Imdex (ASX:IMD) reported what management described as its strongest first-half performance in the company’s history, citing record revenue and earnings, improving exploration conditions, and continued growth in integrated drilling and digital offerings. Managing Director and CEO Paul House said the first half of FY2026 marked an important “swing period” as the industry begins to emerge from three years of declining exploration activity.
Record first-half financial performance
House said Imdex delivered record first-half revenue, normalized EBITDA, and normalized NPATA. Revenue rose 16% versus the prior corresponding period (PCP) to AUD 247 million, which management said was driven by market share gains and increased activity on established exploration projects across all regions.
Imdex reported normalized operating cash flow of AUD 67 million (Lim) and also referenced operating cash flow of AUD 65 million on a later slide discussion. Lim said normalized cash conversion was 86%, reflecting disciplined working capital management while supporting double-digit revenue growth and increased deployment of next-generation sensors.
The company ended the period with AUD 49 million in cash, while net debt increased to AUD 27 million following completion of the ESA acquisition in August. Management said leverage remained low at 0.2x at period end, and House noted Imdex had used balance sheet capacity to fund the Datarock, IoT, and MSI completions after the half-year end.
The board declared an interim fully franked dividend of AUD 0.0169 per share, which House said was the company’s record interim dividend and consistent with its policy of paying out 30% of normalized NPAT.
Business mix and growth drivers
Lim said “sensors, services and software” revenue increased 20% and represented 68% of group revenue, highlighting continued growth in higher value, higher margin solutions. Sale of goods increased 9%, with Lim pointing to strong fluids growth that was “tracking above market growth.”
House said results reflected “positive demand for all products in all regions” despite geopolitical uncertainty and a rising cost environment. He also pointed to increasing adoption of integrated solutions and the connection between hardware sensors and software.
- Integrated field services (directional core drilling and Imdex Managed Solutions) revenue increased 28% versus PCP, and the operating footprint expanded 12% globally as new customers adopted the model.
- HUB-IQ connected revenue increased 22%, which management framed as evidence of growing integration between sensors and software.
- Imdex Mining Technologies revenue grew 47%, led by faster growth in underground applications and deeper penetration into the mining life cycle.
- Within Digital Earth Knowledge, Datarock grew 90% versus PCP, reflecting demand for AI-enabled geological interpretation. Management said ESA’s EarthNET platform was complementary to HUB-IQ and Datarock applications.
Regional performance and market conditions
Management said growth was broad-based, with revenue up in all major regions. The Americas rose 20%, supported by strong U.S. activity and expanded operations across South America and Canada. Lim said the Americas delivered record first-half revenue, and House described the region as Imdex’s strongest growth engine.
In the U.S., House said near-mine and brownfields work remained resilient, with extended drilling programs and improved project visibility from the FAST-41 program supporting demand for productivity-enhancing integrated solutions. Canada was described as improving but still around 20% below its prior peak; management said improved junior funding conditions were encouraging and could translate into higher drilling activity later, “most likely in the back half of calendar year 2026.”
Europe, Middle East and Africa (EMEA) revenue increased 17%, supported by technology-led growth and greater adoption of integrated field services, with EMEA also delivering a record first half. House cited brownfields exploration and policy-led investment in Europe, with softer conditions in Scandinavia offset by growth in the Balkans. In Africa, he said near-mine work for major miners—primarily gold and copper—was driving growth, though parts of West Africa remained challenging.
APAC revenue increased 9%, with Lim citing strong sensor demand in Western Australia and early signs of recovery across Asia. House said Western Australia’s strong gold drilling activity was partially offset by softer conditions in Queensland and New South Wales, while Asia had remained low for an extended period but was showing a more positive outlook and “significant headroom” for growth.
Guidance themes: margins, headcount, FX, and cash conversion
On margins, Lim reiterated management’s prior guidance of around 30% normalized EBITDA margin for FY2026, describing the year as transitional as the cycle turns. She said ongoing investment would be required to support growth in integrated field services, and noted margin pressure from acquired businesses due to their mix.
Responding to questions on staffing, House said headcount discipline partly reflected actions taken at the back end of FY2025, including trimming and reorganization. He said Imdex would continue to add customer-facing roles in response to demand, while also incorporating headcount from acquisitions.
On foreign exchange, Lim said a strengthening Australian dollar created headwinds given about 50% of revenue was U.S. dollar or U.S. dollar-linked. She quantified second-half sensitivity as roughly AUD 1.5 million impact on revenue for each 1% movement in the AUD/USD rate.
For cash conversion, management maintained guidance of 70%, while pointing to the first-half 86% as evidence of disciplined working capital management even during a growth phase.
Exploration outlook and expectations for 2H calendar 2026
House said industry signals had improved since the company’s October AGM, citing a supply-demand imbalance, declining proven reserves, and the need for deeper exploration in more complex ore bodies as structural drivers for advanced subsurface intelligence. While he noted exploration budgets remained below prior peaks, he said visibility was improving and Imdex expected exploration budgets to increase by double digits in calendar 2026.
Management emphasized a typical six to nine month lag between capital raisings and drilling activity. House said record junior capital raisings had not yet translated into a significant uplift “on the ground,” with only limited increases seen in Western Australia and Canada so far. Chief of Exploration and Production Shaun Southwell added that seasonal timing also mattered in Canada, where much junior activity is in British Columbia and drilling typically accelerates into the Canadian summer.
House said that, historically, second halves tend to be stronger than first halves in an upcycle, and he expected Imdex to resume that pattern as exploration conditions improve, while also noting seasonality with the company typically expecting Q3 to be consistent with Q2 and Q4 to step up.
About Imdex (ASX:IMD)
Imdex Limited, a mining-tech company, engages in the provision of drilling optimization products, rock knowledge sensors, and data and analytics for the minerals industry in the Asia-Pacific, Africa, Europe, and the Americas. The company sells and rents drilling optimization products, including bench characterization products, drilling fluids, structural geology products, geoscience products, directional drilling solutions, solids removal units, rig alignment technologies, and survey technology products; and rock knowledge sensors, which include down hole survey, core orientation, gamma logging, and structural orientation sensors.
