Precision Drilling (PDS) Q2 2025 earnings summary

Executive summary

• Q2 2025 results exceeded expectations for adjusted EBITDA, earnings, and cash flow, driven by strong Canadian drilling, improved U.S. activity, and steady Middle East operations.

• Leading land driller in Canada with 98 rigs and a top US presence with 104 rigs, including 66 Super Spec rigs; active internationally with 8 rigs in Kuwait and Saudi Arabia.

• Net earnings reached $60 million, or $1.21 per share, marking the 12th consecutive quarter of positive earnings.

• Customer demand for rig upgrades and term contracts increased, especially in gas basins and Canadian heavy oil.

• Strategic focus on maximizing free cash flow, enhancing shareholder returns, and growing revenue through disciplined capital deployment and cost management.

Financial highlights

• Adjusted EBITDA was $108 million, including a $4 million share-based compensation charge and $7 million in customer-funded upgrade revenue; excluding these, adjusted EBITDA was $105 million.

• Revenue was $407 million, down 5% from Q2 2024.

• Funds and cash provided by operations were $104 million and $147 million, respectively.

• Canadian day rates have increased 47% and US day rates 36% over the last three years, supporting sustained free cash flow.

• CMP segment adjusted EBITDA was $10 million, down 18% year-over-year due to a 23% decrease in well service hours.

Outlook and guidance

• Q3 U.S. daily operating margins expected between $8,000 and $9,000 per day; Canada expected between $12,000 and $13,000.

• Full-year 2025 capital plan increased to $240 million, with $86 million for upgrades and $150 million for sustaining infrastructure.

• Plan to reduce debt by at least $100 million in 2025 and allocate 35–45% of free cash flow to share repurchases.

• Net Debt to Adjusted EBITDA ratio targeted below 1.0x by end of 2025.

• Positive outlook for Canadian market driven by LNG Canada, TMX expansion, and strong oil and gas fundamentals.