ACT Energy Technologies Ltd. press release
ACT Energy Technologies Reports 2026 Q1 Interim Results
TSX - Toronto Stock Exchange · Canada
Canada NewsWire
CALGARY, AB, May 8, 2026/CNW/ - (TSX: ACX) ACT Energy Technologies Ltd (the "Company" or "ACT")'s news release contains "forward-looking statements" within the meaning of applicable Canadian securities laws. For a full disclosure of forward-looking statements and the risks to which they are subject, see the 'Forward-Looking Statements' section in this news release. This news release contains references to Adjusted gross margin, Adjusted gross margin percentage, Adjusted EBITDAS, Adjusted EBITDAS margin percentage, Free cash flow, Net debt, Working capital and Net capital expenditures. These terms do not have standardized meanings prescribed under International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and may not be comparable to similar measures used by other companies. See the 'Non-GAAP measures' section in this news release for definitions and tabular calculations.
2026 Q1 FINANCIAL RESULTS
Revenues of $144.5 million in 2026 Q1 increased 7% compared to $135.4 million one year ago. Strong growth in our Canadian segment plus the acquisition of Texas-based Stryker Directional on January 5, 2026 were the primary factors. Adjusted EBITDAS(1)of $22.9 million grew 16% versus $19.7 million in the first quarter of last year. Adjusted EBITDAS margins(1)increased to 15.9% from 14.6% a year ago. Canadian operating days(2)grew 5% despite the average Canadian rig count falling by 4% year over year. The Company closed the acquisition of Oklahoma-based SB Directional on April 1, 2026 as part of a countercyclical effort to continue adding size, scale and management depth in our U.S. business segment. U.S. operating days(2)grew 64% sequentially versus the total achieved in 2025 Q4 due to increases in our pre-existing base business and contributions from the recent Stryker acquisition. On April 29, 2026, the Company also announced the early $USD 20.0 million repayment of the exchangeable subordinated promissory note. ACT used its available term facility to repay the note.
| _ | | | 1 | Refer to the 'Non-GAAP measures' section in this News Release. | | 2 | Per 'Supplementary financial measures and other definitions' section in this News Release. |
PRESIDENT'S MESSAGE
Comments from President & CEO Tom Connors:
"The first quarter represented an important inflection point for the Company. We delivered continued growth and expansion in our Canadian operations, while executing a transformational consolidation of our U.S. directional and rental businesses into a single, leaner and more focused operating platform. The integration of Stryker Energy Directional Services in January and SB Directional Services in April meaningfully strengthens our U.S. footprint, expands our customer base and adds scale as we position the business for an improving activity environment as we move through 2026 and into 2027.
"In Canada, our market presence, expanding technology offering and focus on high‑performance service delivery once again positioned us among the most active directional drilling providers during the quarter. Operating days increased 5% year‑over‑year, despite a 4% decline in the Western Canadian rig count. While our foundation remains multilateral drilling, the continued adoption of rotary steerable and advanced technologies supported incremental activity and is expected to remain a key driver of utilization throughout the remainder of the year.
"In the United States, activity levels began to recover from the trough experienced in the fourth quarter of 2025, with operating days increasing sequentially by 13% in our pre-existing U.S. base business, and 64% overall when including the acquired Stryker business. The consolidation of management teams, optimization of the rental fleet and increased focus on higher‑value rotary steerable work are improving the operating trajectory of the business. As industry consolidation has reduced competitive capacity, we believe our streamlined operating model and expanding direct‑to‑operator relationships position us to benefit from even modest improvements in overall activity levels.
"Challenging market conditions throughout 2025 and early 2026 have also created attractive counter‑cyclical acquisition opportunities. The acquisitions of Stryker and SB added two experienced management teams, complementary customers and more than 30 incremental operating jobs per day. The integration of our proprietary motor and rotary steerable technology across the combined platform is expected to drive improved margins and returns over time.
