Stock Analysis
Founded in 1985, Pulse Seismic Inc (TSE: PSD) is a Canadian company specializing in the acquisition, marketing, and licensing of two-dimensional (2D) and three-dimensional (3D) seismic data. The company has stated that it is a market leader in the acquisition and licensing of data for the energy sector in Western Canada, covering approximately 65,310 square kilometers of 3D seismic data and 829,207 kilometers of 2D seismic data.
It covers areas in the Western Canada Sedimentary Basin (WCSB) in Alberta, northeast British Columbia, Saskatchewan, Manitoba, Montana, parts of the Northwest Territories, and the Yukon, as well as marine data on the east coast of Canada.
Business Overview
Pulse Seismic’s primary business involves providing seismic data to oil and gas exploration and development companies. It offers valuable geological insights for identifying potential hydrocarbon reserves.
The company is actively involved in expanding its database library through the acquisition of other seismic data library companies or the purchase of seismic data assets from other library owners or energy companies. Some of the advantages of their business model, which the company states on its website as a competitive advantage, are:-
- Enduring Value: Seismic Data doesn’t expire and can be licensed repeatedly. Pulse claims to be an industry leader due to the size, quality, and breadth of regions covered by its data library.
- Experience: Boasts a knowledgeable in-house geotechnical team that offers strong project management skills to support the success of their customers
- Cost Savings: As a survey partner, Pulse assumes a portion of the costs and manages each step of the project. Their fine-tuned methodologies tend to increase efficiency, resulting in a low cost-per-kilometer, which allows clients to cover the largest area for their exploration dollar and obtain exactly the data they want.
Mission of Pulse Seismic Inc: Collaborate with partners to maximize our digital data to create new opportunities and stakeholder value.
The company is also now serving the needs of clients involved in the exploration of non-traditional energy sources and related resources.
Management Team
A brief description of Pulse Seismic core senior management team is mentioned below:
| Neal Coleman, ICD.D ( President & CEO) Education: Bachelor of Applied Business & Entrepreneurship degree from Mount Royal University in Calgary and a Petroleum Engineering Applications Certificate from SAIT Polytechnic in Calgary. Also, a certified director (ICD.D). Prior Experience: Began his career with Pulse Seismic. Became Pulse’s President and CEO in November 2012, after serving four years as Vice-President of Sales & Marketing. Has Two decades of experience in the areas of business development, strategic planning, negotiation, leadership, public company management, and investor relations. Association with Pulse Sesimic Inc: Since 2004 |
| Pamela Wicks, CPA, CMA, ICD.D ( Vice President, Finance & CFO) Education: Chartered Professional Accountant (CPA, CMA) and a Certified Director (ICD.D) and earned a Bachelor of Commerce degree in Accounting and Finance from Memorial University of Newfoundland and Labrador Prior Experience: Pamela joined Pulse Seismic Inc. in 2002 as Corporate Controller, rising to VP of Finance in 2007 and CFO in 2010. She currently oversees Finance, HR, IT, and ESG reporting. Before entering the seismic industry in Calgary in 1998, she held accounting roles in the East Coast offshore oil and gas sector. Association with Pulse Sesimic Inc: Since 2002 |
| Trevor Meier ( Vice President of Sales & Marketing) Education: Trevor earned a Bachelor of Commerce from the University of Saskatchewan. Prior Experience: Began his career with Pulse Seismic Inc. in 2006 as a Sales & Marketing Representative, was promoted in 2012 to Manager, Sales & Marketing, and became Vice President of Sales & Marketing in 2013. Trevor leads Pulse’s sales and marketing initiatives. He focuses on building strong customer relationships based on honesty and transparency and finding creative solutions that help customers realize their energy development goals while driving revenue for Pulse. Association with Pulse Sesimic Inc: Since 2006 |
