Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion highlights the current operating environment and summarizes the financial position of Core Laboratories Inc. and its subsidiaries as of June 30, 2026, 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 2025 Annual Report on Form 10-K for the year ended December 31, 2025.

General

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.

References to "Core Lab", "Core Laboratories", the "Company", "we", "our" and similar phrases are used throughout this Quarterly Report and relate collectively to Core Laboratories Inc. and its consolidated affiliates.

We operate our business in two segments. These complementary operating segments provide different services and products and utilize different technologies for evaluating and improving reservoir performance and increasing oil and gas recovery from new and existing fields.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act"). Certain statements contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations section, including those under the headings "Outlook" and "Liquidity and Capital Resources", and in other parts of this Quarterly Report, are forward-looking. In addition, from time to time, we may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. Forward-looking statements can be identified by the use of forward-looking terminology such as "may", "will", "believe", "expect", "anticipate", "estimate", "continue", or other similar words, including statements as to the intent, belief, or current expectations of our directors, officers, and management with respect to our future operations, performance, or positions or

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which contain other forward-looking information. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, no assurances can be given that the future results indicated, whether expressed or implied, will be achieved. While we believe that these statements are and will be accurate, our actual results and experience may differ materially from the anticipated results or other expectations expressed in our statements due to a variety of risks and uncertainties.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see Part II, "Item 1A - Risk Factors" of this Quarterly Report and "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2025, filed by us with the Securities and Exchange Commission ("SEC").

Outlook

Recent geopolitical developments, including the escalation of armed conflict in the Middle East, have dramatically shifted the crude oil supply-demand balance. On February 28, 2026 the United States and Israel initiated air strikes against Iranian military targets and leadership. Since then, retaliation by Iran and action by other military groups against United States and Israeli interests, including merchant vessels, in the Middle East has been widespread. As of the date of the filing of this Quarterly Report, military activity and hostilities continue to escalate in the Middle East, and the situation throughout the region remains volatile, with the potential for continued escalation into a broader and more sustained regional conflict. While the Company believes the fundamentals for energy-related services remain stable, near-term volatility in commodity prices meaningfully raises the level of uncertainty. The Company is monitoring developments with respect to the ongoing military conflict with Iran, including the impact on global commodity prices and potential shipping and logistics disruptions, which could affect our customers and their activity levels in the region.

The Company believes that activity levels associated with smaller-scale, short-cycle crude oil development projects will be more sensitive to a decrease and/or continued volatility of crude-oil prices. As such, we expect changes in crude oil prices will marginally improve drilling and completion activity levels in the U.S. onshore market which could directly affect demand for our well completion services and products. Outside the U.S., large-scale international oil and gas projects are expected to be more resilient to the near-term volatility of crude-oil prices, and the Company anticipates client projects will continue to be executed as planned, unless directly impacted by the conflicts mentioned above. 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 both the U.S. and internationally. In the U.S., we are involved in projects in many of the onshore unconventional basins and offshore projects in the Gulf of Mexico and Alaska. Outside the U.S., we continue to work on many small and large-scale projects analyzing rock, reservoir fluids, and crude oil and derived products and sell perforating systems and well diagnostic services in every major producing region of the world. Notable larger projects are in locations such as Guyana, Suriname located offshore South America, Australia, West Africa and the Middle East. Additionally, some of our major clients have increased their investment in projects to capture and sequester carbon dioxide.

The ongoing geopolitical conflicts between Russia and Ukraine and between the United States and Iran, 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 fuels. The uncertainty related to the Strait of Hormuz and more recently the Red Sea with the onset of military conflict in Iran has further exacerbated maritime trade flows of crude oil and derived products. Approximately 20% of global crude oil production passes through the Strait of Hormuz and a substantial portion of that crude oil remains stranded. These disruptions resulted in a reduction of 15% to 20% in the global cargo movement of crude oil and derived products during the second quarter of 2026 compared to the same period in the prior year. The decline in trading and maritime transport of crude oil directly impacts demand for the Company's associated laboratory assay services. We have no way to predict the progress or outcome of these events, and any resulting government responses are fluid and beyond our control. Accordingly, the full impact of these events on our business is not known at this time.

