Good morning, everyone, and welcome to Geodrill third quarter 2026 financial results conference call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has difficulty hearing the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded today, November 9, 2026. Before we begin, certain statements made on today's calls by management may be forward-looking in nature, and as such, are subject to various risks and uncertainties. Please refer to the company's press release and MD&A for more details on these risks and uncertainties. I will now turn the call over to Mr. Dave Harper, President and CEO of Geodrill.
Good morning, everyone, and thank you for joining us. The third quarter of 2026 continued the strong momentum we established in the first half of the year. We delivered our second consecutive quarter of record revenue, improved profitability, and return to positive net earnings. Importantly, we achieved this during the West African rainy season, which has historically affected activity levels. That performance reflects strong customer demand, high fleet utilization, and the operational discipline we have brought to the business over the past year or so. The market backdrop remains constructive. Gold prices continue to support exploration spending. Mining companies remain focused on replacing reserves, and bidding activity across our core markets remains strong. We are also seeing an improved commercial environment. As contracts are renewed and new work is awarded, pricing is beginning to better reflect both current operating costs and the value of experienced, reliable drilling contractors.
During the quarter, we secured approximately $25 million in new contracts and extensions. These include a 50,000-meter drilling program with a new client in Chile, along with new contracts and extensions in West Africa. This provides good visibility into the fourth quarter and 2027 and beyond. During the quarter, SEDI filings will reveal that I increased my ownership in GEO by 33,900 shares by way of open market share purchases. This is in addition to the 420,000 shares that I exercised in quarter one, for a total spend thus far this calendar year of CAD 905,000. I have worked through multiple commodity cycles, and I believe Geodrill is exceptionally well-positioned. We have a strong platform, a healthy balance sheet, growing revenue, and a clear opportunity to improve margins and shareholder returns.
I do not believe that our future earnings potential is fully reflected in the company's current valuation, and my share purchases reflect that conviction. Finally, before I hand over to Greg, during the latter part of quarter three, we began to see operational improvement in South America. This is important because this region has faced challenges, but the changes we have implemented are producing encouraging early results. I will now turn the call over to Greg. Thank you.
Apologies, Mr. Harper. This is the Operator speaking. It seems Mr. Borsk's line has continued. Please proceed.
Thank you, Dave. Revenue for the quarter was $55.1 million, an increase of 41% compared to revenue of $39 million for the third quarter of 2025. This represents our second consecutive quarter of $55 million revenue and reflects strong activity levels, high fleet utilization, and continued demand across all of our operating regions. The gross profit for the quarter was $10.2 million, compared to only $2.4 million for the third quarter of 2025. Gross margin also improved to 18%, compared to 6% in Q3 2025. This marks the fourth consecutive quarter of gross profit improvement and reflects stronger operating performance, improved contract economics and continued management focus on operational efficiency. EBITDA for the quarter was $8.7 million, or a doubling of EBITDA compared to EBITDA of $4.3 million in Q3 2025. The EBITDA margin was 16% compared to a margin of only 11% in the third quarter of 2025.
Not only did we double our EBITDA, this was our third consecutive quarter of EBITDA margin improvement and demonstrates that the operational initiatives implemented throughout the business continue to gain traction. Net income for the quarter was $900,000 or $0.02 per share. This compares to a net loss of $1.5 million or a loss of $0.03 per share in Q3 2025. The return to profitability reflects the progress we have made in improving the overall earnings profile of the business. For the first nine months of 2026, revenue reached a record $159 million, an increase of 15% over the comparable period in 2025. From a balance sheet perspective, we ended the quarter with shareholders' equity of approximately $119 million, maintaining financial flexibility while continuing to invest prudently in fleet upgrades and infrastructure to execute our drilling programs.
We also secured a new $8 million term loan in the quarter, which is undrawn and available for future use if needed. Overall, we are encouraged by the trajectory of the business. Revenues remain strong, margins continue to improve, profitability has returned, and our liquidity position remains healthy. With that, I will turn the call back to Dave for some closing remarks.
Thank you, Greg. The message from this quarter is straightforward. Demand remains strong, and our contract pipeline is healthy, and our financial performance is improving. Our focus is now on execution. We need to convert these strong activity levels into sustainable improvements in margins, earnings, and cash flow. We are entering this phase of the market from a strong position, with a healthy balance sheet, operations across highly prospective mining jurisdictions, and a business model that has performed through multiple commodity cycles. There is still some work to do, particularly in driving further operational efficiencies, but I am encouraged by the momentum across the business and the opportunities that lie ahead. We will remain disciplined in how we operate, how we invest, and how we allocate capital, with a clear focus on consistent financial performance and shareholder returns. Thank you for joining us on today's call.
I'll now hand over to the Operator to open the lines for Q&A. Thank you, Operator.
