Canadian Driller ACT Makes $123 Million in U.S. Revenue vs. $55 Million at Home as Tariff Treatment Stays Unresolved

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ACT Energy Technologies is becoming increasingly American in where it earns its money, even as its Canadian operations post some of their fastest growth. The Calgary-based directional-drilling and downhole-technology company generated C$178.5 million in second-quarter 2026 revenue, including C$123.2 million from the United States and C$55.3 million from Canada. That means roughly 69% of quarterly revenue came from south of the border.

The geographic shift reflects an aggressive expansion strategy built around two U.S. acquisitions completed this year. Yet it is unfolding during a difficult moment for cross-border business. ACT says trade policy and the tariff treatment of equipment moving between Canada and the United States remain unresolved, leaving an important cost variable hanging over a company that is now deeply tied to both markets.

The U.S. Now Accounts for Nearly 70% of ACT’s Quarterly Revenue

ACT’s second-quarter numbers illustrate just how dramatically the company’s geographic mix has changed. U.S. revenue reached C$123.2 million, up 50% from C$82.1 million in the comparable quarter of 2025. Canadian revenue, although much smaller at C$55.3 million, climbed an even faster 85% from C$29.9 million. Combined revenue rose 59% year over year to C$178.5 million.

Put another way, ACT generated more than twice as much revenue in the United States as it did in its home market during the quarter. About 69% of total revenue came from U.S. operations and 31% from Canada. The gap is not simply the result of weakness at home. Canadian operations are expanding rapidly. Instead, ACT has deliberately enlarged its U.S. footprint through acquisitions while maintaining an established Canadian business. For a Calgary-headquartered oilfield-services company, that creates both diversification and considerably greater exposure to American economic and trade policy.

Two Acquisitions Have Transformed the American Business

Much of the U.S. expansion can be traced to Stryker Directional and SB Directional, two businesses ACT acquired within the first four months of 2026. Stryker, based in Conroe, Texas, was acquired in January for US$24.2 million, or approximately C$34 million at the time. The company had averaged about 17 active jobs per operating day during 2025 and brought additional rotary-steerable-system capabilities to ACT’s portfolio.

Then came the larger SB Directional transaction on April 1. ACT paid approximately US$47 million, including US$30 million in cash and 3.62 million ACT shares. SB expanded ACT’s exposure to important U.S. drilling areas including the Anadarko and Permian basins. Management says Stryker and SB were the principal reasons U.S. operating days surged in the second quarter. Rather than eliminating the acquired identities, ACT kept the local brands and management teams in place, while centralizing areas such as technology, procurement and capital allocation.

Canada Is Smaller, but Its Growth Is Hard to Ignore

The U.S. revenue number may dominate the headline, but the Canadian performance was arguably one of the quarter’s most striking operational achievements. ACT recorded 3,805 Canadian operating days, an 81% jump from 2,107 a year earlier. The company says that increase substantially exceeded the 29% rise in the average Western Canadian directional rig count during the period.

That difference matters because it suggests ACT’s growth was not simply a product of more drilling across the industry. Management attributed the outperformance to new customers and greater deployment of revenue-generating technologies. Canadian revenue per operating day also edged 2% higher to C$14,524 from C$14,211. At the same time, direct costs fell to 67% of Canadian revenue from 72% a year earlier. The combination of more work, modestly better revenue per operating day and improved cost absorption helped turn Canada into an increasingly important contributor to profitability, even though its absolute revenue remains well below the U.S. segment.

The Revenue Surge Is Starting to Show Up in Earnings

ACT did more than add sales during the quarter. Adjusted EBITDAS reached C$26.9 million, rising 76% from C$15.3 million a year earlier and marking what the company described as its strongest second-quarter Adjusted EBITDAS on record. The associated margin increased to 15% from 14%. Net income was C$2.5 million, compared with a C$10-million loss in the second quarter of 2025.

