Sign in
CC

Civeo Corp (CVEO)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $162.7M and diluted EPS was -$0.25; Adjusted EBITDA was $25.0M. Australia grew mid‑single digits YoY on higher owned‑village occupancy and integrated services margins, while Canada was sharply lower on reduced turnaround activity and headcount cuts .
  • Versus S&P Global consensus, revenue was essentially in line ($163.0M* est. vs $162.7M actual) while EBITDA missed ($22.6M* est. vs $20.7M EBITDA actual); note company emphasizes Adjusted EBITDA of $25.0M *.
  • Full‑year 2025 guidance was maintained and raised versus April: revenue $640–$670M and Adjusted EBITDA $86–$96M; capex unchanged at $20–$25M. Management reiterated accelerated buybacks (883k shares repurchased in Q2, ~7% of shares outstanding as of 3/31) and a target net leverage of ~2x by year‑end .
  • Key near‑term narrative drivers: continued Australian contract momentum (A$250M four‑year renewal; A$64M three‑year integrated services award), integration of Bowen Basin acquisition, and Canada turnaround cadence in Q3/Q4; management flagged met coal price volatility and Canada macro as watch‑items .

What Went Well and What Went Wrong

  • What Went Well

    • Australia delivered YoY growth: segment revenue $112.7M (+4%) and Adjusted EBITDA $23.7M (+10%); billed rooms rose 10% to 690k, supported by Bowen Basin acquisition and integrated services margin improvement .
    • Strategic wins and visibility: four‑year take‑or‑pay renewal (~A$250M) and three‑year integrated services contract (~A$64M) in Bowen Basin; management highlighted strong service levels, safety, and multi‑site coverage as competitive advantages .
    • Capital allocation execution: repurchased 883k shares for ~$19.1M in Q2; since 2021, ~27% of shares repurchased; updated framework prioritizes buybacks using ≥100% of annual free cash flow until 20% authorization is completed .

  • What Went Wrong

    • Canada weakness: revenue $50.0M (-37% YoY), Adjusted EBITDA $7.5M vs $17.3M prior year; billed rooms fell to 450k from 752k on customer cost reductions and loss of Fort Hills occupancy .
    • Cash flow pressure in Q2: operating cash flow -$2.3M, reflecting working capital build and Australian cash tax payments (~$15.8M in Q2, including ~$9.4M related to 2024) .
    • Consensus EBITDA miss: S&P Global EBITDA consensus was $22.6M*, but company EBITDA (GAAP) printed $20.7M; management cited Canada billed‑room declines and currency headwinds (AUD/CAD weakening) * .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$150.951 $144.044 $162.694
Net Income (Loss) ($USD Millions)$(15.070) $(9.842) $(3.314)
Diluted EPS ($)$(1.10) $(0.72) $(0.25)
Operating Income ($USD Millions)$(10.043) $(5.516) $2.800
EBITDA ($USD Millions)$6.637 $11.092 $20.743
Adjusted EBITDA ($USD Millions)$11.440 $12.655 $25.008
Operating Cash Flow ($USD Millions)$9.496 $(8.445) $(2.300)

Narrative comparisons:

  • Q2 2025 YoY: revenue $162.7M vs $188.7M (-13.8%); diluted EPS -$0.25 vs $0.56; Adjusted EBITDA $25.0M vs $31.9M; primary driver was Canada billed‑room declines and lower turnaround activity .
  • Sequential: Q2 revenue up vs Q1 ($162.7M vs $144.0M), Adjusted EBITDA up ($25.0M vs $12.7M), as Australia strength offset Canada .

Segment Performance (Q2 YoY)

MetricQ2 2024Q2 2025
Australia Revenue ($USD Millions)$108.608 $112.672
Australia Adjusted EBITDA ($USD Millions)$21.605 $23.663
Australia Billed Rooms625,353 690,506
Australia Average Daily Rate ($)$78 $76
Canada Revenue ($USD Millions)$79.527 $50.022
Canada Adjusted EBITDA ($USD Millions)$17.337 $7.452
Canada Billed Rooms752,364 449,970
Canada Average Daily Rate ($)$96 $94

KPIs and Balance Sheet

KPIQ4 2024Q1 2025Q2 2025
Net Debt ($USD Millions)$38.095 $58.995 $154.034
Net Leverage Ratio (x)0.5x 0.8x 2.0x
Total Liquidity ($USD Millions)$202.2 $162.2 $72.8
Share Repurchases (Shares / $USD Millions)208,000 / $5.6 153,000 / $3.334 883,000 / $19.1
Capital Expenditures ($USD Millions)$7.733 $5.271 $4.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$620–$650M (Apr 30) $640–$670M (maintained Jul 29) Raised
Adjusted EBITDAFY 2025$75–$85M (Apr 30) $86–$96M (maintained Jul 29) Raised
Capital ExpenditureFY 2025$20–$25M (Apr 30) $20–$25M (maintained Jul 29) Maintained
Free Cash FlowFY 2025$20–$30M (Apr 30) No update; stronger H2 expected Maintained narrative
DividendFY 2025$0.25 declared Feb; suspended in Apr Suspended Lowered/suspended
Share RepurchaseAuthorizationIncreased to 20% and ≥100% of annual FCF until completion (Apr 30) Maintained; 883k shares repurchased in Q2 Ongoing execution

