Geodrill Posts Record Q3 Revenue of $55.1 Million, Returns to Profit

Geodrill (TSE:GEO) grew third-quarter revenue 41% to $55.1 million from $39 million a year earlier, recording its second consecutive quarter of record top-line results and returning to profitability. Net income came in at $900,000, or $0.02 per share, against a net loss of $1.5 million, or $0.03 per share, in the third quarter of 2025, Chief Financial Officer Greg Borsk said on the company's earnings call.

President and CEO Dave Harper attributed the performance to customer demand, high fleet utilization and operational discipline. Gold prices, he said, are supporting exploration spending, and pricing on renewed contracts and newly awarded work is beginning to better reflect operating costs and the value of experienced contractors.

How Much Did Margins Improve?

Substantially. Gross profit rose to $10.2 million from $2.4 million a year earlier, lifting gross margin to 18% from 6%. Borsk called it the fourth consecutive quarter of gross profit improvement, reflecting stronger operations, improved contract economics (the pricing terms drillers secure when work is renegotiated or newly awarded) and efficiency efforts.

EBITDA (earnings before interest, taxes, depreciation and amortization) doubled to $8.7 million from $4.3 million, with the EBITDA margin expanding to 16% from 11%. For the first nine months of 2026, revenue reached a record $159 million, up 15% from the comparable period in 2025.

Asked by Beacon Securities analyst Donangelo Volpe about the sequential improvement in gross margin, Borsk pointed to revenue, improved margins and operational execution. He noted Geodrill had never previously recorded more than $40 million in third-quarter revenue, a period when activity and margins typically decline.

West Africa remained busy despite the rainy season, and the company also saw activity in Egypt and Chile, Borsk said. Harper said customers were eager to continue drilling and described a global shortage of rigs as benefiting Geodrill.

What Do the New Contracts Cover?

Harper said Geodrill secured approximately $25 million in new contracts and extensions during the quarter. The awards include:

• A 50,000-meter drilling program with a new client in Chile;
• New work across West Africa;
• Revenue visibility, in Harper's words, into the fourth quarter, 2027 and beyond.

The company also reported early signs of improvement in South America, where operations had previously faced challenges. Borsk declined to quantify Chile's gross loss, saying Geodrill does not disclose country-specific figures. He confirmed Chile had weighed significantly on group profitability and gross margins in the first half of the year.

Geodrill has exited some significantly unprofitable jobs in Chile and replaced them with new work that has started well, Borsk said. The hope, he added, is that Chile moves from being a drag on the group to making a positive contribution.

Asked whether Geodrill would deploy additional capital or expand its fleet in Chile, Harper said the company wants to see a few positive quarters first. He characterized the early signs as encouraging but said it was too soon to commit. Patience, in this case, appears to be the cheaper option.

What About the Balance Sheet?

Geodrill ended the quarter with approximately $119 million in shareholders' equity and secured an $8 million term loan that remains undrawn and available for future use, Borsk said. The company continued to invest in fleet upgrades and infrastructure.

Harper disclosed that he purchased 33,900 Geodrill shares on the open market during the quarter, in addition to exercising 420,000 shares in the first quarter. He put his total spending for the calendar year at CAD 905,000 and said the purchases reflect his belief that the company's future earnings potential is not fully reflected in its valuation.

What Comes Next?

Looking ahead, Harper said Geodrill's focus is on converting strong activity into sustainable improvements in margins, earnings and cash flow, while continuing to pursue operational efficiencies.

Geodrill holds a leading market position in Ghana and Cote d'Ivoire and also operates in other African jurisdictions, including Egypt and Senegal, with its South American operations concentrated in Chile. Its multi-purpose rig fleet provides drilling services spanning exploration, delineation, underground and grade control drilling, serving senior mining, intermediate and junior exploration companies. The rig shortage, one assumes, helps.