"Our 2026 capital allocation strategy remains disciplined and balanced. We will continue to evaluate organic growth initiatives and accretive acquisitions while maintaining a conservative leverage profile. In parallel, we remain committed to returning capital to shareholders through optimal investments allowing for future debt reduction and investment into our Normal Course Issuer Bid and will continue to deploy capital in a measured and value‑focused manner.
"Overall, we are executing on strategic initiatives that strengthen the business and enhance operating leverage. With recent additions, an expanded technology offering and a more efficient operating structure, we believe the Company is well positioned to capture improving market conditions as activity levels gradually recover," said Tom Connors, ACT President and Chief Executive Officer.
FINANCIAL HIGHLIGHTS
| (stated in thousands of Canadian dollars, except net income per common share amounts) | Three months ended March 31, | | | 2026 | 2025 | | | | | | | Revenues | $ 144,463 | $ 135,357 | | | | | | Gross margin percentage | 21 % | 22 % | | Adjusted gross margin percentage(1) | 27 % | 28 % | | | | | | Adjusted EBITDAS(1) | $ 22,924 | $ 19,699 | | Adjusted EBITDAS margin percentage(1) | 16 % | 15 % | | | | | | Net income | $ 4,845 | $ 7,248 | | Per common share - basic | $ 0.14 | $ 0.21 | | Per common share - diluted | $ 0.13 | $ 0.19 | | | | | | Cash flow - operating activities | $ (245) | $ 18,685 | | | | | | Free cash flow(1) | $ 9,058 | $ 5,731 | | | | | | Weighted average common shares outstanding: | | | | Basic (000s) | 34,942 | 34,160 | | Diluted (000s) | 38,568 | 37,867 |
| (stated in thousands of Canadian dollars) | March 31, 2026 | December 31, 2025 | | | | | | Working capital(1) | $ 87,684 | $ 84,092 | | Total assets | $ 521,288 | $ 462,382 | | Net debt(1) | $ 91,279 | $ 53,581 | | Exchangeable promissory notes ("EP notes") | $ 27,429 | $ 26,697 | | Shareholders' equity | $ 264,913 | $ 248,773 |
| (1) | Refer to the 'Non-GAAP measures' section in this News Release. |
OUTLOOK
Global energy markets entered 2026 with improving supply‑demand fundamentals. Recent geopolitical instability has introduced additional uncertainty but has also reinforced the importance of secure North American supply, supporting a constructive medium‑term commodity price environment. While public E&P capital programs are expected to remain disciplined in the near term, incremental activity from private operators is likely, providing modest upward pressure on drilling and completion activity.
In Canada, second‑quarter activity is expected to be stronger than the prior year, supported by continued adoption of rotary steerable technology and the compelling economics of multi‑lateral drilling. Seasonal spring breakup and weather‑related disruptions may create short‑term variability; however, underlying demand fundamentals remain supportive.
In the United States, the combined platform is currently operating at a high‑water mark of more than 60 active jobs and is expected to steadily build activity as the year progresses. Industry consolidation, reduced service capacity and increased technology differentiation are expected to benefit well‑capitalized, technically capable service providers.
From an oilfield services perspective, activity recovery is likely to be gradual rather than cyclical in nature, favoring companies with scale, strong balance sheets and differentiated technology. We believe our expanded footprint, integrated service model and focus on higher‑margin, technology‑enabled work position the Company to outperform as activity levels normalize.
