Core Viewpoint - PHX Energy reported a consolidated revenue increase of 2% in Q3 2025 compared to Q3 2024, despite a challenging industry environment characterized by lower rig counts and commodity prices [3][12][32]. Financial Highlights - Consolidated revenue for Q3 2025 was $164.3 million, up from $160.6 million in Q3 2024 [3][31]. - Adjusted EBITDA for Q3 2025 was $27.9 million, a decrease of 4% from $29 million in Q3 2024, representing 17% of consolidated revenue [3][15]. - Earnings for Q3 2025 were $8.5 million ($0.16 per share), down from $10.2 million ($0.22 per share) in Q3 2024 [3][4]. - The US division's revenue increased by 3% to $120.2 million, while the Canadian division's revenue remained flat at $44.1 million [3][14]. Operating Results - Direct costs increased by 11% to $146.6 million in Q3 2025, driven by higher equipment repair expenses and inflation [38][39]. - SG&A costs decreased by 20% to $12.7 million in Q3 2025, primarily due to lower cash-settled share-based compensation [42][43]. - The effective tax rate for Q3 2025 was 13%, lower than the combined corporate tax rates in the US and Canada [49]. Capital Expenditures and Financial Position - Capital expenditures for Q3 2025 totaled $16.5 million, with $13.8 million allocated to growing the drilling equipment fleet [23][24]. - As of September 30, 2025, the company had working capital of $102.2 million and net debt of $34.5 million [17][16]. Outlook and Strategic Initiatives - The company anticipates continued resilience in activity and revenue despite a weaker industry environment, focusing on high-margin technologies like Rotary Steerable Systems (RSS) [5][7]. - A preliminary capital expenditure budget of $60 million for 2026 has been approved, with a focus on expanding high-margin technologies [6][27]. - The company plans to leverage its technology fleet to maintain a strong financial position and sustain shareholder returns [11][19].