Q3 FY2026
Filed Oct 28, 2026Third-quarter revenue increased 15% to $532 million and Adjusted EBITDA increased 6% to $125 million, while net earnings attributable to shareholders were $21 million versus a net loss of $7 million in 2025.
North American activity drove 15.0% revenue growth and a return to net earnings, while U.S. reactivation costs, lower international margins and higher capital spending constrained EBITDA growth and cash conversion.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026other | $531.7M | – | 15.0% |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $125.1M | – | 6.4% |
| Net earnings, three months ended September 30, 2026other | $21.29M | – | 428.9% |
| Net earnings attributable to shareholders, three months ended September 30, 2026other | $20.92M | – | 409.4% |
| Net earnings attributable to shareholders per basic share, three months ended September 30, 2026other | $1.65 | – | 423.5% |
| Net earnings attributable to shareholders per diluted share, three months ended September 30, 2026other | $1.65 | – | 423.5% |
| Cash provided by operations, three months ended September 30, 2026other | $70.81M | – | (6.7%) |
| Cash used in investing activities, three months ended September 30, 2026other | $78.74M | – | 28.7% |
| Capital expenditures, three months ended September 30, 2026other | $82.48M | – | – |
| Net capital spending, three months ended September 30, 2026non-GAAP | $77.66M | – | 23.0% |
| Revenue, nine months ended September 30, 2026other | $1.51B | – | 10.6% |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $346.1M | – | (4.7%) |
| Net earnings attributable to shareholders, nine months ended September 30, 2026other | $37.10M | – | (15.7%) |
| Net earnings attributable to shareholders per basic share, nine months ended September 30, 2026other | $2.89 | – | (11.9%) |
| Net earnings attributable to shareholders per diluted share, nine months ended September 30, 2026other | $2.89 | – | (6.5%) |
| Cash provided by operations, nine months ended September 30, 2026other | $279.5M | – | (2.5%) |
| Cash used in investing activities, nine months ended September 30, 2026other | $208.2M | – | 34.8% |
| Net capital spending, nine months ended September 30, 2026non-GAAP | $204.7M | – | 27.7% |
| Contract Drilling Services Adjusted EBITDA as a percentage of revenue, three months ended September 30, 2026non-GAAP | 26.7% | – | – |
| Completion and Production Services Adjusted EBITDA as a percentage of revenue, three months ended September 30, 2026non-GAAP | 26.3% | – | – |
| Cash, September 30, 2026other | $23.18M | – | – |
| Long-term debt, September 30, 2026other | $629.1M | – | – |
| Total long-term financial liabilities, September 30, 2026non-GAAP | $698.5M | – | – |
| Working capital, September 30, 2026non-GAAP | $163.8M | – | – |
| Long-term debt to long-term debt plus equity ratio, September 30, 2026non-GAAP | 0.28 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Contract Drilling Services, three months ended September 30, 2026Increased drilling rig activity in North America was partly offset by lower international results. | $454.2M | – | 16.2% |
| Completion and Production Services, three months ended September 30, 2026The increase reflected 18% higher drilling-related rental activity and 6% higher well servicing activity. | $80.78M | – | 8.3% |
| Contract Drilling Services, nine months ended September 30, 2026Canadian revenue increased due to higher drilling, well servicing and drilling related rentals activity, while U.S. revenue increased due to improved drilling activity and higher average day rates. | $1.29B | – | 10.9% |
| Completion and Production Services, nine months ended September 30, 2026Higher drilling-related rental and well servicing activity supported growth. | $226.3M | – | 8.9% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Q4 2026 and FY 2026 outlook
- NoteCanada Q4 2026 operating margins are expected to average between $13,500 and $14,500 per utilization day.
- NoteU.S. Q4 2026 operating margins are expected to average between US$9,500 and US$10,500 per utilization day.
- Note2026 capital budget: $275 million to $285 million.
- NoteExpected 2026 maintenance, infrastructure, and intangibles capital spending: approximately $172 million.
- NoteExpected 2026 expansion and upgrades capital spending: $103 million to $113 million.
- NoteExpected 2026 Contract Drilling Services capital spending: approximately $252 million to $262 million.
- NoteExpected 2026 Completion and Production Services capital spending: $17 million.
- NoteExpected 2026 Corporate and Other capital spending: $6 million.
- NoteExpected 2026 debt reduction: $100 million.
- NoteIn 2026, Precision intends to allocate up to 50% of free cash flow before debt repayments to share repurchases.
- NoteThe idle rig in Kuwait is expected to return to work in mid-2027 under a five-year contract.
Capital returns
- The Company repurchased 269,331 shares for $31 million during the quarter.
- Year to date, the Company repurchased 405,621 shares for $47 million.
- The Company intends to allocate up to 50% of free cash flow before debt repayments to share repurchases in 2026.
- The Company expects to achieve its $100 million debt repayment target for the year and continue actively repurchasing shares in the fourth quarter.
What drove it
- Canada averaged 73 active rigs, compared with 63 active rigs in the third quarter of 2025.
- U.S. averaged 43 active rigs, compared with 36 active rigs in the third quarter of 2025.
- U.S. revenue per utilization day was US$33,270, compared with US$31,040, driven by higher average day rates and increased technology revenue.