| (1) | Per 'Supplementary financial measures and other definitions' section in this news release. | | (2) | Per Baker Hughes and Rig Locator. |
RESULTS OF OPERATIONS
Financial
| | Three months ended March 31, | | | (stated in thousands of Canadian dollars, except percentages) | 2026 | 2025 | | | | | | Revenues | | | | United States | $ 83,173 | $ 81,616 | | Canada | 61,290 | 53,741 | | Total revenues | 144,463 | 135,357 | | Cost of sales | | | | Direct costs | (104,722) | (97,873) | | Depreciation and amortization | (9,692) | (7,348) | | Share-based compensation | (30) | (131) | | Total cost of sales | (114,444) | (105,352) | | | | | | Gross margin | $ 30,019 | $ 30,005 | | | | | | Gross margin percentage | 21 % | 22 % | | Adjusted gross margin percentage(1) | 27 % | 28 % | | | | |
| (1) | Refer to the 'Non-GAAP measures' section in this News Release. |
Operational
| (stated in Canadian dollars, except operating days and average industry land rig counts) | Three months ended March 31, | % | | | 2026 | 2025 | Change | | | | | | | | Operating days(1) | | | | | United States | 3,184 | 3,040 | 5 % | | Canada | 4,473 | 4,254 | 5 % | | | 7,657 | 7,294 | 5 % | | | | | | | Average industry land rig count(2) | | | | | United States | 516 | 538 | (4 %) | | Canada | 191 | 199 | (4 %) | | | | | | | Average revenues per operating day(1) | | | | | United States | $ 26,122 | $ 26,847 | (3 %) | | Canada | $ 13,702 | $ 12,633 | 8 % | | | $ 18,867 | $ 18,557 | 2 % | | | | | | | Net lost-in-hole equipment reimbursements(3) | $ 4,892 | $ 1,117 | 338 % | | | | | |
| (1) | Per 'Supplementary financial measures and other definitions' section in this News Release. | | (2) | Per JWN RigLocator and Enverus. | | (3) | Refer to the 'Non-GAAP measures' section in this News Release. |
Summary
The Company delivered solid momentum in 2026 Q1, with higher operating days(1)across both Canada and the U.S. - driven in particular by the successful integration of the recent Stryker acquisition - serving as a catalyst for revenue growth over the prior period. Gross margin and Adjusted Gross Margin percentages(2)remained stable, reflecting disciplined operational execution.
Strengthened market position in Canada resulting from deployment of additional technologies, combined with the acquisition of Stryker in US, translated into increased activity levels and meaningful revenue gains compared to the same quarter last year. Adjusted gross margins(2)improved alongside higher revenues, while overall gross margin saw modest growth due to increased depreciation tied to the ongoing rollout of Rime MWD systems.
Overall, 2026 Q1 demonstrates a business that is scaling effectively, integrating acquisitions successfully, and building a stronger platform for sustained growth across both core markets.
| _ | | | 1 | Per 'Supplementary financial measures and other definitions' section in this News Release. | | 2 | Refer to the 'Non-GAAP measures' section in this News Release. |
SEGMENTED INFORMATION
United States
Revenues
U.S. revenues were $83.2 million in 2026 Q1, an increase of $1.6 million or 2%, compared to $81.6 million in 2025 Q1. The Company experienced a 5% increase in operating days(1)in 2026 Q1 (2026 Q1 - 3,184 days; 2025 Q1 - 3,040 days). The Company's activity increased despite a 4% decrease in the average U.S. land rig count, mainly due to recent Stryker acquisition. The average revenues per operating day(1)decreased 3% in 2026 Q1 (2026 Q1 - $26,122 per day; 2025 Q1 - $26,847 per day).The decline is primarily due to the 4% decrease in the average USD-CAD foreign exchange rate over the prior period.
Direct costs
U.S. direct costs included in cost of sales were $66.1 million in 2026 Q1, a increase of $4.0 million or 6%, compared to $62.1 million in 2025 Q1. Direct costs as a percentage of revenues were 80% in 2026 Q1, compared to 76% in 2025 Q1. The increase is mainly due to re-activation of certain equipment to offset rental costs, which resulted in higher maintenance expenses, the benefit is expected to be realized in future periods. Additionally, as the Company began to increase activity, certain of this work required new generation rental technologies, which the Company expects to displace in the upcoming months at minimal capital investment with quick paybacks.
