Actuals vs. estimates
No consensus comparison available for this event.
Verdict
- No consensus estimate was available for the quarter, so the print stands on its own comparisons: record revenue of C$277.3m, up 22.4% year over year, with EPS of C$0.18 against C$0.12.
- Every region grew double digits -- Canada-U.S. up 31.6% to C$110.7m, South and Central America up 18.4% to C$113.4m, Australasia and Africa up 13.7% to C$53.2m.
- Margins moved the other way: adjusted gross margin of 24.0% against 25.2% a year ago, on wage and training costs in a tight North American labour market plus ramp-up costs and weather disruption in Chile.
- EBITDA of C$37.2m grew 15.9%, slower than the 22.4% revenue growth, and no numeric guidance was provided.
- The one thing that matters: the record top line is being bought with labour and ramp-up cost, and the margin recovery management expects has not shown up yet.
Key metrics
| Metric | Reported | Prior year | Change |
|---|---|---|---|
| Adjusted gross margin | 24.0% | 25.2% | — |
| EBITDA | $37.2 million | $32.1 million | +15.9% |
| Net earnings | $14.5 million | $10.1 million | +43.6% |
| Canada-U.S. revenue | $110.7 million | — | +31.6% |
| Net cash | $15.7 million | $20.6 million (April 30, 2026) | — |
| Rig count at quarter-end | 683 | — | 5 drills added, 10 retired |
Guidance changes
No financial guidance change disclosed.
Quality of earnings
- Part of the growth is currency, not activity. Revenue rose C$50.7m year over year, of which roughly C$8m is favourable foreign exchange translation; the company notes the earnings impact was minimal because costs sit in the same currencies.
- Earnings grew faster than profits did. Net earnings rose 43.6% to C$14.5m against 15.9% EBITDA growth, helped by a lower effective tax rate -- C$4.6m of tax on C$19.1m of pretax earnings, which the company attributes to utilization of previously unrecognized losses.
- Cash went the other way from earnings. Operating cash flow fell to C$11.8m from C$14.9m on a C$20.4m working capital outflow, and net cash declined to C$15.7m from C$20.6m at April 30.
Gotchas & watch items
- Gross margin was 18.6%, unchanged from a year ago, so the entire adjusted-margin decline to 24.0% from 25.2% sits in the depreciation add-back rather than in reported profitability.
- Other expenses nearly doubled to C$6.0m from C$3.3m on incentive and stock-based compensation tied to the share price, and G&A rose C$2.4m to C$23.8m.
- The fleet shrank on a net basis -- 5 drills added against 10 retired for a 683 rig count -- so the revenue record came from utilization and price, not capacity.
- The company flags the November-to-January third quarter as normally its weakest, which sits against a first quarter that consumed working capital.