Orbit Garant Drilling (OGD) Q1 2027 earnings summary

Executive summary

• Q1 FY2027 revenue reached a record $60.128m, up 28.9% YoY, while utilization rose to 72%, the highest quarterly level since FY2012.

• Net loss was $858k versus earnings of $349k a year earlier; adjusted EBITDA was $3.9m versus $3.8m.

• Four consecutive quarters of sequential revenue growth; focus is shifting from ramp-up investment toward productivity, margins and earnings.

Financial highlights

• Gross profit was $5.120m versus $5.659m, and gross margin was 8.5% versus 12.1%.

• Adjusted gross profit was $8.5m versus $8.0m; adjusted gross margin was 14.1% versus 17.0%, excluding depreciation and asset-disposal gains.

• Adjusted EBITDA was $3.9m versus $3.8m; its margin declined to 6.4% from 8.1%.

• Net loss was $858k, or $0.02 per diluted share, versus net earnings of $349k, or $0.01 per diluted share.

• Operating activities used $2.773m cash; PP&E acquisitions were $11.578m.

Outlook and guidance

• Strong utilization is expected through FY2027, with utilization potentially approaching 75% by year-end; experienced-driller shortages may limit further gains.

• Improved pricing, contract ramp-ups and gradual productivity gains are expected to support profitability through FY2027.

• Adjusted gross margin’s long-term target is 20% or higher, with a desired timeframe of 12 months; achievement depends on productivity gains and contract ramp-up.

• The northern Canada contract is expected to contribute positively to the bottom line from H2 FY2027.

• Priorities include specialized contracts, cost and cash discipline, productivity, technology, training, retention, safety and environmental standards.