KLX Energy Services Holdings, Inc. (KLXE): Business Model Canvas [10-2024 Updated]
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KLX Energy Services Holdings, Inc. (KLXE) Bundle
The business landscape of KLX Energy Services Holdings, Inc. (KLXE) is intricately designed to meet the dynamic demands of the oil and gas sector. At the core of its operations lies a robust Business Model Canvas that showcases how KLXE effectively collaborates with industry leaders, leverages advanced technologies, and delivers tailored solutions. Discover how this company navigates challenges and seizes opportunities in the competitive energy market by exploring its key components, from value propositions to revenue streams, below.
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Key Partnerships
Collaborations with major oil and gas companies
KLX Energy Services Holdings, Inc. (KLXE) has established strong collaborations with key players in the oil and gas sector to enhance its service offerings and market reach. As of September 30, 2024, KLXE reported total revenues of $543.8 million, a decrease from $694.2 million in the previous year, primarily influenced by market conditions and reduced activity levels. These partnerships enable KLXE to leverage the operational capabilities and resources of major oil companies, allowing for improved service delivery and cost efficiencies.
Strategic alliances with technology partners
KLXE has formed strategic alliances with technology partners to integrate advanced technologies into its service offerings. This approach aims to improve operational efficiency and service quality. For instance, KLXE reported investing in innovative solutions that enhance its drilling and completion capabilities. In the nine months ended September 30, 2024, KLXE incurred capital expenditures of $49.8 million, reflecting its commitment to investing in technology and equipment. These alliances are crucial for maintaining competitive advantages in a rapidly evolving industry.
Contract manufacturers for product development
The company collaborates with contract manufacturers to develop and produce specialized products used in its service lines. This partnership model allows KLXE to minimize capital expenditure and focus on core competencies while ensuring high-quality standards in product offerings. In the nine months ended September 30, 2024, KLXE's total assets included property and equipment valued at $207.1 million, indicating significant investment in physical assets.
Partnerships with service providers for integrated solutions
KLXE has partnered with various service providers to deliver integrated solutions that cater to the comprehensive needs of its clients in the oil and gas sector. These partnerships enhance KLXE's ability to offer bundled services, which can lead to increased customer satisfaction and loyalty. The company's reliance on service partnerships is evident in its revenue breakdown, where the completion services segment accounted for $287.5 million, despite a 22% decline compared to the previous year.
| Partnership Type | Description | Financial Impact (2024) |
|---|---|---|
| Major Oil and Gas Companies | Collaborations to enhance service delivery and market reach. | Total Revenues: $543.8 million |
| Technology Partners | Strategic alliances for integrating advanced technologies. | Capital Expenditures: $49.8 million |
| Contract Manufacturers | Partnerships for product development and quality assurance. | Property and Equipment: $207.1 million |
| Service Providers | Integrated solutions for comprehensive client needs. | Completion Services Revenue: $287.5 million |
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Key Activities
Providing drilling, completion, and production services
KLX Energy Services Holdings, Inc. specializes in offering a range of services across the oil and gas sector, particularly focusing on drilling, completion, and production. For the nine months ended September 30, 2024, the total revenue from these services amounted to $543.8 million, reflecting a significant decrease of 21.7% compared to $694.2 million for the same period in 2023. The breakdown of revenue by service line for the nine months ended September 30, 2024, is as follows:
| Service Line | Revenue (in millions) | % Change from 2023 |
|---|---|---|
| Drilling | $119.4 | (30.6%) |
| Completion | $287.5 | (22.0%) |
| Production | $84.3 | (5.8%) |
| Intervention | $52.6 | (18.1%) |
Research and development for innovative technologies
Research and development (R&D) is critical for KLX Energy Services to maintain competitiveness and innovation in service delivery. For the nine months ended September 30, 2024, R&D expenses were reported at $1.0 million, consistent with the previous year. The company focuses on developing new technologies that enhance operational efficiency and reduce costs, which is vital in a competitive landscape where pricing pressures are prevalent.
Equipment maintenance and rental services
KLX provides maintenance and rental services for equipment used in drilling, completion, and production activities. As of September 30, 2024, the company had total property and equipment valued at $643.1 million, which includes machinery and equipment that are essential for its operations. The depreciation expense for the nine months ended September 30, 2024, was recorded at $68.9 million, indicating the ongoing investment in maintaining and upgrading its asset base.
