Earnings release
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pason Press Release Pason Reports Second Quarter 2026 Results and Declares Quarterly Dividend FOR IMMEDIATE RELEASE CALGARY , Alberta ( August 11 , 2026 ) - Pason Systems Inc. ( " Pason " or the " Company " ) ( TSX : PSI ) announced today its 2026 second quarter results and the declaration of a quarterly dividend . The following news release should be read in conjunction with the Company's Management Discussion and Analysis ( " MD & A " ) , the Condensed Consolidated Interim Financial Statements and related notes for the three and six months ended June 30 , 2026 , as well as the Annual Information Form for the year ended December 31 , 2025. All of these documents are available on SEDAR + at www.sedarplus.ca . Financial Highlights Three Months Ended June 30 , 2026 Six Months Ended June 30 , 2025 Change 2026 2025 Change ( 000s , except per share data ) ( $ ) ( $ ) ( % ) ( $ ) ( $ ) ( % ) North American Drilling Revenue 67,082 62,479 7 136,896 138,251 ( 1 ) International Drilling Revenue 13,092 13,614 ( 4 ) 24,818 27,603 ( 10 ) Completions Revenue 15,850 15,345 3 30,898 31,358 ( 1 ) Solar and Energy Storage Revenue 4,758 4,978 ( 4 ) 10,614 12,381 ( 14 ) Total Revenue 100,782 96,416 5 203,226 209,593 ( 3 ) Adjusted EBITDA ( 1 ) 35,714 31,574 13 73,909 76,786 ( 4 ) As a % of revenue 35.4 32.7 270 bps 36.4 36.6 ( 20 ) bps Funds flow from operations Per share - basic Per share - diluted 33,540 26,484 27 65,464 63,027 4 0.43 0.34 28 0.84 0.80 6 0.43 0.34 28 0.84 0.80 6 Cash from operating activities 20,536 20,231 2 41,473 60,173 ( 31 ) Net capital expenditures ( 2 ) 17,075 14,955 14 29,471 31,663 ( 7 ) Free cash flow ( 1 ) 3,461 5,276 ( 34 ) 12,002 28,510 ( 58 ) Cash dividends declared ( per share ) 0.13 0.13 0.26 0.26 Net income 13,601 12,008 13 26,003 31,654 ( 18 ) Net income attributable to Pason 14,061 12,648 11 27,104 32,657 ( 17 ) Per share basic Per share diluted 0.18 0.18 0.16 13 0.35 0.41 ( 16 ) 0.16 13 0.35 0.41 ( 16 ) As at ( CDN 000s ) Cash and cash equivalents Short - term investments Total Cash ( 1 ) June 30 , 2026 ( $ ) 68,271 December 31 , 2025 Change ( $ ) ( % ) 75,705 ( 10 ) - 1,430 ( 100 ) 68,271 106,972 77,135 ( 11 ) 90,416 18 Working capital Total interest bearing debt Shares outstanding end of period ( # ) 77,640,286 77,791,365 ( 1 ) Non - GAAP and supplementary financial measures are defined under Non - GAAP Financial Measures in this press release ( 2 ) Includes additions to property , plant , and equipment , development costs and changes in non - cash working capital , net of proceeds on disposal from Pason's Condensed Consolidated Interim Statements of Cash Flows
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Pason's financial results for the three months ended June 30, 2026 reflect improving industry conditions in the Company's North American Drilling and Completions segments. Pason generated $100.8 million of revenue, a 5% increase from $96.4 million recorded in the prior year comparative period. Pason generated record quarterly Revenue per Industry Day in the second quarter of 2026 of $1,078, a 5% increase from $1,026 generated in the second quarter of 2025. Against relatively flat industry activity year over year, the North American segment grew revenue by 7%, from $62.5 million generated in Q2 2025 to $67.1 million generated in Q2 2026. Revenue per Industry Day in the second quarter benefited from improved product adoption and increased Canadian activity year over year, a region which generates comparatively higher day rates than the US. O perating expenses for the segme nt remain mostly fixed in nature and decreased by 3% in the second quarter of 2026 over the 2025 comparative period. Resulting segment gross profit was $38.6 million during the second quarter of 2026 compared to $34.0 million in the comparative period of 2025, demonstrating the Company's operating leverage with increased revenue over a mostly fixed cost base. Continuing to outpace changes in active frac spreads in the US, the Company's Completions segment generated $15.9 million in revenue in the second quarter of 2026, a 3% increase from $15.3 million in the comparative period in 2025, while US frac spreads decreased 4% during the same period. During the second quarter of 2026, the business unit averaged 31 IWS Active Jobs, compared to 33 IWS Active Jobs in the second quarter of 2025, reflecting the Company's strategic focus in recent quarters away from lower value, ancillary only jobs. As a result, Revenue per IWS day of $5,625 increased from $5,069 in Q2 2025, reflecting this improved and higher complexity mix of work year over year. As the segment continues to make operating