Dawson Geophysical Company — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the quarter ended June 30, 2026, was $17.9 million, an 82% increase compared to $9.9 million in the same period of 2025.
• Fee revenue for the quarter was $14.0 million, a 60% increase over the second quarter of 2025.
• Year-to-date fee revenue increased 94% to $46.5 million.
• Net loss for the quarter was $3.4 million ($0.11 per share), which included $1.7 million of strategic transaction costs.
• Year-to-date net income was $4.2 million ($0.14 per share), which included $2.4 million of strategic transaction costs.
• Adjusted EBITDA for the quarter was $0.6 million, an improvement of $1.8 million over the second quarter of 2025.
• Year-to-date Adjusted EBITDA was $11.5 million, an 875% increase over the six months ended June 30, 2025.
• Gross margin for the quarter ended June 30, 2026, was 19%, compared to 13% in the comparable quarter of 2025.
• Cash and cash equivalents were $5.8 million as of June 30, 2026.
• Working capital deficit was $2.9 million as of June 30, 2026, compared to a deficit of $5.0 million at December 31, 2025.
• The credit facility had no balance outstanding with a borrowing base of $4.1 million.
• Deferred revenue was $5.3 million as of June 30, 2026, down from $7.5 million at December 31, 2025.
• Total liabilities were $35.3 million as of June 30, 2026, compared to $40.2 million at December 31, 2025.

Business Segments and Product Lines

• The company completed two large channel crew jobs and operated two smaller channel crews in the United States during the second quarter.
• At the end of the quarter, the company started a high-density channel count job deploying 70,000 single node channels over a concentrated area.
• Seasonal operations in Canada halted in April but are expected to resume in the fourth quarter of 2026.
• The company continues to schedule and bid larger channel count jobs due to its inventory of new single node channels.
• Activity has increased in non-traditional seismic exploration, including geothermal, Carbon Capture Utilization and Storage (CCUS) seismic monitoring, and rare minerals.

Market and Competitive Landscape

• Management expects demand for high-density seismic acquisition services to increase significantly if the current high-density channel count test is successful.
• Increased bid activity is being observed for larger channel count jobs in the Canadian market for the fourth quarter of 2026 and into 2027.
• The company believes its investment in high channel count parameters and compute power provides a competitive advantage in providing seismic data acquisition services.

Risks and Challenges

• There is no guarantee that discussions with controlling stockholder Wilks Brothers, LLC regarding potential asset contributions, sales, or business combinations will result in a definitive agreement.
• Forward-looking statements highlight risks related to the ability to operationalize new single node channels in a timely manner or at all.
• Risks include the potential failure to achieve anticipated operational efficiencies or improved financial performance from new equipment deployment.
• The company faces risks related to dependence on energy industry spending, volatility of oil and natural gas prices, and customer credit risk.
• Potential risks include contract delays, reductions or cancellations of service contracts, and limited market for the company's common stock.

Management Commentary and Tone

• Tony Clark, President and CEO, stated that a significant capital investment made a year ago has improved revenues, margins, profitability, and cash flows.
• Management noted that the new single node channels are still new to the company and they are identifying areas for improvement to achieve further operational efficiencies.
• Management is investing in compute power to improve the speed of data delivery to customers.
• Management expressed confidence that providing better data and faster delivery will continue to increase competitive advantage and improve profitability.

Other Key Points

• The company incurred approximately $1.7 million and $2.4 million in strategic transaction expenses related to discussions with Wilks Brothers, LLC for the three and six months ended June 30, 2026, respectively.
• A special committee of independent directors has been formed to evaluate and negotiate any potential transactions with Wilks Brothers, LLC.
• The Board approved a $3 million capital budget for 2026, including a $0.9 million final payment for single node channels made in January 2026.
• The company has been in discussions with Wilks Brothers, LLC, which controls approximately 80% of the company's common stock, regarding potential transactions involving assets owned by Wilks or its affiliates.
• Adjusted EBITDA is a non-GAAP financial measure defined as net income before interest, taxes, depreciation, amortization, and non-recurring charges.