- Canadian revenue per utilization day was $33,654, compared with $34,193, with the reduction attributed to rig mix as Super Single rig utilization increased 18% year over year.
- Canadian well servicing rig operating hours increased 6%.
- Completion and Production Services Adjusted EBITDA increased 10% to $21 million, supported by higher drilling-related rental and well servicing revenue and lower start-up costs.
Concerns
- U.S. operating margin was US$7,653, compared with US$8,700 in 2025, as rig reactivation costs averaged US$2,125 per utilization day compared with US$502 per utilization day in 2025.
- International revenue per utilization day decreased to US$46,304 from US$53,811 because of a change in rig mix and planned rig recertifications that resulted in non-billable utilization days.
- International revenue decreased to $30 million from $35 million, and international operating expenses increased due to rig mix and incremental costs associated with geopolitical tensions in the Middle East.
- Additional depreciation expense from revised drill-pipe useful life estimates was $8 million in the quarter and $30 million year to date.
- Precision estimates a maximum tax liability of approximately $155 million, excluding interest, if it is ultimately determined not to be entitled to deduct the intercompany dividends challenged by the CRA.
What to watch
- Whether U.S. operating margins reach the expected US$9,500 to US$10,500 per utilization day as the pace of rig reactivations slows.
- Canada operating margins against the expected Q4 range of $13,500 to $14,500 per utilization day.
- Execution of the revised $275 million to $285 million 2026 capital budget and the pending upgrade opportunity involving multiple rigs contracted through 2029.
- Progress toward the $100 million 2026 debt-reduction target, following $75 million of debt reduction during the year to September 30, 2026.
- International operating costs and activity disruptions related to Middle East tensions, plus the expected mid-2027 return of the idle Kuwait rig.
- The CRA reassessment process and any reassessments for the 2019 to 2023 tax years.
Balance sheet and cash flow
- Cash provided by operations was $70,813 thousand in the third quarter of 2026, compared with $75,869 thousand in 2025.
- Cash provided by operations was $279,536 thousand for the nine months ended September 30, 2026, compared with $286,783 thousand in 2025.
- Capital expenditures were $82,482 thousand in the third quarter and $223,846 thousand for the nine months ended September 30, 2026.
- Cash was $23,177 thousand at September 30, 2026, compared with $85,781 thousand at December 31, 2025.
- Long-term debt was $629,116 thousand at September 30, 2026, compared with $679,291 thousand at December 31, 2025.
- The Company had more than $460 million in available liquidity at September 30, 2026.
- Total outstanding under the Senior Credit Facility and unsecured senior notes was $635 million at September 30, 2026, compared with $687 million at December 31, 2025.
- Capital commitments were $143 million at September 30, 2026, with payments expected through 2028.
Analysis
Precision delivered a stronger third quarter as North American activity increased. Revenue was $531,652 thousand, up 15.0%, led by 16% growth in Canadian utilization and 19% growth in U.S. utilization. U.S. revenue per utilization day rose to US$33,270 from US$31,040 on higher average day rates and technology revenue. Completion and Production Services also expanded, with revenue up 8.3% and Adjusted EBITDA up 10.1%.
Profit conversion was less pronounced than revenue growth. Adjusted EBITDA increased 6.4% to $125,116 thousand, while Contract Drilling Services Adjusted EBITDA as a percentage of revenue declined to 26.7% from 29.9%. The principal constraint was U.S. reactivation activity: six rigs were reactivated and related costs averaged US$2,125 per utilization day, compared with four rigs and US$502 per utilization day in 2025. International mix, recertification-related non-billable days and elevated Middle East operating costs also weighed on margins.
Net earnings attributable to shareholders improved to $20,917 thousand, or $1.65 per basic and diluted share, from a loss in the prior-year quarter. The improvement primarily reflected lower income tax expense because the prior-year period included a $33 million deferred income tax expense related to waived U.S. tax deductions. The current quarter also absorbed $8 million of additional depreciation expense caused by the revised useful-life estimate for drill pipe.
Cash generation was lower year over year, with cash provided by operations of $70,813 thousand versus $75,869 thousand, as capital expenditures rose to $82,482 thousand from $69,326 thousand. The Company repurchased $31 million of shares during the quarter and had repurchased $47 million year to date, while reducing debt by $75 million during the year. Cash was $23,177 thousand and long-term debt was $629,116 thousand at quarter end.
Management revised its 2026 capital budget upward to $275 million to $285 million from $265 million to support long-lead deliveries and a pending Canadian upgrade opportunity. The Q4 outlook calls for Canadian operating margins of $13,500 to $14,500 per utilization day and a U.S. margin step-up to US$9,500 to US$10,500 per utilization day as reactivation activity moderates. The key execution tests are realization of that U.S. margin recovery, delivery of the capital program, continued debt reduction and containment of international disruption and costs.
Not in the filing
stated, not guessed- Gross profit and gross margin were not reported.
- Operating income was not reported.
- Free cash flow was not reported.
- Dividend amount and dividend guidance were not reported.
- GAAP or IFRS tax rate was not reported.
- Revenue guidance was not reported.
- Prior-period outlook was not provided, so no comparison of actual results with prior guidance is available.
- Named executive quotes were not included in the filing text.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.