No consensus estimate was available for this event, so the print stands on the company's own comparisons: revenue of $57.2 million against $47.2 million a year earlier, and a net loss of $1.9 million, or $0.05 per share, against net earnings of $2.2 million, or $0.06 per share, in Q4 2025.
Revenue growth of 21.3% arrived with sharply lower profitability at every line: gross margin 8.2% from 16.0%, adjusted gross margin 13.6% from 20.2%, and adjusted EBITDA $3.6 million from $5.5 million.
There is no fiscal 2027 revenue or earnings guidance. The only quantified forward items are the new northern Canada specialized drilling contract at more than $100 million over an initial five-year term and the $20.0 million of capital expenditures required to start it.
The one thing that matters: Orbit Garant paid for its record quarter with margin and leverage. Rig utilization of 70% was filled with trainee drillers on legacy-priced contracts, turning 21.3% revenue growth into a loss, while long-term debt under the Credit Facility rose to $23.7 million from $14.0 million to fund the next contract.
Key metrics
Metric
Reported
Prior year
Change
Revenue
$57.2 million
$47.2 million
+21.3%
Gross margin
8.2%
16.0%
—
Adjusted EBITDA
$3.6 million
$5.5 million
—
Net earnings (loss)
net loss of $1.9 million
net earnings of $2.2 million
—
Drill rig utilization rate
70%
—
—
Long-term debt under Credit Facility, including current portion
$23.7 million as at June 30, 2026
$14.0 million as at June 30, 2025
—
Guidance changes
Item
New guidance
Prior guidance
New northern Canada specialized drilling contract, revenue over initial term
expected to generate more than $100 million over its initial five-year term
—
Capital expenditures required for the new specialized drilling contract
$20.0 million in required capital expenditures for modification or manufacturing of drill rigs and related inventory
—
Quality of earnings
The loss is not mainly the one-time item. The $1.4 million expected credit loss on the West Africa receivable is non-cash, and adjusted EBITDA excludes it, yet adjusted EBITDA still fell to $3.6 million from $5.5 million and adjusted EBITDA margin to 6.3% from 11.7% — the deterioration sits in the drilling operations.
The adjusted margin is flattered by a depreciation charge that keeps growing. Adjusted gross profit of $7.7 million against reported gross profit of $4.6 million is $3.0 million of depreciation held out of cost of contract revenue, versus $2.3 million a year earlier, and the prior year also carried a $0.4 million gain on disposal that did not repeat.
Fiscal 2026 as a whole has the same shape, so the quarter is a trend accelerating rather than a single bad period: revenue up 7.5% to $203.2 million while gross profit fell to $19.7 million from $28.3 million and $7.5 million of net earnings became a $1.5 million net loss.
Gotchas & watch items
The growth is being financed before it earns anything: long-term debt under the Credit Facility, including the current portion, rose to $23.7 million from $14.0 million, and the $20.0 million of capital expenditures for the new contract is funded by facility drawdowns and a new $9.67 million term loan.
Record utilization is the cause of the margin problem rather than the cure for it. Utilization of 70%, the highest since fiscal 2012, was reached by adding apprentice cohorts, and gross margin fell 7.8 points to 8.2%.
The route back to profit rests on pricing the release never quantifies — contracts awarded in the first half of fiscal 2026 have been repriced, but no revenue-per-metre figure, margin target or fiscal 2027 outlook accompanies the claim.