Ensign Energy Services (ESI) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 was $418.0 million, down 4% year-over-year, primarily due to lower Canadian activity and negative FX translation, while U.S. revenue remained flat.

• Adjusted EBITDA decreased 7% to $94.8 million; net loss attributable to shareholders was $11.1 million, compared to net income of $3.7 million in Q1 2025.

• Funds flow from operations fell 9% to $88.0 million; cash provided by operating activities dropped 16% to $45.4 million.

• The sector outlook remains constructive despite geopolitical and economic uncertainties impacting activity and commodity prices.

• Leadership transition with Trevor Russell appointed as CFO, succeeding Michael Gray, who remains as Executive Advisor until July.

Financial highlights

• Q1 2026 revenue was $418.0 million, down from $436.5 million in Q1 2025.

• Adjusted EBITDA was $94.8 million, a 7% decrease year-over-year.

• Net loss was $11.1 million ($0.06/share) versus net income of $3.7 million ($0.02/share) prior year.

• Funds flow from operations was $88.0 million, down 9% year-over-year.

• Interest expense dropped 37% to $12.9 million, aided by lower debt, rates, and a one-time recovery.

Outlook and guidance

• Maintenance capital budget for 2026 set at $162 million, with $79.5 million in selective upgrade capital, including $58.2 million customer funded.

• Targeting $125 million in debt reduction for 2026, with flexibility to adjust based on industry conditions.

• Expecting to increase contract rates by 5%-10% in the back half of the year due to tightening rig supply.

• Canadian activity expected to remain steady, supported by infrastructure projects and LNG Canada start-up; US and international activity stable to slightly improved.

• Industry faces heightened volatility due to geopolitical events and supply shocks, with medium-term outlook dependent on oil price durability and capital discipline.