Precision Drilling (NYSE: PDS) revenue jumps 15% but nine-month EBITDA slips

Posted by Hanz Christensen on Oct 30th, 2026

What happened

Precision Drilling Corporation (NYSE: PDS) grew third-quarter revenue 15% to C$532 million, but its nine-month Adjusted EBITDA is still 4.7% below last year. More rigs working has not yet meant higher earnings before depreciation.

In its Oct. 27 earnings release, the Calgary driller said revenue was up from C$462 million a year earlier. It credited stronger drilling activity in North America and higher average U.S. day rates, which more than offset lower international results. Figures are in Canadian dollars unless marked US$.

Quarterly Adjusted EBITDA rose 6% to C$125 million from C$118 million. Net earnings attributable to shareholders were C$21 million, against a net loss of C$7 million a year earlier.

Over nine months, revenue was C$1.51 billion, up C$145 million from 2025. Adjusted EBITDA fell to C$346 million from C$363 million.

Key numbers

Metric	Latest	Change	Source
Third-quarter revenue	C$532 million	from C$462 million, +15.0%	Precision Drilling SEC 6-K, Exhibit 99.1
Third-quarter Adjusted EBITDA	C$125 million	from C$118 million, +6.4%	Precision Drilling SEC 6-K, Exhibit 99.1
Nine-month revenue	C$1.51 billion	from C$1.37 billion, +10.6%	Precision Drilling SEC 6-K, Exhibit 99.1
Nine-month Adjusted EBITDA	C$346 million	from C$363 million, -4.7%	Precision Drilling SEC 6-K, Exhibit 99.1
Third-quarter net earnings attributable to shareholders	C$21 million	from -C$7 million (net loss)	Precision Drilling SEC 6-K, Exhibit 99.1
2026 capital budget	C$275 million to C$285 million		Precision Drilling SEC 6-K, Exhibit 99.1

Where the quarter's growth came from

Canada and the U.S. did the work. Precision averaged 73 active rigs in Canada, up 16% from 63. Canadian revenue rose as higher oil prices lifted demand for drilling and well servicing.

In the U.S., the company averaged 43 active rigs, up from 36 and ahead of a 10% rise in industry activity. U.S. revenue rose C$42 million. Revenue per utilization day climbed to US$33,270 from US$31,040. International revenue fell C$6 million because of rig mix and planned recertifications that left rigs with non-billable days.

The U.S. growth cost margin. Operating margin per utilization day fell to US$7,653 from US$8,700 because Precision reactivated six rigs, against four a year earlier. Reactivation costs averaged US$2,125 per utilization day, up from US$502.

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Why it matters

OptimistFi has argued that Precision is a cyclical cash-generation bet on disciplined high-spec land drilling capacity. This report supports the high-spec side, since utilization is rising in both North American markets. It tests the cash side, because spending is rising faster than operating cash flow.

Cash provided by operations was C$71 million, down from C$76 million. Capital expenditures were C$82 million, up from C$69 million. Precision still repurchased C$31 million of shares. Its cash balance ended September at C$23 million, down from C$86 million at the end of 2025. It reported more than C$460 million in available liquidity.

The swing to a quarterly profit is not an operating improvement. The 2025 quarter carried a C$33 million deferred income tax expense tied to waiving certain U.S. tax deductions. This year's quarter took C$8 million of extra depreciation from a shorter useful life for drill pipe. That change has added C$30 million so far in 2026.

Management blames the nine-month EBITDA decline on lower upfront capital payments in Canada, higher operating costs in the U.S. and internationally, and higher share-based compensation. That compensation rose as the share price appreciated 16% in the period.

The balance sheet is moving in the right direction. Long-term debt was C$629 million, down from C$679 million at year-end. Precision says it has cut debt by C$75 million this year against a C$100 million target.

The Canada Revenue Agency dispute

In late July, the Canada Revenue Agency issued a reassessment for Precision's 2018 tax year. It denies the deduction of certain intercompany dividends received in connection with a preferred share financing. The agency has also sent a proposal covering 2019 to 2022 on the same basis.

Precision will file a notice of objection and says its filing position is appropriate. It has recorded no liability. If it loses, it estimates a maximum tax liability of approximately C$155 million, excluding interest. While the issue is unresolved, it would have to pay 50% of any assessed tax and interest. It would be refunded with interest if it wins.

Because of existing tax pools, the company does not expect an impact on taxes payable until the 2024 to 2027 tax years.

What's next

The fourth-quarter results are the next test. Precision expects U.S. operating margins to average US$9,500 to US$10,500 per utilization day as reactivations slow. CEO Carey Ford puts the increase at approximately 30%. Canadian margins are guided to C$13,500 to C$14,500 per utilization day.

A U.S. margin inside that range would show the third-quarter squeeze was a reactivation cost. A margin near US$7,653 would suggest the pressure is more lasting. Precision also expects to meet its C$100 million debt repayment target and keep buying back shares. It has repurchased C$47 million so far.

The final capital budget will show how much the pending upgrade opportunity adds. The company says it would put multiple rigs under contract through 2029 for a large Canadian producer. Precision also expects its idle Kuwait rig to return to work in mid-2027 under a five-year contract.