Archer (ARCH) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 EBITDA of $34.9 million, up 14% year-over-year, with Q3 revenue of $335 million, marking the best quarterly result since 2016.

• Net income for Q3 was $2.9 million, reversing a prior year loss, with adjusted net income at $0.9 million.

• Completed acquisition of Wellbore Fishing & Rental Tools (WFR) and increased ownership in Iceland Drilling to 60%.

• Raised $50 million in an oversubscribed private placement to fund the WFR acquisition, with no value dilution for existing shareholders.

• Multiple acquisitions in 2024, including Comtrac AS, ADA Argentina SRL, Moreld Ocean Wind AS, and Vertikal Services AS, supporting diversification and growth.

Financial highlights

• Q3 revenue reached $335 million, up 10.7% year-over-year, with Q3 EBITDA before certain items at $36.4 million, up 13% year-over-year.

• Positive net income of $2.9 million for the quarter; Q3 operating income was $19.8 million.

• Year-to-date EBITDA earnings reached $98.6 million, up 15% year-over-year.

• Cash and cash equivalents at September 30, 2024, were $56.9 million, up from $52.1 million at year-end 2023.

• Total assets at $930.2 million and equity at $190.8 million as of September 30, 2024.

Outlook and guidance

• Updated 2024 pro forma EBITDA guidance to $155-$160 million, with a pro forma leverage ratio of 2.2-2.4 at year-end.

• Pro forma 2024 revenue expected at $1.3-$1.4 billion, representing nearly 18%-20% annual growth since 2022.

• Pro forma annual cash contribution projected at $90-$100 million for 2024, supporting future dividend capacity.

• Leverage ratio expected to reduce further in 2025, targeting around 2x Net Debt/EBITDA and enabling refinancing at improved terms.

• Management expects continued growth, supported by a solid contract backlog in Platform Operations and Well Services for the next 3–5 years.