and capital investments for its current stage of growth, gross profit for Completions was $0.01 million in the second quarter of 2026, down from $1.2 million in the comparable period of 2025. Gross profit for the segment also includes $2.2 million of amortization expense on intangible assets arising from the acquisition of IWS, but not indicative of capital required to operate the business. The Company's International Drilling segment navigated challenging industry conditions in the second quarter and generated $13.1 million of revenue which compares to $13.6 million in the second quarter of 2025. While the majority of operating expenses for the segment remain mostly fixed in nature, Pason incurred $6.0 million in operating expenses in the second quarter of 2026, a 9% reduction from the second quarter of 2025 which reflects lower activity and revenue levels year over year. Resulting gross profit was $6.0 million in the second quarter of 2026 compared to $6.4 million in the second quarter of 2025. Revenue generated by the Solar and Energ y Storage segment remained consistent year over year with $4.8 million of revenue in the second quarter of 2026. Quarterly revenue for the Solar and Energy Storage business unit fluctuate with the timing of control system project deliveries. Pason generated $35.7 million in Adjusted EBIT DA, or 35.4% of revenue in the second quarter of 2026, compared to $31.6 million or 32.7% of revenue in the second quarter of 2025. Current quarter Adjusted EBITDA reflects higher levels of revenue generated by the Company's North American Drilling segment and the resulting operating leverage in the segment with its mostly fixed cost base. The Company recorded net income attributable to Pason of $14.1 million ($0.18 per share) in the second quarter of 2026, compared to net income attributable to Pason of $12.6 million ($0.16 per share) recorded in the corresponding period in 2025, reflecting higher Adjusted EBITDA year over year as further outlined above, offset with higher depreciation and amortization expense which has increased as a result of the Company's capital investments in recent quarters. Sequentially, Q2 2026 consolidated revenue of $100.8 million was a 2% decrease from consolidated revenue of $102.4 million in the first quarter of 2026, driven primarily by expected seasonality in Canadian drilling activity. Revenue in the North American Drilling business unit decreased from $69.8 million in the first quarter of 2026 to $67.1 million in the second quarter of 2026, demonstrating the effects of this seasonality. Partially offsetting the decline in industry activity, Revenue per Industry Day in the second
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quarter of 2026 was $1,078, a new quarterly record and a 3% increase from the $1,046 in the first quarter of 2026. The International Drilling segment also saw improved revenue in several regions and reported revenue of $13.1 million, which was an increase from the $11.7 million in Q1 2026. With an increase in active frac spreads in the US, the Completions segment generated $15.9 million in revenue, a 5% increase from the $15.0 million generated in the first quarter of 2026. IWS Active Jobs increased from 28 jobs in the first quarter of 2026 to 31 jobs in the second quarter of 2026, while Revenue per IWS day decreased 4% as a result of job mix. Revenue per IWS day will continue to fluctuate depending on the mix of technology adopted amongst existing customers and changes in foreign exchange. The Solar and Energy Storage segment generated $4.8 million of revenue in the second quarter of 2026 compared to revenue of $5.9 million reported in Q1 2026, with fewer control system deliveries sequentially. Consolidated Adjusted EBITDA was $35.7 million or 35.4% of revenue in the second quarter of 2026, compared to $38.2 million or 37.3% of revenue in the first quarter of 2026 primarily reflecting the effect of the seasonal slowdown in Canadian drilling activity over the Company's mostly fixed cost base. The Company recorded net income attributable to Pason in the second quarter of 2026 of $14.1 million ($0.18 per share) compared to $13.0 million ($0.17 per share) in the first quarter of 2026. The increase quarter over quarter is primarily driven by lower stock-based compensation expense in the second quarter which reflects changes in the Company's share price, offsetting the effect of lower Adjusted EBITDA sequentially as outlined above. Pason's balance sheet remains strong, with no interest bearing debt, and $68.3 million in Total Cash, as at June 30, 2026 , compared to $77.1 million , as at December 31, 2025. Pason generated cash from operating activities of $20.5 million