Total Energy Services ((TSE:TOT)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Total Energy Services recently held its earnings call, revealing a mixed sentiment. While the company celebrated record-breaking second-quarter results and strategic expansions, particularly in the Australian and CPS segments, it also faced significant challenges in the U.S. drilling and completion activities, alongside a modest decline in Canadian drilling activity. Despite these hurdles, Total Energy maintained a strong financial position and expressed a positive outlook for the future.
Record Second Quarter Results
Total Energy Services reported record-breaking financial results for the second quarter of 2025. The company achieved a 17% increase in consolidated revenue and a 21% rise in EBITDA compared to the previous year. These figures underscore the company’s robust performance and strategic initiatives that have contributed to its financial success.
Strong Australian Market Performance
The Australian segment of Total Energy Services experienced significant growth, with a 30% increase in operating days for drilling and service rigs. This led to a 9% year-over-year increase in segment revenue, primarily driven by rig upgrades. The Australian market continues to be a strong performer for the company.
CPS Segment Growth
The Compression and Process Services (CPS) segment demonstrated impressive growth, with a 22% increase in revenue compared to 2024. Operating income surged by 29%, and segment EBITDA rose by 26%, highlighting the segment’s strong contribution to the company’s overall performance.
Increased Fabrication Sales Backlog
Total Energy Services reported a significant increase in its fabrication sales backlog, which grew by $38.5 million, or 15%, reaching $303.9 million compared to the end of March 2025. This increase reflects the company’s ability to secure new projects and maintain a steady pipeline of work.
Strong Financial Position
The company maintained a robust financial position with $108.7 million in positive working capital, including $34.2 million in cash. Its senior bank debt to bank EBITDA ratio stood at a low 0.2x, indicating strong financial health and stability.
Strategic Expansion in U.S. Market
Total Energy Services announced a strategic expansion in the U.S. market, with the Board approving a $19.5 million increase to the 2025 capital expenditure budget. This investment will fund a new assembly plant in Weirton, West Virginia, expected to boost U.S. fabrication capacity by at least 75%.
Successful Acquisition in Oklahoma
The company successfully acquired 280 rental pieces in Oklahoma, increasing its U.S. major rental fleet by 30% and establishing a new branch in El Reno, Oklahoma. This acquisition is part of Total Energy’s strategy to strengthen its presence in the U.S. market.
Substantial Decline in U.S. Drilling and Completion Activities
Despite the company’s successes, the U.S. market faced a substantial decline in drilling and completion activities, which impacted overall performance. Aggressive pricing and idle equipment remain challenges in this segment.
Modest Decline in Canadian Drilling Activity
In Canada, Total Energy Services experienced a modest year-over-year decline in drilling activity, which affected segment performance. However, the company remains optimistic about future opportunities in this market.
Forward-Looking Guidance
Looking ahead, Total Energy Services provided detailed guidance for the remainder of 2025, emphasizing its record results despite challenging conditions in the U.S. and a slight decline in Canadian drilling activity. The company highlighted a 17% year-over-year increase in consolidated revenue and a 21% rise in EBITDA. The Board’s approval of a $19.5 million capital expenditure increase aims to expand U.S. fabrication capacity and upgrade a service rig in Australia, with expectations of enhanced operational capacity by 2027.
In conclusion, Total Energy Services’ earnings call presented a picture of resilience and strategic growth. While facing challenges in the U.S. and Canadian markets, the company achieved record-breaking results and maintained a strong financial position. With strategic expansions and a positive outlook, Total Energy Services is poised for continued success.