Civeo Corp (CVEO)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $144.0M, net loss was $9.8M ($0.72 diluted EPS), and Adjusted EBITDA was $12.7M; management lowered FY25 revenue and Adjusted EBITDA guidance to $620–$650M and $75–$85M, respectively .
• Australia delivered 13% YoY revenue growth to $103.6M with strong occupancy, while Canada revenue fell 40% YoY to $40.4M amid spending cuts and Fort Hills-related occupancy loss; Canada recorded negative Adjusted EBITDA and a restructuring charge with additional actions planned in Q2–Q3 .
• Capital return pivot: authorization increased to repurchase up to 20% of shares (from 10%) and quarterly dividend suspended; $6.8M returned in Q1 via buybacks and the dividend .
• Strategic momentum: previously announced Bowen Basin acquisition closed on May 7 (post-Q1), adding annualized ~$32M revenue and ~$17M Adjusted EBITDA; FY25 guidance updated to $640–$670M revenue and $86–$96M Adjusted EBITDA post-close .

What Went Well and What Went Wrong

• What Went Well

  • Australia topline growth: Australian segment revenue rose 13% YoY to $103.6M on integrated services activity tied to a six-year A$1.4B renewal; billed rooms up modestly and occupancy strong .
  • Capital allocation clarity: Board boosted buyback authorization to 20% and suspended the dividend to focus 100% of FCF on repurchases until completion; returned $6.8M in Q1 .
  • Strategic expansion: Progressed Bowen Basin acquisition during Q1 and closed shortly after, expected to be immediately accretive to operating cash flow .

• What Went Wrong

  • Canada macro headwinds: Canadian revenue fell to $40.4M with negative Adjusted EBITDA (-$0.2M), driven by reduced billed rooms, oil sands spending cuts, and Fort Hills-related occupancy loss after McClelland sale .
  • Cash flow seasonality and restructuring: Q1 operating cash flow was -$8.4M; a ~$1.0M restructuring charge was recorded, with further ~$1.0M charges expected in Q2 .
  • Guidance cut: FY25 revenue and Adjusted EBITDA guidance lowered, reflecting Canada weakness and FX headwinds; CapEx guidance reduced to $20–$25M .

Financial Results

Segment Breakdown (Revenue and Adjusted EBITDA):

KPIs (Billed Rooms and ADR):

Estimates vs Actuals (Wall Street consensus – S&P Global):

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Under our refreshed capital allocation strategy, we are rebalancing our capital return mix to prioritize share repurchases as the primary vehicle… and eliminating Civeo’s quarterly dividend to maximize flexibility.” – CEO Bradley Dodson .
• “First quarter revenues from our Australian segment were $103.6 million… primarily driven by increased integrated services activity… Operating cost management will continue to be a focal point.” – CFO Collin Gerry .
• “In Canada… we reduced our Canadian employee headcount by approximately 25%… and are focusing on additional steps to optimize our cost structure.” – CEO Bradley Dodson .
• “Taking into account our new adjusted EBITDA and CapEx guidance, we are lowering our free cash flow guidance for 2025 to $20–$30 million… burdened by approximately $10 million of onetime deferred tax payments.” – CEO Bradley Dodson .
• “We intend to allocate 100% of annual free cash flow to executing repurchases… Given the current valuation… this approach is prudent, value-enhancing.” – CEO Bradley Dodson .

Q&A Highlights

• Dividend suspension rationale: management found the dividend was not valued by the market; buybacks seen as better value creation; framework may be revisited in future .
• Canada actions and outlook: rightsizing cost structure; consulting firm engaged; viewed as a long-term behavioral shift with potential upside from Pathways carbon capture and LNG projects .
• Tariffs impact: primarily in Canada; focus on local sourcing and customer pass-throughs for operational consumables .
• Guidance cadence and seasonality: EBITDA weighted to Q2–Q3; acquisition boosts 2H contribution .
• LNG and project pipeline: monitoring LNG Canada Phase 2, Cedar LNG (FID), and Western LNG/PRGT; early-stage opportunities for mobile camps and lodging .

Estimates Context

• Q1 2025: Revenue missed consensus ($144.0M actual vs $148.1M*), EBITDA missed (actual $11.1M vs $12.0M*), EPS consensus unavailable; 3 estimates on revenue for Q1 . Values retrieved from S&P Global.*
• Implications: With Canada weakness and guidance cuts at Q1, Street models likely need lower FY25 Canadian contribution and reflect FX headwinds; the May guidance raise post-acquisition supports higher 2H trajectory but does not offset near-term Canada softness .

Key Takeaways for Investors

• Australia is the earnings anchor with durable occupancy and expanding integrated services; recent contract expansion and Bowen Basin acquisition enhance visibility and 2H weighted cash flow .
• Canada remains the swing factor: occupancy and billed rooms are under pressure; restructuring and cold shutting lodges aim to stabilize margins amid macro/political uncertainty .
• Capital allocation is a clear catalyst: dividend suspended and authorization lifted to 20% with intent to deploy 100% of FCF to buybacks until completion; expect continued repurchase activity .
• FY25 outlook: Q1 guidance cut reflected Canada/FX; post-close guidance raised (revenue/Adj. EBITDA) underscores acquisition accretion and 2H bias .
• Watch tariff impacts and FX: management is mitigating via local sourcing; FX remains an earnings headwind versus 2024 .
• Medium-term optionality from LNG Phase 2, Cedar LNG ramp, and Pathways carbon capture could drive Canadian recovery, but timing remains uncertain .
• Near-term trading lens: stock likely sensitive to pace of repurchases, Canada KPI stabilization (billed rooms/ADR), and incremental Australia contract wins; Q2–Q3 seasonality should support sequential improvement .

Additional Document References

• Q1 2025 8-K press release details (financials, guidance, capital allocation) .
• Q1 2025 earnings call transcript (prepared remarks and Q&A) .
• Prior quarters: Q4 2024 press release and call ; Q3 2024 press release .
• Other relevant press releases in Q1 period: dividend declaration ; Six Nations partnership ; March buyback authorization ; Jan integrated services contract .