Overview

* STEP Energy Q3 revenue slightly beats analyst expectations despite a year-over-year decline

* Adjusted EBITDA for Q3 beats analyst estimates, reflecting strong operational performance

* ARC Financial proposes acquisition of all STEP shares, potential TSX delisting

Outlook

* STEP anticipates strong Q4 utilization, slowing as clients wind down capital programs

* Company expects Q1 2026 fracturing schedule to be almost fully booked

* STEP notes pricing pressure on fracturing work due to lower commodity prices

Result Drivers

* U.S. OPERATIONS TERMINATION - Revenue decline attributed to termination of U.S. fracturing operations

* BALANCE SHEET STRENGTHENING - Co focused on reducing net debt and investing in sustainable operations

* TECHNOLOGY INVESTMENT - Investment in technology to replace diesel with natural gas as part of sustainability strategy

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q3 Slight C$227.24 C$225.40

Revenue Beat* mln mln (3

Analysts

)

Q3 EPS C$0.09

Q3 Net C$6.78

Income mln

Q3 Beat C$45.17 C$40.10

Adjusted mln mln (5

EBITDA Analysts

)

Q3 Free C$23.29

Cash mln

Flow

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

* The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the oil related services and equipment peer group is "buy."

* Wall Street's median 12-month price target for Step Energy Services Ltd ( SNVVF ) is C$5.50, about 0.7% above its November 5 closing price of C$5.46

* The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release:

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)