Canadian
Revenues
Canadian revenues were $61.3 million in 2026 Q1, an increase of $7.6 million or 14%, compared to $53.7 million in 2025 Q1, due to a 5% increase in operating days(1)in 2026 Q1 (2026 - 4,473 days; 2025 - 4,254 days). Canadian operating days(1)increased 5% in Q1 2026, compared to Q1 2025, despite a 4% decrease in the Western Canadian rig count(1). The main reasons are the use of ancillary technologies, new customers and delay in seasonal spring break in activities. The average revenues per operating day(1)increased by 8% in 2026 Q1 (2026 - $13,702 per day; 2025 - $12,633 per day). The increase in the average revenues per operating day(1)is mainly attributable to a favorable job mix requiring additional revenue generating technologies.
Direct costs
Canadian direct costs included in cost of sales were $38.6 million in 2026 Q1, an increase of $2.8 million or 8%, compared to $35.7 million in 2025 Q1. The increase is mainly due to higher repair, third-party rental and labour costs in 2026 Q1, consistent with higher activity levels. As a percentage of revenues, direct costs were 63% in 2026 Q1, compared to 66% in 2025 Q1.
CONSOLIDATED
Revenues
The Company's revenues were $144.5 million in 2026 Q1, an increase of $9.1 million or 7%, compared to $135.4 million in 2025 Q1. The increase is driven by a 5% increase in operating days(1)(2026 Q1 - 7,657 days; 2025 Q1 - 7,294 days) and by a 2% increase in the average revenues per operating day(1)(2026 Q1 - $18,867; 2025 Q1 - $18,557).
Direct Costs
The Company recognized $104.7 million of direct costs in 2026 Q1, an increase of $6.8 million or 7%, compared to $97.9 million in 2025 Q1. The increase is mainly due to higher labour and repair costs resulting from the increase in operating days(1).
Direct costs as a percentage of revenues remained stable at 72% in 2026 Q1 and 2025 Q1.
Gross margin and Adjusted gross margin(2)
The Gross margin and Adjusted gross margin percentages(2)remained relatively consistent in 2026 Q1 compared to 2025 Q1.
Depreciation and amortization expense
Depreciation and amortization expense included in cost of sales increased to $9.7 million in 2026 Q1, compared to $7.3 million in 2025 Q1, mainly due to addition of Stryker assets and a higher portion of the MWD build-out being depreciated.
Selling, general and administrative ("SG&A") expenses
| | Three months ended March 31, | | | (stated in thousands of Canadian dollars) | 2026 | 2025 | | | | | | Selling, general and administrative expenses: | | | | Direct costs | $ 16,906 | $ 16,433 | | Depreciation and amortization | 3,157 | 2,826 | | Share-based compensation | 497 | 541 | | Selling, general and administrative expenses | $ 20,560 | $ 19,800 |
| | | | 1 | Per 'Supplementary financial measures and other definitions' section in this News Release. | | 2 | Refer to the 'Non-GAAP measures' section in this News Release. |
The Company recognized direct costs included in SG&A expenses of $16.9 million in 2026 Q1, which were slightly higher than $16.4 million in 2025 Q1. As a result of SG&A being more fixed cost in nature, against higher revenues, direct costs included in SG&A expenses as a percentage of revenues were the same 12% in 2026 Q1, compared to 12% in 2025 Q1.
Depreciation and amortization included in SG&A expenses was $3.2 million in 2026 Q1, compared to $2.8 million in 2025 Q1. The slight increases are mainly due to amortization expense coming from recent Stryker acquisition.
Stock-based compensation included in SG&A expenses were $0.5 million in 2026 Q1, compared to $0.5 million in 2025 Q1.
Research and development ("R&D") costs
| | Three months ended March 31, | | | (stated in thousands of Canadian dollars) | 2026 | 2025 | | | | | | Research and development costs | $ 1,410 | $ 1,364 |
The Company recognized R&D costs of $1.4 million in 2026 Q1, compared to $1.4 million in 2025 Q1. R&D costs include salaries, benefits, purchased materials and shop supply costs related to new product development and technology and engineering.
