Shearwater GeoServices (SHEARWATER) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw a significant slowdown in marine seismic acquisition activity, with seasonal demand in the North Sea not as prolonged as the previous year, leading to lower revenue and EBITDA year-over-year.

• Project awards were slow in Q3, but recent tender and award activity has increased, with a stronger backlog expected to support higher activity in 2025.

• The company successfully executed a major OBN survey in India and completed key streamer and multi-client projects in Canada and Brazil.

Financial highlights

• Q3 2024 revenue was $178.7M, down 33% from $267.3M in Q3 2023.

• EBITDA was $50.6M (28% margin), down from $86.0M (32% margin) in Q3 2023.

• EBIT was $13.6M, compared to $52.7M in Q3 2023.

• Net loss for the quarter was $1.3M, versus a profit of $36.2M a year earlier.

• Cash flow from operations was $85.3M, with free cash flow at $64M.

• Cash and cash equivalents at quarter-end were $93.8M.

Outlook and guidance

• Q4 2024 activity is expected to remain low, but the project pipeline for early 2025 is robust, with increased backlog and visibility for the first half of 2025.

• The company is focused on maintaining sustainable rates and operational efficiency amid uncertain demand timing.

• Backlog increased to around $360M by end of November 2024, with most new project execution in 2025.