Pason Reports Second Quarter 2025 Results and Declares Quarterly Dividend

Executive Summary

• Pason Systems Inc. reported its second quarter 2025 financial results, showing a 1% year-over-year increase in consolidated revenue to $96.4 million, driven by strong performance in Completions and Solar & Energy Storage segments, despite a slowdown in North American drilling activity.
• The company declared a quarterly dividend of $0.13 per share and returned a total of $20.2 million to shareholders during the quarter through dividends and share repurchases.
• Net income attributable to Pason was $12.6 million ($0.16 per share), while Adjusted EBITDA decreased 5% to $31.6 million, reflecting lower margins in the Completions and Solar segments due to growth-stage investments.

Key Details

• Financial Highlights (Q2 2025 vs Q2 2024):
  • Total Revenue: $96.4 million (up 1%).
  • Adjusted EBITDA: $31.6 million (down 5%); Margin of 32.7% (down 190 bps).
  • Net Income Attributable to Pason: $12.6 million ($0.16 per share basic/diluted).
  • Funds Flow from Operations: $26.5 million.
  • Free Cash Flow: $5.3 million.
  • Cash and Cash Equivalents: $69.3 million.
• Segment Performance:
  • North American Drilling: Revenue of $62.5 million (down 2%); Gross profit of $34.0 million. Revenue per Industry Day increased 3% to $1,026.
  • International Drilling: Revenue of $13.6 million (down 11%); Gross profit of $6.4 million. Activity decreased in Argentina due to a customer's shift from conventional to unconventional drilling.
  • Completions: Revenue of $15.3 million (up 12%); Gross profit of $1.2 million. Averaged 33 IWS Active Jobs (up from 29 in Q2 2024). Revenue per IWS Day was $5,069.
  • Solar and Energy Storage: Revenue of $5.0 million (up 58%); Gross loss of $0.6 million. Growth driven by increased control system deliveries.
• Capital Allocation & Shareholder Returns:
  • Dividend declared: $0.13 per share, payable September 29, 2025, to shareholders of record on September 15, 2025.
  • Total return to shareholders in Q2: $20.2 million ($10.2 million in dividends + $10.0 million in share repurchases).
  • Net Capital Expenditures: $15.0 million.
  • 2025 Capital Program Guidance: Expected to total between $55 million and $60 million (down from original $65 million plan).
• Balance Sheet:
  • No interest-bearing debt.
  • Total Cash: $69.3 million (down from $80.8 million at Dec 31, 2024).
  • Working Capital: $104.8 million.

Notable Quotes

• "Pason's financial and operating results for the second quarter of 2025 reflected the strength of our competitive position in the face of slowing industry conditions."
• "Our highest expected returns on capital come from the investments we are making to generate additional free cash flow in our existing businesses."
• "In the current environment of uncertainty and market volatility, we favour maintaining flexibility in our shareholder returns. This involves maintaining our regular quarterly dividend at $0.13 per share and deploying additional capital beyond the requirements of our organic investments and regular dividends to share repurchases."