PHX Energy Announces Second Quarter Results and Record Second Quarter Revenue

Core Insights - PHX Energy reported consolidated revenue of $167.7 million for Q2 2025, a 9% increase from $154.2 million in Q2 2024, marking the highest second-quarter revenue on record [3][6][24] - Adjusted EBITDA for Q2 2025 was $27.4 million, representing 16% of consolidated revenue, down from $30 million (19% of revenue) in Q2 2024 [3][9][32] - Earnings for Q2 2025 were $8.5 million ($0.17 per share), a decrease of 34% from $12.9 million ($0.26 per share) in Q2 2024 [4][9][42] Financial Highlights - Revenue from directional drilling services increased by 8% to $153.9 million in Q2 2025, while motor rental revenue rose by 28% to $12.8 million [24][27] - The Canadian division reported revenue of $39.6 million, a 4% increase from $38.2 million in Q2 2024, despite a 6% decline in Canadian industry drilling days [8][25] - Excess cash flow for Q2 2025 was $9.3 million, a significant increase of 163% from $3.5 million in Q2 2024 [4][12] Operational Performance - The US division's revenue grew by 10% to $128.1 million in Q2 2025, despite a 5% decline in the average number of active rigs in the US [7][46] - The average revenue per day for directional drilling services improved by 7% to $22,476 in Q2 2025, driven by higher RSS activity [26][27] - The Canadian division's average revenue per day increased by 16% to $16,409, supported by the expansion of RSS activity [8][26] Cost and Expenses - Direct costs increased by 13% to $143.4 million in Q2 2025, primarily due to higher equipment repair expenses and increased costs from tariffs [30][31] - SG&A costs rose by 21% to $16.7 million in Q2 2025, mainly due to rising personnel-related costs [33][34] - Depreciation and amortization expenses on drilling and other equipment increased by 13% to $12.6 million in Q2 2025 [31][42] Shareholder Returns - The company declared a dividend of $0.20 per share, totaling $9.1 million, paid on July 15, 2025 [11][12] - The corporation repurchased and cancelled 100,000 common shares for $0.9 million under the Normal Course Issuer Bid (NCIB) [15][16] - Since 2017, 28% of outstanding shares have been purchased and cancelled as part of the Return of Capital Strategy (ROCS) [5][12] Outlook - The company anticipates continued strong activity and revenue in the second half of 2025, focusing on its premium Rotary Steerable Systems (RSS) offerings [5][6] - Despite a softer market expected through 2025, there are opportunities for growth in natural gas-focused drilling rigs due to increasing LNG exports [5][6] - The company plans to apply for the renewal of its NCIB to continue rewarding shareholders [16][12]