Precision Drilling (PDS) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 6% to $526 million, driven by higher activity in Canada and the U.S. despite industry declines.

• Adjusted EBITDA was $124 million, down 10% year-over-year, impacted by higher share-based compensation and depreciation.

• Net earnings attributable to shareholders dropped to $17–18 million, affected by non-cash expenses and a 39% share price increase.

• Cash from operations reached CAD 63 million, supporting $4 million in share repurchases and $25 million in debt reduction.

• Continued deployment of Alpha™ digital technologies and automation initiatives delivered record drilling results and operational efficiencies.

Financial highlights

• Revenue: $526 million (+6% year-over-year); Adjusted EBITDA: $124 million (CAD 143 million before share-based compensation).

• Net earnings: $17–18 million, down from $35 million in Q1 2025, impacted by higher stock-based compensation.

• Capital expenditures totaled $65 million, with $35 million for sustaining/infrastructure and $30 million for rig upgrades.

• Working capital at quarter-end: $208 million; cash balance: $41 million; long-term debt: $664 million.

• Adjusted EBITDA margin: 23.6% of revenue; net debt to adjusted EBITDA targeted below 1x.

Outlook and guidance

• Q2 Canadian rig count expected to average 60, ending in the mid-70s, with operating margins at CAD 12,000–13,000 per day.

• U.S. rig count to increase to 35 next week, exiting Q2 at 38–39 rigs; operating margins expected at US $7,500–8,500 per day.

• Internationally, seven rigs expected to run under long-term contracts, but with lower margins due to rig mix and regional disruptions.

• Full-year capital expenditures guidance raised to CAD 265 million, with $168 million for sustaining/infrastructure and $97 million for upgrades.

• Targeting at least $100 million debt reduction and up to 50% of free cash flow for share repurchases in 2026.