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Our major clients continue to focus on capital management, return on invested capital, free cash flow, and returning capital to their shareholders, as opposed to a focus on production growth. The companies adopting value versus volume metrics tend to be the more technologically sophisticated operators and form the foundation of Core Lab's worldwide client base. The Company expects our clients' activities associated with increasing oil and gas reserves and production levels will continue to increase in the coming years.

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Results of Operations

Our results of operations as a percentage of applicable revenue are as follows (in thousands):

"NM" means not meaningful

*Percentage based on applicable revenue rather than total revenue

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"NM" means not meaningful

*Percentage based on applicable revenue rather than total revenue

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"NM" means not meaningful

*Percentage based on applicable revenue rather than total revenue

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Operating Results for the Three Months Ended June 30, 2026 compared to the Three Months Ended June 30, 2025 and March 31, 2026 and for the Six Months Ended June 30, 2026 compared to the Six Months Ended June 30, 2025

Service Revenue

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, 2026, service revenue was $94.3 million, a decrease of 2% year-over-year and flat sequentially. Year-over-year, revenues decreased primarily due to lower activity levels in the international markets partially offset by increased activity in the U.S. market. International revenue was negatively impacted by the Middle East conflict that began in the first quarter of 2026 and other ongoing geopolitical conflicts in the Middle East and between Russia and Ukraine. Sanctions previously discussed have disrupted the movement and trading patterns of crude oil and derived products as well as restricted our ability to perform services in certain international markets, primarily Russia. The limited transit through the Strait of Hormuz since the conflict began resulted in temporary supply-chain disruptions, delays and rerouting of crude oil and derived products, which has negatively impacted our laboratory assay services and regional studies.

Sequentially, service revenue was flat primarily due to increased activity in several international regions offset by decreased activity in the U.S. markets.

For the six months ended June 30, 2026, service revenue was $188.5 million, a decrease of 1% compared to the same period in the prior year, primarily driven by a decline in the international markets due to the ongoing geopolitical conflicts in the Middle East and between Russia and Ukraine, and expanded sanctions as previously discussed. Additionally, severe weather events across North America, Europe, and the Mediterranean region occurring in the first quarter of 2026, negatively impacted certain operations and delayed our client activity in 2026.

Product Sales Revenue

Product sales are primarily tied to U.S. onshore drilling and completion activities and 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, 2026, product sales revenue of $30.3 million decreased 11% year-over-year and increased 10% sequentially. Year-over-year, the decrease was primarily due to the non-recurrence of large shipments of manufactured laboratory equipment sales that occurred in the prior year quarter, as well as lower bulk shipments to certain international markets impacted by the geopolitical conflicts, as discussed above. The decrease in sales revenue was partially offset by increased U.S. onshore drilling and completion activity during the three months ended June 30, 2026.

Sequentially, the increase was primarily due to a significant increase in product sales for U.S. onshore completion activity, partially offset by lower level of shipments of manufactured laboratory equipment.

For the six months ended June 30, 2026, product sales revenue was $57.9 million, a decrease of 7% compared to the same period in the prior year, primarily due to lower level of shipments of manufactured laboratory equipment and bulk shipments to international markets, partially offset by increased sales in the U.S. onshore markets in 2026 compared to 2025.

Cost of Services, excluding depreciation

Cost of services was $75.7 million for the three months ended June 30, 2026, an increase of 2% year-over-year and relatively flat sequentially. Cost of services expressed as a percentage of service revenue was 80% for the three months ended June 30, 2026, compared to 77% for the same period in the prior year and 81% for the prior quarter. The year-over-year increase in cost of services and cost of services expressed as a percentage of service revenue was driven by 1) the impact of the Middle East conflict, as the Company has maintained its cost structure in the region while revenue decreased significantly; and 2) higher laboratory supply costs associated with inflationary pressure.

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Sequentially, changes in cost of services were in line with changes in service revenue. Cost of services as a percentage of service revenue was relatively flat but improved slightly primarily due to a slight decrease in employee compensation costs.

For the six months ended June 30, 2026, cost of services was $151.9 million, an increase of 3% compared to the same period in the prior year. Cost of services expressed as a percentage of service revenue increased to 81% from 77% when compared to the same period in the prior year. The increases are primarily due to lower service revenue as a result of the conflict in the Middle East and increased employee compensation and other operating costs, as discussed above.

