Archer (ARCH) Q4 2025 TU earnings summary

Executive summary

• Achieved $1.209 billion in 2025 revenue (up 8% YoY) and 12% EBITDA growth to $166.5 million, with margin expansion despite challenging markets.

• Operations span well services, platform operation, land drilling, and renewable services, with a $4 billion backlog at year-end, supported by major contract wins and acquisitions.

• Divested low-margin workover business in southern Argentina to focus on higher-growth Vaca Muerta shale region, triggering a $20 million non-cash write-down.

• Formalized renewable services as a separate segment, generating over $100 million in 2025, with strong geothermal performance but delays in offshore wind projects.

• Transitioned financial reporting from U.S. GAAP to IFRS in Q4 2025, impacting revenue and EBITDA presentation.

Financial highlights

• Q4 2025 revenue was $309 million (up 3% YoY), EBITDA $44.5 million (up 14% YoY); full-year revenue $1.209 billion (up 8%), EBITDA $166.5 million (up 12%).

• Backlog including options stood at $4 billion at year-end; net interest-bearing debt was $426 million.

• Initiated quarterly shareholder distributions from Q2 2025, with a yield of 10-11% and Q4 distribution of $6.1 million.

• $425 million senior secured bond issued, extending debt maturity to 2030 and reducing cost of debt.

• Year-end contract backlog at $3.6 billion post-divestment, covering over 80% of 2025 operational revenue for 2026.

Outlook and guidance

• 2026 EBITDA expected to grow single digits, with margin expansion of 2-3 percentage points and stronger H2 driven by new projects.

• H2 2026 EBITDA projected to be 20%-30% higher than H1, supported by new P&A units and YPF rigs.

• CapEx estimated at 6-10% of revenue, with maintenance CapEx stable at 3% and growth investments temporarily elevated.

• Shareholder distributions expected to increase from late 2026, in line with earnings growth.

• Backlog of $3.6 billion (excluding divested business), with $2.3 billion firm and $1.3 billion in options.