Imdex Rides The Exploration Wave

Commodities | 11:00 AM

Global mining services provider Imdex posted a solid first half beat, aided by increased gold and copper activity, but the second half is shaping up to be even stronger.

• Imdex posts comfortable first half revenue and earnings beats
• Increased gold and copper activity drives performance
• Exploration budgets and junior raisings point to a stronger second half
• Still early stages of an upswing in exploration, Says Canaccord Genuity

By Greg Peel

Imdex ((IMD)) services the mining sector, offering an integrated range of drilling optimisation products, which are cloud-connected, rock knowledge sensors, directional core drilling, and data and analytics improving the process of identifying and extracting mineral resources.

Imdex’s fortunes are very much tied to global exploration activity.

The company’s first half FY26 earnings rose 16% year on year to $77.9m, an 8% beat of consensus. Revenue of $247m also grew 16% and was 5% ahead of consensus.

Imdex’s geographies performed strongly across the board, Macquarie notes, but the Americas were the standout. Revenue grew 9% year on year in Asia-Pacific, 17% in Europe/Middle East/Africa, and 20% in the Americas, which represents 51% of group revenue. Imdex is seeing strong growth in the US, expanded activity in Canada, with higher penetration of integrated field services, Macquarie points out.

Sensors, services and SaaS revenues grew 20% year on year and increased to 68% of group revenue from 66% a year ago. Imdex's “share of wallet” increased to $2.30 per $100 of exploration spend, Macquarie notes, up from $2.10 in the first half FY25 and $2.20 in the full year FY25.

Integrated field services revenue grew 28% year on year driven by Americas and 12% across a number of global sites.

Second quarter revenue would typically reflect seasonal softness, Morgans notes, but in FY26 was in line with the first quarter and increased 23% year on year despite challenging comparables for Fluids, which are set to ease from the second half.

More importantly, the result reinforces Morgans’ confidence in the base business’s ability to deliver meaningful operating leverage.

Market share gains look likely to be supported by “integrated managed solutions” which Canaccord Genuity expects to feature more prominently in future results, while the product suite continues to improve with more capital investment and the integration of recent acquisitions.

Exploration Boom

The number of drill holes across the globe shows an uptick since June last year, Canaccord notes, up 28% year on year in the second half of 2025. Gold and copper (circa 75% of global exploration spend) are unsurprisingly the main drivers underneath the strong trend recently.

Imdex enters the second half in an environment of strengthening global exploration fundamentals underpinned by increased activity on established projects, Macquarie reports, and management noted raised capital from juniors is yet to be deployed that, combined with anticipated budget increases at major miners, provides the backdrop for a much stronger 2026.

Junior miner raisings in the seasonally soft month of January reached US$1.1bn, Morgans notes, up146% year on year, shattering the prior January record of US$640m in 2022. This marks the eighth consecutive month of raisings above US$1.0bn, lifting trailing twelve-month raisings to US$14.6bn or 85% year on year.

With soft comparables over the next four to five months, Morgans expects this trend to continue. There is typically a six to nine-month lag between dollars raised and being put into the ground, Canaccord points out, which should align with a second half uptick in drilling activity.

Bell Potter is highly encouraged by the 2026 global gold and copper major and Intermediate miner budgets announced to date, implying a significant uplift in exploration spend compared with 2025.

Together, with greater junior miner exploration activity, as a record wave of recently raised equity is deployed, Bell Potter believes Imdex will see robust demand growth for its products and services and operating leverage.

Recent Acquisitions

In the first half, Imdex’s earnings margins grew 140 basis point year on year to 31.6%, more than 70bps ahead of consensus. This is a disciplined outcome, Macquarie suggests, after two to three years of tighter opex control in less buoyant end-markets.

While management has loosely guided to circa 30% margins, there is likely some upside, Macquarie believes, given the activity upswing will accelerate through 2026.

The consolidation of recent acquisitions Datarock and Krux may nevertheless create a margin headwind of -50-100bps.

While margins are likely to moderate as broadly earnings-neutral acquisitions are consolidated, Morgans is now comfortable that core margins will continue to expand alongside volume growth.

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