MDI: FQ4 Results: Strong results and a positive FY2027 outlook

Research evidence excerpt

MDI: FQ4 Results: Strong results and a positive FY2027 outlook

EQUITY RESEARCH QUICK TAKE

RBC Dominion Securities Inc.

Sam Crittenden, P.Eng., CFA (Analyst)

Ali Mecklai (Associate)

Saad Khan (Associate)

June 11, 2026

Major Drilling Group

FQ4 Results: Strong results and a positive FY2027 outlook

TSX: MDI | CAD 16.23 | Outperform | Price Target CAD 20.00

Sentiment: Positive

Our view: We expect a positive reaction from Major Drilling shares on FQ4 results that exceeded both top and bottom line

expectations driven by stronger senior exploration budgets and activities from juniors, and we'd flag that labour availability remains

the key bottleneck for increasing utilization rates as exploration activity picks up. The most notable growth came from North

America where revenues of $97.9M grew 66.5% year-over-year, accompanied by moderate growth in other regions. Looking ahead

to FY2027, we expect activity to pickup driven by strong metals prices, increasing exploration budgets, and improved pricing which

should all support margins. We think that MDI's growth will largely hinge on their ability to unlock greater operating leverage and

improve margins to coincide with growing exploration budgets, and the company is investing in labour training to alleviate that

key bottleneck alongside optimizing their rig fleet for efficiency and deploying new rigs into the market as capacity allows.

Financial results: Revenues of $234M were a touch higher than RBCe estimates of $232M and surpassed consensus of $216M

while EBITDA of $28M exceeded both RBCe and consensus estimates of $24M. The adjusted gross margin of 22% was slightly

above the RBCe estimate of 21%, but mostly flat year-over-year given broad cost push inflation from labour and consumables,