Write-off of property, plant and equipment
| | Three months ended March 31, | | | (stated in thousands of Canadian dollars) | 2026 | 2025 | | | | | | Write-off of property, plant and equipment | $ 982 | $ 179 |
The Company recognized a write-off of property, plant and equipment of $1.0 million in 2026 Q1, compared to $0.2 million in 2025 Q1. The write-offs related to equipment lost-in-hole and damaged beyond repair. Lost-in-hole equipment and damaged beyond repair reimbursements from customers are based on service agreements held with clients and are recognized as revenue.
Finance costs
| | Three months ended March 31, | | | (stated in thousands of Canadian dollars) | 2026 | 2025 | | | | | | Finance costs - loans and borrowings and promissory notes | $ 2,309 | $ 2,235 | | Finance costs - lease liabilities | $ 353 | $ 281 |
Finance costs - loans and borrowings and promissory notes were $2.3 million, an increase of $0.1 million, compared to $2.2 million in 2025 Q1. The increase is mainly due to a higher outstanding balance of loans and borrowings in 2026 Q1 compared to 2025 Q1 and issuance of promissory notes related to Stryker acquisition (refer to Transactions section of this News Release), offset by lower average borrowing costs.
In addition, the Company had finance costs of $0.4 million in 2026 Q1, related to lease liabilities, compared to $0.3 million in 2025 Q1.
Foreign exchange
| | Three months ended March 31, | | | (stated in thousands of Canadian dollars) | 2026 | 2025 | | | | | | Foreign exchange gain (loss) | $ 2,302 | $ (250) | | Foreign currency translation gain (loss) on foreign operations | $ 1,041 | $ (79) |
The Company recognized a foreign exchange gain of $2.3 million in 2026 Q1 , compared to a foreign exchange loss of $0.3 million in 2025 Q1. During 2026 Q1 the Canadian dollar exchange rate increased by 1% from $1.37 at December 31, 2025 to $1.39 at March 31, 2026. Therefore the Company recognized foreign exchange loss of $0.6 million on revaluation of the Company's USD denominated balances and foreign exchange gain of $2.9 million on revaluation of the intercompany loans issued by the parent company to its self-sustaining foreign subsidiaries. The offsetting foreign exchange loss on intercompany loans held by the subsidiaries is recognized as part of the translation of foreign operations within other comprehensive income, as described below.
The Company's foreign operations are denominated in USD and differences due to fluctuations in the foreign currency exchange rates are recorded in other comprehensive income. The Company recognized a foreign currency translation gain on foreign operations of $1.0 million in 2026 Q1, compared to a loss of $0.1 million in 2025 Q1.
Income tax expense (recovery)
| | Three months ended March 31, | | | (stated in thousands of Canadian dollars) | 2026 | 2025 | | | | | | Current tax expense | $ 110 | $ 74 | | Deferred tax expense (recovery) | 1,634 | (1,269) | | Income tax expense (recovery) | $ 1,744 | $ (1,195) |
The Company recognized an income tax expense of $1.7 million in 2026 Q1, compared to an income tax recovery of $1.2 million in 2025 Q1. Income tax expense (recovery) is recognized based upon expected annualized rates using the statutory rates of 23% for both Canada and the U.S. adjusted for key items that will affect the Company's actual tax for the period.
LIQUIDITY AND CAPITAL RESOURCES
Annually, the Company's principal source of liquidity is cash generated from its operations. In addition, the Company has the ability to fund liquidity requirements through its credit facility and the issuance of additional debt and/or equity, if available. The Company remains focused on sustaining reasonable levels of Net debt(1), deploying excess Free cash flow(1)and utilizing excess available capital resources for high return investment opportunities, including the NCIB and strategic and accretive acquisitions.