Free cash flow also improved sharply, reaching C$9.7 million compared with roughly C$1 million a year earlier. There is an important wrinkle, however. Cash flow from operating activities actually declined to C$9.4 million from C$26 million because the larger business required substantially more working capital. Expanding crews, customer receivables, inventory and acquired operations can consume cash before the benefits of growth fully arrive. ACT ended June with C$105.2 million of working capital, and management expects part of that investment to unwind as activity normalizes.

The Price of Expansion Is Visible on the Balance Sheet

Acquiring two U.S. directional-drilling businesses in quick succession has given ACT scale, but it has also materially increased leverage. Net debt stood at C$142.1 million on June 30, compared with C$53.6 million at the end of 2025. Loans, borrowings and promissory notes totaled approximately C$160.6 million, versus C$61.5 million six months earlier.

Management argues the balance sheet still has significant room. ACT reported a funded-debt-to-credit-agreement-EBITDA ratio of 1.4 times, comfortably below its covenant ceiling of 3.0 times. It also repaid its exchangeable subordinated promissory notes in full during the second quarter. Even so, the company has made its priorities clear: reducing leverage is expected to receive the first claim on free cash flow through the remainder of 2026. That makes the next several quarters important. Investors will be watching whether the added U.S. revenue translates into enough cash generation to rapidly bring acquisition-related debt back down.

Tariffs Are the Unresolved Variable in ACT’s Cross-Border Strategy

ACT’s growing reliance on American operations arrives precisely when Canada-U.S. trade rules have become unusually unpredictable. In its second-quarter outlook, the company said trade policy and the cross-border tariff treatment of equipment remain unresolved and that it continues assessing possible effects on its supply chain and cost base. Crucially, ACT did not disclose a specific Q2 tariff charge or state that the C$123.2 million of U.S. revenue itself is subject to a particular tariff.

The uncertainty is nevertheless significant for a company whose operations span both sides of the border and rely on specialized downhole technology, motors and measurement equipment. ACT had already warned in earlier regulatory disclosure that U.S. tariffs, Canadian countermeasures and uncertainty surrounding CUSMA could disrupt cross-border supply chains and affect operations or cash flow. That concern has become more immediate amid another round of U.S. tariff actions against Canadian goods and ongoing negotiations between Ottawa and Washington. Canadian and U.S. officials were still discussing broader trade and sectoral tariff issues in Washington this week.

ACT Is Betting Technology Can Matter More Than the Rig Count

One of the more revealing parts of ACT’s quarter is that its operating growth dramatically outpaced changes in industry rig activity. U.S. operating days increased 76% to 5,000 even though the average U.S. directional rig count was only about 1% higher year over year. In Canada, operating days rose 81% against the 29% industry increase. Acquisitions explain much of the American gap, but ACT also argues the broader drilling business is changing.

Longer horizontal sections, greater well complexity and more technology deployed on each active rig mean the traditional rig count may no longer capture the entire opportunity for directional-drilling companies. ACT is emphasizing rotary steerable systems, measurement-while-drilling equipment and company-owned mud motors, all of which can increase the amount of revenue captured from each job. That strategy also creates potential cost savings. When ACT acquired Stryker, for example, it identified more than C$5 million of potential annual synergies, largely from replacing rented mud motors with equipment ACT already owned.

The Second Half Will Test Whether the Strategy Can Deliver Cash

ACT entered the third quarter saying activity was continuing to build in both Canada and the United States. Management expects a seasonally stronger Canadian quarter and a busier second half than in 2025, while describing the likely U.S. improvement as more modest. The company is not basing its strategy on a dramatic increase in the number of rigs working. Instead, it expects technology intensity, longer wells and consolidation among customers and service companies to determine where business flows.

Commodity prices add another layer of uncertainty. ACT reported that WTI averaged US$95.75 a barrel during the second quarter, compared with US$71.98 in the first, before falling back into the low-to-mid-US$80s during July. North American natural gas moved the other way, averaging US$2.95 per MMBtu in Q2 versus US$4.79 in Q1. For ACT, however, the larger questions may now be operational: integrate two acquisitions, convert record activity into cash, reduce C$142 million of net debt and manage cross-border equipment costs while tariff rules remain unsettled.

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