2025, service revenue was $191.3 million, a decrease of 1% compared to the same period in the prior year, primarily driven by the disruptions to the maritime movement and trading of crude oil during the first quarter of 2025, as discussed above.
Current report
Sequentially, the increase was due to a higher levels of bulk shipments to international markets, as well as higher level of laboratory instrumentation sales.
Current report
For the six months ended June 30, 2025, product sales revenue was $62.4 million and decreased 7% compared to the same period in the prior year, primarily due to decreased sales in the U.S. onshore markets as a result of lower average drilling and completion activity in 2025 compared to 2024, which was partially offset by increased international bulk product sales.
Current report
For the six months ended June 30, 2025, cost of services was $147.0 million, a decrease of 1% compared to the same period in the prior year. The year-over-year changes in cost of services was in line with changes in service revenue. Cost of services expressed as a percentage of service revenue remained relatively flat compared to the same period in the prior year.
Current report
Sequentially, cost of product sales as a percentage of product sales improved due to improved absorption of fixed costs on a higher revenue base, partially offset by the write-down of certain inventory as previously discussed.
Current report
For the six months ended June 30, 2025, cost of product sales was $56.1 million, a decrease of 5% compared to the same period in the prior year. Cost of product sales expressed as a percentage of product sales revenue was 90% for the six months ended June 30, 2025, compared to 87% from the same period in the prior year. The increase in cost of product sales as a percentage of product sales revenue was due to higher absorption of fixed costs on a lower revenue base and the write-down of certain inventory as discussed above.
Current report
For the six months ended June 30, 2025, G&A expense was $24.1 million compared to $22.0 million for the six months ended June 30, 2024. The year-over-year increase was due to increased license fees and implementation costs associated with a new global human capital management system and outside consulting fees as discussed previously, and changes in employee compensation costs.
Current report
Interest expense for the three months ended June 30, 2025, was $2.7 million and decreased $0.5 million or 16% year-over-year and slightly increased compared to the prior quarter. For the six months ended June 30, 2025, interest expense decreased $1.3 million or 20%.
Current report
The year-over-year decreases are primarily due to lower average borrowings on our bank revolving credit facility during the three and six months ended June 30, 2025. Slight increase sequentially is primarily due to changes in blended variable interest rates on our bank revolving credit facility during these periods.
Current report
On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law. The Act includes significant provisions, including tax cut extensions and modifications to the U.S. and international tax frameworks. We are evaluating the impact of these legislative changes as additional guidance becomes available, and uncertainty remains regarding the timing and interpretation by tax authorities in affected jurisdictions. These legislative changes could have an adverse impact on our future effective tax rate, tax assets and liabilities, including our deferred tax assets and liabilities, and cash payments for tax.
Current report
Revenue from the Reservoir Description operating segment of $167.2 million for the six months ended June 30, 2025 decreased 2% from the same period in the prior year. The decreased revenue in 2025 primarily due to the temporary disruption of the maritime movement and trading of crude oil and derived products which occurred in the first quarter of 2025. The decline in international offshore commercial success rate for exploration and appraisal wells projects, discussed above, has also negatively impacted the level of activity on international projects planned for 2025.
Current report
Operating income of $14.5 million for the six months ended June 30, 2025, decreased $3.8 million from the same period in the prior year. Operating margins were 9% for the six months ended June 30, 2025, compared to 11% for the same period in the prior year. The decrease in operating income and operating margins was primarily attributable to 1) decremental revenue of $3.3 million in 2025; 2) a different mix of revenue with a higher level of manufactured equipment sales that yield lower margin compared to service revenue; and 3) a total charge of $2.9 million associated with employee severance, facility consolidation and asset write-down recorded in 2025 compared to $1.5 million recorded in the same period in prior year.
Current report
Revenue from the Production Enhancement operating segment of $86.6 million for the six months ended June 30, 2025, decreased 3% from the same period in the prior year. The decrease in revenue primarily driven by lower product sales in the U.S. land and international markets in 2025, partially offset by higher revenue in well completion diagnostic services in the U.S. and international markets.
Current report
Operating income of $3.1 million for the three months ended June 30, 2025, decreased $1.3 million year-over-year, and increased $1.6 million sequentially. Operating margins for the three months ended June 30, 2025, were 7%, compared to operating margins of 10% year-over-year and 4% sequentially. Year-over-year, the decrease in operating income and margins was primarily driven by a total charge of $1.3 million associated with employee severance, facility consolidation and inventory write-downs in 2025, compared to $0.3 million in 2024. Sequentially, the increase in operating income and margins was primarily due to 1) incremental revenue of $1.2 million in the three months ended June 30, 2025, 2) certain employee severance and facility consolidation costs of $0.5 million recorded in the prior quarter, and no such transaction in the current quarter; and 3) a $1.1 million increase the first quarter of 2025, due to the acceleration of stock compensation expense for retirement of eligible executives. These increases partially offset by inventory write-downs of $0.8 million recorded in the second quarter of 2025, no such transaction recorded in the prior quarter.