Streamlining operations to reduce non-productive time
Operational efficiency is a key focus for KLX Energy Services. The company continually implements strategies to minimize non-productive time (NPT) across its operations. For the nine months ended September 30, 2024, KLX reported a net loss of $38.4 million, primarily attributed to reduced activity and pricing pressures. The company has been proactive in managing its operational costs, with selling, general, and administrative expenses (SG&A) amounting to $62.1 million, or 11.4% of revenues, showing a decrease from the prior year despite the decline in revenue.
| Performance Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Operating Income (Loss) | ($10.6 million) | $54.9 million | (119.3%) |
| Net Loss | ($8.2 million) | $7.6 million | (208.4%) |
| Revenue | $188.9 million | $220.6 million | (14.4%) |
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Key Resources
Extensive fleet of coiled tubing and wireline assets
KLX Energy Services Holdings, Inc. operates a comprehensive fleet that includes coiled tubing and wireline assets essential for providing its services. As of September 30, 2024, the total property and equipment, net, was valued at $207.1 million, reflecting ongoing investments in maintaining and upgrading these critical assets.
Skilled workforce with technical expertise
The company employs a skilled workforce, crucial for executing its operations across various segments. The workforce is characterized by its extensive technical expertise, which is vital in delivering specialized services within the oil and gas industry. The workforce's efficiency is evident in the labor cost per employee, which decreased by 10.9% for the nine months ended September 30, 2024, compared to the previous year.
Proprietary tools and patented technologies
KLX Energy Services holds proprietary tools and patented technologies that enhance its service offerings. These innovations support the company's competitive edge in providing efficient and cost-effective services. The investment in research and development (R&D) costs was consistent at approximately $1.0 million for both the nine months ended September 30, 2024, and 2023.
Geographic presence across major shale basins
KLXE's geographic footprint spans across key shale basins, including the Rocky Mountains, Southwest, and Northeast/Mid-Con regions. As of September 30, 2024, the company reported total assets allocated by segment as follows:
| Segment | Total Assets (in millions) |
|---|---|
| Rocky Mountains | $131.0 |
| Southwest | $167.1 |
| Northeast/Mid-Con | $106.0 |
| Corporate and Other | $82.7 |
| Total | $486.8 |
This geographic diversity allows KLXE to leverage regional market dynamics and customer bases effectively.
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Value Propositions
Comprehensive suite of engineered solutions
KLX Energy Services Holdings, Inc. (KLXE) offers a diverse range of services designed to meet the varying needs of its customers in the oil and gas sector. The solutions include:
- Drilling services
- Completion services
- Production services
- Intervention services
For the nine months ended September 30, 2024, KLXE generated total revenue of $543.8 million, a decrease of 21.7% from $694.2 million in the same period of 2023. This decline reflects reduced activity and pricing pressures across its service lines.
High-quality service execution at wellsites
KLXE emphasizes high-quality service execution, which is evident in its operational performance metrics. The company reported:
- Operating income for the Rocky Mountains segment was $19.0 million, down 51.8% from $39.4 million in the prior year period.
- Operating income for the Southwest segment was $2.6 million, down 85.3% from $17.7 million.
- Operating income for the Northeast/Mid-Con segment was $1.9 million, down 94.8% from $36.5 million.
These figures illustrate the company's commitment to maintaining high service standards, even amid challenging market conditions.
Ability to manage complex well challenges
KLXE's expertise in addressing complex well challenges sets it apart from competitors. The company has developed specialized technologies and methodologies that enhance operational efficiency and effectiveness. For instance, its completion services generated $287.5 million in revenue for the nine months ended September 30, 2024, down 22.0% from $368.5 million in the prior year.
Cost-effective solutions tailored to customer needs
KLXE focuses on delivering cost-effective solutions, which is critical in a highly competitive industry. The company reported a cost of sales of $422.3 million for the nine months ended September 30, 2024, representing 77.7% of total sales, compared to $520.4 million or 75.0% of sales in the prior year. This increase in the cost of sales percentage is indicative of the company's efforts to manage costs while providing tailored solutions to its clients.
The following table summarizes KLXE's revenue by service offering for the nine months ended September 30, 2024, compared to the same period in 2023:
| Service Offering | 2024 Revenue ($ millions) | 2023 Revenue ($ millions) | % Change |
|---|---|---|---|
| Drilling | 119.4 | 172.0 | (30.6) |
| Completion | 287.5 | 368.5 | (22.0) |
| Production | 84.3 | 89.5 | (5.8) |
| Intervention | 52.6 | 64.2 | (18.1) |
| Total Revenue | 543.8 | 694.2 | (21.7) |
This table illustrates the impact of market conditions on KLXE's various service lines, emphasizing the company's ability to adapt its offerings to meet customer demands effectively.
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Customer Relationships
Focus on long-term partnerships with clients
KLX Energy Services Holdings, Inc. emphasizes building long-term partnerships with its clients across various segments of the oil and natural gas industry. In the nine months ended September 30, 2024, the total revenue from major clients showed a decrease of approximately 21.7%, down to $543.8 million from $694.2 million in the same period of the previous year.
