March quarter revenue was up A$3.9 million quarter-on-quarter to $27.4 million, while EBITDA was up $4 million to $6.6 million at a margin of 24.1%.

Quarterly net operating cashflow went from negative $3.4 million in the December 2022 quarter to $9.8 million.

Year-to-date revenue was $73.3 million with EBITDA of $11.6 million at a margin of 15.8%.

The company's cash balance rose by $6.1 million over the quarter to $10.9 million.

Argonaut analyst Ian Christie described the quarter as excellent for the company with a big improvement on the December half.

"We had anticipated a recovery and the 3Q23 update backs up DDB's outlook commentary and our expectations," he said.

DDB has 46 drill rigs in its fleet and employs more than 300 people across its subsidiaries, Dynamic Drill & Blast, Orlando Drilling and Welldrill.

The company said it was experiencing a sustained level of inbound enquiries.

Its current revenue split by commodity is 34% gold, 29% iron ore and 27% lithium with the remainder coming from other commodities.

"To hit our full year forecasts, DDB now needs to deliver revenue of $28.8 million and EBITDA of $4.7 million in 4Q23," Christie said.

"This is doable, particularly at the EBITDA line given the extent of the margin recovery (we had assumed a 20% EBITDA margin in the 2H).

"If DDB can string together more good quarters like the latest, it will demonstrate that the last half was an aberration amongst otherwise good numbers over the last couple of years.

"We continue to like the complementary offering, and in particular see significant upside potential in the water well drilling business."

DDB shares closed 6% higher yesterday at 26c, valuing the company at $35 million. Argonaut has a buy rating and price target of 42c.