Earnings Call Themes & Trends

TopicQ4 2024 (Prev‑2)Q1 2025 (Prev‑1)Q2 2025 (Current)Trend
Capital allocation / buybacksFramework includes dividend + buybacks; ~65% of 2024 FCF returned Shift to prioritize buybacks; dividend suspended; 20% authorization; 100% annual FCF to buybacks Accelerated buybacks in Q2; 883k shares; target ~2x year‑end leverage More aggressive buybacks; higher leverage ceiling
Australia occupancy & contractsOwned villages strong; integrated services growth; six‑year A$1.4B renewal Strong occupancy; integrated services ramp; Bowen Basin acquisition expected Four‑year A$250M renewal and A$64M integrated services win; Q3 to improve with full quarter of acquisition Strengthening; added assets/contracts
Canada headwinds & turnaroundsCanadian billed rooms down; restructuring planned Headcount cut ~25%; cold‑closing two lodges; turnaround seasonality noted Q3 outlook depends on turnaround realization; stabilization tentative Ongoing pressure; hinge on turnarounds
Tariffs/supply chain/currencyFX headwinds noted for 2025 Tariff mitigation via local sourcing; pass‑through where needed Trade impacts minor so far; watch food costs in Canada Managed; monitor
LNG / Canada project pipelineMedium‑term catalysts: LNG Canada, Cedar LNG, Pathways CCS Watching LNG Canada Phase 2, Cedar LNG ramp; potential PRGT pipeline/Ksi Lisims No near‑term rebound expected; focus on cost and diversification Longer‑dated optionality

Management Commentary

  • “We capitalized on equity market softness earlier in the second quarter to repurchase 883,000 common shares… approximately 7% of Civeo’s common shares outstanding.”
  • “Revenue in [Australia] increased 4% year over year… adjusted EBITDA grew by 10%… driven by the recently completed acquisition… and margin improvement in the integrated services business.”
  • “In Canada… turnaround occupancy remains subdued… customers remain steadfast in their singular focus on cost reductions.”
  • “We are maintaining our full year 2025 revenue and adjusted EBITDA guidance… revenue $640–$670M and adjusted EBITDA $86–$96M.”
  • On contracts and met coal volatility: “It speaks to the service level… safety record… [but] met coal price puts our antenna up.”

Q&A Highlights

  • Guidance cadence and H2 improvement: Australia expected stronger in Q3 with full quarter from acquired villages and new integrated services; Canada stable in Q3 with typical Q4 seasonal downtime .
  • Contract renewals despite met coal weakness: Multi‑year extensions reflect service quality and scale; uncertainty mainly on usage above contracted minimums if customers defer maintenance .
  • Free cash flow trajectory: First‑half cash outflows due to seasonality and Australian cash taxes; management expects stronger second half and continued buyback activity .
  • Canada turnaround visibility: Guidance assumes pickup in Q3; if turnarounds slip, that portion of guidance would be missed; tentative signs of stabilization .
  • Australia oil & gas exposure: Historically minimal; growth focus remains owned village portfolio and integrated services; mobile camps not a major driver near term .

Estimates Context

MetricConsensus (Q2 2025)*Actual (Q2 2025)Surprise
Revenue ($USD)$163.005M*$162.694M In line (−$0.311M)*
EBITDA ($USD)$22.622M*$20.743M (company EBITDA) Miss (−$1.879M)*
EPS ($)N/A*$(0.25) N/A*

Values retrieved from S&P Global. Company reports Adjusted EBITDA of $25.008M, which is not directly comparable to S&P EBITDA consensus *.

Implications:

  • Slight revenue miss/in‑line and EBITDA miss vs S&P EBITDA consensus reflect Canada weakness and currency; estimate models should reflect reduced Canadian billed rooms and FX headwinds. H2 uplift tied to Australia acquisition full‑quarter, integrated services wins, and turnaround execution .

Key Takeaways for Investors

  • Australia remains the growth engine: owned‑village occupancy strong; new A$250M and A$64M contracts add visibility; Q3 expected stronger sequentially with full quarter of acquired villages .
  • Canada is the swing factor: guidance sensitivity to turnaround realization; structural cost actions underway (two lodges cold‑closed, headcount reduction ~25%) to protect cash generation .
  • Capital allocation is an active catalyst: accelerated buybacks (883k in Q2) and commitment to ≥100% annual FCF until 20% authorization completion; net leverage guided ~2x by year‑end .
  • Cash flow seasonality and taxes matter: Q2 OCF negative due to working capital and Australian cash taxes; management expects stronger H2 free cash flow; model accordingly .
  • Estimates likely adjust: modest downward bias to EBITDA vs S&P consensus in Q2 driven by Canada/FX; narrative improves in H2 on Australia momentum and cost actions *.
  • Watch met coal prices and Canadian policy: commodity volatility could affect above‑minimum room usage; Canada macro/policy remains an overhang; LNG/Pathways projects are medium‑term optionality .
  • Guidance maintained at higher ranges post‑acquisition update: revenue $640–$670M; Adjusted EBITDA $86–$96M; capex $20–$25M—provides stability to the outlook despite regional divergence .