NPK Reports Strong Third Quarter 2025 Results with 56% Revenue Growth and Higher Margins
NPK has reported another quarter of robust growth and operational progress, underscoring the company’s continued momentum in the power transmission and specialty equipment markets. For the third quarter ended September 30, 2025, NPK achieved total revenues of $68.8 million, marking a 56% increase compared to $44.2 million in the same period last year. This performance reflects both strong customer demand and disciplined execution across product and rental services.
Financial Highlights
- Total Revenues: $68.8 million, up 56% year-over-year
- Rental Revenues: $29.6 million, up 57% year-over-year
- Operating Income from Continuing Operations: $9.1 million, representing a 13.2% operating margin
- Income from Continuing Operations: $6.1 million, or $0.07 per diluted share
- Adjusted EBITDA: $15.4 million, a 22.3% Adjusted EBITDA margin
- Cash Flow from Operating Activities: $24.7 million
- Free Cash Flow: $12.5 million
- Total Cash: $35.6 million
- Total Debt: $9.5 million
The results underscore strong operating leverage and demonstrate NPK’s focus on maintaining profitability while expanding its fleet and customer base.
CEO Commentary
“We delivered another quarter of outstanding results, with revenue increasing by 56%—a testament to our team’s ability to execute amid a rapidly growing power transmission market,” said Matthew Lanigan, President and Chief Executive Officer of NPK.
He continued, “Our commercial sales and operational teams continue to excel in serving the largest and most complex utility projects across the country. Based on our visibility into the fourth quarter and 2026, we are raising our full-year capital expenditure plan by $10 million to meet expected demand growth. At the same time, we are accelerating plans to expand our manufacturing capacity to support sustainable long-term growth.”
Lanigan emphasized NPK’s flexible rental business model as a key differentiator:
“One of our strongest competitive advantages is the scale and adaptability of our rental fleet, which enables us to respond to customers’ changing needs quickly. During the quarter, we were able to accommodate several last-minute project extensions and scope changes. Although these rapid adjustments created minor operational inefficiencies and modest margin pressure, they strengthened our customer relationships and reinforced our reputation as an industry leader.”
Despite short-term cost fluctuations, Lanigan reaffirmed the company’s confidence in maintaining mid-30% gross margins over the longer term. “We ended Q3 with record utilization levels, a strong cash position, and accelerating demand. As a result, we are raising our full-year outlook and remain focused on executing our strategic priorities while pursuing disciplined growth,” he added.
Business Update
NPK’s strategic plan centers on three pillars: driving organic growth in high-margin rental and product markets, improving asset optimization and organizational efficiency, and executing a balanced capital allocation strategy that funds innovation while returning value to shareholders.
1. Sustained Demand in Specialty Rental and Power Transmission
The company experienced ongoing strength in its specialty rental and services segment, generating $44 million in revenue from matting rental and related services during the third quarter of 2025. Demand remained robust even through the traditionally softer summer months, driven by continued investment in power transmission infrastructure.
Product sales also saw solid growth, totaling $25 million for the quarter—NPK’s best quarterly performance this year—reflecting consistent demand from major utility companies investing in equipment to support grid modernization and reliability projects.
2. Operational Efficiency and Cost Optimization
NPK continued to advance operational excellence through productivity initiatives and digital transformation. During Q3, the company began the rollout of a new cloud-based ERP system designed to improve visibility, streamline workflows, and enhance decision-making across its operations. The rollout is expected to be substantially completed by Q1 2026.
Selling, general, and administrative (SG&A) expenses were $13.3 million, or 19.3% of revenue, compared to 24.9% in the prior-year quarter. The improvement reflects greater operating leverage and disciplined cost management.
The quarter also included approximately $1 million in performance-based incentive expenses and $0.5 million in costs related to the ERP implementation and strategic planning projects.
Lanigan noted, “Our goal is to bring SG&A down to the mid-teens as a percentage of revenue by early 2026, while continuing to invest in innovation and customer service excellence.”
3. Capital Allocation and Share Repurchases
NPK continued to demonstrate its commitment to shareholder value through a consistent return of capital program. During Q3 2025, the company repurchased approximately 0.4 million shares for $3.4 million under its existing buyback program.
In parallel, NPK continued investing in growth, expanding its rental fleet by 13% year-to-date, and implementing debottlenecking measures that improved production output by 5%. These initiatives position the company for enhanced capacity and responsiveness as customer demand grows.
Financial Performance Overview
In the third quarter of 2025, NPK reported income from continuing operations of $6.1 million, or $0.07 per diluted share, compared to $14.9 million, or $0.17 per diluted share, in the third quarter of 2024.
The prior-year results included a one-time income tax benefit of $14.6 million, linked to the release of valuation allowances following the sale of the company’s Fluids Systems business.
Gross margin improved significantly to 31.9%, compared with 27.5% in the third quarter of 2024, driven by favorable product mix, pricing discipline, and improved fleet utilization.
Adjusted EBITDA rose to $15.4 million (22.3% of revenue), up from $7.5 million (17.0% of revenue) last year — a 105% increase.
Balance Sheet and Liquidity
NPK continues to maintain a strong and flexible balance sheet to support growth initiatives.
As of September 30, 2025:
- Total Cash: $35.6 million
- Total Debt: $9.5 million
- Available Liquidity: $144 million under the senior secured revolving credit facility
Operating cash flow reached $24.7 million in the quarter, up substantially from $2.8 million a year earlier, reflecting improved profitability and working capital efficiency.
Capital investments of $12.2 million were directed primarily toward expanding the mat rental fleet and supporting new utility contracts, while $3.4 million was allocated to share repurchases.
Lanigan stated, “Our cash position and liquidity of nearly $180 million give us the flexibility to pursue both organic expansion and strategic investments, ensuring we remain well-positioned for the future.
Financial Guidance for Full-Year 2025
Reflecting its strong year-to-date performance and favorable market trends, NPK updated its full-year 2025 financial outlook as of October 30, 2025.
The company now expects:
- Total Revenues: $268 million to $272 million
- Adjusted EBITDA: $71 million to $74 million
- Capital Expenditures: $45 million to $50 million
This updated guidance reflects higher expected utilization rates, continued strength in specialty rentals, and an expanded production capacity entering 2026
NPK enters the final quarter of 2025 with record fleet utilization, accelerating customer demand, and a strengthened operational foundation. The company’s leadership remains confident that ongoing investments in technology, fleet expansion, and workforce development will continue to deliver long-term growth and profitability.
“Our third-quarter performance reinforces the strength of our strategy and our people,” concluded Lanigan. “We’re building a company designed for durability and consistent performance, no matter the market environment. As we look ahead to 2026, NPK’s focus remains clear: grow responsibly, execute with excellence, and deliver value to our customers and shareholders.
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