in the second quarter of 2026, exceeding $20.2 million generated in the second quarter of 2025, reflecting higher Adjusted EBITDA year over year, partially offset by investments in working capital with increasing revenue in the Company's drilling and completions segments throughout the quarter. In contrast, revenue levels in these segments declined through the second quarter of 2025, resulting in lower accounts receivable balances at the end of the prior year comparative quarter. During the three months ended June 30, 2026, Pason invested $17.1 million in net capital expenditures, compared to $15.0 million in the second quarter of 2025 as the Company continues to execute on its 2026 capital budget. Net capital expenditures in Q2 2026 includes investments associated with supporting the continued growth of the Company's pressure control automation technology for the Completions segment, as well as the ongoing refresh of Pason's drilling related technology platform. Resulting Free Cash Flow in the second quarter of 2026 was $3.5 million, compared to $5.3 million in the same period in 2025 as a result of the aforementioned factors. In the second quarter of 2026, Pason returned $11.5 million to shareholders through the quarterly dividend of $10.1 million and $1.4 million of share repurchases. President’s Message The second quarter of 2026 demonstrated the benefits of a leading market position and significant operating leverage that accrue to Pason in periods of increasing industry activity. While our ability to generate meaningful growth is not wholly reliant on higher levels of industry activity, increasing activity is undoubtedly a tailwind to stronger financial and operational results for Pason. After remaining in a narrow range of between 525 and 535 active land drilling rigs for the second half of 2025 and early 2026, US land drilling activity began to move higher in the second quarter and currently sits above 570 rigs. Owing to the operating leverage in our drilling business, we are able to achieve exceptional incremental margins during periods of increasing activity. Our business has long been recognized for strong margins and returns on capital, but it can be easy to overlook the continued strength of our core drilling-related business while we scale earlier stage businesses. Lower margin and return profiles at their earlier stage of development in completions and solar and energy storage can dilute the strong margins from our
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drilling business. As an illustration of this point, our North American Drilling segment gross profit increased by $4.6 million from the second quarter of 2025 on a $4.6 million increase in revenue in the same period. We expect to deliver meaningful growth that outpaces increases in underlying industry activity from five areas: • scaling our business in the completions market; • increasing adoption and price realization from our existing, established drilling-related products and services in North America; • providing compelling new technologies in the drilling market, including the mud analyzer; • deploying additional products in international markets with a growing proportion of unconventional drilling and completions; and • pursuing under-addressed data management opportunities in adjacent oil and gas well construction activities. Our focus in building our Completions business is on both scalability and scale, from a predominantly fixed operating cost base, which should drive higher incremental margins and returns on capital over time. The reality of a rental business model in an earlier stage of development is that capital intensity appears higher as we make capital expenditures in the short-term that are expected to generate rental revenue and corresponding earnings over a period of several years. While our free cash flow generation from our drilling business benefits from revenue generated from assets in the later stages of their expected rental life, our Completions rental assets are still in the earlier years of their expected rental life. Over time, as Completions rental revenue streams continue from prior capital investments, free cash flow conversion is expected to migrate higher as aggregate capital intensity decreases. We are making investments to streamline and simplify our product and service offerings to deliver higher levels of customer satisfaction, while lowering operating and capital costs per job over time. We are also focusing our efforts on jobs where our distinctive technology and service advantages are most applicable; this provides greater opportunities to scale revenue as job complexity increases. In both our Drilling and Completions