Cost of Product Sales, excluding depreciation

Cost of product sales was $25.6 million for the three months ended June 30, 2026, a decrease of 14% year-over-year and 1% sequentially. Cost of product sales expressed as a percentage of product sales revenue was 85% for the three months ended June 30, 2026, compared to 87% for the same period in the prior year and compared to 94% in the prior quarter. The year-over-year decrease in cost of product sales was primarily driven by internal initiatives to reduce the costs of goods through manufacturing efficiencies and reducing overhead costs, and 2025 included a write-down of certain assets. Additionally, cost of product sales for the second quarter of 2026 benefited from the partial refund of tariffs previously imposed and paid on the importation of certain materials.

Sequentially, the decline in cost of product sales and cost of product sales expressed as a percentage of product sales revenue was due to 1) the tariff refunds received in the second quarter of 2026, as discussed above; and 2) improvement in absorption of fixed costs on a higher revenue base.

For the six months ended June 30, 2026, cost of product sales was $51.6 million, a decrease of 8% compared to the same period in the prior year. Cost of product sales expressed as a percentage of product sales revenue was 89% for the six months ended June 30, 2026, compared to 90% from the same period in the prior year. The decrease in cost of product sales was achieved in 2026 due to the internal initiatives to reduce cost of goods sold, and inventory write-down costs recorded in the prior year that did not recur in the current year, despite the decrease in revenue from the prior year. In addition, cost of product sales was slightly lower due to tariff refunds received in the second quarter of 2026, as discussed above.

General and Administrative Expense, excluding depreciation

General and administrative ("G&A") expense includes corporate management and centralized administrative services that benefit our operations.

G&A expense for the three months ended June 30, 2026, was $11.0 million, which increased $0.5 million, compared to the same period in 2025. The year-over-year increase was primarily due to changes in employee compensation and contract labor costs in these periods.

G&A expense for the three months ended June 30, 2026, decreased $3.8 million compared to the prior quarter primarily due to the acceleration of stock compensation expense for retirement eligible employees of $3.7 million recorded in the first quarter of 2026.

For the six months ended June 30, 2026, G&A expense was $25.7 million which increased $1.6 million, compared to the six months ended June 30, 2025. The year-over-year increase was primarily due to an increase in stock compensation expense and contract labor costs, partially offset by lower other employee compensation costs.

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Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended June 30, 2026, was $3.8 million, an increase of 4% year-over-year and 2% sequentially. Depreciation and amortization expense for the six months ended June 30, 2026, was $7.6 million, an increase of 3% year-over-year. The increases in depreciation and amortization expense for the three and six months ended June 30, 2026, compared to the prior year periods were primarily due to 1) additional amortization costs associated with business acquisitions in the fourth quarter of 2025; and 2) higher spending in capital expenditures in 2026. Sequentially, the slight increase was primarily due to higher spending in capital expenditures during the three months ended June 30, 2026.

Other (Income) Expense, Net

The components of other (income) expense, net, are as follows (in thousands):

As a result of our continuous efforts in consolidating and exiting certain facilities in the U.S. and other international locations for operational efficiency, we sold property in Tulsa, Oklahoma for a net gain of $0.9 million during the six months ended June 30, 2026. In addition, we recognized write-downs of leasehold improvements, right of use assets and other assets and incurred lease termination and other exit costs of $0.6 million and $0.7 million during the six months ended June 30, 2026 and 2025, respectively.

In February 2024, we had a fire incident at our Aberdeen, U.K. facility, and we have recorded insurance recovery associated with business interruption and increase in cost of work of $1.0 million during the three and six months ended June 30, 2025.

Additionally, we recorded insurance recovery associated with loss on property and assets of $1.6 million during the three and six months ended June 30, 2025. Core Lab reached final settlement with the insurance company in September 2025.

In January 2026, we had storm damage at our Malta facility, and we have recorded a partial insurance settlement associated with business interruption and increase in cost of work of $0.2 million during the three and six months ended June 30, 2026.