Current report
Operating income of $4.7 million for the six months ended June 30, 2025, decreased $1.3 million compared to the same period in the prior year. Operating margins for the six months ended June 30, 2025, were 5% compared to operating margins of 7% in the same period of the prior year. The decrease in operating income and margins was primarily due to a higher absorption of fixed costs on a lower revenue base and a higher severance and inventory write-down as discussed above.
Removed paragraphs (11)
Previous report
“NM” means not meaningful
Previous report
*Percentage based on applicable revenue rather than total revenue
Previous report
Current ratio is calculated as follows: current assets divided by current liabilities.
Previous report
“NM” means not meaningful
Previous report
*Percentage based on applicable revenue rather than total revenue
Previous report
Current ratio is calculated as follows: current assets divided by current liabilities.
Previous report
Sequentially, the decrease was due to a lower level of bulk shipments to international markets, including the international order that was suspended, described above. However, the lower international product deliveries were partially offset by a higher level of product sales in the U.S. onshore market.
Previous report
Sequentially, the slight increase in cost of services as a percentage of services revenue was primarily due to a lower revenue base in the three months ended March 31, 2025, versus the prior quarter.
Previous report
Sequentially, cost of product sales as a percentage of product sales decreased primarily due to approximately $3.3 million in additional costs associated with the write-down of certain inventory and other related assets in the prior quarter.
Previous report
Interest expense for the three months ended March 31, 2025, was $2.6 million and decreased $0.8 million or 24% year-over-year and was relatively flat compared to the prior quarter. The year-over-year decrease is due to lower interest rates and lower average borrowings on our bank revolving credit facility during the three months ended March 31, 2025.
Previous report
Operating income of $1.5 million for the three months ended March 31, 2025, decreased slightly year-over-year, and increased $4.1 million sequentially. Operating margins for the three months ended March 31, 2025, were 4%, compared to operating margins of 3% year-over-year and (6)% sequentially. Year-over-year, the increase in operating income and margins was primarily driven by a different mix of revenue, with a higher level of service revenue that contributed to higher margins in 2025 compared to 2024, mostly offset by a higher level of corporate G&A expenses absorbed by the segment. Sequentially, the increase in operating income and margins was primarily due to 1) a strong growth in well diagnostic projects with high incremental margins; 2) certain severance costs, inventory and other related asset write-downs of approximately $4.1 million recorded in the prior quarter, compared to $0.5 million recorded in the current quarter; offset by 3) a higher level of corporate G&A expenses absorbed by the segment in the current quarter. See discussion of General and Administrative Expense, above.
Reworded paragraphs (32)
Previous wording
The following discussion highlights the current operating environment and summarizes the financial position of Core Laboratories Inc. and its subsidiaries as of March 31, 2025, and should be read in conjunction with (i) the unaudited interim consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and (ii) the audited consolidated financial statements and accompanying notes thereto included in our 2024 Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
The following discussion highlights the current operating environment and summarizes the financial position of Core Laboratories Inc. and its subsidiaries as of June 30, 2025, and should be read in conjunction with (i) the unaudited interim consolidated financial statements and notes thereto included elsewhere in this Quarterly Report and (ii) the audited consolidated financial statements and accompanying notes thereto included in our 2024 Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
Core Laboratories Inc. is a Delaware corporation. It was established in 1936 and is one of the world's leading providers of proprietary and patented reservoir description and production enhancement services and products to the oil and gas industry. These services and products can enable our clients to evaluate and improve reservoir performance and increase oil and gas recovery from new and existing fields. We make measurements on reservoir rocks, reservoir fluids (crude oil, natural gas and water) and their derived products. In addition, we assist clients in evaluating subsurface targets associated with carbon capture and sequestration projects or initiatives. Core Laboratories Inc. has over 70 offices in more than 50 countries and employs approximately 3,400 people worldwide.
Current wording
Core Laboratories Inc. is a Delaware corporation. It was established in 1936 and is one of the world's leading providers of proprietary and patented reservoir description and production enhancement services and products to the oil and gas industry. These services and products can enable our clients to evaluate and improve reservoir performance and increase oil and gas recovery from new and existing fields. We make measurements on reservoir rocks, reservoir fluids (crude oil, natural gas and water) and their derived products. In addition, we assist clients in evaluating subsurface targets associated with carbon capture and sequestration projects or initiatives. Core Laboratories Inc. has over 70 offices in more than 50 countries and employs approximately 3,300 people worldwide.
