PHX Energy Services (PHX) investor relations material

Executive summary

• Achieved record second quarter consolidated revenue of $178.9 million, up 7% year-over-year, driven by strong Canadian drilling activity and record Rotary Steerable Systems (RSS) utilization, which reached 21% of consolidated activity.

• Adjusted EBITDA rose 20% to $33 million (18% of revenue), and net earnings increased to $11 million ($0.21 per share), reflecting higher revenue, strong RSS and motor rental margins, and lower share-based compensation.

• Canadian division revenue surged 29% to $51.1 million, with operating days up 24%, outpacing industry growth; US division revenue was flat at $127.8 million, maintaining market share despite a 4% industry rig count decline.

Financial highlights

• Consolidated revenue: $178.9M (+7% YoY); Adjusted EBITDA: $33M (+20% YoY); Net earnings: $11M (+29% YoY).

• Adjusted EBITDA margin improved to 18% from 16% YoY; gross profit margin (excl. D&A) rose to 23%.

• Cash flows from operating activities: $13.5M (+29% YoY); excess cash flow: $20.5M (+120% YoY).

• Net capital expenditures: $1.9M (down from $9.9M YoY); working capital: $135M; net debt: $43.9M.

• Dividend of $0.20/share ($9.2M) declared and paid.

Outlook and guidance

• Third quarter activity levels are trending upward, supported by rising commodity prices and increased rig counts.

• Continued investment in premium RSS and proprietary technologies expected to drive future growth and margin expansion.

• Capital expenditure budget for 2026 increased from $65M to $80M, with 60% allocated to growth, mainly RSS fleet expansion.

• Management remains focused on technology leadership, operational efficiency, and shareholder returns through dividends and share repurchases.