CES Energy Solutions (CEU) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 revenue of $632.4 million, up 7% year-over-year and 4% sequentially, with strong EBITDA of $99.9 million and EBITDA margin of 15.8%.

• Maintained industry-leading North American land rig market share of over 26.5%, with 64% of revenue from the U.S. and 36% from Canada.

• Net income was $44.1 million, a 19% decrease year-over-year due to higher finance costs and taxes.

• Returned $28.1 million to shareholders via $6.8 million in dividends and $21.3 million in share repurchases.

• Increased headcount by 83 employees in Q1, reflecting ongoing business expansion.

Financial highlights

• U.S. revenue was $402.5 million (64% of total), up 4% year-over-year and 3% sequentially; Canadian revenue reached $230 million, up 14% year-over-year and 7% sequentially.

• Adjusted EBITDA was $100 million, with a margin of 15.8%, in line with guidance but down from 17.3% last year.

• Funds Flow from Operations was $77.8 million, up 5% year-over-year.

• Free cash flow was $25.6 million, down 55% year-over-year due to higher working capital and CapEx.

• Working capital surplus of CAD 686.8 million exceeded total debt by CAD 217.5 million.

Outlook and guidance

• 2025 capital expenditures projected at $80 million, split between maintenance and expansion.

• Anticipate continued growth in all divisions, with higher margins expected in the second half of the year.

• Remain optimistic about Canadian market due to infrastructure projects and LNG Canada start-up.

• Plans to maintain disciplined capital allocation and adjust expenditures as needed for growth.

• Plan to fully execute current NCIB and renew for another 10% of float.