Previous wording
The global demand for crude oil and natural gas is forecast to continue growing for both 2025 and the longer term. According to the latest reports from the U.S. Energy Information Administration, the International Energy Agency and the Organization of the Petroleum Exporting Countries and other oil producing nations (“OPEC+”), global demand for crude oil and natural gas is expected to continue increasing in 2025 and beyond. However, in the first week of April 2025, crude oil prices declined sharply after announcements that the United States would impose new tariffs on imported goods. The announcement of new tariffs has triggered global trade negotiations and has raised the level of uncertainty for global economies and the likelihood of a global recession. Additionally, on April 3, 2025, OPEC+ affirmed their decision to proceed with a gradual return of 2.2 million barrels of daily production by removing the voluntary production restrictions established in 2023. The gradual increase in production from OPEC+ is scheduled to begin in May 2025 with incremental increases in production through September 2026. OPEC also published an updated “compensation plan” which shows committed reductions in production for countries that produced volumes over their committed quotas since January 2024, which if complied with, should partially offset the scheduled increases to production quotas. In each announcement from OPEC+ regarding the production increases, they have also stated they will continue to hold monthly meetings to review market conditions, conformity, and compensation.
Current wording
According to the latest reports from the U.S. Energy Information Administration, the International Energy Agency and the Organization of the Petroleum Exporting Countries and other oil producing nations (“OPEC+”), global demand for crude oil and natural gas is expected to continue increasing in 2025 and beyond. Beginning in April 2025, the announcement of new tariffs by the U.S. has triggered global trade negotiations and has raised the level of uncertainty for global economies. Additionally, OPEC+ affirmed their decision to proceed with a gradual return of 2.2 million barrels of daily production by removing the voluntary production restrictions established in 2023. The gradual increase in production from OPEC+ began in May 2025 with incremental increases in production expected through September 2026. OPEC also published an updated “compensation plan” which shows committed reductions in production for countries that produced volumes over their committed quotas since January 2024, which if complied with, should partially offset the scheduled increases to production quotas. In each announcement from OPEC+ regarding the production increases, they have also stated they will continue to hold monthly meetings to review market conditions, conformity, and compensation.
Previous wording
The ongoing geopolitical conflicts between Russia and Ukraine and in the Middle East, along with associated sanctions, continue to cause disruptions to traditional maritime supply chains and the trading of crude oil and derived products, such as diesel fuel. The announcement of expanded sanctions on January 10, 2025 by the United States, disrupted and temporarily decreased the trading and maritime transportation of crude oil, along with demand for the Company's associated laboratory assay services. Demand for the laboratory assay analysis services recovered somewhat in March 2025, however these geopolitical conflicts and associated sanctions continue to create a higher level of uncertainty. The United States, the European Union, the United Kingdom and other countries continue to expand sanctions, export controls and other measures against Russia, Belarus, Iran and other countries, companies, officials, individuals or industries in the respective territories, which may have further impact on the trading and movement of crude oil and derived products. We have no way to predict the progress or outcome of these events, and any resulting government responses are fluid and beyond our control.
Current wording
The ongoing geopolitical conflicts between Russia and Ukraine and in the Middle East, along with associated and expanded sanctions in the United States, the European Union, the United Kingdom and other countries continue to cause disruptions to traditional maritime supply chains and the trading of crude oil and derived products, such as diesel fuel. These disruptions to the trading and maritime transportation of crude oil, also impact the demand for the Company's associated laboratory assay services. Although demand for the Company’s laboratory assay analysis services increased in the second quarter compared to the first quarter of 2025, these geopolitical conflicts and associated sanctions continue to create a higher level of uncertainty. We have no way to predict the progress or outcome of these events, and any resulting government responses are fluid and beyond our control.
Previous wording
We continue to focus on large-scale core analyses and reservoir fluids characterization studies in most oil-producing regions across the globe, which include both newly developed fields and brownfield extensions in many offshore developments in both the U.S. and internationally. In the U.S., we are involved in projects with many of the onshore unconventional basins and offshore projects in the Gulf of Mexico. Outside the U.S., we continue to work on many small and large-scale projects analyzing reservoir rock and fluid samples in every major producing region of the world. Notable larger projects are in locations such as offshore South America, Australia, West Africa and the Middle East. Analysis and measurement services also occur in every major producing region of the world. Additionally, some of our major clients have increased their investment in projects to capture and sequester carbon dioxide (“CO2”). The Company’s activities on these projects expanded in 2024 and are expected to continue expanding in 2025 and beyond.
Current wording
We continue to focus on large-scale core analyses and reservoir fluids characterization studies in most oil-producing regions across the globe, which include both newly developed fields and brownfield extensions in many offshore developments in both the U.S. and internationally. In the U.S., we are involved in projects with many of the onshore unconventional basins and offshore projects in the Gulf of Mexico. Outside the U.S., we continue to work on many small and large-scale projects analyzing reservoir rock and fluid samples in every major producing region of the world. Notable larger projects are in locations such as offshore South America, Australia, West Africa and the Middle East. Analysis and measurement services also occur in every major producing region of the world. Additionally, some of our major clients have increased their investment in projects to capture and sequester carbon dioxide in recent years that has expanded the Company’s activities on these projects beginning in 2024 and into 2025.