segments, growing demand for data, fueled in large part by rapid proliferation of artificial intelligence tools, provides a tailwind for our core products and services as well as opportunities to develop additional products. Our approach to capital allocation looks to balance the discipline and predictability of our regular quarterly dividend, which is unchanged at $0.13 per share, with the flexibility to pursue organic investments and share repurchases, which we evaluate through the lens of expected returns on capital. Any M&A opportunities that might surface have to compete against the expected returns on investment in our own business or our own shares. We continue to see the highest expected returns from organic investments in our business, and we continue to expect to spend between $60 and $70 million in capital expenditures in 2026. In addition, working capital investments are generally most pronounced through periods of rising activity levels and we will absorb these investments as necessary, while focusing on maintaining strong cash collection trends. We expect to see continued volatility in global commodity prices in the short-term as the dynamics around the military conflict in the Middle East change and evolve; however, significant reductions in global oil supplies and drawdowns of inventories (including strategic reserves that countries must replenish over time) provide greater confidence for our customers around improved commodity prices in the medium to longer term. We anticipate these factors will translate into continued activity increases through the remainder of 2026 and into 2027. We have the ability to respond to the needs of our customers as activity increases. The benefits of our leading market share and high operating leverage are most pronounced during times of increasing activity, as was evidenced in our second quarter performance.
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Our focus remains on delivering exceptional performance in areas which are within our control. Our priorities are centered on expanding our service and technology advantages, maintaining a strong balance sheet, and returning capital to shareholders in a disciplined manner. Quarterly Dividend Pason announced today that the Board of Directors have declared a quarterly dividend of thirteen cents (C$0.13) per share on the Company’s common shares. The dividend will be paid on September 29, 2026 to shareholders of record at the close of business on September 15, 2026. Second Quarter Conference Call Pason will be conducting a conference call for interested analysts, brokers, investors, and media representatives to review its 2026 second quarter results at 9:00 a.m. (MT) on Wednesday, August 12, 2026. The conference call dial-in numbers are 1-888-510-2154 or 1-437-900-0527, and the call will be simultaneously audio webcast via: www.pason.com/webcast. You can access the fourteen-day replay by dialing 1-888-660-6345 or 1-289-819-1450, using password 76135#. An archived audio webcast of the conference call will also be available on Pason’s website at www.pason.com/investors. Non-GAAP Financial Measures A non-GAAP financial measure has the definition set out in National Instrument 52-112 "Non-GAAP and Other Financial Measures Disclosure". The following non-GAAP measures may not be comparable to measures used by other companies. Management believes these non-GAAP measures provide readers with additional information regarding the Company's operating performance, and ability to generate funds to finance its operations, fund its research and development and capital expenditure program, and return capital to shareholders through dividends or share repurchases. EBITDA and Adjusted EBITDA EBITDA is defined as net income before interest income and expense, income taxes, stock-based compensation expense, and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA, adjusted for foreign exchange, impairment of property, plant, and equipment, restructuring costs, net monetary adjustments, government wage assistance, revaluation of put obligation, gain or loss on mark-to-market of short-term investments, gain on previously held equity interest and other items, which the Company does not consider to be in the normal course of continuing operations. Management believes that EBITDA and Adjusted EBITDA are useful supplemental measures as they provide an indication of the results generated by the Company's principal business activities prior to the consideration of how these results are taxed in multiple jurisdictions, how the results are impacted by foreign exchange or how the results are impacted by the Company's accounting policies for equity-based compensation plans.
