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Civeo Corp (CVEO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $170.5M and Adjusted EBITDA $28.8M; both were slightly below Wall Street consensus, with revenue missing by ~$3.0M and EBITDA by ~$0.8M, while diluted EPS was a loss of $0.04 . Consensus (S&P Global) revenue: $173.5M*, EBITDA: $27.8M*; EPS consensus was unavailable*.
  • Australia continued to drive the story: segment revenue up 7% YoY to $124.5M and Adjusted EBITDA up 19% YoY to $26.7M; first full quarter from four Bowen Basin village acquisitions and higher occupancy at legacy villages offset FX headwinds .
  • Canada showed cost-cutting traction: segment Adjusted EBITDA rose to $8.0M from $3.4M YoY despite a 20% decline in billed rooms; gross margin rose to 22.5% from 13.3% YoY as direct field costs fell 29% and overhead fell 23% .
  • Guidance tightened: FY25 revenue narrowed to $640–$655M (from $640–$670M) and Adjusted EBITDA to $86–$91M (from $86–$96M); capex maintained at $20–$25M . Share repurchases accelerated (1.051M shares in Q3; ~69% of authorization completed), lifting net leverage to 2.1x and total liquidity to ~$70M .

What Went Well and What Went Wrong

  • What Went Well

    • Australia: “Revenues for Australia increased 10% and Adjusted EBITDA increased 13% sequentially,” with full-quarter impact from acquired villages and strong legacy occupancy .
    • Canada cost actions: “Direct field level costs in Canada declined by 29%… overhead costs reduced by 23%… gross margin increased by 35%,” lifting Canadian gross margin to 22.5% despite lower rooms .
    • Capital returns: Repurchased ~1.051M shares at ~$24.93, returning ~$52M YTD and reaching ~69% of the 20% buyback authorization; management reiterated using ≥100% of annual FCF to complete program .

  • What Went Wrong

    • Consolidated topline soft: Revenue declined ~3% YoY (to $170.5M from $176.3M), partially reflecting Canada oil sands demand reduction and FX headwinds in Australia .
    • EPS and operating cash flow: Diluted EPS of -$0.04, net loss -$0.5M; operating cash flow $13.8M vs $35.7M in Q3’24, constrained by mix and macro factors .
    • Canada demand: Billed rooms fell 20% YoY; management cited underutilized mobile camps and ongoing oil sands cost cuts suppressing lodge occupancy and turnaround activity .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$176.3 $162.7 $170.5
Net Income (Loss) ($USD Millions)-$5.1 -$3.3 -$0.5
Diluted EPS ($USD)-$0.36 -$0.25 -$0.04
Operating Income ($USD Millions)$0.04 $2.8 $7.0
EBITDA ($USD Millions)$17.9 $20.7 $27.0
Adjusted EBITDA ($USD Millions)$18.8 $25.0 $28.8
Operating Cash Flow ($USD Millions)$35.7 -$2.3 $13.8

Segment performance (Q3 2025 vs Q3 2024):

Segment MetricQ3 2024Q3 2025
Australia Revenue ($USD Millions)$116.6 $124.5
Australia Operating Income ($USD Millions)$14.3 $16.7
Australia Adjusted EBITDA ($USD Millions)$22.5 $26.7
Canada Revenue ($USD Millions)$57.7 $46.0
Canada Operating Income (Loss) ($USD Millions)-$6.5 -$2.4
Canada Adjusted EBITDA ($USD Millions)$3.4 $8.0

KPIs – billed rooms and ADR trend:

KPIQ1 2025Q2 2025Q3 2025
Australia Billed Rooms625,636 690,506 762,974
Australia ADR (USD)$75 $76 $77
Canada Billed Rooms358,697 449,970 382,660
Canada ADR (USD)$93 $94 $100

Balance sheet and liquidity (quarter-end):

MetricQ2 2025Q3 2025
Total Debt ($USD Millions)$168.7 $187.9
Cash & Equivalents ($USD Millions)$14.6 $12.0
Net Debt ($USD Millions)$154.0 $175.9
Net Leverage (x)2.0x 2.1x
Total Liquidity ($USD Millions)~$72.8 ~$70.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$640–$670 (Q2 update) $640–$655 (Q3) Lowered (tightened down)
Adjusted EBITDA ($USD Millions)FY 2025$86–$96 (Q2 update) $86–$91 (Q3) Lowered (tightened down)
EBITDA ($USD Millions)FY 2025$78.3–$88.3 (Q2) $75.7–$80.7 (Q3) Lowered
Capex ($USD Millions)FY 2025$20–$25 (Q1/Q2) $20–$25 (Q3) Maintained
Capital ReturnsFY 2025Use ≥100% FCF to complete 20% buyback (Q1) Reiterated; ~69% completed by 9/30 Executing/maintained

