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1. Company Snapshot

1.a. Company Description

Pason Systems Inc., an energy services and technology company, provides data management systems for drilling rigs in Canada, the United States, and internationally.The company offers Electronic Drilling Recorder, which monitors and records drilling operations around the rig; DataHub for storing data and information collected from the rig for on-demand retrieval; DataLink service provides direct connection interfaces for IT systems and analytics tools; Pason Live for monitoring rig operations in real-time using desktop computers or mobile devices; and daily and end-of-well KPI reports provide visual statistics on rig performance.It also provides Drilling intelligence to suggest drilling parameters, detect disfunction, and send event alerts to onsite personnel and remote engineers in real time; and Drilling automation, a reality across rig platforms.


In addition, the company offers Pason Gas Analyzer for real-time gas measurement; a robust system of alarms and sensors to monitor ambient gasses in the atmosphere and in the drilling fluids; and Pason Pit Volume Totalizer to track the volumes, gains, and losses of drilling fluids on location.Further, it provides field support, monitoring, drilling optimization, and office support for data integration.The company serves E&P operators, drilling contractors, and other oilfield service companies.


Pason Systems Inc.was founded in 1978 and is headquartered in Calgary, Canada.

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1.b. Last Insights on PSI

Pason Systems Inc.'s recent performance was positively driven by its strong revenue growth in completions and solar segments. The company's Q3 2025 earnings call highlighted resilience amid industry challenges, with a decline in North American drilling activity. A quarterly dividend of CA$0.13 per share was declared, providing investors with a steady income stream. The oilfield communications market, where Pason operates, is projected to grow at a CAGR of 8.3% from 2025 to 2030, driven by demand for high-speed data transfer and advancements in communication technologies.

1.c. Company Highlights

2. Pason's Q3 2025 Earnings: Resilient Performance Amidst Challenging Industry Conditions

Pason's financial performance in Q3 2025 demonstrated resilience amidst a decline in North American drilling activity. The company generated consolidated revenue of $101 million, a 7% decline year-over-year, while adjusted EBITDA was $38.5 million, or 38.1% of revenue. Earnings per share (EPS) was $0.16, below analyst estimates of $0.1867. Revenue per industry day increased by 1% to a new quarterly record level of $1,071, driven by increased product adoption across its technology offering.

Publication Date: Nov -24

📋 Highlights
  • Revenue Resilience:: North American segment revenue declined only 7% YoY despite 9% industry drilling activity drop, achieving a record $1,071 revenue per industry day.
  • Solar & Energy Storage Growth:: Generated $5.1M quarterly revenue, up 30% YoY, reflecting strong expansion in renewable energy markets.
  • Margin Strength:: Adjusted EBITDA reached $38.5M (38.1% of revenue), outperforming industry activity declines and highlighting operational efficiency.
  • Shareholder Returns:: Returned $13.1M to shareholders via $10.1M dividends and $3M share repurchases in Q3 2025.

Segment Performance

The North American segment saw a 7% decline in revenue year-over-year, despite a 9% decline in overall North American industry drilling activity. The company's solar and energy storage segment generated $5.1 million in quarterly revenue, a 30% increase from the 2024 comparative period. This diversification is a positive sign, as it reduces the company's reliance on a single segment.

Capital Allocation and Balance Sheet

Pason maintained a prudent balance sheet, ending the quarter with total cash, including short-term investments, of $75.6 million and no interest-bearing debt. The company returned $13.1 million to shareholders through its quarterly dividend and share repurchase program. The capital allocation priorities remain unchanged, with a focus on investments in areas that can generate high returns on capital.

Outlook and Growth Drivers

Pason expects ongoing economic uncertainty and concerns about the potential for oversupplied oil markets to result in challenging industry conditions. However, the company believes its competitive position and diversified revenue streams will enable it to continue to grow and create value for shareholders over time. Growth drivers include opportunities in the drilling business, completions technology adoption, and international business. As Jon Faber mentioned, the company is "uniquely positioned to offer data management capabilities that combine drilling and completions data, which could lead to new revenue streams."

Valuation

With a P/E Ratio of 12.52 and an EV/EBITDA of 5.61, Pason's valuation appears reasonable. The Dividend Yield is 4.43%, which is attractive for income-seeking investors. The company's ROE is 14.91%, indicating a strong ability to generate returns on equity. Analysts estimate next year's revenue growth at 2.7%, which is a relatively modest growth rate. Overall, Pason's resilient performance and diversified revenue streams position it well for future growth.

