PHX Energy Services (PHX) Q4 2024 earnings summary

Executive summary

• Achieved record quarterly and annual consolidated revenue in 2024, with Q4 revenue at $178.7M and annual revenue at $659.7M, both all-time highs.

• US division contributed 73-74% of total revenue, with Q4 US revenue at $132.3M (up 8% YoY) and Canadian revenue at $46.3M (up 7% YoY).

• Despite revenue growth, profitability declined due to higher equipment repair costs, weaker high-margin RSS and motor rental activity in the US, and lower net gain on equipment sales.

• Net earnings for 2024 were $54.6M (down 45% YoY), with Q4 earnings at $14.1M (down 57% YoY).

Financial highlights

• Q4 adjusted EBITDA was $29.6M (17% of revenue), down from $35.4M (21%) YoY; annual adjusted EBITDA was $123.7M (19% of revenue), down from $150.7M (23%).

• Q4 earnings per share (diluted) were $0.30 (down 56% YoY); annual EPS was $1.16 (down 41% YoY).

• Q4 excess cash flow was $17.3M (down 23% YoY); annual excess cash flow was $47.6M (down 49% YoY).

• Dividends paid in 2024 totaled $37.6M (up 24% YoY); $20.6M spent on share repurchases under NCIB.

• Working capital at year-end was $84.5M; net debt was $2.7M.

Outlook and guidance

• US division expects robust activity in early 2025, focusing on RSS utilization and Atlas motor rental growth.

• Canadian division started 2025 with higher activity and aims to increase high-margin RSS activity.

• 2025 capital expenditures budget set at $55M, with half allocated to growth and half to maintenance.

• Management targets ROCS distributions to remain within 70% of excess cash flow.

• Monitoring potential impacts from tariffs and global trade changes.