DAWSON GEOPHYSICAL CO (DWSN)·Q2 2024 Earnings Summary

Executive Summary

• Soft quarter driven by utilization drop: revenue fell 38% YoY to $12.5M and swung sharply lower QoQ from $31.6M in Q1; EBITDA turned negative as crews were cut from two to one late May amid “softness in our calendar.” Management expects activity to reaccelerate late Q3 as backlog improves and two U.S. crews redeploy, with equipment expected to be fully utilized through the end of Q2 2025 .
• Profitability mixed: Q2 net loss narrowed YoY to $(3.5)M (EPS $(0.12)) from $(4.4)M (EPS $(0.18)), but deteriorated QoQ from Q1 net income of $5.8M (EPS $0.19). Q2 consolidated EBITDA was $(2.34)M vs $7.57M in Q1 and $(2.52)M in Q2’23 .
• Liquidity intact after capital return: paid a $0.32/share special dividend (~$9.9M) in May; ended Q2 with $11.2M cash and ~$9M working capital; YTD operating cash flow of $7.8M supports operations during trough utilization .
• Estimates context: S&P Global consensus for Q2’24 EPS/revenue/EBITDA was unavailable at the time of analysis; beats/misses vs Street could not be determined (see Estimates Context).

What Went Well and What Went Wrong

• What Went Well

  • Backlog and utilization outlook improved; management expects an activity ramp later in Q3 with two U.S. crews deployed and full equipment utilization through the end of Q2’25: “We expect to ramp up our activity later in the third quarter… We have improved our backlog and expect to have two crews deployed later in the third quarter, and expect to have our current equipment fully deployed throughout the end of the second quarter of 2025.”
  • Cost discipline showing up YTD: 37% reduction in G&A YTD vs 2023; YTD net income of $2.3M and YTD operating cash flow of $7.8M despite a weak Q2 .
  • Strategic focus and marketing/bidding recalibration to stabilize utilization: “We have strategically adjusted our bidding and marketing process to improve our utilization throughout the year going forward.”

• What Went Wrong

  • Steep utilization-driven revenue drop: Q2 revenue declined to $12.5M (–38% YoY) from $20.2M, and down sharply QoQ vs $31.6M in Q1 as the company reduced from two U.S. crews to one late May and Canada seasonally halted in April .
  • Return to losses and negative EBITDA: Q2 net loss $(3.5)M (EPS $(0.12)) and EBITDA $(2.34)M vs Q1 EBITDA $7.57M; sequential deterioration reflects lower activity and mix (lower reimbursables) .
  • Canada seasonality and asset underutilization: Canadian ops halted in April; management is evaluating divestiture of under-utilized assets to improve returns .

Financial Results

Segment breakdown – Q2 2024:

Key balance sheet and cash flow KPIs:

Notes: Q2 diluted EPS equals basic; Canada revenue in Q2 rounded from $5k; YTD CFO provided for H1’24.

Guidance Changes

Earnings Call Themes & Trends

Note: We did not locate a Q2’24 earnings call transcript in our corpus; themes below reflect management disclosures in Q1 and Q2 press releases.

Management Commentary

• “We began the quarter with two crews operating in the United States, and dropped to one crew in late May. We reacted quickly to the softness in our calendar and reduced headcount to one crew to conserve our cash flows during this time.” — Tony Clark, President & CEO
• “We have strategically adjusted our bidding and marketing process to improve our utilization throughout the year going forward. We expect to ramp up our activity later in the third quarter of this year improving our utilization, revenues and operating cash flows.” — Tony Clark
• “Our new management team completed our first full quarter, delivered solid financial results… We took steps… to improve margins… reduce G&A… and improve operating cash flows in the first quarter.” — Tony Clark (Q1)

Q&A Highlights

• No Q2’24 earnings call transcript was located in our document set; therefore, no Q&A themes or clarifications were available to review as of this analysis window [ListDocuments returned none].

Estimates Context

• Street consensus (S&P Global) for Q2’24 EPS, revenue, and EBITDA was unavailable at query time due to data access limits; as a result, we cannot determine beats/misses vs consensus in this report. We recommend revisiting once S&P Global estimates are accessible to calibrate model updates and narrative.
• Actuals for context: Revenue $12.512M, Diluted EPS $(0.12), EBITDA $(2.337)M .

Key Takeaways for Investors

• Utilization is the near-term swing factor: management flagged late-Q2 softness but expects a ramp in late Q3 with two U.S. crews; watch project mobilizations and reimbursable revenue mix as leading indicators .
• Cost actions are working: despite low Q2 activity, YTD profitability and YTD operating cash generation reflect lower G&A and disciplined operations; this creates operating leverage if utilization normalizes in H2 .
• Capital return already executed: the $0.32 special dividend (~$9.9M) reduces excess cash but signals confidence; liquidity remains adequate with $11.2M cash and $9M working capital post-payout .
• Canada seasonality reversing: operations paused in April are expected to resume in Q4; combined with U.S. crew redeployment, sequential revenue and EBITDA should improve into H2 barring delays .
• Strategic optionality: management is evaluating divestiture of under-utilized assets, which could enhance ROIC and fund growth opportunities (including CCUS monitoring) .
• Model implications: Given the magnitude of the Q2 utilization dip vs Q1, we would bias near-term estimates lower for Q3 start but raise H2 run-rates to reflect two-crew operations and higher reimbursable pass-through, pending confirmation from updated backlog and mobilization timing .
• Risk checks: project timing/slippage, land access/weather, customer spending cadence, and mix (fee vs reimbursable) remain key drivers of quarterly volatility .

Sources: Q2’24 press release and 8‑K (including detailed financial tables) and Q1’24 press release .