Previous wording
Operating Results for the Three Months Ended March 31, 2025 compared to the Three Months Ended March 31, 2024 and December 31, 2024
Current wording
Operating Results for the Three Months Ended June 30, 2025 compared to the Three Months Ended June 30, 2024 and March 31, 2025 and for the Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024
Previous wording
Service revenue is primarily tied to activities associated with the exploration, appraisal, development and production of oil, gas and derived products outside the U.S. For the three months ended March 31, 2025, service revenue was $95.1 million, a decrease of 1% year-over-year and sequentially. Year-over-year, the slight decrease was due to lower activity levels in the international market. Revenue was negatively impacted by the ongoing geopolitical conflicts and expanded sanctions previously discussed, which disrupted and impacted the trading and maritime transportation of crude oil and derived products, and the associated laboratory assay services the Company provides. However, these decreases were partially offset by a strong growth in well completion diagnostic services in the U.S. and certain international markets when compared to the same period in 2024.
Current wording
Service revenue is primarily tied to activities associated with the exploration, appraisal, development and production of oil, gas and derived products outside the U.S. For the three months ended June 30, 2025, service revenue was $96.2 million, flat year-over-year and an increase of 1% sequentially. Year-over-year, revenues remained relatively flat due to an increase in international markets offset by a reduction in the U.S. market. Despite disruptions from the ongoing geopolitical conflicts and expanded sanctions in January 2025, we had some recovery in demand for our laboratory assay services during the second quarter of 2025 and continued growth in well completion diagnostic services in certain international markets when compared to the same period in 2024. Service revenue in 2025 has been negatively impacted by certain projects that were planned and scheduled but were canceled, as the wells drilled by our clients were determined to be uneconomical or unsuccessful.
Previous wording
Sequentially, the decrease in service revenue was primarily due to lower demand for laboratory assay services in international markets partially offset by an increase in the U.S. market. As discussed above, the expanded sanctions announced in January 2025 disrupted the trading and maritime transportation of crude oil and derived products, and as a result demand for the associated laboratory assay services provided by the Company declined. This decline was partially offset by an increase in demand for our well completion diagnostic services in the U.S. and international markets compared to the prior quarter.
Current wording
Sequentially, the increase in service revenue was primarily due to a recovery in demand for laboratory assay services in international markets partially offset by a decrease in the U.S. market. As discussed above, the expanded sanctions announced in January 2025 had caused a temporary disruption in the trading and maritime transportation of crude oil and derived products, and demand for the associated laboratory assay services declined during the first quarter of 2025. These activities re-stabilized in the second quarter of 2025 and demand for our associated crude assay services also increased during the three months ended June 30, 2025.
Previous wording
Product sales are primarily tied to supporting the U.S. onshore drilling and completion activities and bulk product sales to international markets. Product sales to international markets are typically sold and shipped in bulk, and revenue can vary from one quarter to another. For the three months ended March 31, 2025, product sales revenue of $28.5 million decreased 14% year-over-year and 13% sequentially. The year-over-year decrease was driven by a reduction in product sales to both the U.S. and international markets. One large international order scheduled for delivery in February 2025, was suspended when the expanded sanctions were announced in January 2025. Additionally, the U.S. onshore drilling and completion activity decreased throughout 2024 and remained at these lower levels in 2025. The average U.S. land rig count for the three months ended March 31, 2025 was 5% lower when compared to the same period in 2024.
Current wording
Product sales are primarily tied to supporting the U.S. onshore drilling and completion activities and bulk product sales to international markets. Product sales to international markets are typically sold and shipped in bulk, and revenue can vary from one quarter to another. For the three months ended June 30, 2025, product sales revenue of $33.9 million decreased 1% year-over-year and increased 19% sequentially. The decrease was driven by lower drilling and completion activity onshore in the U.S. for the three months ended June 30, 2025 when compared to the same period in 2024, resulting in a lower level of product sales in the U.S. onshore market.
Previous wording
Cost of services was $73.0 million for the three months ended March 31, 2025, a decrease of 1% year-over-year and flat sequentially. Cost of services expressed as a percentage of service revenue was 77% for the three months ended March 31, 2025, comparable to the same period in the prior year, and compared to 76% in the prior quarter. The year-over-year changes in cost of services as a percentage of service revenue was in line with changes in service revenue.
Current wording
Cost of services was $74.1 million for the three months ended June 30, 2025, a decrease of 1% year-over-year and an increase of 1% sequentially. The year-over-year and sequential changes in cost of services was in line with changes in service revenue. Cost of services expressed as a percentage of service revenue was 77% for the three months ended June 30, 2025, compared to 78% for the same period in the prior year. Cost of services as a percentage of service revenue remained relatively flat sequentially.
Previous wording
Cost of product sales was $26.5 million for the three months ended March 31, 2025, a decrease of 14% year-over-year and 20% sequentially. Cost of product sales expressed as a percentage of product sales revenue was 93% for the three months ended March 31, 2025, comparable to the same period in the prior year and compared to 101% in the prior quarter. The year-over-year changes in cost of product sales as a percentage of product sales was in line with changes in product sales revenue.