3. NewsRoom

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Pason Systems' (TSE:PSI) Dividend Will Be CA$0.13

Dec -03

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Oilfield Communications Market Forecast 2025-2030 with Nokia, Redline, RAD, Commtel Networks, Mostar, Tampnet, Kongsberg Digital, Tait, Inductive Automation, Pason Systems, Peloton, Petrolink Leading

Nov -21

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Why Pason Systems' (TSE:PSI) Shaky Earnings Are Just The Beginning Of Its Problems

Nov -14

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Pason Systems Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Nov -09

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Pason Systems Inc (PSYTF) Q3 2025 Earnings Call Highlights: Resilience Amid Industry Challenges

Nov -08

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Pason Reports Third Quarter 2025 Results and Declares Quarterly Dividend

Nov -06

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Pason to Release 2025 Third Quarter Results on November 6, 2025

Oct -02

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Pason Systems Inc. (TSE:PSI) is a favorite amongst institutional investors who own 51%

Sep -30

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.29%)

6. Segments

Drilling Data

Expected Growth: 12%

Pason Systems Inc.'s drilling data growth is driven by increasing adoption of digitalization in oil and gas operations, rising demand for real-time data analytics, and growing need for operational efficiency. Additionally, expansion into new markets, strategic partnerships, and investments in research and development are contributing to the 12% growth.

Mud Management and Safety

Expected Growth: 10%

Pason Systems Inc.'s Mud Management and Safety segment growth is driven by increasing demand for drilling optimization, rising focus on ESG and sustainability, and growing adoption of digital technologies in the oil and gas industry. Additionally, the need for real-time data and analytics to improve operational efficiency and reduce costs also contributes to the 10% growth.

Analytics and Other

Expected Growth: 11%

Pason Systems Inc.'s 11% growth in Analytics and Other is driven by increasing adoption of digital technologies in the energy sector, rising demand for data-driven insights, and expansion into new markets. Additionally, the company's investments in research and development, strategic partnerships, and cost optimization initiatives have contributed to this growth.

Drilling Intelligence

Expected Growth: 13%

Pason Systems Inc.'s Drilling Intelligence growth is driven by increasing demand for real-time drilling data, rising adoption of digitalization in the oil and gas industry, and growing need for operational efficiency and cost reduction. Additionally, the company's expanding customer base, strategic partnerships, and continuous innovation in drilling automation and analytics also contribute to its 13% growth.

Communications

Expected Growth: 9%

Pason Systems Inc.'s 9% growth is driven by increasing demand for digital oilfield technologies, expansion into new markets, and strategic partnerships. The company's proprietary data management systems and real-time drilling data analytics are key differentiators, enabling oil and gas operators to optimize drilling operations and reduce costs.

7. Detailed Products

Drilling Data Acquisition Systems

Pason Systems Inc. provides drilling data acquisition systems that collect and analyze real-time data from drilling operations, enabling operators to make informed decisions and optimize their drilling processes.

Drilling Intelligence Software

Pason Systems Inc. offers drilling intelligence software that provides advanced analytics and visualization tools to help operators identify trends, patterns, and insights from their drilling data.

Wellbore Placement Optimization

Pason Systems Inc. provides wellbore placement optimization solutions that use advanced algorithms and machine learning to optimize wellbore placement and reduce drilling risks.

Real-time Data Analytics

Pason Systems Inc. offers real-time data analytics solutions that provide operators with instant insights into their drilling operations, enabling them to make data-driven decisions.

Drilling Automation Systems

Pason Systems Inc. provides drilling automation systems that automate drilling processes, reducing the risk of human error and improving drilling efficiency.

8. Pason Systems Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Pason Systems Inc. faces moderate threat from substitutes, as there are limited alternatives to its drilling data management systems. However, the company's strong brand reputation and customer loyalty mitigate this threat.

Bargaining Power Of Customers

Pason Systems Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are highly customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Pason Systems Inc. relies on a few key suppliers for critical components. While the company has established long-term relationships with these suppliers, it still faces some risk of supply chain disruptions.

Threat Of New Entrants

The drilling data management systems industry has high barriers to entry, including significant capital expenditures and technical expertise. This limits the threat of new entrants to Pason Systems Inc.

Intensity Of Rivalry

The drilling data management systems industry is highly competitive, with several established players competing for market share. Pason Systems Inc. must continually innovate and improve its products to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 3.09%
Debt Cost 3.95%
Equity Weight 96.91%
Equity Cost 12.44%
WACC 12.18%
Leverage 3.18%

11. Quality Control: Pason Systems Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Total Energy Services

A-Score: 7.2/10

Value: 8.8

Growth: 7.2

Quality: 5.7

Yield: 5.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Trican Well Service

A-Score: 7.0/10

Value: 7.1

Growth: 8.0

Quality: 7.0

Yield: 5.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Pason Systems

A-Score: 6.3/10

Value: 5.8

Growth: 5.9

Quality: 8.0

Yield: 7.0

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
CES Energy Solutions

A-Score: 6.2/10

Value: 6.3

Growth: 8.4

Quality: 5.7

Yield: 4.0

Momentum: 6.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
TerraVest

A-Score: 5.4/10

Value: 2.3

Growth: 9.3

Quality: 4.6

Yield: 1.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Solaris Oilfield

A-Score: 4.6/10

Value: 2.9

Growth: 6.2

Quality: 6.7

Yield: 5.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.23$

Current Price

12.23$

Potential

-0.00%

Expected Cash-Flows