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Foreign exchange (gain) loss, net for the primary currencies in which we operate and those with a material effect for the period presented is summarized in the following table (in thousands):

Interest Expense

Interest expense for the three months ended June 30, 2026, was $2.8 million an increase of 5% year-over-year and a decrease of 2% sequentially. For the six months ended June 30, 2026, interest expense increased $0.4 million or 8%. For the three and six months ended June 30, 2026, the year-over-year increase in interest expense is primarily due to higher variable interest rates on the $50.0 million term loan that was used to retire the fixed rate $45.0 million 2021 Senior Notes Series A in the first quarter of 2026. This was partially offset by lower average borrowings on our revolving credit facility.

Sequentially, the slight decrease in interest expense was primarily due to lower average borrowings on our revolving credit facility in the three months ended June 30, 2026.

Income Tax Expense

The Company recorded an income tax expense of $0.5 million and $0.3 million for the three and six months ended June 30, 2026, compared to income tax expense of $1.9 million and $3.7 million for the three and six months ended June 30, 2025, respectively. The effective tax rate for the three and six months ended June 30, 2026, was 8.0% and 4.8%, 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 three and six months ended June 30, 2026 was primarily impacted by the jurisdictional earnings mix subject to tax for the period and discrete benefits to the period. The effective tax rate for the three and six months ended June 30, 2025, was primarily impacted by the jurisdictional earnings mix subject to tax for the period, changes in uncertain tax positions in certain jurisdictions and discrete expenses in the period.

Segment Analysis

We operate our business in two segments. These complementary operating segments provide different services and products and utilize different technologies for evaluating and improving reservoir performance and increasing oil and gas recovery from new and existing fields. The following tables summarize our results by operating segment (in thousands):

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Reservoir Description

Reservoir Description operations are closely correlated with trends in international and offshore activity levels, with approximately 80% of its revenue sourced from existing producing fields, development projects and movement of crude oil products outside the U.S.

Revenue from the Reservoir Description operating segment of $78.7 million for the three months ended June 30, 2026 decreased 9% year-over-year and 4% sequentially. Year-over-year, the decrease in revenue was primarily due to 1) a lower international revenue as a result of the continued conflicts in the Middle East, and in Russia and Ukraine, as well as the expanded sanctions previously discussed have disrupted client activity and demand for our laboratory assay work and regional studies; and 2) the non-recurrence of large shipments of manufactured laboratory equipment sales that occurred in the second quarter of 2025, partially offset by higher reservoir rock and fluid analysis projects in the U.S. during the three months ended June 30, 2026. Sequentially, the decrease in revenue was primarily due to the impact associated with the Middle East conflict and a lower level of manufactured laboratory equipment sales in the current quarter.

Revenue from the Reservoir Description operating segment of $160.7 million for the six months ended June 30, 2026, decreased 4% from the same period in the prior year. The decrease in revenue was primarily due to 1) the recent Middle East conflict that began in the first quarter of 2026; 2) decrease in manufactured laboratory equipment sales; and 3) the ongoing geopolitical conflict in Russia and Ukraine, as well as expanded sanctions as previously discussed.

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Operating income of $3.7 million for the three months ended June 30, 2026, decreased year-over-year by $8.5 million and increased $2.5 million sequentially. Operating margins were 5% for the three months ended June 30, 2026, compared to 14% for the same period in the prior year, and 1% sequentially. Year-over-year, the decrease in operating income and operating margins was primarily attributable to 1) decremental revenue of $7.5 million primarily caused by the geopolitical conflicts mentioned above; 2) increases in employee compensation and other operating costs as discussed above; and 3) a gain on insurance recovery in prior year associated with the fire at the Aberdeen, U.K. facility of $2.5 million recorded in 2025, compared to $0.2 million gain on insurance recovery in 2026.

Sequentially, despite lower revenues for the three months ended June 30, 2026, operating income and operating margins were increased primarily due to 1) $2.4 million recorded in the prior quarter associated with the acceleration of stock compensation expense for retirement eligible employees; and 2) a charge of $0.6 million recorded in the prior quarter associated with facility exit costs and certain asset write-downs and no similar transactions in the second quarter of 2026.

