Precision Drilling (PDS) Q4 2025 earnings summary

Executive summary

• Achieved $413 million in free cash flow in 2025, enabling $101 million debt reduction and $76 million in share repurchases, reducing outstanding shares by 6%.

• Q4 2025 revenue rose 2.2% to $479 million, with Adjusted EBITDA up 4.9% to $126 million, driven by higher U.S. rig activity and lower share-based compensation.

• Net loss attributable to shareholders in Q4 was $42 million, including $67 million in non-cash decommissioning charges and $17 million in drill pipe write-downs.

• Full-year 2025 revenue was $1.84 billion, down 3% year-over-year, with net earnings dropping to $1.8 million, impacted by lower U.S. activity and one-time charges.

• Strategic priorities for 2026 include revenue growth, operational excellence, and maximizing free cash flow.

Financial highlights

• Q4 cash provided by operations was $126 million, funding $81 million in capital expenditures and $22 million in share repurchases.

• Ended 2025 with $445 million in available liquidity and a Net Debt to Adjusted EBITDA ratio of 1.2x.

• Annual capital expenditures totaled $263 million, including $107 million for 27 major rig upgrades.

• General and administrative expenses decreased to $114 million from $132 million in 2024, mainly due to lower share-based compensation.

• Full-year net earnings attributable to shareholders was $1.8 million, or $0.14 per share, down from $111 million, or $7.81 per share, in 2024.

Outlook and guidance

• 2026 capital spending is projected at $245 million, with $182 million for maintenance and $63 million for upgrades.

• Plans to reduce debt by $100 million and allocate up to 50% of free cash flow (before debt repayments) to share repurchases in 2026.

• Canadian rig utilization expected to remain strong, with winter drilling activity anticipated to exceed prior year; U.S. rig utilization steady with potential upside.

• International operations supported by long-term contracts, with seven active rigs and efforts to increase utilization.

• Operating margins in Q1 2026 projected at $14,000–$15,000 per utilization day in Canada and $8,000–$9,000 in the U.S.