Civeo Q2 Earnings Call Highlights

Key Points

• Revenue grew 11% to $180 million in Q2 2026, while adjusted EBITDA declined modestly to $23.8 million due to Australian inflation and Canadian contract start-up costs. Operating cash flow improved to $11.6 million, and the net loss narrowed to $2.5 million.
• Australia remained Civeo’s primary cash-flow platform, with revenue rising 11% and EBITDA slightly increasing despite lower billed-room volume and higher fuel costs. Canada is expected to deliver approximately 20% revenue growth in the second half of 2026 as new contracts and turnaround work ramp up.
• Civeo maintained its 2026 guidance of $675 million-$700 million in revenue and $85 million-$90 million in adjusted EBITDA. The company also highlighted a North American bid pipeline above $1.5 billion and issued $115 million of convertible notes, partly funding share repurchases.

Civeo NYSE: CVEO reported second-quarter 2026 revenue growth but a modest decline in adjusted EBITDA, as foreign exchange benefits and higher activity in Canada were partly offset by start-up costs and inflationary pressure in Australia.

The company posted revenue of $180 million for the quarter, up 11% from $162.7 million a year earlier. Net loss narrowed to $2.5 million, or $0.23 per diluted share, from a loss of $3.3 million, or $0.25 per share, in the prior-year period. Adjusted EBITDA declined to $23.8 million from $25 million, while operating cash flow improved to $11.6 million from negative $2.3 million.

Chief Financial Officer and Treasurer Collin Gerry said the revenue increase was driven primarily by foreign exchange, particularly the stronger Australian dollar, alongside acquired villages and increased integrated-services work in Australia. Higher occupancy tied to a new Ontario integrated-services contract also contributed in Canada.

Australia Remains Core Cash Flow Platform

Australia generated $125.4 million in second-quarter revenue, an 11% increase from $112.7 million a year ago. Adjusted EBITDA rose slightly to $22.6 million from $22.3 million, although the segment faced what management characterized as temporary cost inflation.

Australian owned-village billed rooms fell to approximately 675,000 from 691,000 in the prior-year quarter. Average daily rates increased to AUD 85 from AUD 76, an increase that Gerry said primarily reflected the stronger Australian dollar against the U.S. dollar.

President and Chief Executive Officer Bradley Dodson said the Australian operating environment remains fundamentally healthy, supported by metallurgical coal prices above $220 per ton. However, higher fuel costs and concerns regarding diesel availability have led customers to operate more conservatively, limiting occupancy upside and creating cost pressure.

Dodson said these headwinds are expected to persist through the end of 2026, though the company sees potential for improved conditions in 2027 and beyond if uncertainty surrounding diesel costs eases. He described occupancy at Civeo-owned villages in Queensland as “very strong.”

The company also reaffirmed its objective for its Australian integrated-services business to reach an annualized run rate of AUD 500 million in services revenue by the end of 2027. Dodson said Civeo continues to win work despite facing greater competition from larger industry participants.

Canada Revenue Rises as New Contract Carries Start-Up Costs

Canadian revenue increased to $54.6 million from $50 million in the second quarter of 2025, while adjusted EBITDA declined to $6 million from $6.9 million. The EBITDA decline was principally related to start-up costs for the Ontario integrated-services contract, which management expects to be temporary.

Canadian billed rooms increased to approximately 458,000 from 450,000 a year earlier, and the average daily rate rose to CAD 96 from CAD 94.

For the second half of 2026, Civeo expects approximately 20% year-over-year revenue growth in Canada, driven by its base business, additional integrated-services activity and turnaround work that shifted from the second quarter into the third quarter. Dodson said recent rainfall has reduced wildfire concerns in Alberta, where the company expects third-quarter turnaround activity to proceed, although concerns remain in British Columbia and Ontario.

Management said oil sands activity is expected to remain stable and disciplined near term, but it sees more upside than downside from present levels as pipeline and carbon-capture infrastructure initiatives advance. The company also cited continued engagement around LNG, Canadian infrastructure, power and data-center-related projects.

Pipeline Exceeds $1.5 Billion as Company Raises Convertible Debt

Civeo said its North American bid pipeline remained above $1.5 billion in total contract value. The timing of awards remains dependent on customers reaching final investment decisions, but Dodson said the company expects that “something meaningful” could reach final investment decision and lead to contract awards by year-end.

In response to questions about potential Canadian LNG work, Dodson said projects that receive final investment decisions could take roughly four to six months to progress to a Civeo contract award. Such projects could become meaningful contributors in 2027, although they may not contribute for the full year depending on mobilization schedules and weather conditions.

The company has 2,700 mobile camp rooms in Western Canada available for deployment, along with approximately 7,000 to 8,000 oil sands lodge rooms that could be redeployed for suitable projects. Dodson said mobile camps are generally suited for projects requiring 250 to 1,000 workers and lasting two to four years, while larger, longer-duration projects may be better served by multi-story lodge rooms.

After the quarter ended, Civeo issued $115 million in 4.5% convertible senior notes due 2031. The company used proceeds to repurchase shares and repay borrowings under its revolving credit facility. The notes have an initial conversion price of $40.51 per share, a 20% premium to the July 1 closing price.

Concurrent with the offering, Civeo repurchased 660,297 shares for approximately $22.3 million. Including those purchases, the company has repurchased roughly $36.7 million of stock year to date. Gerry said the company’s framework calls for returning at least 75% of annual free cash flow to shareholders through repurchases, though management also intends to maintain balance-sheet capacity for growth projects.

2026 Outlook Unchanged

Civeo maintained its full-year guidance for revenue of $675 million to $700 million, adjusted EBITDA of $85 million to $90 million, and capital expenditures of $25 million to $30 million.

At June 30, before the convertible notes issuance, the company had total liquidity of about $82 million, total debt of approximately $209 million and net debt of roughly $191 million. Its net leverage ratio stood at approximately 2.1 times.

Dodson said variability within the company’s guidance range includes Canadian turnaround activity, Australian casual occupancy above take-or-pay commitments, and the timing of mobile-camp projects. He said the company expects some mobile-camp work in the fourth quarter and is preparing assets for potential deployment without making significant speculative expenditures.

About Civeo (NYSE:CVEO)

Civeo Corporation is a leading provider of workforce accommodations and integrated facility management services, primarily serving the oil and gas, mining, and construction sectors. The company specializes in the development, ownership, and operation of remote lodging facilities, commonly known as “man camps,” designed to house workers in geographically challenging environments. Its services include turnkey accommodations, catering, housekeeping, grounds maintenance, and logistical support, tailored to meet the needs of large-scale energy and resource projects.

With a network of lodges and villages across North America and Australia, Civeo caters to clients operating in regions such as Alberta's oil sands, the Bakken shale play, and Australia's Pilbara and Bowen Basin mining districts.

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