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Reconcile Net Income to EBITDA Three Months Ended Sep 30, 2024 Dec 31, 2024 Mar 31, 2025 Jun 30, 2025 Sep 30, 2025 Dec 31, 2025 Mar 31, 2026 Jun 30, 2026 (000s) ($) ($) ($) ($) ($) ($) ($) ($) Net income 23,717 16,585 19,646 12,008 11,841 8,107 12,402 13,601 Add: Income taxes 6,148 2,404 8,214 4,445 4,545 2,514 4,356 4,757 Depreciation and amortization 13,659 13,889 14,184 13,901 15,680 15,095 16,062 15,759 Stock-based compensation (117) 3,370 2,892 1,929 2,527 2,562 4,332 2,391 Net interest (income) expense (803) (218) (512) (804) (567) 1,392 376 202 EBITDA 42,604 36,030 44,424 31,479 34,026 29,670 37,528 36,710 Reconcile EBITDA to Adjusted EBITDA Three Months Ended Sep 30, 2024 Dec 31, 2024 Mar 31, 2025 Jun 30, 2025 Sep 30, 2025 Dec 31, 2025 Mar 31, 2026 Jun 30, 2026 (000s) ($) ($) ($) ($) ($) ($) ($) ($) EBITDA 42,604 36,030 44,424 31,479 34,026 29,670 37,528 36,710 Add: Foreign exchange (gain) loss (1,245) 5,574 (170) (1,174) 3,352 (948) 605 (1,239) Put option revaluation — (1,413) — — — (1,200) — — Other expenses 2,789 1,928 958 1,269 1,128 10,587 62 243 Adjusted EBITDA 44,148 42,119 45,212 31,574 38,506 38,109 38,195 35,714 Free cash flow Free cash flow is defined as cash from operating activities plus proceeds on disposal of property, plant, and equipment, less capital expenditures (including changes to non-cash working capital associated with capital expenditures), and deferred development costs. This metric provides a key measure on the Company's ability to generate cash from its principal business activities after funding capital expenditure programs, and provides an indication of the amount of cash available to finance, among other items, the Company's dividend and other investment opportunities. Reconcile cash from operating activities to free cash flow Three Months Ended Sep 30, 2024 Dec 31, 2024 Mar 31, 2025 Jun 30, 2025 Sep 30, 2025 Dec 31, 2025 Mar 31, 2026 Jun 30, 2026 (000s) ($) ($) ($) ($) ($) ($) ($) ($) Cash from operating activities 30,375 35,825 39,942 20,231 29,425 28,086 20,937 20,536 Less: Net additions to property, plant and equipment (12,444) (16,707) (15,268) (13,562) (9,444) (10,676) (10,948) (15,888) Deferred development costs (1,277) (1,472) (1,440) (1,393) (1,254) (1,306) (1,448) (1,187) Free cash flow 16,654 17,646 23,234 5,276 18,727 16,104 8,541 3,461 Supplementary Financial Measures A supplementary financial measure: (a) is, or is intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Company; (b) is not presented in the financial statements of the Company; (c) is not a non-GAAP financial measure; and (d) is not a non-GAAP ratio. Supplementary financial measures found within this press release are as follows:
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Revenue per Industry Day Revenue per Industry Day is defined as the total revenue generated from the North American Drilling segment over all active drilling rig days in the North American market. This metric provides a key measure of the North American Drilling segment's ability to evaluate and manage product adoption, pricing, and market share penetration. Drilling rig days are calculated by using accepted industry sources. IWS Active Jobs IWS Active Jobs represents the average number of jobs per day that IWS is generating revenue on through the rental of its technology offering to customers during the reporting period. This metric provides a key measure of IWS' market penetration. Revenue per IWS Day Revenue per IWS Day is defined as the total revenue generated by the Completions segment over all IWS active days during the quarter. IWS active days are calculated by using IWS Active Jobs in the reporting period. This metric provides a key measure of the IWS' ability to evaluate and manage product adoption and pricing. Adjusted EBITDA as a percentage of revenue Calculated as Adjusted EBITDA divided by revenue. Total Cash Calculated as the sum of cash and cash equivalents, and short-term investments from the Company's Condensed Consolidated Interim Balance Sheets. The Company's short-term investments are comprised of US dollar bonds. Forward Looking Information Certain statements contained herein constitute “forward-looking statements” and/or “forward-looking information” under applicable securities laws (collectively referred to as “forward-looking statements”). F o r w a r d - l o o k i n g s t a t e m e n t s c a n g e n e r a l l y b e i d e n t i f i e d b y t h e w o r d s “ a n t i c i p a t e , ” “ e x p e c t , ” “ b e l i e v e , ” “may,” “could,” “should,” “will,” “estimate,” “project,” “intend,” “plan,” “outlook,” “forecast” or expressions of a similar nature suggesting a future outcome or outlook. W i t h o u t l i m i t i n g t h e f o r e g o i n g , t h e f o r w a r d - l o o k i n g s t a t e m e n t s i n t h i s d o c u m e n t i n c l u d