Foraco International (FAR) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue rose to $66.3 million from $55 million year-over-year, driven by strong growth in Canada, the U.S., South America, and new contracts.

• EBITDA remained stable at $7.4 million, with margins impacted by ramp-up costs for new contracts.

• Order book remains near record levels, providing strong visibility for future quarters.

• The business is in the early stages of a growth cycle, supported by robust commodity demand and favorable market fundamentals.

• Five new rigs were deployed under long-term contracts, increasing operational capacity and workforce by 16%.

Financial highlights

• Revenue reached $66.3 million, up from $55.0 million in Q1 2025.

• Gross margin was $7.1 million (10.7% of revenue), down from 14.1% last year due to ramp-up phase of new contracts.

• EBITDA was $7.4 million (11.1% margin), slightly up from $7.0 million (12.8%) in Q1 2025.

• Net profit was $0.1 million, down from $1.0 million in Q1 2025.

• Net debt increased to $91 million, reflecting higher working capital and CapEx.

Outlook and guidance

• Margins are expected to improve as projects mature and ramp-up costs subside over the next two quarters.

• Utilization rates are projected to increase throughout 2026, with a target of reaching 60% or higher.

• Working capital is expected to remain elevated until Q4, with reversal in cash before year-end.

• Additional rigs scheduled for mobilization and strong industry indicators point to improved performance in coming quarters.

• Continued disciplined approach to growth, focusing on scalable, long-term projects.