Executive Summary

Q3 2024 revenue was $14.4M, down 37% YoY, but up 15% sequentially vs Q2; EPS was -$0.18 and EBITDA was -$4.3M, reflecting lower utilization and a mix shift toward reimbursable revenue .
Management is deploying a second large channel crew in mid-November, resumed seasonal operations in Canada in October, and expects increased revenues and profitability from Canada through Q1 2025 .
The Board increased capital budget to $6M to purchase single node channels, expected to improve margins via crew efficiency and support more competitive bids; the company is evaluating divestitures of under-utilized assets to improve ROIC .
Liquidity: cash was $7.0M and working capital $4.4M at quarter-end; operating cash flow was $3.6M YTD, indicating disciplined cash management despite operating losses .
Potential stock catalysts: near-term activity ramp from Canada seasonality and crew deployments; medium-term margin lift from single node investments and asset optimization .

What Went Well and What Went Wrong

What Went Well

Sequential revenue improvement and activity ramp: “We currently have one crew operating and a second large channel crew scheduled to deploy in mid-November… Our seasonal operations in Canada resumed in October, and we expect increased revenues and profitability from Canada through the first quarter of 2025.”
Strategic equipment plan to lift margins: “We are currently testing new single node channels… investing in new single node channels will improve our revenue and margins due to improved crew efficiency.”
Cash discipline and liquidity: Generated $3.6M cash from operations YTD; ended Q3 with $7.0M cash and $4.4M positive working capital, supporting operational flexibility .

What Went Wrong

YoY contraction: Revenue fell to $14.4M from $23.0M, net loss widened to -$5.6M (vs -$5.2M), and EBITDA deteriorated to -$4.3M (vs -$3.4M) on lower fee revenue and reduced utilization .
Mix and margin pressure: Fee revenue declined sharply ($4.7M vs $9.7M YoY), reimbursables dominated ($9.8M), compressing margins and driving a -29.8% EBITDA margin (calc.) .
Higher OpEx vs activity: Total operating expenses were $20.2M in Q3 vs $14.4M revenue, highlighting fixed-cost absorption challenges and the need for improved utilization .

Financial Results

Metric	Q1 2024	Q2 2024	Q3 2024
Revenues ($USD Thousands)	31,584	12,512	14,421
Fee Revenue ($USD Thousands)	26,738	8,326	4,663
Reimbursable Revenue ($USD Thousands)	4,846	4,186	9,758
Net Income (Loss) ($USD Thousands)	5,846	(3,546)	(5,617)
Diluted EPS ($USD)	$0.19	$(0.12)	$(0.18)
EBITDA ($USD Thousands)	7,570	(2,251)	(4,301)
Net Income Margin (%)	18.5% (calc. 5,846/31,584)	-28.3% (calc. -3,546/12,512)	-38.9% (calc. -5,617/14,421)
EBITDA Margin (%)	24.0% (calc. 7,570/31,584)	-18.0% (calc. -2,251/12,512)	-29.8% (calc. -4,301/14,421)

Q3 Comparison	Q3 2023	Q2 2024	Q3 2024
Revenues ($USD Thousands)	22,961	12,512	14,421
Diluted EPS ($USD)	$(0.20)	$(0.12)	$(0.18)
EBITDA ($USD Thousands)	(3,351)	(2,251)	(4,301)

Segment breakdown (Q3 2024):

Metric ($USD Thousands)	USA	Canada	Consolidated
Fee Revenue	4,652	11	4,663
Reimbursable Revenue	9,758	0	9,758
Operating Expenses (incl. reimbursables)	15,484	811	16,295
G&A	2,393	136	2,529
Depreciation & Amortization	1,144	244	1,388
(Loss) from Operations	(4,611)	(1,180)	(5,791)
Net (Loss)	(4,442)	(1,175)	(5,617)

Liquidity KPIs:

KPI	Q1 2024	Q2 2024	Q3 2024
Cash and Equivalents ($USD Thousands)	11,462	11,158	6,980
Accounts Receivable ($USD Thousands)	14,888	4,424	2,788
Deferred Revenue ($USD Thousands)	5,318	5,709	691
Working Capital ($USD Millions)	11.3	9.0	4.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Crew deployment (US)	Q4 2024	Not disclosed	Second large channel crew scheduled mid-November; majority of channels deployed	Raised activity
Canada seasonal operations	Q4 2024–Q1 2025	Not disclosed	Resumed in Oct; expect increased revenues and profitability through Q1 2025	Positive outlook
Capital budget (single node channels)	FY 2024–2025	Not disclosed	Board approved increase to $6M for new single node channels to improve margins and competitiveness	Raised
Asset optimization	Ongoing	Not disclosed	Evaluating divestiture of under-utilized assets to improve ROIC	Initiated

Earnings Call Themes & Trends

Note: No Q3 2024 earnings call transcript found; themes reflect management commentary in press releases.

