Capital Limited backs raised 2026 revenue guidance after strong Q3 growth

Capital Limited has reported another period of strong annual growth, with third-quarter revenue climbing 23.2% to $115.7 million.

The mining services group also backed its recently increased 2026 revenue guidance of $435-$455 million. That upgrade reflects the consolidation of newly acquired Australian drilling business Metres Down Under, known as MDU, from 30 September 2026.

It was not an entirely clean quarter. Group revenue slipped slightly compared with Q2, while drilling revenue, fleet utilisation and the average number of operating rigs were all lower than a year earlier.

Even so, rapid mining revenue growth, a record quarter from MSALABS and an expanded contract at Fortescue's Belinga Iron Ore Project give investors several encouraging developments to consider.

You can read the original company announcement for the complete statement.

Capital Limited's Q3 figures

Capital generated revenue of $115.7 million during the three months to 30 September 2026. That was 23.2% ahead of Q3 2025, although 1.4% below the previous quarter.

Revenue for the first nine months reached $334.7 million, representing year-on-year growth of 32.2%.

Q3 key metric	Q3 2026	Q3 2025	Annual change	Q2 2026	Quarterly change
Group revenue	$115.7 million	$93.9 million	23.2%	$117.3 million	-1.4%
Drilling and associated revenue	$64.5 million	$65.1 million	-0.9%	$68.0 million	-5.1%
Mining revenue	$25.2 million	$7.8 million	223.1%	$25.5 million	-1.2%
MSALABS revenue	$26.0 million	$21.0 million	23.8%	$23.8 million	9.2%

The revenue mix is worth noting. Drilling remained the largest division, but it was mining and laboratory services that drove the group's annual growth.

Mining revenue more than tripled compared with Q3 2025, reflecting operations running at planned levels. MSALABS, Capital's geochemical laboratory business, delivered another record quarter and increased revenue both annually and sequentially.

Why drilling revenue softened

Drilling and associated revenue fell 5.1% from Q2 to $64.5 million and was 0.9% lower than a year earlier.

Management attributed the quarterly decline to equipment being redeployed from NGM and Sadiola into new and existing contracts offering higher returns. This may prove beneficial if the relocated assets generate stronger economics, but the announcement did not disclose expected margins or the financial benefit from the redeployment.

The operating data also remained subdued:

• Fleet utilisation was 72%, unchanged from Q2 but below 76% in Q3 2025.
• Capital operated an average of 94 rigs, compared with 97 in Q2 and 102 a year earlier.
• Average revenue per month per operating rig was $208,000, up 5.1% annually but down 4.6% quarterly.
• The closing fleet remained at 131 rigs, compared with 134 a year earlier.

Higher annual revenue per operating rig partly offsets the lower activity levels. Nevertheless, investors will want to see utilisation and operating rig numbers improve as new contracts mobilise.

Belinga contract adds visible drilling activity

Capital secured a two-year extension and expansion of its drilling work at Fortescue's Belinga Iron Ore Project, where it has operated since 2023.

The expanded scope covers five additional rigs, two of which were already on site at the time of the update. This will bring the project total to 10 rigs.

Contract extensions can be valuable because they improve revenue visibility without requiring the company to establish an entirely new customer relationship. The announcement did not disclose the contract's financial value, expected margins or minimum activity levels, however.

Capital said its Q4 priorities include mobilising with Fortescue and Maaden.

MDU opens the Australian market

Capital completed its acquisition of MDU during the quarter, establishing a position in Australia's drilling market and adding specialist underground reverse circulation drilling capabilities.

Reverse circulation drilling uses compressed air to bring rock samples to the surface and is commonly used during mineral exploration and mine development.

MDU generated approximately $25 million in revenue and $6 million in adjusted EBITDA during the 12 months to September 2026. Adjusted EBITDA is a measure of operating earnings before interest, tax, depreciation and amortisation, with certain items excluded.

Capital expects the transaction to be earnings-enhancing from day one. It also strengthens the group's relationship with AngloGold Ashanti.

The acquisition is the reason Capital's 2026 group revenue guidance was recently lifted to $435-$455 million. This compares with $430-$450 million at the half-year results and the original range of $410-$440 million published with the FY 2025 results.

With nine-month revenue of $334.7 million, Capital needs to generate between $100.3 million and $120.3 million in Q4 to land within the latest range. The newly consolidated MDU contribution should help, although integration execution is now an additional consideration.

For wider context on the company's previous targets, see my coverage of Capital Limited's FY 2025 results and initial 2026 guidance.

MSALABS continues to build momentum

MSALABS was arguably the cleanest performer in the update. Revenue rose 23.8% year-on-year and 9.2% quarter-on-quarter to a record $26.0 million.

Laboratory utilisation improved slightly from 55% in Q2 to 56%, matching the level recorded a year earlier.

An on-site laboratory at Montage Gold's Koné Gold Project began receiving samples during Q3. Capital is also commissioning a commercial laboratory in Korhogo, Côte d'Ivoire, and an on-site facility at United Gold's Amulsar Gold Mine in Armenia. Both are expected to receive their first samples in Q4.

Expansion work is under way at several North American laboratories. Capital maintained its full-year MSALABS revenue guidance at $85-$95 million.

Mining contracts and the investment portfolio

Mining operations at Reko Diq and Sukari continued in line with their contracts. Additional equipment was commissioned at Sukari, while equipment destined for Reko Diq is expected to arrive during Q4.

Capital's listed and unlisted investment portfolio was valued at $126.7 million on 30 September, up from $116.5 million at the end of June.

The increase included $4.3 million of realised and unrealised investment gains and $5.9 million of net purchases. The portfolio returned 11.8% over the first nine months, while the VanEck Junior Gold Miners UCITS ETF declined by 0.1% over the same period.

Its main holdings remained WIA Gold, Asara Resources and Apollo Minerals. These investments can create value, but they also expose Capital's balance sheet to commodity-market and share-price volatility.

What investors should watch next

The main positive is that Capital is entering Q4 with annual revenue growth above 30%, an expanded Belinga contract, new laboratory capacity and an Australian acquisition expected to contribute immediately.

Safety performance also improved, with the rolling 12-month total recordable injury frequency rate falling to approximately 1.1 per million hours worked from 1.2 at Q2.

The less comfortable points are the quarterly reduction in group revenue, softer drilling activity and the absence of updated profit or adjusted EBITDA guidance. Capital reiterated capital expenditure guidance of $55-$65 million, but investors have not been given a fresh indication of how higher revenue could translate into earnings or cash generation.

The next test is therefore delivery. Successful MDU integration, higher drilling utilisation and smooth mobilisation at Belinga and Maaden would strengthen the growth case. For more background on the business, visit the Capital Limited share overview.