Step Energy Services (STEP) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $227.2M, down 11% year-over-year, but stable sequentially; net income reached $6.8M versus a $5.5M loss in Q3 2024.

• Adjusted EBITDA for Q3 2025 was $45.2M (20% margin), down from $49.4M (19%) in Q3 2024, but up from $34.8M (15%) in Q2 2025.

• Free Cash Flow was $23.3M, lower than Q3 2024 but higher than Q2 2025; working capital increased to $77.9M.

• Net Debt decreased to $36.3M, the lowest since Q1 2018, reflecting ongoing deleveraging.

• A definitive agreement was reached for ARC Financial to acquire all outstanding shares at $5.50/share; delisting from TSX expected post-closing.

Financial highlights

• Q3 2025 revenue: $227.2M (Q3 2024: $256.0M); nine months: $763.0M (2024: $807.5M).

• Net income Q3 2025: $6.8M ($0.09/share) vs. Q3 2024 loss of $5.5M ($0.08/share loss).

• Adjusted EBITDA Q3 2025: $45.2M (20% margin); Free Cash Flow: $23.3M.

• Operating expenses and employee costs declined due to U.S. fracturing exit; material costs rose year-to-date.

• Cash and equivalents at quarter-end: $2.5M; total assets: $600M.

Outlook and guidance

• Q4 2025 expected to start strong, with high utilization in early quarter, then seasonal slowdown.

• Q1 2026 fracturing and coiled tubing schedules nearly fully booked; margin compression expected due to pricing pressure.

• Long-term outlook constructive, with LNG export growth and stable natural gas demand anticipated.