On Thursday, Barclays adjusted its price target on Pason Systems Inc (PSI:CN) (OTC: PSYTF) shares, reducing it to Cdn$13.00 from the previous Cdn$15.00 while maintaining an Equalweight rating on the stock.
Pason Systems, known for its electronic drilling recorder (EDR), reported a second-quarter EBITDA of Cdn$33 million, aligning with the consensus but falling short of Barclays' Cdn$37 million forecast.
The company's revenue saw a year-over-year increase of 13% to Cdn$96 million, which was slightly below Barclays' expectations but surpassed the consensus estimate.
The company experienced a decline in EBITDA margins, which dropped approximately 1,017 basis points year-over-year to 34.6%. Free cash flow (FCF) for the quarter was reported at Cdn$9 million, modestly below the Cdn$17 million anticipated by both Barclays and the consensus. At the end of the quarter, Pason Systems held a strong cash position with Cdn$67 million and carried no debt.
Pason's business model focuses on the digital enablement of energy and production (E&P) companies and land drillers by collecting, aggregating, and providing data through its primary product, the EDR.
The company's revenue is predominantly generated in North America, which accounts for approximately 85% of its sales, with international markets contributing around 15%. The performance of Pason Systems is closely tied to the US land rig count, as higher utilization rates of its EDRs directly benefit the company.
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