Total Energy Services Inc. Announces Q2 2025 Results

Executive Summary

• Total Energy Services Inc. reported record second-quarter 2025 financial results, driven by substantial increases in Australian drilling and service rig activity, strong North American demand for compression and process equipment, and improved performance in Canadian well servicing.
• Consolidated revenue for the three months ended June 30, 2025, reached $250.4 million (up 17% year-over-year), while net income attributable to shareholders was $17.1 million (up 11% year-over-year).
• The company announced a $19.5 million increase to its 2025 capital expenditure budget, raising the total to $102.4 million, primarily directed toward expanding U.S. compression fabrication capacity and upgrading Australian service rigs.

Key Details

• Consolidated Financial Highlights (Three Months Ended June 30, 2025):
  • Revenue: $250,416,000 (vs. $213,334,000 in 2024; +17%).
  • Operating Income: $22,314,000 (vs. $14,612,000 in 2024; +53%).
  • EBITDA: $45,396,000 (vs. $37,447,000 in 2024; +21%).
  • Net Income Attributable to Shareholders: $17,111,000 (vs. $15,472,000 in 2024; +11%).
  • Diluted EBITDA per Share: $1.20 (vs. $0.93 in 2024).
  • Diluted Net Income per Share: $0.45 (vs. $0.39 in 2024).
• Consolidated Financial Highlights (Six Months Ended June 30, 2025):
  • Revenue: $502,325,000 (vs. $418,020,000 in 2024; +20%).
  • Operating Income: $48,377,000 (vs. $36,642,000 in 2024; +32%).
  • EBITDA: $95,884,000 (vs. $80,737,000 in 2024; +19%).
  • Net Income Attributable to Shareholders: $36,077,000 (vs. $30,954,000 in 2024; +17%).
• Segment Performance (Q2 2025):
  • Contract Drilling Services (CDS): Revenue $71,222,000 (+5%); EBITDA $16,031,000 (+11%). Operating days decreased 6% to 1,945, but Australian activity surged (+30% operating days, +30% revenue per operating day) offsetting declines in the U.S. (-58% operating days) and Canada (-12% operating days).
  • Rentals and Transportation Services (RTS): Revenue $16,186,000 (-9%); EBITDA $5,608,000 (-8%). Revenue per utilized piece of equipment decreased 16% to $13,596. The segment acquired 280 major pieces of rental equipment in Oklahoma on June 10, 2025.
  • Compression and Process Services (CPS): Revenue $133,233,000 (+22%); EBITDA $22,157,000 (+26%). Fabrication sales backlog reached a record $303.9 million at period end (+49% year-over-year). Rental equipment utilization decreased to 63% from 80% in 2024.
  • Well Servicing (WS): Revenue $29,775,000 (+64%); EBITDA $3,457,000 (+66%). Service hours increased 52% to 27,440, driven by a 110% increase in Australian activity and 38% increase in Canadian activity, partially offset by a 34% decline in U.S. activity.
• Capital Expenditures and Financing:
  • Q2 2025 capital expenditures totaled $26.3 million, primarily for rig upgrades in Australia and Canada and U.S. rental equipment acquisition.
  • Year-to-date capital expenditures were $60.8 million, including $9.0 million for the Oklahoma rental equipment acquisition.
  • The Board approved a $19.5 million increase to the 2025 capex budget, bringing the total to $102.4 million. Approximately 70% of the budget targets growth opportunities, including a U.S. plant capacity expansion of at least 75% (expected completion Q1 2027).
  • The company repaid a $40.4 million mortgage loan maturing on April 29, 2025.
  • Working capital was $111.8 million; cash on hand was $34.2 million; available credit under the $175 million revolving facility was $75.0 million.
  • Weighted average interest rate on outstanding bank debt was 4.49%.
• Shareholder Returns:
  • $17.0 million returned to shareholders in H1 2025, comprising $7.2 million in dividends and $9.8 million in share repurchases under the normal course issuer bid.
  • $10.9 million of bank debt was repaid during the first half of 2025.
• Outlook:
  • Oil prices remained weak due to global economic uncertainty, impairing North American drilling and completion activity.
  • Strong North American demand for compression/process equipment and stable Australian conditions are offsetting weaknesses.
  • The CPS backlog provides visibility into 2026.
  • An idle Australian service rig will be upgraded and put into service by Q1 2026 under a minimum 12-month contract.

Notable Quotes

• "Total Energy’s financial results for the second quarter of 2025 represent record second quarter results. A substantial increase in Australian drilling and service rig activity, continued strong North American demand for compression and process equipment and improved performance from Canadian well servicing more than offset a substantial decline in United States drilling and completion activity and a modest decline in Canadian drilling activity."