Precision Drilling (PDS) Q4 2024 earnings summary

Executive summary

• Achieved strong cash flow and profitability in 2024, with a strategic focus on maximizing free cash flow, disciplined capital deployment, and cost management.

• 2025 priorities include further debt reduction, increased share repurchases, and revenue growth in existing service lines.

• Fully realized synergies from the CWC acquisition, which contributed to increased service rig hours and EBITDA, and continued investment in technology and fleet upgrades.

• Q4 2024 revenue was $468 million, down 8% year-over-year, mainly due to lower U.S. activity and day rates, partially offset by higher Canadian and international activity.

• For 2024, annual revenue was $1.9 billion, nearly flat year-over-year, with adjusted EBITDA of $521 million and net earnings of $111 million.

Financial highlights

• 2024 revenue was CAD 1.9 billion, flat year-over-year; adjusted EBITDA was CAD 521 million, down 15% year-over-year.

• Funds from operations totaled CAD 463 million, a 13% decrease; cash from operations was CAD 482 million, similar to prior year.

• Debt reduced by $176 million; $75 million in share repurchases (4% of shares); positive EPS every quarter for 10 consecutive quarters.

• Capital expenditures in 2024 totaled $217 million, with $52 million for expansion/upgrades and $165 million for maintenance/infrastructure.

• Q4 adjusted EBITDA was $121 million, including $15 million share-based comp and $8 million non-recurring charges; normalized EBITDA would have been $144 million.

Outlook and guidance

• 2025 capital plan of $225 million: $175 million for sustaining infrastructure, $50 million for upgrades/expansion, with focus on fleet upgrades and customer-funded projects.

• Plan to reduce debt by at least $100 million in 2025; long-term debt reduction goal increased to $700 million by 2027.

• Guidance for 2025: depreciation CAD 300 million, cash interest CAD 65 million, effective tax rate 25%-30%, SG&A CAD 100 million, share-based comp CAD 25-35 million.

• Plans to allocate 35–45% of free cash flow (before debt repayments) to shareholders in 2025, moving toward 50% over time.

• Canadian drilling margins and activity expected to remain robust, supported by new pipeline and LNG projects; U.S. and international activity to be flat, with potential for gas rig growth in late 2025.