Dawson(DWSN) - 2025 Q2 - Quarterly Results

Dawson Geophysical Q2 2025 Earnings Report Management Commentary and Strategic Initiatives The company made a significant capital investment in new seismic data acquisition technology to meet rising demand and enhance operational efficiency - The company made a significant capital investment to purchase new single-node channels from a subsidiary of Geospace Technologies[3] - The new channels are lightweight and autonomous, expected to improve operational efficiency through faster field deployment and retrieval[3] - This investment aims to meet the rising demand for high-resolution, high channel count surveys and improve both top-line and bottom-line results[3][4] - The company's backlog is improving, with multiple jobs contracted for the newly purchased equipment[4] Second Quarter 2025 Financial Highlights The company reported a 5% increase in Q2 fee revenues and a reduced net loss, though year-to-date net income declined significantly from the prior year Q2 Financial Performance (Three Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Fee Revenues | $8.7 million | $8.3 million | +5% | | Gross Margin | 13% | 1% | +12 p.p. | | Net Loss | ($2.3 million) | ($3.5 million) | Improved | | Loss per Share | ($0.08) | ($0.12) | Improved | | EBITDA | ($1.2 million) | ($2.3 million) | Improved | YTD Financial Performance (Six Months Ended June 30) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Net (Loss) Income | ($1.4 million) | $2.3 million | Declined | | (Loss) Income per Share | ($0.04) | $0.07 | Declined | | EBITDA | $1.2 million | $5.2 million | -77% | - Revenues in the United States increased over 200% quarter over quarter due to improved crew utilization[4] Operations and Capital Allocation The company deployed a large crew with high expected utilization, committed to a $24.2 million equipment purchase, and significantly increased its cash position - One large channel crew was deployed at the beginning of April and is expected to be highly utilized through the end of the year[7] - The company entered into an Equipment Purchase Agreement with GTC, Inc to acquire single point node channels for an aggregate price of approximately $24.2 million[8][9] - The equipment purchase is financed with approximately $6.0 million in cash and $18.2 million through three 36-month promissory notes at an 8.75% interest rate[9] Liquidity Position as of June 30, 2025 | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash Position | $16.2 million | $1.4 million | | Working Capital | $4.9 million | $4.6 million | Detailed Financial Statements Consolidated Statements of Operations Q2 2025 total revenues decreased due to lower reimbursable revenue, but the operating loss improved year-over-year because of lower operating expenses Q2 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Fee Revenue | $8,735 | $8,326 | | Total Operating Revenues | $9,851 | $12,512 | | Total Operating Costs | $12,222 | $16,281 | | (Loss) from Operations | ($2,371) | ($3,769) | | Net (Loss) | ($2,349) | ($3,546) | YTD Statement of Operations Highlights (in thousands) | Line Item | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Fee Revenue | $23,994 | $35,064 | | Total Operating Revenues | $25,929 | $44,096 | | (Loss) Income from Operations | ($1,337) | $2,033 | | Net (Loss) Income | ($1,357) | $2,300 | Consolidated Balance Sheets The balance sheet shows a significant increase in cash and total assets, alongside a rise in current liabilities driven by higher deferred revenue Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $16,228 | $1,385 | | Total current assets | $31,428 | $14,541 | | Property and equipment, net | $11,330 | $12,979 | | Total assets | $45,684 | $30,870 | | Total current liabilities | $26,545 | $9,930 | | Total stockholders' equity | $16,413 | $17,281 | Segment Operations USA Operations drove Q2 revenue but incurred a loss, while Canada Operations was profitable on a year-to-date basis despite a Q2 loss Q2 2025 Operations by Segment (in thousands) | Metric | USA Operations | Canada Operations | Consolidated | | :--- | :--- | :--- | :--- | | Operating Revenues | $9,520 | $331 | $9,851 | | (Loss) from Operations | ($1,317) | ($1,054) | ($2,371) | | Net (Loss) | ($1,297) | ($1,052) | ($2,349) | | EBITDA | ($303) | ($856) | ($1,159) | YTD 2025 Operations by Segment (in thousands) | Metric | USA Operations | Canada Operations | Consolidated | | :--- | :--- | :--- | :--- | | Operating Revenues | $12,816 | $13,113 | $25,929 | | (Loss) Income from Operations | ($5,838) | $4,501 | ($1,337) | | Net (Loss) Income | ($5,843) | $4,486 | ($1,357) | | EBITDA | ($3,706) | $4,885 | $1,179 | Non-GAAP Measures and Reconciliations - The company uses EBITDA, a non-GAAP measure, to assess financial performance, liquidity, and operating performance over time[12] Reconciliation of EBITDA to Net Income Consolidated EBITDA improved year-over-year for Q2 2025 but showed a significant decrease for the six-month period EBITDA Reconciliation (in thousands) | Period | Net (Loss) Income | Depreciation & Amortization | EBITDA | | :--- | :--- | :--- | :--- | | Q2 2025 | ($2,349) | $1,174 | ($1,159) | | Q2 2024 | ($3,546) | $1,406 | ($2,337) | | YTD 2025 | ($1,357) | $2,445 | $1,179 | | YTD 2024 | $2,300 | $2,995 | $5,233 | Reconciliation of EBITDA to Net Cash from Operating Activities The company generated $14.9 million in net cash from operating activities in Q2 2025, which reconciles to its negative EBITDA after adjustments EBITDA to Operating Cash Flow Reconciliation - Q2 2025 (in thousands) | Line Item | Amount | | :--- | :--- | | Net cash provided by operating activities | $14,875 | | Changes in working capital and other items | ($15,737) | | Non-cash adjustments to net loss | ($297) | | EBITDA | ($1,159) | Company Information and Disclosures About Dawson Geophysical The company is a leading provider of onshore seismic data acquisition services in North America, with a growing focus on CCUS monitoring - The company is a leading provider of North American onshore seismic data acquisition services[11] - Services include acquiring and processing 2-D, 3-D, and multi-component seismic data for clients[11] - Carbon Capture Utilization and Storage (CCUS) seismic monitoring is a growing and intricate part of the business[11] Forward-Looking Statements This section outlines risks and uncertainties related to future performance, including energy price volatility and dependence on industry spending - Forward-looking statements relate to future events, financial performance, expected utilization, and anticipated benefits from the new equipment purchase[14] - Key risks include dependence on energy industry spending, volatility of oil and gas prices, contract delays, and risks associated with the new equipment[14]