Current wording
Cost of product sales was $29.6 million for the three months ended June 30, 2025, an increase of 5% year-over-year and 12% sequentially. Cost of product sales expressed as a percentage of product sales revenue was 87% for the three months ended June 30, 2025, compared to 82% for the same period in the prior year and compared to 93% in the prior quarter. The year-over-year changes in cost of product sales as a percentage of product sales increased primarily due to higher absorption of fixed costs on a lower revenue base, along with a write-down of certain inventory of approximately $0.8 million in the three months ended June 30, 2025.
Previous wording
G&A expense for the three months ended March 31, 2025, was $13.6 million, which increased $1.9 million compared to the same period in 2024. The year-over-year increase was primarily due to increased outside consulting fees and license fees primarily associated with implementation costs of a global human capital management system that commenced from the second quarter of 2024, and losses on our company owned life insurance policies in 2025 compared to gains in 2024.
Current wording
G&A expense for the three months ended June 30, 2025, was $10.5 million, which increased 2% or $0.2 million, compared to the same period in 2024. The slight year-over-year increase was primarily due to increased consulting and license fees associated with implementation costs of a global human capital management system partially offset by gains on our company owned life insurance policies in 2025 compared to 2024.
Previous wording
G&A expense for the three months ended March 31, 2025, increased $4.6 million compared to the three months ended December 31, 2024 primarily due to the acceleration of stock compensation expense for retirement eligible executives of $3.5 million in 2025. In addition, adjustments to revalue performance awards based on expected performance criteria were $0.9 million higher in 2025 compared to 2024.
Current wording
G&A expense for the three months ended June 30, 2025, decreased $3.2 million compared to the prior quarter primarily due to the acceleration of stock compensation expense for retirement eligible executives of $3.5 million in the first quarter of 2025, partially offset by changes in employee compensations costs in these periods.
Previous wording
Depreciation and amortization expense for the three months ended March 31, 2025, was $3.7 million compared to $3.8 million for the three months ended March 31, 2024 and $3.7 million for the three months ended December 31, 2024. The slight decrease in depreciation and amortization expense compared to the prior year period is primarily due to assets which became fully depreciated.
Current wording
Depreciation and amortization expense for the three months ended June 30, 2025, was $3.7 million, a decrease of 3% year-over-year and 1% sequentially. Depreciation and amortization expense for the six months ended June 30, 2025, was $7.4 million, a decrease of 3% year-over-year. The decrease in depreciation and amortization expense compared to the prior year periods and sequentially is primarily due to assets which became fully depreciated.
Previous wording
As a result of consolidating and exiting certain facilities in the U.S. and other international locations, we incurred a total of $0.7 million and $1.8 million associated with lease abandonment, other exit costs, and write-down of the associated leasehold improvements, right of use assets and other assets during the three months ended March 31, 2025 and 2024, respectively.
Current wording
During the six months ended June 30, 2025 and 2024, as a result of consolidating and exiting certain facilities in the U.S. and other international locations, we recognized a write-down of the associated leasehold improvements, right of use assets and other assets and incurred lease abandonment and other exit costs of $0.7 million and $1.8 million, respectively.
Previous wording
In February 2024, we had a fire incident at our Aberdeen, U.K. facility and have recorded a partial insurance settlement of $1.0 million during the three months ended March 31, 2024, associated with costs incurred and loss of income from business interruption.
Current wording
In February 2024, we had a fire incident at our Aberdeen, U.K. facility and we have recorded insurance recovery associated with business interruptions, increase in cost of work, and loss on property and assets during the three and six months ended June 30, 2025 and 2024.
Previous wording
The Company recorded an income tax expense of $1.7 million for the three months ended March 31, 2025 and 2024. The effective tax rate for the three months ended March 31, 2025, was 96.2% recorded on income before income taxes of $1.8 million. The effective tax rate for the three months ended March 31, 2024, was 32.2%, recorded on income before income taxes of $5.1 million. The effective tax rate for the three months ended March 31, 2025, was impacted by approximately $1.4 million of additional tax expense recorded for items discrete to the quarter. These discrete items are primarily associated with the finalization of certain tax jurisdictions’ return to provision assessments due to changes in estimates. The effective tax rate for the three months ended March 31, 2024, was impacted by the earnings mix of jurisdictions subject to tax for the period and items discrete to the quarter.
Current wording
The Company recorded an income tax expense of $1.9 million and $3.7 million for the three and six months ended June 30, 2025, respectively compared to income tax expense of $3.6 million and $5.3 million for the three and six months ended June 30, 2024, respectively. The effective tax rate for the three and six months ended June 30, 2025, was 15.2% and 25.4%, respectively. The effective tax rate for the three and six months ended June 30, 2024, was 28.2% and 29.3%, respectively. The effective tax rate for the three and six months ended June 30, 2025, was impacted by the earnings mix of jurisdictions, changes in uncertain tax position in certain jurisdictions and the finalization of certain tax jurisdictions’ return to provision assessments due to changes in estimates. These items are discrete to these periods. The tax rate for the three and six months ended June 30, 2024 was impacted by the earnings mix of jurisdictions subject to tax for the period and items discrete to the quarter.
