Koil Energy Solutions Reports 10% Revenue Decline in Q2 2025

Koil Energy Solutions, Inc. reported a decline in financial performance for the second quarter of 2025, with revenues totaling $5.2 million, a decrease of 10% from $5.8 million in the same period last year. For the first half of 2025, revenues also fell by 10% to $10.4 million compared to $11.6 million in the first half of 2024. The decrease in revenue was primarily attributed to a reduction in fixed-price contract sales and backlog for the manufacture of flying leads and hydraulic distribution manifolds, although there was a partial offset from increased service contract work. The company recorded a net income of $61,000 for the second quarter, down from $984,000 in the prior year, and a net income of $32,000 for the first half of 2025, compared to $1.6 million in the same period last year.

In terms of operational metrics, Koil Energy's cost of sales for the second quarter was $3.5 million, slightly lower than the $3.5 million reported in the previous year. However, gross profit decreased significantly to $1.7 million, down 23% from $2.2 million, reflecting reduced direct employee utilization and increased overhead costs. Selling, general, and administrative expenses rose by 55% to $2 million, driven by higher administrative payroll, legal fees related to a lawsuit settlement, and expenses for outside consultants. The company’s Adjusted EBITDA for the second quarter was $163,000, a substantial decrease from $1.2 million in the prior year.

Koil Energy's balance sheet as of June 30, 2025, showed total assets of $19.6 million, an increase from $18.7 million at the end of 2024. Current assets decreased slightly to $9.7 million, with cash on hand at $2.2 million, down from $3.4 million at the end of the previous fiscal year. The company’s total liabilities increased to $10.8 million, up from $10.1 million, while stockholders' equity rose to $8.8 million from $8.6 million. The company continues to manage its liquidity through cash flows from operations and has entered into a factoring agreement to sell accounts receivable as needed.

Strategically, Koil Energy is focusing on expanding its capabilities in subsea tie-back projects, which are becoming increasingly popular among offshore operators due to their shorter payback periods compared to traditional projects. The company has been actively hiring to build out its team in alignment with its long-term growth strategy. Despite the current challenges, Koil Energy remains optimistic about its future, citing a growing backlog and increased order intake from subsea tie-back and maintenance projects. The company is committed to balancing profitability with investment in its operational capabilities and expects to continue adapting to market conditions to enhance its competitive position in the energy services sector.