Operating income of $4.8 million for the six months ended June 30, 2026, decreased $9.7 million from the same period in the prior year. Operating margins were 3% for the six months ended June 30, 2026, compared to 9% for the same period in the prior year. The decreases in operating income and operating margins were primarily attributable to 1) decremental revenue of $6.5 million in 2026 primarily caused by the geopolitical conflicts mentioned above; and 2) a prior year insurance recovery associated with the fire at the Aberdeen, U.K. facility of $2.5 million recorded in the three months ended June 30, 2025.

Production Enhancement

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, 2026, declined by 3.1% year-over-year but was higher by 1.5% sequentially. International average rig count was down 2.0% year-over-year and 2.5% sequentially.

Revenue from the Production Enhancement operating segment of $45.9 million for the three months ended June 30, 2026, increased 5% year-over-year and 15% sequentially. Year-over-year, the increase was primarily driven by continued growth in well diagnostic services in the U.S. and completion product sales in the U.S. land market, despite a lower average rig count in the U.S. land market. Sequentially, the increase was primarily driven by increased product sales associated with large customer bulk shipment orders in the international markets which were delayed from prior quarter and higher demand in U.S. land market activity. Additionally, the demand for our well diagnostic services continued to grow during the second quarter of 2026.

Revenue from the Production Enhancement operating segment of $85.7 million for the six months ended June 30, 2026, decreased 1% from the same period in the prior year. The slight decrease in revenue was primarily driven by lower product sales to the international markets, partially offset by higher revenue in well completion diagnostic services in the U.S. in 2026.

Operating income of $5.2 million for the three months ended June 30, 2026, increased $2.1 million year-over-year, and $4.4 million sequentially. Operating margins for the three months ended June 30, 2026, were 11%, compared to operating margins of 7% year-over-year and 2% sequentially. Year-over-year, the increase in operating income and margins was primarily due to 1) incremental revenue of $2.0 million; 2) partial refund of tariffs received in 2026 as previously discussed; and 3) improved absorption of fixed costs on a higher revenue base during the three months ended June 30, 2026.

Sequentially, the increase in operating income and margins was primarily driven by 1) incremental revenue of $6.0 million; 2) partial refund of tariffs received in 2026 as previously discussed; and 3) $1.3 million higher stock compensation expense allocation associated with the acceleration of stock compensation expense for retirement eligible employees that recorded in the first quarter of 2026.

Operating income of $6.0 million for the six months ended June 30, 2026, increased $1.4 million compared to the same period in the prior year. Operating margins for the six months ended June 30, 2026 of 7% increased compared to 5% from the

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same period in the prior year. The increase in operating income and margins was primarily due to 1) partial refund of tariffs received in 2026; and 2) a total charge of $1.3 million associated with employee severance, facility consolidation and inventory write-downs recorded in 2025 and no similar transactions in 2026.

Liquidity and Capital Resources

General

We have historically financed our activities through cash on hand, cash flows from operations, bank credit facilities, equity financing and the issuance of debt. Cash flows from operating activities provide the primary source of funds to finance operating needs, capital expenditures, dividends and discretionary share repurchases. Our ability to maintain and grow our operating income and cash flow depends, to a large extent, on continued investing activities. We believe our future cash flows from operations, supplemented by our borrowing capacity and the ability to issue additional equity and debt, should be sufficient to fund our debt requirements, capital expenditures, working capital, dividends, discretionary share repurchases and future acquisitions. The Company will continue to monitor and evaluate the availability of capital in the debt and equity markets.

We are a holding company incorporated in Delaware and 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.

Cash Flows

As of June 30, 2026, we had $22.7 million of cash and cash equivalents, compared to $22.7 million of cash and cash equivalents at December 31, 2025. As of June 30, 2026, $21.8 million of our $22.7 million of cash was held by our foreign subsidiaries.

Cash flows from operating activities were $11.8 million for the six months ended June 30, 2026, compared to $20.6 million for the same period in the prior year. The decrease compared to the same period in the prior year was primarily due to lower profitability during 2026, which has been primarily impacted by the Middle East conflict which began in the first quarter of 2026, as discussed above. These unfavorable factors were partially offset by improved efficiency in operational working capital management in 2026.