Previous wording
Revenue from the Reservoir Description operating segment of $80.9 million for the three months ended March 31, 2025 decreased 4% year-over-year and 7% sequentially. The year-over-year decrease was primarily due to disruptions in the trading and maritime transportation of crude oil and derived products as a result of the expanded sanctions announced in January 2025. The decrease in these activities resulted in a decrease in demand for the Company’s laboratory assay services. Additionally, offshore commercial success rates for well exploration and appraisal projects continued to decline in 2024, which resulted in the cancellation of some reservoir rock and fluid analysis projects that were originally planned for what turned out to be unsuccessful wells. Demand for fluid analysis services continues to be negatively impacted by the on-going geopolitical conflicts and expanded sanctions previously discussed. Sequentially, the decrease in revenue was primarily associated with the same factors described above.
Current wording
Revenue from the Reservoir Description operating segment of $86.3 million for the three months ended June 30, 2025 relatively flat year-over-year and increased 7% sequentially. The year-over-year revenue growth in the Company’s international projects and crude-assay services was substantially offset by lower revenue in the U.S. market. Sequentially, the increase in revenue was primarily due to higher revenue in laboratory crude-assay services, as the trading and maritime transportation of crude oil and derived products re-stabilized in the second quarter of 2025, after the expanded sanctions were announced in January of 2025. Additionally, revenue associated with manufactured laboratory instrumentation sales increased sequentially. Revenue in 2025 has been negatively impacted by the decrease in the success rate for international offshore exploration and appraisal wells, which reached a 20-year low for the six-month period ending March 31, 2025. The decrease in international offshore commercial success rates has resulted in the cancellation of several reservoir rock and fluid analysis projects that were originally planned for late 2024 and 2025.
Previous wording
Operating income of $2.3 million for the three months ended March 31, 2025, decreased $4.6 million, year-over-year and $14.3 million sequentially. Operating margins were 3% for the three months ended March 31, 2025, compared to 8% year-over-year, and 19% sequentially. Year-over-year, the decrease in operating income and operating margins was primarily attributable to 1) decremental revenue of $3.3 million in the three months ended March 31, 2025; 2) a total charge of $2.7 million associated with severance, facility exit cost and certain asset write-downs recorded during the three months ended March 31, 2025, compared to $1.5 million in the same period of the prior year; and 3) a gain on insurance proceeds associated with the fire at the Aberdeen, U.K. facility of $1.0 million recorded in the three months ended March 31, 2024, and no such gain in the current quarter.
Current wording
Operating income of $12.2 million for the three months ended June 30, 2025, increased $0.8 million, year-over-year and $9.9 million sequentially. Operating margins were 14% for the three months ended June 30, 2025, compared to 13% year-over-year, and 3% sequentially. Year-over-year, the increase in operating income and operating margins was primarily attributable to insurance recovery associated with the fire at the Aberdeen, U.K. facility of $2.6 million recorded in the three months ended June 30, 2025, compared to a $1.3 million gain in the same period in prior year.
Previous wording
Sequentially, the decrease in operating income and operating margins was primarily due to 1) decremental revenue of $5.9 million in the three months ended March 31, 2025; 2) a gain on insurance proceeds associated with the fire at the Aberdeen, U.K. facility of $3.1 million recorded in the three months ended December 31, 2024, and no such gain in the current quarter; 3) a gain of $1.4 million on the sale of assets during the three months ended December 31, 2024, and no such sale in the current quarter; and 4) a higher level of Corporate G&A expenses absorbed in the segment. See discussion of General and Administrative Expense, above.
Current wording
Sequentially, the increase in operating income and operating margins was primarily due to 1) incremental revenue of $5.4 million in the three months ended June 30, 2025; 2) insurance recovery associated with the fire at the Aberdeen, U.K. facility of $2.6 million recorded in the three months ended June 30, 2025, and no such gain in the prior quarter; 3) a $2.4 million increase in the first quarter of 2025, associated with to the acceleration of stock compensation expense for retirement eligible executives; and 4) a total charge of $2.9 million associated with employee severance, facility consolidation and asset write-down recorded in the three months ended March 31, 2025, and no such transactions in the current quarter.
Previous wording
Production Enhancement operations are largely focused on complex completions in unconventional oil and gas reservoirs in the U.S. as well as conventional projects across the globe. U.S. onshore drilling and completion activities typically experience a seasonal decline at end of the year with activity levels increasing at the beginning of the year. Average rig count in the U.S. land market for the three months ended March 31, 2025, was down by 5% year-over-year and relatively flat sequentially. International rig count was down over 6% year-over-year and down 2% sequentially.
Current wording
Production Enhancement operations are largely focused on complex completions in unconventional oil and gas reservoirs in the U.S. as well as conventional projects across the globe. U.S. onshore drilling and completion activities typically experience a seasonal decline at end of the year with activity levels increasing at the beginning of the year. Average rig count in the U.S. land market for the three months ended June 30, 2025, was down by 4% year-over-year and 3% sequentially. International rig count was down 7% year-over-year and relatively flat sequentially.
