ACT Energy Technologies Reports 2025 Q3 Interim Results

Executive Summary

• ACT Energy Technologies reported Q3 2025 revenue of C$118.3 M, a 20% decline year‑over‑year, with Adjusted EBITDAS falling 23% to C$23.4 M.
• Net income dropped to C$15.2 M from C$26.2 M YoY, driven by lower revenues and a prior‑period tax recovery; however, free cash flow improved to C$18.2 M.
• The company repurchased 1.35 M shares for $7.4 M, reduced loans by $7.6 M, and maintained strong liquidity with $68.7 M undrawn credit capacity.

Key Details

• Revenue: C$118.3 M (2025 Q3) vs. C$148.4 M (2024 Q3), down 20%; U.S. revenue fell 29% to C$61.5 M, Canada revenue down 8% to C$56.8 M.
• Adjusted EBITDAS: C$23.4 M, a 23% decrease from C$30.2 M YoY; margin remained at 20%.
• Net Income: C$15.2 M vs. C$26.2 M prior year; impacted by absence of an $11.1 M tax pool recovery recorded in 2024 Q3.
• Free Cash Flow: C$18.2 M (up from C$14.2 M YoY).
• Operating Days: Canada down 11%, U.S. down 30% YoY; average revenue per day increased 4% in Canada and 1% in the U.S.
• Gross Margin: Improved to 27% (up from 26%); Adjusted gross margin rose to 33% (up from 30%).
• Capital Allocation: Repurchased 1,350,186 shares at $5.54 average price; total share repurchase cost C$7.4 M. Reduced loans/borrowings by C$7.6 M; remaining loans and borrowings $55.9 M.
• Liquidity: Undrawn credit facility $68.7 M; cash balance C$14.1 M (Dec 31 2024: C$12.8 M).
• Net Capital Expenditures: Negative net capex of –C$1.3 M for the quarter, reflecting higher lost‑in‑hole reimbursements versus equipment purchases.
• Credit Facility Amendment (Mar 21 2025): Fifth Amended and Restated Credit Agreement providing a $124.3 M revolving facility; interest rate adjusted to prime + 1.0%–1.75% (CAD) / SOFR + 2.0%–2.75% (USD); maturity extended to Mar 21 2028.
• Outlook: Management expects U.S. activity bottomed in Q3 and anticipates gradual recovery starting Q4 2025; continued deployment of proprietary MWD systems expected to cut third‑party rental costs by up to US$10 M in 2025 and recapture an additional US$10 M in 2026.

Notable Quotes

• Tom Connors, President & CEO: “We delivered resilient performance despite lower activity, maintaining Adjusted EBITDAS margins at year‑ago levels. Our MWD rollout will reduce third‑party rental expenses by up to $10 M this year and further in 2026.”

Materiality Assessment

• Material – Negative (significant revenue decline, earnings drop, but ongoing liquidity and strategic initiatives disclosed).