Other sources of cash during the six months ended June 30, 2026, include receipt of $3.1 million from the sale of assets, primarily associated with sales of property in Tulsa, Oklahoma of $1.2 million and $0.3 million proceeds from life insurance policies. See also "Credit Facility, Senior Notes and Available Future Liquidity" below regarding a net increase in our debt of $3.4 million.

Uses of cash during the six months ended June 30, 2026 include: 1) total capital expenditures of $10.7 million, which includes $2.5 million related to the rebuilding of the facility and replacement of assets damaged in the Aberdeen, U.K. fire incident which have been covered by insurance proceeds received in 2025; 2) share repurchases of $6.7 million, which includes payments related to personal tax liabilities of participants in our stock-based compensation plan; and 3) quarterly dividends paid of $0.9 million.

We utilize the non-GAAP financial measure of free cash flow to evaluate our cash flows and results of operations. Free cash flow is defined as net cash provided by operating activities (which is the most directly comparable GAAP measure) less cash paid for capital expenditures. Management believes that free cash flow provides useful information to investors regarding the cash available in the period that was in excess of our needs to fund our capital expenditures and operating activities. Free cash

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flow is not a measure of operating performance under GAAP and should not be considered in isolation nor construed as an alternative to operating income, net income or cash flows from operating, investing or financing activities, each as determined in accordance with GAAP. Free cash flow does not represent residual cash available for distribution because we may have other non-discretionary expenditures that are not deducted from the measure. Moreover, since free cash flow is not a measure determined in accordance with GAAP and thus is susceptible to varying interpretations and calculations, free cash flow as presented may not be comparable to similarly titled measures presented by other companies. The following table reconciles this non-GAAP financial measure to the most directly comparable measure calculated and presented in accordance with GAAP (in thousands):

Free cash flow for the six months ended June 30, 2026 was $3.6 million compared to $14.3 million for the same period in 2025. The net cash provided by operating activities of $11.8 million during the six months ended June 30, 2026 compared to $20.6 million for the same period in 2025 was primarily due to the factors as discussed in cash flow from operating activities above. Capital expenditures-operations, which exclude capital expenditures of $2.5 million associated with the Aberdeen, U.K. fire incident that are covered by insurance, increased by $1.9 million during the six months ended June 30, 2026 compared to the same period in the prior year.

Credit Facility, Senior Notes and Available Future Liquidity

We, along with our direct subsidiary Core Laboratories (U.S.) Interests Holdings, Inc. ("CLIH"), have a secured credit facility for an aggregate borrowing commitment of $150.0 million with a $50.0 million "accordion" feature ("Credit Facility"). Draws up to $100.0 million are available in the form of a revolving credit facility, and a single draw of $50.0 million was made in the form of a delayed draw term loan on January 12, 2026. The $50.0 million proceeds from the delayed draw term loan were primarily used to retire $45 million of the senior notes which matured on January 12, 2026, as discussed below. As of June 30, 2026, the Credit Facility has an available borrowing capacity of approximately $85.6 million.

Additionally, we along with CLIH as issuer, have senior notes outstanding that were issued through private placement transactions ("Senior Notes"). On January 12, 2026, we repaid the 2021 Senior Notes Series A with aggregate principal amount of $45.0 million upon the maturity date with the single draw of $50.0 million from the delayed draw term loan.

These debt instruments are summarized in the following table (in thousands):

(1) Interest is payable semi-annually on June 30 and December 30.

(2) Interest is payable semi-annually on March 28 and September 28.

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See Note 6 - Long-term Debt, net of the Notes to the Interim Consolidated Financial Statements for additional information regarding the terms and financial covenants of the Credit Facility and the Senior Notes.

In accordance with the terms of the Credit Facility, our interest coverage ratio is 6.53 and our leverage ratio is 1.30 each for the period ended June 30, 2026. We are in compliance with all covenants contained in our Credit Facility and Senior Notes as of June 30, 2026. Certain of our material, wholly owned subsidiaries are guarantors or co-borrowers under the Credit Facility and Senior Notes.

See Note 10 - Derivative Instruments and Hedging Activities of the Notes to the Interim Consolidated Financial Statements, for additional information regarding interest rate swap agreements we have entered to fix the underlying risk-free rate on our 2023 Senior Notes Series A and B.