Previous wording
Revenue from the Production Enhancement operating segment of $42.7 million for the three months ended March 31, 2025, decreased 6% year-over-year and increased 1% sequentially. Year-over-year, the decrease was primarily due to lower product sales in the U.S. land market and decline in bulk shipments in the international market. These decreases were partially offset by a growth in well completion diagnostic services in the U.S. and international markets. Sequentially, the increase was primarily driven by continued expansion of well completion diagnostic service in the U.S and certain international markets, substantially offset by lower product sales to the international market.
Current wording
Revenue from the Production Enhancement operating segment of $43.9 million for the three months ended June 30, 2025, decreased 1% year-over-year and increased 3% sequentially. Year-over-year, the decrease was primarily due to lower product sales in the U.S. land market. This decrease was substantially offset by increased revenue in bulk shipments in the international market and a growth in well completion diagnostic services in the U.S. and international markets. Sequentially, the increase was primarily driven by increased product sales in international markets, however this was partially offset by a lower revenue in well completion diagnostic services for projects in the Gulf of Mexico.
Previous wording
We are a holding company incorporated in Delaware. Therefore, we conduct substantially all of our operations through our subsidiaries. Our cash availability is largely dependent upon the ability of our subsidiaries to pay cash dividends or otherwise distribute or advance funds to us and on the terms and conditions of our existing and future credit arrangements. There are no restrictions preventing any of our subsidiaries from repatriating earnings, except for the unrepatriated earnings of our Russian subsidiary which are not expected to be distributed in the foreseeable future, and there are no restrictions or income taxes associated with distributing cash to the parent company through loans or advances. As of March 31, 2025, $21.2 million of our $22.1 million of cash was held by our foreign subsidiaries.
Current wording
We are a holding company incorporated in Delaware. Therefore, we conduct substantially all of our operations through our subsidiaries. Our cash availability is largely dependent upon the ability of our subsidiaries to pay cash dividends or otherwise distribute or advance funds to us and on the terms and conditions of our existing and future credit arrangements. There are no restrictions preventing any of our subsidiaries from repatriating earnings, except for the unrepatriated earnings of our Russian subsidiary which are not expected to be distributed in the foreseeable future, and there are no restrictions or income taxes associated with distributing cash to the parent company through loans or advances. As of June 30, 2025, $21.9 million of our $31.2 million of cash was held by our foreign subsidiaries.
Previous wording
Comparing the three months ended March 31, 2025 to the same period in the prior year, cash flows provided by operating activities improved to $6.7 million in 2025 compared to $5.5 million in the same period 2024. The Company’s working capital improved primarily due to effectiveness in leveraging credit terms on accounts payable.
Current wording
Comparing the six months ended June 30, 2025 to the same period in the prior year, cash flows provided by operating activities decreased to $20.6 million in 2025 compared to $22.7 million in the same period 2024. Net income generated from operations was lower in 2025, but was partially offset by more efficient utilization in operational working capital in 2025.
Previous wording
Cash flows provided by investing activities for the three months ended March 31, 2025 of $0.8 million were primarily driven by proceeds on the sale of assets of $1.2 million and proceeds from insurance recovery associated with the fire incident at the Aberdeen, U.K. facility of $3.1 million, offset by capital expenditures of $3.6 million, which includes $0.8 million related to the replacement of assets damaged in the fire incident. Cash flows used in investing activities for the three months ended March 31, 2024 of $1.7 million were driven primarily by funding capital expenditures of $3.1 million offset by proceeds on the sale of assets of $0.6 million and net proceeds on company owned life insurance policies of $0.8 million.
Current wording
Cash flows used in investing activities for the six months ended June 30, 2025 of $0.9 million include proceeds on the sale of assets of $2.2 million, proceeds from insurance recovery associated with the fire incident at the Aberdeen, U.K. facility of $4.7 million and proceeds on company owned life insurance policies of $0.8 million, offset by total capital expenditures of $7.9 million, which includes $1.6 million related to the replacement of assets and the facility which were damaged in the 2024 fire incident, and a business acquisition, net of cash acquired of $0.6 million. Cash flows used in investing activities for the six months ended June 30, 2024 of $2.3 million include the funding of $5.9 million for capital expenditures, partially offset by $0.8 million of proceeds from the sale of assets and $2.8 million of net proceeds received from company owned life insurance policies.
Previous wording
Cash flows used in financing activities for the three months ended March 31, 2025 of $4.5 million include a $2.0 million net reduction in long-term debt, $0.5 million for quarterly dividends and $2.0 million for the repurchase of common stock. Cash flows provided by financing activities for the three months ended March 31, 2024 of $4.1 million were primarily driven by a $3.0 million net reduction in long-term debt, $0.5 million for quarterly dividends and $0.5 million in costs associated with equity transactions.