Financial Analysis
| Earnings Information | Q1 2025 (Ending 31/03/25) | YoY Change | Q1 2024 (Ending 31/03/24) | 2024 | YoY Change | 2023 | YoY Change | 2022 |
| Revenue | $ 22,759 | 159% | $ 8,777 | $ 23,379 | -40% | $ 39,127 | 309% | $ 9,570 |
| Operating Expenses | $ 4,959 | 3% | $ 4,838 | $ 17,060 | -5% | $ 17,879 | 2% | $ 17,610 |
| Operating Profit/(Loss) | $ 17,800 | 352% | $ 3,939 | $ 6,319 | -70% | $ 21,248 | 364% | $ (8,040) |
| Finance Expenses | $ 4 | -78% | $ 18 | $ 32 | -81% | $ 172 | -13% | $ 198 |
| Net Earnings | $13,375 | 399% | $ 2,681 | $ 3,391 | -77% | $ 15,007 | 290% | $ (7,907) |
| Net earnings per share, basic and diluted | $ 0.26 | 420% | $ 0.05 | $ 0.07 | -75% | $ 0.28 | -287% | $ (0.15) |
| Balance Sheet Information | ||||||||
| Cash and cash equivalents | $ 14,305 | 4% | $ 13,765 | $ 8,722 | -45% | $ 15,948 | 174% | $ 5,822 |
| Current Assets | $ 19,426 | 35% | $ 14,419 | $ 11,481 | -49% | $ 22,521 | 191% | $ 7,738 |
| Total assets | $ 27,412 | -12% | $ 31,122 | $ 21,516 | -48% | $ 41,249 | 17% | $ 35,222 |
| Current Liabilities | $ 5,225 | 36% | $ 3,840 | $ 2,259 | -85% | $ 15,053 | 1215% | $ 1,145 |
| Shareholders’ equity | $ 20,533 | -23% | $ 26,543 | $ 18,295 | -29% | $ 25,655 | -23% | $ 33,496 |
| Cash Flow Information | ||||||||
| Cash Flow from Operating Activities | $ 16,615 | 59% | $ 10,464 | $ 14,195 | -40% | $ 23,524 | 96% | $ 11,992 |
| Cash Flow used in Investing Activities | $ – | -100% | $ (225) | $ (270) | 864% | $ (28) | 133% | $ (12) |
| Cash Flow used in Financing Activities | $ (11,032) | -11% | $ (12,422) | $(21,151) | 58% | $(13,370) | 117% | $ (6,158) |
*All Information is in Thousands of Canadian dollars except per share data
An analysis of the key financial figures for Pulse Seismic Inc reveals the following information:
- Revenue has shown strong year-over-year growth in Q1 2025, rising by 159% to $22.76 million compared to $8.78 million in Q1 2024. This sharp increase is especially notable after a 40% annual revenue decline in 2024. The volatility indicates a business highly dependent on large one-time licensing deals, which is common in the seismic data industry.
- Operating Profit improved substantially, with Q1 2025 profit rising 352% YoY to $17.8 million. In contrast, full-year 2024 operating profit dropped by 70% to $6.32 million. This improvement in profitability, despite relatively flat operating expenses (3% YoY growth), suggests more efficient revenue generation from its data library.
- Net Earnings surged to $13.38 million in Q1 2025, a 399% YoY increase, supported by both higher operating income and a 78% decline in finance costs. This is in stark contrast to full-year 2024, where net earnings plummeted by 77% to $3.39 million, primarily due to lower revenue and high relative expense base. EPS jumped from $0.05 to $0.26 YoY in Q1 2025, while full-year 2024 EPS declined to $0.07, from $0.28 in 2023.
- Liquidity has remained stable, with cash and cash equivalents growing 4% YoY to $14.31 million in Q1 2025. However, full-year 2024 saw a 45% decline in cash holdings, falling from $15.95 million to $8.72 million, indicating cash strain during that fiscal year.
- Current liabilities increased by 36% YoY in Q1 2025, rising to $5.23 million, following a similar trend from 2024, which had already seen an 85% spike. At the same time, shareholders’ equity fell 23% YoY in Q1 2025 and was already down 29% in 2024, which could reflect dividend payments or adjustments in retained earnings due to weaker prior-year profitability.
- Cash Flow from Operating Activities in Q1 2025 was robust at $16.62 million, marking a 59% YoY growth. This is a positive shift from 2024, where operating cash flow fell by 40% to $14.2 million. Financing cash outflows in Q1 2025 were $11.03 million, showing continued distributions or repayments, but lower than the $12.42 million outflow in Q1 2024. No investment cash flow was recorded in Q1 2025, indicating minimal capital deployment or acquisitions during the period.
