Orbit Garant Drilling (OGD) Q4 2026 earnings summary

Executive summary

• Achieved record annual revenue of CAD 203.2 million in fiscal 2026, up 7.5% year-over-year, driven by strong demand in Canada and South America.

• Drill rig utilization reached 70% in Q4, the highest since 2012, meeting a key operational target.

• Profitability was negatively impacted by lower drilling efficiency, increased trainee drillers, legacy contract pricing, inflation in production costs, and a non-cash expected credit loss.

• Secured a major specialized drilling contract in Northern Canada, expected to generate over CAD 100 million in five years, requiring significant capital investment.

• Anticipates improved profitability in fiscal 2027 due to pricing adjustments and ramp-up of new projects.

Financial highlights

• Q4 revenue was CAD 57.2 million, up 21.3% year-over-year; Canada revenue rose 16.8%, international revenue up 32.7%.

• Q4 gross profit was CAD 4.6 million (8.2% margin), down from CAD 7.6 million (16.4%) last year; adjusted gross margin was 13.6% vs. 20.2%.

• Q4 adjusted EBITDA was CAD 3.6 million (6.3% margin), down from CAD 5.5 million; net loss was CAD 1.9 million vs. net earnings of CAD 2.2 million last year.

• Fiscal 2026 gross profit was CAD 19.7 million (9.7% margin), down from CAD 28.3 million (15.0%) in 2025; adjusted EBITDA was CAD 13.7 million (6.8% margin) vs. CAD 21.7 million.

• Fiscal 2026 net loss was CAD 1.5 million, or CAD 0.04 per share diluted, compared to net earnings of CAD 7.5 million (CAD 0.20 per share) in 2025.

Outlook and guidance

• Pricing adjustments on legacy contracts are expected to improve profitability in fiscal 2027, with about half of contracts repriced by December.

• Management targets a return to higher gross margins, aiming to approach 2025 levels as ramp-up costs subside and new contracts mature.

• CapEx for fiscal 2027 projected at CAD 19 million, with CAD 6.3 million dedicated to the new Northern Canada contract.

• Working capital expected to increase, with an estimated CAD 10 million use due to inventory needs for new projects.

• Continued strong customer demand and ramp-up of major contracts support positive outlook.