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Revenue: Record quarterly revenue of $55.1 million, a 10% increase compared to Q2 2025.
Gross Profit: $8.8 million, resulting in a gross margin of 16%, down from 24% in the prior year period.
EBITDA: $7.9 million, with an EBITDA margin of 14%, compared to 28% in the same period last year.
Net Income: Net loss of approximately $200,000, or effectively nil on a per share basis, versus net income of $5.4 million in Q2 2025.
Shareholders’ Equity: Approximately $118 million at the end of the quarter.
Cote d’Ivoire Tax Repayment: Repaid approximately $4.5 million of the scheduled $8.4 million repayment through June 2026, with monthly payments reduced from $900,000 to $450,000.
Release Date: August 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Record quarterly revenue of $55.1 million, up 10% year-over-year, driven by strong demand across key markets.
Healthy utilization levels and active bidding activity across West Africa and Egypt, with customers committing to multi-rig, multi-year programs.
Strong balance sheet with approximately $118 million in shareholders’ equity, providing financial flexibility for fleet upgrades and infrastructure investments.
Long-term contracts provide revenue visibility, utilization stability, and strong customer relationships, which are being renewed with improved pricing to reflect current cost structures.
Profitable operations in West Africa and MENA regions, with a clear focus on addressing underperforming Chilean operations to improve overall margins.
Negative Points
Gross margin compressed to 16% from 24% year-over-year, driven by higher labor, operating costs, and the appreciation of the Canadian dollar.
EBITDA margin fell to 14% from 28% in the prior year period, reflecting significant margin pressure.
Net loss of approximately $200,000 for the quarter, compared to net income of $5.4 million in Q2 2025.
Chilean operations continue to incur operating losses due to lower-than-expected productivity on certain long-term contracts, requiring a strategic review and potential wind-down of unprofitable client relationships.
The company has suspended share buybacks and dividend payments to conserve cash, and is making monthly payments of $450,000 to Cote d’Ivoire tax authorities under a memorandum of understanding, reducing available capital.
Q & A Highlights
Q: What specific actions is Geodrill taking to address the underperformance in its Chilean operations? Are there plans for reduced headcount or demobilization of rigs?A: Greg Borsk, CFO, explained that the company is assessing Chile on a client-by-client basis. The primary issue is not pricing but productivity, as the company is not achieving the forecasted meters on certain long-term contracts. The strategy is to wind up drilling for unprofitable clients as quickly as possible while continuing to focus on and potentially expand profitable accounts. This is expected to be a process over the next couple of quarters.
Q: Are the long-term contracts in Chile still in their startup phase, and will they generate acceptable returns once fully operational, or is pricing off due to inflation?A: The CFO clarified that the issue is not pricing but productivity. The company is paid by the meter, and on some accounts, they are not achieving the necessary productivity to cover fixed costs. While some unprofitable accounts will be addressed, the company does have several very good, profitable accounts in Chile that are expected to continue into 2027.
Q: Could you provide the gross margin for the company’s operations excluding Chile, to better understand the impact of the region’s losses?A: Greg Borsk stated he did not have that specific figure at his fingertips. However, he confirmed that all other operating regionsWest Africa (Ghana, Cote d’Ivoire, Senegal) and the MENA region (Egypt)are profitable. The company’s core issue is isolated to the Chilean operations.
Q: What were the key drivers behind the significant margin compression in Q2 2026, and what is the company’s strategy to improve profitability?A: The CFO attributed the margin compression to higher labor and operating costs, the appreciation of the Canadian dollar, and operating losses in Chile. The company’s strategy is focused on execution, improving performance in Chile, driving productivity gains, and managing costs responsibly to convert record revenue into stronger profitability.
Q: Can you provide an update on the Cote d’Ivoire tax situation and the repayment plan?A: The CFO provided an update, stating that the company entered into a memorandum of understanding to repay the amounts. They successfully requested a reduction in monthly installments from approximately $900,000 to $450,000. Through June 2026, they have repaid approximately $4.5 million of the scheduled $8.4 million repayment. The company continues to pursue legal remedies but cannot comment further at this time.
Q: What is the company’s current stance on returning capital to shareholders, given the record revenue and strong balance sheet?A: The CFO stated that after reviewing return on capital options, the company has decided to maintain cash in the business to support operations. Future decisions regarding share buybacks and/or dividend payments will be reviewed again on a quarterly basis.
Q: Despite record revenue, the company reported a net loss. What is the overall outlook for the remainder of 2026?A: The company’s outlook remains constructive. Gold prices are strong, copper fundamentals are positive, and exploration budgets remain healthy. Customers are committing to multi-rig and multi-year programs, indicating strong demand. The company believes it is well-positioned to translate this strong demand environment into improved profitability as it moves through the balance of the year and beyond.
Q: How is the company addressing the impact of legacy long-term contracts that were negotiated in a lower cost environment?A: The CFO acknowledged that many long-term contracts negotiated years ago have become less profitable due to rising costs. However, as these contracts renew or as new work is secured, the company has opportunities to incorporate pricing and terms that better reflect today’s cost structure, which should help absorb inflationary pressures going forward.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.