Dedicated account management for major customers
The company employs a dedicated account management approach for its major customers. This strategy is designed to enhance customer satisfaction and retention. For example, operating income from the Rocky Mountains segment was $19.0 million for the nine months ended September 30, 2024, compared to $39.4 million in the prior year, indicating a focus on maintaining relationships even during downturns.
Responsive customer service to address needs
KLX Energy Services prides itself on its responsive customer service. The company reported that customer feedback is actively sought and utilized to improve service delivery. The cost of sales for the nine months ended September 30, 2024, was $422.3 million, which was 77.7% of total sales, reflecting a commitment to maintaining service quality while managing operational costs.
Engagement through regular feedback and collaboration
Engagement with customers is facilitated through regular feedback and collaboration initiatives. The company has noted a focus on understanding client needs better to tailor its services accordingly. In terms of cash flow, KLX Energy Services reported $28.2 million in cash flows provided by operating activities for the nine months ended September 30, 2024, compared to $77.0 million in the same period of the previous year, which highlights the impact of customer engagement on financial performance.
| Customer Segment | Revenue (2024) | Revenue (2023) | % Change |
|---|---|---|---|
| Rocky Mountains | $174.9 million | $211.3 million | (17.2%) |
| Southwest | $207.9 million | $237.5 million | (12.5%) |
| Northeast/Mid-Con | $161.0 million | $245.4 million | (34.4%) |
| Total Revenue | $543.8 million | $694.2 million | (21.7%) |
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Channels
Direct sales to large independent and major oil companies
KLX Energy Services Holdings, Inc. (KLXE) primarily engages in direct sales to large independent and major oil companies. As of September 30, 2024, KLXE reported total revenues of $543.8 million for the nine months ended, a decrease of 21.7% compared to $694.2 million in the same period of 2023. The company serves various segments, including Rocky Mountains, Southwest, and Northeast/Mid-Con, which have seen varying degrees of revenue decline due to market conditions.
| Segment | Revenue (2024) | Revenue (2023) | % Change |
|---|---|---|---|
| Rocky Mountains | $174.9 million | $211.3 million | (17.2%) |
| Southwest | $207.9 million | $237.5 million | (12.5%) |
| Northeast/Mid-Con | $161.0 million | $245.4 million | (34.4%) |
| Total | $543.8 million | $694.2 million | (21.7%) |
Online platforms for service inquiries and bookings
KLXE utilizes online platforms to facilitate service inquiries and bookings. This digital presence allows customers to access services efficiently, enhancing customer experience and operational efficiency. The company continues to invest in its online capabilities to streamline operations and improve client engagement. The integration of digital tools aligns with industry trends, emphasizing the need for quick access to services in a competitive market.
Trade shows and industry events for networking
Participation in trade shows and industry events is a crucial channel for KLXE to network with potential clients and showcase its service offerings. These events allow KLXE to strengthen relationships with existing customers and build new partnerships, facilitating growth opportunities in the oil and gas sector. The company actively seeks to engage with industry stakeholders during these events to promote its diverse service portfolio.
Marketing through industry publications and reports
KLXE employs marketing strategies that include advertising in industry publications and reports. This approach enhances brand visibility and positions KLXE as a thought leader in the oilfield services sector. By disseminating information about its services and industry insights, KLXE aims to attract new customers while retaining existing ones.
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Customer Segments
Major oil and gas companies operating in the U.S.
KLX Energy Services Holdings, Inc. primarily serves large, integrated oil and gas companies in the United States. These companies often require comprehensive oilfield services, including drilling, completion, and production support. As of September 30, 2024, KLXE reported revenues of $543.8 million for the nine months ended, a decrease of 21.7% from $694.2 million in the same period in 2023.
Independent exploration and production companies
The company also targets independent exploration and production firms, which tend to be smaller and more agile than their larger counterparts. These companies rely on KLXE’s services to efficiently manage their operations. The revenue from the Southwest segment, which includes many independent operators, was $207.9 million for the nine months ended September 30, 2024, down from $237.5 million in the prior year, reflecting a 12.5% decrease.
Industries requiring specialized oilfield services
KLX Energy Services provides specialized services to various industries, including those engaged in unconventional resource plays such as shale oil and gas extraction. The company’s drilling services generated $119.4 million in revenue for the nine months ended September 30, 2024, a decline of 30.6% from $172.0 million in 2023.
