Major Drilling Announces First Quarter 2026 Results

Executive Summary

• Major Drilling Group International Inc. reported first-quarter fiscal 2026 results (ended July 31, 2025), showing a 19.3% year-over-year increase in revenue to $226.6 million, driven largely by strong performance in South and Central America.
• Net earnings decreased to $10.1 million ($0.12 per share) from $15.9 million ($0.19 per share) in the prior year quarter, impacted by lower gross margins in North America and the integration of the Explomin acquisition.
• The company maintained a strong balance sheet with net debt of only $2.8 million and reported capital expenditures of $14.4 million, while expanding its rig count to 709 units.

Key Details

• Revenue: $226.6 million, up 20.8% from Q4 2025 and 19.3% from Q1 2025 ($190.0 million).
  • Canada - U.S.: $84.1 million (down 3.6% YoY), impacted by permitting delays and forest fires.
  • South and Central America: $95.8 million (up 92.4% YoY), driven by Explomin ($47.9 million) and increased activity in Chile.
  • Australasia and Africa: $46.8 million (down 11.9% YoY), due to unexpected modifications to drill programs.
• Profitability Metrics:
  • Adjusted Gross Margin: 25.2% (down from 28.9% in Q1 2025).
  • Gross Margin: 18.6% (down from 22.1% in Q1 2025).
  • EBITDA: $32.1 million (down from $34.3 million in Q1 2025).
  • Net Earnings: $10.1 million ($0.12 EPS basic/diluted), down from $15.9 million ($0.19 EPS) in Q1 2025.
• Operational Updates:
  • Rig Count: Total rig count increased to 709 at quarter-end; 5 new rigs added and 4 older rigs disposed of.
  • Capital Expenditures: $14.4 million, lower than expected due to strategic relocation of rigs and previous fleet investments.
  • Balance Sheet: Net debt of $2.8 million; working capital grew by $13.1 million to $206.8 million.
• Segment Performance:
  • Explomin Integration: Contributed $47.9 million in revenue; characterized by stable, longer-term contracts with a higher proportion of underground operations, resulting in a lower margin profile but providing geographic diversification.
  • Costs: General and administrative costs increased by $3.2 million to $21.4 million, driven by Explomin integration and inflationary wage adjustments. Amortization of intangible assets increased by $1.2 million to $1.5 million.
• Outlook: Management expects continued top-line momentum from new project start-ups and potential modest margin improvement. Optimism remains for the North American region due to signs of life in the junior financing market and streamlined permitting discussions.

Notable Quotes

• “As expected, operations ramped up sharply in the first fiscal quarter of 2026, with revenue growing by 20.8% from the prior quarter. We were particularly pleased with activity levels in Peru and Chile, which helped offset a slowdown in the Australasian region caused by pauses at certain projects due to changes in drill programs.” — Denis Larocque, President and CEO
• “The Company’s balance sheet remains strong with net debt of $2.8 million... A total of 5 new drill rigs were added, while 4 older, less efficient rigs were disposed of, bringing the total rig count to 709 at quarter-end.” — Ian Ross, CFO