Oct 28, 2026 earnings call — Q3 results and rig activity outlook
Precision's Q3 revenue increased 15% to $532 million.
Revenue $0.4B (est $0.4B) · EPS $1.63 (est $1.24)
Key quotes
"Where we are currently running 16 rigs compared to 8 rigs 1 year ago."
"Our capital expenditures budget increased to a range between $275 million and $285 million"
"Our Alpha and Evergreen businesses are on track to have their highest revenue and contribution margin ever."
Analyst Q&A 5
rig upgrades, margins, and buybacks
Q (Aaron MacNeil · TD Cowen): Analyst asked if next-year rig upgrades are mostly capital not operating costs, Canada versus U.S. split, and whether U.S. upgrades need reactivation spend. He also asked when free cash flow could shift to buybacks and if repurchases could ramp in 2027.
A: Management said Q4 reflects a more sustainable margin. They reactivated many rigs this year (6 in Q3), expect only single digit reactivations next year, noted just over 50 rigs are warm and they are reactivating 1 rig in Q4. On capital return, they said they are nearly finished reducing debt, plan to pay down $100 million leaving about $60 or $65 million, aim for roughly a 1x leverage multiple, and see share buybacks as a primary way to return capital.
"I can kind of I can tell you that we think we are hitting a more sustainable margin and Q4 is going to reflect that." — Carey Thomas Ford (CEO)
upgrade scope and Canadian demand
Q (Keith MacKey · RBC): Analyst asked how many rigs could be upgraded, what types (including robotics), whether the 2026 spend is for that customer or the total CapEx, and if Canada needs more rigs or just steadier drilling throughout the year.
A: They said the 2026 potential spend would be for a customer in Canada and would be all the spend for that customer. For 2027 they see similar work: probably 2 or 3 ERD upgrades in Canada and low single digit pad upgrades for super singles; in the U.S. they expect low to mid single digit opportunities to reactivate or upgrade Super Triple 15 hundreds for the Permian and some Haynesville work. They also said converting pad configs can add 100 drilling days per rig and that if they upgraded all 27 Super Single rigs without pad configs they would add the capability of 9 more rigs.
"If we did all of those, we would actually add 9 more rigs to our fleet or the capability of 9 more rigs." — Carey Thomas Ford (CEO)
inflation effects and contract lengths
Q (Sean Mitchell · Daniel Energy Partners): Analyst asked where inflation is showing up (labor, parts, logistics, diesel) and how the company is managing it. He also asked if U.S. operators are signing longer contracts as rig count rises.
A: Management said they have managed inflation well thanks to vertical integration and internal manufacturing, but the key cost pressures are access and retention of high-end field labor, steel-intensive purchases like drill pipe, and higher diesel. They noted their Evergreen offering and measures like batteries, bi-fuel systems, and hydrogen injection help reduce diesel use, and they recently raised field wages in Canada and the U.S. On contracts, they said the market moved from spot or up to 6 month deals early this year, into 6 month to 1 year deals in the middle of the year, and now they are having more conversations in the 1 to 2 year range (though the broad market is still mostly 6 month to 1 year).
"And then throughout the middle of this year, it is kind of gone into 6 month to 1 year contract, and now we are having more conversations in the 1 to 2 year range." — Carey Thomas Ford (CEO)
Canadian pricing and U.S./international rig plans
Q (ATB): Analyst asked if Canadian pricing can move higher with strong utilization and whether the U.S. rig count outlook (near 50 rigs) changed. He also asked for updates on international opportunities including Argentina and the Middle East.
A: They said there is support to move pricing higher as utilization and rig performance rise, and they have moved pricing up a bit but do not expect broad repricing until spring breakup; customers are asking for added rig features that could raise pricing. On rigs, they noted they were around 46 rigs recently, think 50 is on the horizon (probable in the first part of next year) and said they will have 52 hot rigs at the end of this quarter, which they expect to hit without major reactivation cost. Internationally, they have one reactivation scheduled in Kuwait in the middle of next year, and Argentina shows strong demand but contract terms and financial risk remain to be resolved.
"we will have 52 hot rigs at the end of this quarter, which we should be able to hit that number without sustaining any major reactivation cost." — Carey Thomas Ford (CEO)
who is requesting rigs and growth regions
Q (Derek Podhaizer · Piper Sandler): Analyst asked whether the early-year startup requests are from public or private operators, which basins they target, and whether there are other regions the market underestimates for growth.
A: They said requests are a mix of publics and privates, with publics getting more active in recent months and earlier in the year activity was more private. The inquiries are mainly in the Permian with a few in the Haynesville and Rockies, Northeast rig adds are already contracted, and their core growth regions are the Rockies, Permian, Haynesville and Marcellus; they have a couple rigs in the Eagle Ford, none in Oklahoma or North Dakota, and customer interest in robotics has increased.
"I would say that the publics in the past few months have gotten more active in with rig increases." — Carey Thomas Ford (CEO)