| Ratio Analysis | Q1 2025 (Ending 31/03/25) | Q1 2024 (Ending 31/03/24) | 2024 | 2023 | 2022 |
| Operating Profit Margin | 78.2% | 44.9% | 27.0% | 54.3% | -84.0% |
| Net Profit Margin | 58.8% | 30.5% | 14.5% | 38.4% | -82.6% |
| Return on Equity | 65.1% | 10.1% | 18.5% | 58.5% | -23.6% |
| Cash Ratio | 2.74 | 3.58 | 3.86 | 1.06 | 5.08 |
| Current Ratio | 3.72 | 3.75 | 5.08 | 1.50 | 6.76 |
| Asset Turnover Ratio | 0.83 | 0.28 | 1.09 | 0.95 | 0.27 |
The Ratio Analysis for Pulse Seismic Inc reveals the following information:
- Profitability improved sharply in Q1 2025, with the Operating Profit Margin rising to 78.2%, up from 44.9% in Q1 2024 and 27.0% in full year 2024. Similarly, the Net Profit Margin more than doubled to 58.8% from 30.5% in Q1 2024 and 14.5% for 2024. These gains suggest the company generated significantly higher profits on each dollar of revenue in early 2025, likely due to cost discipline and higher-margin licensing activity.
- The Return on Equity (ROE) rose dramatically to 65.1% in Q1 2025, up from 10.1% in Q1 2024 and 18.5% for full year 2024. This indicates a strong return on shareholders’ investment, driven by higher earnings and lower equity base.
- Liquidity ratios declined slightly but remain healthy. The Cash Ratio dipped to 2.74 in Q1 2025 from 3.86 in 2024, and the Current Ratio decreased to 3.72 from 5.08. Although the company is still well-positioned to cover short-term liabilities.
- The Asset Turnover Ratio improved to 0.83 in Q1 2025, compared to 0.28 in Q1 2024, though it remains slightly below the 1.09 seen in 2024. This suggests the company became more efficient in generating revenue from its asset base in the recent quarter, after a temporary dip in Q1 of the prior year.
Share Price Performance
As of June 6, 2025, Pulse Seismic’s share price reached a new 52-week high of CAD 2.80, reflecting a 20.51% increase over the past year. With a beta of 0.68, the stock exhibits lower volatility compared to the broader market. The company’s valuation also appears fair, with a P/E Ratio of 10.07.
Risk Factors
- Dependence on Oil & Gas Sector: Most of Pulse’s customers are oil and natural gas exploration and development companies. Oil and natural gas prices are volatile and directly affect the demand by such customers for seismic data.
- Demand for Seismic Data: Pulse’s ability to generate revenue, EBITDA, shareholder free cash flow, and earnings depends on the demand for seismic data. Activity in such plays and areas depends on commodity prices, customers’ budgets, geological understanding, advances in drilling technology, government fiscal and regulatory regimes, and access to processing and pipeline capacity, all of which are beyond Pulse’s control.
- Cybersecurity Threats: As a digital data company, Pulse is vulnerable to cybersecurity risks that could compromise sensitive client data or restrict data access, potentially impacting its reputation and operations.
Recent Developments
When Pulse Seismic announced its Q1 2025 results on April 22, 2025, the company approved a 17% increase to the regular quarterly dividend, declaring a dividend of $0.0175 per share. Also, a special dividend of $0.20 per share was declared. The company repurchased 43,300 shares at an average price of $2.43 per share for a total cost of approximately $106,000.
Regarding its future outlook, the company noted that it has limited visibility into future seismic data library sales levels, regardless of prevailing industry conditions. The company remains focused on business practices that have served throughout the full range of conditions. The company maintains a strong balance sheet and carries no debt.
Should you Buy or Sell Pulse Seismic Stock
Pulse Seismic Inc. stands out as a Buy for investors looking for exposure to the energy sector with reduced operational risk. As a market leader in seismic data licensing, it boasts a vast 2D and 3D seismic library that retains long-term value and can be re-licensed multiple times. The company maintains a lean workforce of just 15 employees, benefiting from a deeply experienced management team, most of whom have been with Pulse for over two decades.
Unlike traditional exploration and mining companies, Pulse avoids heavy capital expenditures and environmental liabilities, positioning itself as an asset-light, profitable player in a cyclical industry. Moreover, Pulse is debt-free, which significantly reduces financial risk, and its liquidity ratios suggest a strong ability to meet short-term obligations.
However, investors should also exercise some caution, as future revenues remain unpredictable, and the company has limited geographic diversification. Its strong dependence on energy exploration in Western Canada may expose it to regional regulatory or economic pressures. On the positive side, the company’s low price-to-earnings ratio and its history of share buybacks serve as added advantages. Overall, Pulse Seismic Inc. offers a unique, low-risk entry point into the energy sector, characterized by solid fundamentals, experienced leadership, and a highly reliable asset base. All of these factors make Pulse a compelling long-term investment for investors with a moderate risk appetite.
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Aaditya Shah
(Freelance Finance Content Writer)