ACT Energy Technologies Reports 2025 Q2 Interim Results

Executive Summary

• ACT Energy Technologies reported a net loss of $10.0 million for Q2 2025, compared to a net income of $5.3 million in Q2 2024, driven by a $6.5 million unrealized foreign exchange loss and a $4.8 million provision for a sales tax issue.
• Revenues declined 14% to $112.0 million due to a 24% drop in U.S. operating days, though Adjusted EBITDAS remained resilient at $14.8 million (down 14%) due to lower third-party rental costs from the Rime MWD deployment.
• The Company completed its Normal Course Issuer Bid (NCIB) for the period, repurchasing 1,110,858 shares for $6.3 million, and announced a new NCIB authorization for up to 2,034,285 shares.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Revenues: $112.0 million (down 14% from $130.3 million).
  • Adjusted EBITDAS: $14.8 million (down 14% from $17.3 million).
  • Adjusted EBITDAS Margin: 13% (consistent with prior year).
  • Net Loss: $(9.96) million (vs Net Income of $5.26 million).
  • Operating Cash Flow: $26.0 million (down from $34.1 million).
  • Free Cash Flow: $2.7 million (vs deficit of $1.8 million).
  • Gross Margin Percentage: 22% (vs 21%).
  • Adjusted Gross Margin Percentage: 29% (vs 26%).
• Operational Metrics:
  • U.S. Operating Days: 2,838 (down 24% from 3,746).
  • Canada Operating Days: 2,107 (down 1% from 2,130).
  • Total Operating Days: 4,945 (down 16% from 5,876).
  • U.S. Average Revenue per Operating Day: $28,918 (up 9%).
  • Canada Average Revenue per Operating Day: $14,211 (down 3%).
• Balance Sheet & Liquidity:
  • Cash Balance: $24.0 million (up from $12.8 million at Dec 31, 2024).
  • Undrawn Credit Facility Capacity: $62.2 million.
  • Loans and Borrowings less Cash: $38.1 million (down from $50.7 million at Dec 31, 2024).
  • Working Capital (excl. current debt): $73.7 million.
• Share Repurchases (NCIB):
  • Q2 2025 NCIB: Purchased 1,110,858 shares for $6.3 million at an average price of $5.69 per share.
  • New NCIB Authorization: Approved for up to 2,034,285 shares (10% of outstanding), commencing August 11, 2025, and terminating August 10, 2026.
• Credit Facility Amendment:
  • Entered Fifth Amended and Restated Credit Agreement on March 21, 2025.
  • Total Revolving Facility: ~$124.3 million ($100M CAD Syndicated, $10M CAD ATB, $10M USD HSBC).
  • Interest Rate: Reduced to Prime + 1.0% to 1.75% or CORRA/SOFR + 2.0% to 2.75%.
  • Maturity: Extended to March 21, 2028.
  • Covenant: Consolidated Interest Coverage Ratio required to be no less than 3.0:1 (calculated at 10.8:1).
• Capital Expenditures & Technology:
  • Gross Capital Expenditures (6 months): $30.9 million.
  • Net Capital Expenditures (6 months): $22.9 million.
  • MWD Deployment: 29 Rime MWD systems deployed to date; 21 additional systems expected by end of Q3 2025.
  • PPE not yet depreciated (MWD equipment in manufacturing/testing): $14.3 million.
• Specific Items Impacting Net Income:
  • Unrealized Foreign Exchange Loss: $6.5 million (primarily intercompany balance translation).
  • Sales Tax Provision: $4.8 million recognized in Q2 2025.
  • Total Accrued Provision for Altitude Acquisition Tax Issue: $12.0 million (as of June 30, 2025).
  • Indemnity Receivable for Pre-Closing Tax Issue: $14.7 million recognized in Other Receivables.

Notable Quotes

• Tom Connors, President & CEO: "Our second quarter 2025 showed steady results in Canada and improving adjusted gross margins corporately despite weaker U.S. activity... We remain committed to returning capital to our shareholders. During the second quarter, we completed our 2024 / 2025 NCIB program, maxing out our available repurchases... We are renewing our program and will continue to utilize this program as a lever for returning capital to shareholders."
• Tom Connors, President & CEO: "Our U.S. results were heavily impacted by the 10% weakening in West Texas Intermediate ("WTI") oil prices in 2025 Q2 versus 2025 Q1 levels... Combined with the lingering effects of client mergers and acquisitions ("M&A") in 2024, our U.S. operating days dropped 7% sequentially, however, despite a soft U.S. operating environment, our Adjusted gross margin, including and excluding lost-in-hole revenues, improved versus 2025 Q1 and 2024 Q2."