Earnings Call Themes & Trends

TopicQ1 2025 (Previous Mentions)Q2 2025 (Previous Mentions)Q3 2025 (Current Period)Trend
Australia integrated services growth6-year A$1.4B contract driving revenue; expanding presence; Bowen Basin acquisition pending Acquisition completed; margin expansion; contract awards (A$250M and A$64M) Reiterated trajectory; target AUD 500M revenue by 2027; expanded geography (QLD) Positive growth, execution progressing
Australia occupancy & FXStrong occupancy; FX headwinds reduced revenue/EBITDA FX headwinds continued Expected modest seasonal softness; met coal demand/layoffs; strong contract position Near-term softness; resilient contracts
Canada cost-cutting & lodge occupancyAnnounced 25% headcount reduction; restructuring; cold-closing two lodges Seasonality and macro headwinds; continued cost actions Material cost savings realized (29% direct, 23% overhead); gross margin +35%; occupancy stabilizing Stabilizing, margin improvement
Mobile camp opportunity (N.A.)Diversify away from oil sands; evaluating mobile deployments Pursuing bids; timing dependent on project approvals Busiest bidding in recent memory; ~2,500 readily deployable rooms; incremental capex only if simultaneous wins Pipeline building; 2H26–2027 potential
Capital allocation (buybacks vs M&A)Increase repurchase authorization to 20%; suspend dividend; ≥100% FCF to buybacks Continued repurchases Reaffirmed buybacks; bolt-ons considered within ~2x leverage Steady buyback focus; opportunistic M&A
FY25 Guidance postureLowered on Q1 (revenue/Adj. EBITDA) Maintained ranges Tightened ranges downward (revenue/Adj. EBITDA) Cautious/tightening

Management Commentary

  • “Our third quarter consolidated results exhibited our operational and strategic efforts with continued growth in Australia and improved cost structure in Canada.” — Bradley J. Dodson, CEO .
  • “We are tightening our full-year 2025 revenue and adjusted EBITDA guidance… revenue guidance is $640–$655M and adjusted EBITDA guidance of $86–$91M.” — CEO prepared remarks .
  • “Direct field level costs in Canada declined by 29% year-over-year… gross margin increased by 35%.” — CEO prepared remarks .
  • “We remain on track to reach our goal of AUD 500 million of revenue by 2027” in Australia integrated services; expanding across WA, SA, and QLD .
  • “We repurchased approximately 1 million common shares… completed 69% of our buyback authorization as of September 30, 2025” and are comfortable at 2.1x net leverage .

Q&A Highlights

  • FY26 outlook: Management pushed back on “flattish” characterization, expecting FY26 to be up YoY with integrated services growth and Canadian occupancy flat to up; quantification to come on Q4 call .
  • Mobile camps: ~2,500 rooms readily deployable (+~1,000 redeployable); second-half 2026 contribution possible; multi-year projects could drive utilization; incremental capex ~$5–10M if staggered, up to $25–30M if simultaneous .
  • Australia integrated services target: Management “feels better” about hitting AUD 500M by 2027, believes organic path is sufficient, with potential M&A as an enhancer .
  • Staffing in Australia: Labor tightness (especially chefs) persists but better than 2 years ago; recruitment programs continue .
  • Canada: Further cost actions underway, but emphasis shifting to revenue growth via bid pipeline; customers’ structural cost reductions in oil sands are not viewed as temporary .

Estimates Context

  • Quarterly consensus vs actual (S&P Global; EBITDA is unadjusted EBITDA):
MetricQ1 2025Q2 2025Q3 2025
Revenue Estimate ($USD)$148.1M*$163.0M*$173.5M*
Revenue Actual ($USD)$144.0M $162.7M $170.5M
EBITDA Estimate ($USD)$11.96M*$22.62M*$27.78M*
EBITDA Actual ($USD)$11.09M $20.74M $26.99M
  • EPS consensus was unavailable* for these periods; diluted EPS actuals: -$0.72 (Q1) , -$0.25 (Q2) , -$0.04 (Q3) .
  • Results imply modest misses on revenue and EBITDA across Q1–Q3 2025; Adjusted EBITDA outperformed unadjusted EBITDA due to add-backs (cost initiatives, share-based comp, activist costs) .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Australia remains the growth engine; despite expected seasonal softness and met coal headwinds, strong contracts and the Bowen Basin acquisitions support cash generation; integrated services tracking toward AUD 500M by 2027 .
  • Canada’s margin rebuild is real: cost cuts sharply improved profitability despite lower rooms; near-term upside hinges on mobilizing camps for infrastructure/LNG projects, with more material financial impact likely in 2027 .
  • Buybacks are the near-term capital allocation priority; program ~69% complete, leverage at 2.1x with ~$70M liquidity — expect continued share count reduction, a potential multiple catalyst .
  • Guidance tightened for FY25 (lower revenue/EBITDA ranges), reflecting conservative posture amid macro softness; watch Q4 seasonality in Australia and stabilization trajectory in Canada .
  • Trading implications: Slight consensus misses and tighter guidance may cap near-term upside; however, visible buyback cadence, Australian resilience, and camp bid pipeline provide supportive medium-term setup.
  • Estimate revisions: Street likely to edge down FY25 revenue/EBITDA toward the tightened ranges; monitor FX impacts on Australian metrics and any contract announcements extending integrated services growth .
  • Catalysts: Additional buyback execution, integrated services wins (Australia), mobile camp awards (Canada/U.S.), and clarity on FY26 trajectory in February Q4 call .