Current wording
Cash flows used in financing activities for the six months ended June 30, 2025 of $7.7 million include a $2.0 million net reduction in long-term debt, quarterly dividends of $0.9 million, and $4.8 million used to repurchase the Company’s common stock. Cash flows used in financing activities for the six months ended June 30, 2024 of $17.8 million include a $16.0 million net reduction in long-term debt, quarterly dividends of $0.9 million, and $0.6 million in costs associated with equity transactions.
Previous wording
During the three months ended March 31, 2025, we repurchased 131,598 shares of our common stock for $2.0 million, including rights to 2,123 shares of our common stock to satisfy personal tax liabilities of participants in our stock-based compensation plan for an aggregate purchase price of $32 thousand.
Current wording
During the six months ended June 30, 2025, we repurchased 369,230 shares of our common stock for $4.8 million, including rights to 12,454 shares of our common stock to satisfy personal tax liabilities of participants in our stock-based compensation plan for an aggregate purchase price of $168 thousand.
Previous wording
Free cash flow for the three months ended March 31, 2025, increased $1.4 million from $2.5 million for the same period in 2024. The net cash provided by operating activities of $6.7 million during the three months ended March 31, 2025, was primarily driven by effectiveness in leveraging credit terms on accounts payable. Capital expenditures, excluding capital expenditures of $0.8 million associated with the Aberdeen, U.K. fire incident that were recovered from insurance proceeds, were $0.3 million lower during the three months ended March 31, 2025 compared to the same period in the prior year.
Current wording
Free cash flow for the six months ended June 30, 2025, decreased $2.5 million from $16.8 million for the same period in 2024. The net cash provided by operating activities of $20.6 million during the six months ended June 30, 2025, was derived from a lower level of net income, but is partially offset by more efficient utilization in operational working capital in 2025. Capital expenditures-operations, which exclude capital expenditures of $1.6 million associated with the Aberdeen, U.K. fire incident and are covered by insurance, increased slightly by $0.3 million during the six months ended June 30, 2025 compared to the same period in the prior year.
Previous wording
Senior Notes, Credit Facility and Available Future Liquidity
Current wording
Credit Facility, Senior Notes and Available Future Liquidity
Previous wording
Additionally, we, along with CLIH, have a secured credit facility, the Eighth Amended and Restated Credit Agreement (as amended, the “Credit Facility”) for an aggregate borrowing commitment of $135.0 million with a $50.0 million “accordion” feature. As of March 31, 2025, the Credit Facility has an available borrowing capacity of approximately $108.0 million.
Current wording
We, along with our wholly owned subsidiary Core Laboratories (U.S.) Interests Holdings, Inc. (“CLIH”), have a secured credit facility, the Eighth Amended and Restated Credit Agreement (as amended, the “Credit Facility”) for an aggregate borrowing commitment of $135.0 million with a $50.0 million “accordion” feature. As of June 30, 2025, the Credit Facility has an available borrowing capacity of approximately $108.0 million.
Previous wording
We, along with our wholly owned subsidiary Core Laboratories (U.S.) Interests Holdings, Inc. (“CLIH”) as issuer, have senior notes outstanding that were issued through private placement transactions.
Current wording
Additionally, we along with CLIH as issuer, have senior notes outstanding that were issued through private placement transactions.
Previous wording
In accordance with the terms of the Credit Facility, our leverage ratio is 1.31, and our interest coverage ratio is 6.86, each for the period ended March 31, 2025. We are in compliance with all covenants contained in our Credit Facility and Senior Notes as of March 31, 2025. Certain of our material, wholly owned subsidiaries are guarantors or co-borrowers under the Credit Facility and Senior Notes. See Note 7 -Long-term Debt, net of the Notes to the Interim Consolidated Financial Statements for additional information regarding the terms and financial covenants of the Senior Notes and the Credit Facility.
Current wording
In accordance with the terms of the Credit Facility, our leverage ratio is 1.27, and our interest coverage ratio is 7.22, each for the period ended June 30, 2025. We are in compliance with all covenants contained in our Credit Facility and Senior Notes as of June 30, 2025. Certain of our material, wholly owned subsidiaries are guarantors or co-borrowers under the Credit Facility and Senior Notes. See Note 7 -Long-term Debt, net of the Notes to the Interim Consolidated Financial Statements for additional information regarding the terms and financial covenants of the Senior Notes and the Credit Facility.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Debt to EBITDA ratio is calculated as follows: debt less cash divided by the sum of consolidated net income plus interest, taxes, depreciation and amortization and certain non-cash adjustments.
Current report — wording carried from elsewhere
Debt to Adjusted EBITDA ratio (as defined in our Credit Facility) is calculated as follows: debt less cash divided by the sum of consolidated net income plus interest, taxes, depreciation, amortization, impairments, severance and certain non-cash adjustments.
Current report — wording carried from elsewhere
See Note 7 –Long-term debt, net of the Notes to the Interim Consolidated Financial Statements, for additional information regarding the renewal of the Credit Facility on July 22, 2025.