Thank you, Mr. Harper. Ladies and gentlemen, we now begin the question-and-answer session. If you'd like to ask a question, please press star, followed by the number one on your telephone keypad. If you'd like to redial in the queue, please press star, followed by the number two. If you're using a speakerphone, please lift your handset before pressing any keys.
Anyone who takes the question, that's where the state is. To you.
Your first question comes from Donangelo Volpe with Beacon Securities. Please go ahead.
Hey, good morning, guys. Congratulations on the results. Just looking at revenue for the quarter, it's called effectively flat versus last quarter, but we did see some solid gross margin improvement, about 200 basis points. Just wondering what specifically drove that incremental profitability for the quarter. Was it predominantly pricing of contracts, or were there other factors at play?
Yes. Thanks, Donny. Thanks for the question. First of all, you're right, the revenue for the quarter, this is the second quarter where we actually achieved $55 million, $55.1 million to be specific in Q3. I think what needs to be highlighted is we've never had a Q3 with revenue over $40 million. Typically, we're extremely busy in Q1 and Q2, and then Q3 slows down. What you've seen in Q3 2026, the revenue increase quarter 2026 - 2025 increased 41%. What drove that? What drove that was we were extremely busy in our primary markets. West Africa continued to be busy, continued to drill through the typical wet season. We were also busy in our other markets. We were busy in Egypt. We were also busy in Chile. Chile, we were in the process of exiting some jobs and entering into some new jobs.
To answer your question on profitability, the profitability really is a function of the demand for our services, the revenue. You can see the margin. Again, this is a bit of an outlier. Q3, our gross margin was 18%. Usually, our margin in Q3 dips. Q1 and Q2 are typically the higher gross margin quarters for us. Just, I guess, to not to ramble, to summarize it, what drove the profitability in the quarter was the top line, improved margins, and just operational execution.
Donangelo, if I can just add.
Oh, yep.
If I can just add to what Greg was saying. It is not that it did not have the typical wet season in West Africa. It was wet. It rained. It bucketed down. The reality is, gold is north of $4,000 an ounce, and our customers are producing gold at $2,000 an ounce. There is a lot of emphasis on drilling at the moment. It is not just us. Everyone is busy. Utilizations of drilling fleets around the world are increasing, and they are just increasing as a result of increased activity, and that is driven by strong commodity prices. This is evidence of just how anxious our customers are to continue drilling. You need to drill in order to produce gold. You produce gold, you have to drill. You cannot not drill. The more you mine, the more you have to drill.
The wet season is traditionally a season where our customers would typically try and take the Canadian summer and spend time with the family and that sort of thing. But the situation is that our customers are quite anxious. They want to keep drilling. There is a global shortage of rigs around, and we are fortunately benefiting by that at the moment. Okay?
Okay, thanks. I appreciate the color there. Just pivoting over quickly to South America. Just regarding Chile, I'm just wondering if you guys can quantify the gross loss for the quarter, how much it improved sequentially from Q2, and maybe provide a little bit more color on what you meant by signs are encouraging in Chile for, I guess, let's call it Q4 in 2027. Would that be a flip to gross profit, or how are you guys looking at this?
Yeah, Donangelo we don't disclose the Chile specifically, but even in Q3, even with Chile, we were profitable, okay? What you were seeing in Q1 and Q2, it was weighing down significantly on our profitability and on our gross margins. What we've done, we've initiated a review of our contracts. I think we've mentioned this in Q1 and Q2. What we've done, and you'll see this even more in Q4 when we announce Q4 early in 2027, you're seeing a reversing of the negative impact of Chile. We've actually exited some significantly unprofitable jobs, and we've replaced them with new jobs. The new jobs we've replaced them with, we just started up, but they're going extremely well for us. Hopefully that answers your question for you. Q4 should be the impact of Chile.
We're actually hoping not only will it reverse being negative on the group, we're hoping it flips to positive. The other regions, as we disclose in the MD&A, as we talk, our other regions we do extremely well on. The one we've had to really focus on in 2026 has been Chile and making sure we have the proper clients there. Okay?
Okay, thank you. Just to follow on to that recent question, I guess just on overall willingness to deploy additional capital to Chile. With this new inbound work, would you guys be looking at expanding the fleet, or do we expect it to remain kind of flat or potentially reduce fleet size there?
Donangelo, we'd just like to get a few positive quarters ahead of ourself before we take a decision on that. The early signs, as Greg was saying, are extremely encouraging, but it's early days. We've got a lot of work to do, but the early signs are great. I wouldn't want to commit just at this point in time to anything until we've had a good chance to sit back and just get our head around it.
Okay. Congratulations on the results, guys. I'll hop back in the queue.
Thanks, Donangelo.
Thanks, Donangelo.
Thank you, Donnie. Ladies and gentlemen, if you have any questions, please press star one. There are no further questions at this time. Please proceed.
Okay. Well, on that, thank you very much, everyone, for joining us on today's call. Have a great day. Thanks. Bye.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.