Archer (ARCH) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $342.5 million, up 11% year-over-year, with strong growth in Land Drilling and Renewables segments.

• Adjusted EBITDA before restructuring costs was $41.2 million, up from $32.9 million in Q1 2024, with EBITDA margin at 12%.

• Initiated first quarterly cash distribution of $5.5 million, representing an ~11% annual yield, with plans to increase over time.

• Secured over $550 million in new contract backlog, including major P&A agreements with Equinor and Repsol.

• Successfully refinanced with a $425 million senior secured bond at 9.5% coupon, maturing in 2030, repaying prior facilities.

Financial highlights

• Q1 2025 EBITDA margin before exceptional items was 12%, up from 10.7% last year.

• Net loss of $29.6 million, mainly due to $37 million in one-off refinancing charges and FX losses; adjusted net income was $3.6 million.

• Cash and cash equivalents at quarter-end were $74.8 million; available liquidity at $107.8 million.

• Net interest-bearing debt increased to $425.7 million, mainly due to refinancing-related fees.

• Capex for Q1 2025 was $10.7 million, in line with guidance of 3–4% of revenue.

Outlook and guidance

• 2025 revenue expected at $1,300–1,350 million, with low single-digit growth due to reduced Land Drilling activity.

• EBITDA projected to grow 15–25% year-over-year, with stronger performance anticipated in the second half.

• Renewables segment expected to expand as a strategic focus.

• Capex to remain around 4% of revenue, with leverage ratio targeted between 2.1x and 2.3x by year-end, and long-term goal of 1.5–2.0x.

• Expectation to maintain current dividend level through 2025, with potential for increases as earnings grow.