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
Utilization & activity	Q1: Two large US crews + four in Canada, strong utilization, margin improvement . Q2: Dropped to one US crew, adjusted bidding/marketing to improve utilization; expect ramp later in Q3 .	One US crew; two small channel crews later in quarter; second large channel crew deploying mid-November .	Improving utilization into Q4
Equipment modernization	Q2: Evaluating asset divestitures to improve ROIC .	Testing single node channels; $6M capital budget to increase channel count for efficiency/margins .	Accelerating investment
Canada seasonality	Q2: Canada halted seasonally; expected to resume in Q4 .	Canada operations resumed in October; expect increased revenues/profitability through Q1 2025 .	Positive seasonal lift
Cost structure & G&A	Q1: 22% reduction vs Q4 2023; strong EBITDA . Q2: 37% YTD G&A reduction vs 2023 .	Margins pressured by low fee revenue; focus shifts to efficiency gains via equipment and utilization .	Mixed—costs managed, margins pressured
Liquidity & capital allocation	Q1: Special $0.32 dividend paid May 6; cash+restricted $16.5M; working capital $11.3M . Q2: Cash $11.2M; working capital $9.0M .	Cash $7.0M; working capital $4.4M; $3.6M CFO YTD .	Decreased cash; still positive CFO YTD
CCUS services	Mentioned as growing/important part of business .	Continued emphasis; base surveys acquired, plans for more .	Steadily growing

Management Commentary

“We currently have one crew operating and a second large channel crew scheduled to deploy in mid-November… We expect increased revenues and profitability from Canada through the first quarter of 2025.” — Tony Clark, President & CEO
“We are currently testing new single node channels in the field… investing in new single node channels will improve our revenue and margins due to improved crew efficiency with the lighter weight equipment.” — Tony Clark
“We expect to finish the year strong and believe that we are positioned to capitalize on the opportunities in our industry.” — Tony Clark
Prior quarter context: “We reacted quickly to the softness… reduced headcount to one crew to conserve cash flows… adjusted bidding and marketing to improve utilization.” — Tony Clark (Q2)
Prior quarter context: “Improving margins… reducing G&A… improving operating cash flows.” — Tony Clark (Q1)

Q&A Highlights

No Q3 2024 earnings call transcript was found; therefore, no Q&A highlights or clarifications are available for this quarter [Search: no transcript found].

Estimates Context

Wall Street consensus (S&P Global) for Q3 2024 EPS and revenue was unavailable due to SPGI daily request limits at the time of this analysis. We will update estimate comparisons when accessible.

Attempted metrics: Primary EPS Consensus Mean, Revenue Consensus Mean, and # of Estimates for Q3 2024 — unavailable (SPGI limit error).

Metric	Period	Consensus	# of Estimates
EPS (Primary)	Q3 2024	Unavailable (S&P Global limit)	Unavailable (S&P Global limit)
Revenue	Q3 2024	Unavailable (S&P Global limit)	Unavailable (S&P Global limit)

Key Takeaways for Investors

Sequential activity improving: Q3 revenue rose to $14.4M from $12.5M in Q2; crew deployments and Canada seasonality should support Q4/Q1 activity .
Mix-driven margin pressure: Fee revenue declined while reimbursables were elevated; EBITDA margin compressed to -29.8% (calc.), underscoring the need for higher fee-based utilization .
Capex to lift efficiency: $6M capital budget for single node channels should enable more competitive bids and improved margins via lighter, more efficient equipment .
Liquidity watch: Cash fell to $7.0M and working capital to $4.4M; however, $3.6M YTD operating cash flow provides some buffer during the transition .
Operational optimization: Management is evaluating divestitures of under-utilized assets to improve ROIC—execution here could be a medium-term value driver .
Near-term setup: The deployment of a second large channel crew and Canada ramp are catalysts for revenue and margin recovery into Q4/Q1 .
Estimates pending: With SPGI consensus currently unavailable, monitor forthcoming estimate updates; depending on utilization and mix, Street may need to adjust margin and EPS trajectories.

Sources: Q3 2024 press release and 8-K (including exhibits), plus Q2 and Q1 2024 press releases and 8-Ks .

DAWSON GEOPHYSICAL CO (DWSN)·Q3 2024 Earnings Summary