e , b u t a r e n o t l i m i t e d to, the following: the Company’s growth strategy and related schedules; divergence in activity levels between the geographic regions in which we operate; demand fluctuations for our products and services; the Company’s ability to increase or maintain market share; projected future value, forecasted operating and financial results; planned capital expenditures; expected product performance and adoption, including the timing, growth and profitability thereof; potential dividends and dividend growth strategy; potential repurchases under the Company’s NCIB; future use and development of technology; our financial ability to meet long-term commitments not included in liabilities; the collectability of accounts receivable; the application of critical accounting estimates and judgements; treatment under governmental regulatory and taxation regimes; and projected increasing shareholder value. These forward-looking statements reflect the current views of Pason with respect to future events and operating performance as of the date of this document. They are subject to known and unknown risks, uncertainties, assumptions, and other factors that could cause actual results to be materially different from results that are expressed or implied by such forward-looking statements. Although we believe these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity
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and achievements to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to: the state of the economy; volatility in industry activity levels and resulting customer expenditures on E&P activities; customer demand for existing and new products; the industry shift towards more efficient drilling and completions activity and technology to assist in that efficiency; the impact of competition; the loss of key customers; the loss of key personnel; cybersecurity risks; reliance on proprietary technology and ability to protect the Company’s proprietary technologies; reliance on renewable energy; changes to government regulations (including those related to safety, environmental, or taxation); the impact of extreme weather events and seasonality on our suppliers and on customer operations; and war, terrorism, pandemics, social or political unrest that disrupts global markets. These risks, uncertainties and assumptions include, but are not limited to, those discussed in this document under the heading, “Risk Factors” and in the Company's other filings with Canadian securities regulators. These documents are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR+ website (www.sedarplus.ca) or through Pason's website (www.pason.com). Forward-looking statements contained in this document are expressly qualified by this cautionary statement. There is no representation by Pason and there can be no assurance that actual results achieved will be the same, in whole or in part, as those set out in the forward-looking statements contained herein. Readers are therefore cautioned not to place undue reliance on such forward-looking statements. Except to the extent required by applicable law, Pason assumes no obligation to publicly update or revise any forward-looking statements made in this document or otherwise, whether resulting from new information, future events or otherwise. Pason Systems Inc. Pason is a leading global provider of specialized data management systems for oil and gas drilling and completions operations. Pason’s drilling related solutions which include data acquisition, wellsite reporting, automation, remote communications, web-based information management, and data analytics, enable collaboration between operations in the field and the office. Through Intelligent Wellhead Systems ("IWS"), Pason also provides engineered controls, data acquisition, and software, to automate workflows and processes for oil and gas well completions operations, improving wellsite safety and efficiency. Through Energy Toolbase ("ETB"), the Company also provides products and services for the solar power and energy storage industry. ETB’s solutions enable project developers to model, control, and monitor economics and performance of solar energy and storage projects. Pason’s common shares trade on the Toronto Stock Exchange and OTC Markets Group under the symbol PSI and PSYTF, respectively. For more information about Pason Systems Inc., visit the company’s website at www.pason.com or contact investorrelations@pason.com. Jon Faber President and Chief Executive Officer 403-301-3400 Celine Boston Chief Financial Officer 403-301-3400 Additional information on risks and uncertainties and other factors that could affect Pason’s operations or financial results are included in Pason’s reports on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR+ website ( www.sedarplus.ca) or through Pason’s website (www.pason.com).