Precision Drilling (PDS) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $496 million, down 6% year-over-year, with strong Canadian drilling offset by lower U.S. activity.

• Adjusted EBITDA reached $137 million, including $3 million each in restructuring and share-based compensation; net earnings were $35 million ($2.52/share), nearly flat year-over-year.

• Cash from operations was $63 million, supporting $31 million in share repurchases and $17 million in debt repayment.

• Capital expenditures totaled $60 million; the 2025 capital budget was reduced to $200 million from $225 million.

• The company remains focused on cost control, capital discipline, and free cash flow generation.

Financial highlights

• Adjusted EBITDA margin was stable at 28%, with net earnings at $35 million and diluted EPS at $2.20.

• Cash provided by operations was $63 million; funds from operations were $110 million; available liquidity was nearly $550 million.

• General and administrative expenses dropped to $30 million from $45 million, mainly due to lower share-based compensation.

• Net capital spending increased 12% to $56 million, with $20 million for upgrades and $40 million for maintenance/infrastructure.

• Net debt to trailing 12-month EBITDA ratio is 1.5x; average cost of debt is 6.9%.

Outlook and guidance

• 2025 capital plan reduced to $200 million, with further adjustments possible based on demand.

• Targeting at least $100 million in debt reduction for 2025 and allocating 35%-45% of free cash flow before debt payments to share repurchases.

• Canadian drilling activity expected to remain strong in H1 2025, supported by LNG and pipeline projects.

• U.S. rig activity modestly increased from Q4, with 34 rigs currently operating, focused on natural gas plays.

• International operations provide predictable cash flow with most rigs under long-term contracts through 2027-2028.