Dawson Geophysical Company (NASDAQ: DWSN) (the "Company") today reported unaudited financial results for its second quarter ended June 30, 2025.
Management Comment
Tony Clark, Dawson's President and CEO, commented, "Due to the observed increase in demand for large integrated high-resolution, high channel count surveys and improvement to our backlog, we made the decision to make a significant capital investment to purchase new single node channels from a wholly-owned subsidiary of Geospace Technologies. These new channels are a small, lightweight, single-component, autonomous land wireless seismic data acquisition solution. Each sub-1-pound wireless geophone (5 HZ), battery, 24-bit digitizer, and GPS receiver are enclosed in its sealed case, allowing for a more efficient and faster field deployment and retrieval operation, which we expect will significantly improve our operational efficiency. Increasing our channel count with this purchase coupled with our existing channels will allow us to be able to acquire higher and more intensive seismic surveys in North America, as well as be more competitive on the smaller 2D & 3D surveys.
We deployed one large channel crew at the beginning of April, which should keep that crew highly utilized throughout the end of the year. We continue to improve our backlog, and have multiple jobs contracted for quick deployment of our recently purchased equipment. We expect that this investment will improve our top line and bottom-line results as the equipment is deployed and we capitalize on the anticipated efficiencies."
Second Quarter and Year-to-Date Results
For the second quarter ended June 30, 2025, the Company reported fee revenues of $8.7 million, an increase of 5% compared to $8.3 million for the comparable quarter ended June 30, 2024. Total revenue included reimbursable revenue of $1.1 million and $4.2 million for the quarters ended June 30, 2025, and June 30, 2024, respectively. Gross margin1 for the quarter ended June 30, 2025, was 13% compared to 1% for the comparable quarter ended June 30, 2024, due to improved efficiencies in our operations. Our revenues in the United States increased over 200% quarter over quarter due to improved crew utilization, and we expect our revenue to continue to increase in the third quarter due to our strong backlog.
We incurred a net loss of $2.3 million or $0.08 per common share compared to a net loss of $3.5 million or $0.12 per common share for the quarters ended June 30, 2025 and 2024, respectively. During the quarter ended June 30, 2025, we generated negative EBITDA of $1.2 million, compared to negative EBITDA of $2.3 million in the same quarter of 2024.
For the year to date ended June 30, 2025, we incurred a net loss of $1.4 million or $0.04 per common share compared to net income of $2.3 million or $0.07 per common share for the same period of 2024. For the year to date ended June 30, 2025, we generated EBITDA of $1.2 million, compared to EBITDA of $5.2 million in the same period of 2024.
1 Defined as fee revenues less fee operating expenses, divided by fee revenues
Operations Update
We deployed one large channel crew at the beginning of April, which should keep that crew highly utilized throughout the remainder of the year in the United States. We continue to improve our backlog and have multiple small channel crew jobs contracted in the third quarter for quick deployment of our recently purchased equipment.
Capital Budget and Liquidity
On August 8, 2025, Dawson Operating LLC, a wholly-owned subsidiary of the Company ("Dawson Operating"), entered into an Equipment Purchase Agreement, with GTC, Inc., a wholly-owned subsidiary of Geospace Technologies Corporation("GTC"), to acquire single point node channels (the "Purchase Agreement"). Under the Purchase Agreement, the equipment is to be delivered in three shipments commencing in August 2025, with the final shipment scheduled for delivery by early January 2026.
The Purchase Agreement provides that, subject to the terms and conditions set forth therein, Dawson Operating will pay to GTC an aggregate purchase price of approximately $24.2 million, as follows: (i) approximately $4.8 million paid in cash in connection with the execution of the Purchase Agreement; (ii) approximately $1.2 million will be payable in cash upon acceptance of the third and final delivery of the equipment; and (iii) approximately $18.2 million in the aggregate will be financed by the delivery of three separate thirty-six (36) month promissory notes each with a fixed interest rate of 8.75% (each, a "Note" and collectively, the "Geospace Notes") payable by Dawson Operating and the Company, jointly and severally, to GTC, with each Note to be issued in connection with the Dawson Operating's acceptance of one of the three equipment deliveries. We believe this investment will allow the Company to be a leader in the industry, giving us a competitive advantage for large integrated high-resolution, high channel count surveys currently demanded by the exploration & production efforts of our customers.
We increased our cash position to $16.2 million at June 30, 2025 and improved our positive working capital position to $4.9 million, compared to $1.4 million and $4.6 million, at December 31, 2024, respectively. We believe that our cash on hand and operating cash flows are sufficient to fund our operating and investing cash flow requirements as well as our obligations under the Geospace Notes.