Clients in unconventional resource plays
Clients involved in unconventional resource plays, such as hydraulic fracturing and horizontal drilling, represent a significant customer segment for KLXE. The Northeast/Mid-Con segment, which serves clients in these areas, saw revenues drop to $161.0 million from $245.4 million, marking a 34.4% decrease.
| Customer Segment | Revenue (9 Months Ended Sept 30, 2024) | Revenue (9 Months Ended Sept 30, 2023) | % Change |
|---|---|---|---|
| Major Oil and Gas Companies | $543.8 million | $694.2 million | -21.7% |
| Independent Exploration and Production Companies | $207.9 million (Southwest Segment) | $237.5 million (Southwest Segment) | -12.5% |
| Industries Requiring Specialized Oilfield Services | $119.4 million (Drilling Services) | $172.0 million (Drilling Services) | -30.6% |
| Clients in Unconventional Resource Plays | $161.0 million (Northeast/Mid-Con Segment) | $245.4 million (Northeast/Mid-Con Segment) | -34.4% |
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Cost Structure
Capital expenditures for equipment and technology
For the nine months ended September 30, 2024, KLX Energy Services incurred capital expenditures of $49.8 million, compared to $44.3 million for the same period in 2023. The anticipated total capital expenditures for the year ending December 31, 2024, are projected to be between $55.0 million and $60.0 million, with approximately 80% allocated for maintenance capital spending.
| Type of Capital Expenditure | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Total Capital Expenditures | $49.8 million | $44.3 million |
| Projected Total for 2024 | $55.0 - $60.0 million | N/A |
| Maintenance Capital Spending (%) | 80% | N/A |
Operating costs related to service delivery
Operating costs related to service delivery for KLX Energy Services for the nine months ended September 30, 2024, included cost of sales amounting to $422.3 million, which represented 77.7% of total revenues. This is a decrease from $520.4 million in the previous year, which accounted for 75.0% of revenues.
Research and development expenses
Research and development expenses for KLX Energy Services during the nine months ended September 30, 2024, were $1.0 million, consistent with the same period in 2023.
| Expense Type | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Research and Development Expenses | $1.0 million | $1.0 million |
Maintenance and operational overheads
Maintenance and operational overheads for KLX Energy Services have seen fluctuations, particularly in the context of labor and repair costs. For the nine months ended September 30, 2024, labor costs per employee decreased by 10.9% compared to the prior year, while repair and maintenance costs increased by 20.9% as a percentage of revenues.
| Cost Component | Change (2024 vs. 2023) |
|---|---|
| Labor Costs per Employee | Decreased by 10.9% |
| Repair & Maintenance Costs (% of Revenues) | Increased by 20.9% |
KLX Energy Services Holdings, Inc. (KLXE) - Business Model: Revenue Streams
Service fees from drilling and completion operations
KLX Energy Services generates significant revenue through service fees associated with drilling and completion operations. For the nine months ended September 30, 2024, revenue from drilling services amounted to $119.4 million, down from $172.0 million in the same period of 2023, reflecting a decline of 30.6%. Completion services brought in $287.5 million, compared to $368.5 million, marking a decrease of 22.0%.
Equipment rentals for oilfield services
The company also earns revenue through equipment rentals essential for oilfield operations. Although specific figures for equipment rentals were not disclosed separately, they are included in the overall revenue from segments. The total revenue for the Rocky Mountains, Southwest, and Northeast/Mid-Con segments for the nine months ended September 30, 2024, was $543.8 million, compared to $694.2 million in the prior year, indicating a total revenue decline of 21.7%.
Revenue from proprietary product sales
KLX Energy Services also benefits from proprietary product sales, contributing to its overall revenue. However, specific financial data regarding proprietary product sales was not explicitly detailed in the reports. The overall product line revenue for the nine months ended September 30, 2024, was $543.8 million, showing a decline across all product lines.
Consulting services for operational efficiency
Additionally, KLX offers consulting services aimed at enhancing operational efficiency for its clients. These services are part of the broader revenue generation strategy. Detailed financial performance metrics for consulting services were not separated in the financial statements, as they are typically bundled within the overall service offerings. Nevertheless, the company emphasizes the importance of operational consulting in its service portfolio.
| Revenue Stream | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | % Change |
|---|---|---|---|
| Drilling Services | 39.4 | 53.3 | (26.1) |
| Completion Services | 101.5 | 113.1 | (10.3) |
| Production Services | 30.4 | 33.1 | (8.2) |
| Intervention Services | 17.6 | 21.1 | (16.6) |
| Total Revenue | 188.9 | 220.6 | (14.4) |
In summary, KLX Energy Services Holdings, Inc. relies on diverse revenue streams including service fees from drilling and completion operations, equipment rentals, proprietary products, and consulting services. The company has faced challenges in revenue generation, particularly in the recent fiscal year, as reflected in the overall revenue decline across its segments and services.
Article updated on 8 Nov 2024
Resources:
- KLX Energy Services Holdings, Inc. (KLXE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of KLX Energy Services Holdings, Inc. (KLXE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View KLX Energy Services Holdings, Inc. (KLXE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.