PHX Energy Smashes Revenue Records in Q4 and FY 2024

PHX Energy, a leading provider of directional drilling and motor rental services, has announced record-breaking revenue for the fourth quarter and full year 2024. The company's strategic focus on these core services, coupled with its commitment to innovation and customer satisfaction, has driven its exceptional financial performance.

In the fourth quarter of 2024, PHX Energy generated consolidated revenue of $178.7 million, marking the highest level of quarterly revenue in the company's history. This impressive result was driven by an 8% increase in US division revenue to $132.3 million and a 7% increase in Canadian division revenue to $46.3 million compared to the same period in 2023. The company's motor rental revenue also contributed to this growth, with $10 million generated in the quarter.



For the full year 2024, PHX Energy achieved annual consolidated revenue of $659.7 million, the highest in the company's history. The US division revenue was $479.5 million, only 3% lower than the record set in 2023, while the Canadian division generated $180.2 million, the highest level since 2014. The company's motor rental revenue for the year was $38.4 million, a decrease from $47 million in 2023 but still a significant contributor to the company's annual revenue.



PHX Energy's strong financial performance can be attributed to several key factors:

1. Growth in Revenue Streams: The company's US division revenue increased by 8% in the fourth quarter of 2024 compared to the same period in 2023, driven by an increase in directional drilling services, particularly Rotary Steerable System (RSS) services. The Canadian division also experienced a 7% increase in quarterly revenue, driven by strong activity and the addition of new technologies.
2. Expansion of Motor Rental and Sales Business: PHX Energy's motor rental revenue increased to $10 million in the fourth quarter of 2024, up from $10.3 million in the same period in 2023. The company foresees further growth in this segment, driven by the creation of a dedicated rental fleet and current marketing strategies. Revenue generated from the sale of motor equipment and parts also increased, driven by existing customers placing ongoing orders for parts and potentially expanding their fleets.
3. Investment in Technology and Innovation: PHX Energy has invested in developing real-time communications technology that allows its RSS to transmit data to its Measurement-While-Drilling (MWD) systems. This technology is in high demand by operators utilizing RSS and further entrenches PHX Energy as an industry leader. The company has also increased its R&D expenditures by 40% in 2023 compared to 2022, focusing on developing new technologies to gain market share and improve revenue per day.

PHX Energy's strong financial performance is expected to continue in the long term, as the company remains committed to investing in technology, expanding its revenue streams, and rewarding shareholders through dividends and share buybacks. However, the company remains cautious about the potential impact of weakening natural gas prices on its Canadian operations in the third and fourth quarters of 2024.

In conclusion, PHX Energy's record-breaking revenue in the fourth quarter and full year 2024 is a testament to the company's strategic focus on directional drilling and motor rental services, as well as its commitment to innovation and customer satisfaction. With a strong financial performance and a promising outlook, PHX Energy is well-positioned to continue its growth trajectory in the long term.