Precision Drilling (PDS) Q1 2025 earnings summary

Executive summary

• Q1 revenue was CAD 496 million, down 6% year-over-year, with strong Canadian drilling offset by lower U.S. activity.

• Adjusted EBITDA reached CAD 137 million, including CAD 3 million each in share-based compensation and restructuring charges; excluding these, adjusted EBITDA was CAD 143 million.

• Net earnings were CAD 35 million (CAD 2.52/share), nearly flat year-over-year, marking the 11th consecutive quarter of positive earnings.

• Cash from operations was CAD 63 million, supporting CAD 31 million in share repurchases and CAD 17 million in debt repayment.

• The company remains focused on cost control, capital discipline, and free cash flow generation.

Financial highlights

• Adjusted EBITDA margin was 28%, stable year-over-year.

• Funds from operations were CAD 110 million; cash provided by operations was CAD 63 million.

• Q1 capital expenditures totaled CAD 60 million, with CAD 20 million for upgrades/expansion and CAD 40 million for maintenance/infrastructure.

• Net debt to trailing 12-month EBITDA ratio is 1.5x; average cost of debt is 6.9%.

• General and administrative expenses dropped to CAD 30 million from CAD 45 million, mainly due to lower share-based compensation.

Outlook and guidance

• 2025 capital plan reduced to CAD 200 million (from CAD 225 million), with CAD 158 million for sustaining infrastructure and CAD 42 million for upgrades/expansion.

• Targeting CAD 100 million in debt reduction for 2025 and allocating 35%-45% of free cash flow before debt payments to share repurchases.

• Canadian drilling activity expected to remain above 2024 levels in the first half, supported by LNG and pipeline expansions.

• International segment to maintain 7–8 active rigs, with stable cash flow expected from long-term contracts.

• SG&A expected at CAD 95 million (before share-based compensation); effective tax rate 25%-30%.