Core Insights - Civeo reported a quarterly loss of $0.25 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.03, marking an earnings surprise of -733.33% [1] - The company's revenues for the quarter ended June 2025 were $162.69 million, missing the Zacks Consensus Estimate by 1.6% and down from $188.71 million year-over-year [2] - Civeo's stock has increased by approximately 8.1% since the beginning of the year, slightly underperforming the S&P 500's gain of 8.6% [3] Earnings Outlook - The future performance of Civeo's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $177.24 million, while for the current fiscal year, the estimate is -$0.36 on revenues of $643.33 million [7] Industry Context - The Hotels and Motels industry, to which Civeo belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Civeo's stock performance [5][6]

Second Quarter Highlights Civeo's Q2 2025 highlights encompass financial performance, strategic actions, and capital return to shareholders [Overall Financial Performance (Q2 2025 vs Q2 2024)](index=1&type=section&id=Overall%20Financial%20Performance) Civeo reported a decrease in revenues and a net loss in Q2 2025 compared to Q2 2024, alongside negative operating cash flow, primarily due to reduced customer spending in Canada and specific one-time financial impacts Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (YoY) | | :----------------------- | :--------------------- | :--------------------- | :----------- | | Revenues | $162.7 | $188.7 | -13.7% | | Net Income (Loss) | ($3.3) | $8.2 | -140.2% | | Diluted EPS | ($0.25) | $0.56 | -144.6% | | Operating Cash Flow | ($2.3) | $32.4 | -107.1% | | Adjusted EBITDA | $25.0 | $31.9 | -21.6% | - The year-over-year decrease in **Adjusted EBITDA** was mainly due to decreased billed rooms at **Canadian lodges** from ongoing customer spending reductions and lower turnaround activity[5](index=5&type=chunk) - **Operating cash flow decrease** was exacerbated by a **$9.4 million** one-time collection of holdbacks in Q2 2024 and approximately **$15.8 million** in Australian cash taxes in Q2 2025 (including a **$9.4 million** payment for the 2024 tax year) not incurred in Q2 2024[6](index=6&type=chunk) [CEO Commentary & Strategic Actions](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Actions) The CEO highlighted Q2 2025 revenues and Adjusted EBITDA met expectations, with accelerated capital return to shareholders. Strategic actions included margin expansion in Australian integrated services, key contract awards, and an accretive acquisition in Australia, while continuing to right-size the Canadian business amidst macroeconomic headwinds - Civeo delivered revenues and **Adjusted EBITDA** consistent with expectations while accelerating capital return to shareholders[3](index=3&type=chunk) - The company drove **margin expansion** in its integrated services business and positioned the Australian segment for success through multiple key contract awards and the acquisition of **four new owned-villages** in the Bowen Basin[3](index=3&type=chunk) - Civeo repurchased **883,000 common shares** for **$19.1 million** (approximately **7% of outstanding shares** as of March 31, 2025) and intends to continue opportunistically executing its share repurchase authorization[3](index=3&type=chunk) - The Canadian business continues to face macroeconomic headwinds and typical seasonality effects, leading to cash consumption driven by working capital; Civeo is right-sizing the Canadian business and pursuing diversification opportunities[3](index=3&type=chunk) Business Segment Results This section details the financial performance of Civeo's Australian and Canadian business segments for Q2 2025 [Australia Segment](index=1&type=section&id=Australia%20Segment) The Australian segment showed strong growth in Q2 2025, with increased revenues and Adjusted EBITDA, primarily driven by the acquisition of four owned-villages and margin improvements in integrated services, despite a negative impact from a weakened Australian dollar Australia Segment Financial Performance | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (YoY) | | :---------------- | :--------------------- | :--------------------- | :----------- | | Revenues | $112.7 | $108.6 | +3.8% | | Operating Income | $14.6 | $13.9 | +5.0% | | Adjusted EBITDA | $23.7 | $21.6 | +9.7% | - The year-over-year increase was primarily driven by the recently completed acquisition of **four owned-villages**, which contributed **$4.9 million** in revenues in the last two months of Q2 2025, and **margin improvement** in the integrated services business[8](index=8&type=chunk)[9](index=9&type=chunk) - A weakened Australian dollar relative to the U.S. dollar negatively impacted revenues by **$3.2 million** and **Adjusted EBITDA** by **$0.7 million**[7](index=7&type=chunk) - Key contract awards in the Bowen Basin include a **four-year contract** with expected revenues of **A$250 million** and a **three-year integrated services contract** with expected revenues of **A$64 million**[8](index=8&type=chunk) [Canada Segment](index=2&type=section&id=Canada%20Segment) The Canadian segment experienced a significant decline in Q2 2025 revenues and shifted to an operating loss, primarily due to reduced lodge occupancy and customer spending in the oil sands region, leading the company to pursue cost-saving actions Canada Segment Financial Performance | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (YoY) | | :---------------- | :--------------------- | :--------------------- | :----------- | | Revenues | $50.0 | $79.5 | -37.1% | | Operating Income | ($1.9) | $6.9 | -127.5% | | Adjusted EBITDA | $7.5 | $17.3 | -56.6% | - Lodge occupancy in the Canadian oil sands region remains challenged due to ongoing customer capital and operational spending reductions, including lower turnaround activity[11](index=11&type=chunk) - The Canadian segment incurred approximately **$0.5 million** in implementation costs related to the cold-closure of two lodges, which are excluded from **Adjusted EBITDA**[12](index=12&type=chunk) - Civeo is evaluating additional cost-saving actions to right-size its North American cost structure in light of macroeconomic factors influencing the global oil market[12](index=12&type=chunk) Financial Condition & Capital Allocation This section reviews Civeo's liquidity, debt, leverage, share repurchase activities, and capital expenditures [Liquidity, Debt & Leverage](index=2&type=section&id=Liquidity%2C%20Debt%20%26%20Leverage) Civeo's total debt and net debt significantly increased as of June 30, 2025, primarily due to the recent acquisition and share repurchases, resulting in a net leverage ratio of 2.0x Liquidity, Debt, and Leverage Overview | Metric | As of June 30, 2025 (Millions USD) | As of March 31, 2025 (Millions USD) | Change (Millions USD) | | :---------------- | :--------------------------------- | :---------------------------------- | :-------------------- | | Total Liquidity | $72.8 | N/A | N/A | | Total Debt | $168.7 | $87.4 | +$81.3 | | Net Debt | $154.0 | $59.0 | +$95.0 | | Net Leverage Ratio| 2.0x | N/A | N/A | - The increase in **net debt** is attributable to the recent acquisition and share repurchases[13](index=13&type=chunk) [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) Civeo continued its share repurchase program in Q2 2025, buying back 883,000 shares for $19.1 million, and plans to utilize at least 100% of its annual free cash flow to complete the program - In Q2 2025, Civeo repurchased approximately **883,000 shares** for **$19.1 million** at an average price of **$21.64 per share**[14](index=14&type=chunk) - The company intends to use no less than **100% of its annual free cash flow** to complete the authorized share repurchase program as market conditions allow[14](index=14&type=chunk) [Capital Expenditures](index=2&type=section&id=Capital%20Expenditures) Capital expenditures in Q2 2025 decreased slightly year-over-year, primarily focused on maintenance spending for the company's lodges and villages Capital Expenditures Overview | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (YoY) | | :------------------ | :--------------------- | :--------------------- | :----------- | | Capital Expenditures| $4.5 | $5.3 | -15.1% | - Capital expenditures in both periods were primarily related to maintenance spending on the Company's lodges and villages[15](index=15&type=chunk) Full Year 2025 Guidance Civeo is maintaining its full-year 2025 guidance for revenue, Adjusted EBITDA, and capital expenditures Full Year 2025 Financial Guidance | Metric | Full Year 2025 Guidance Range (Millions USD) | | :---------------- | :------------------------------------------- | | Revenues | $640 - $670 | | Adjusted EBITDA | $86 - $96 | | Capital Expenditures| $20 - $25 | Conference Call Civeo hosted a conference call on July 29, 2025, to discuss its second quarter 2025 financial results, with webcast and dial-in options available - Civeo hosted a conference call on **July 29, 2025**, at **8:30 a.m. Eastern time** to discuss Q2 2025 financial results[17](index=17&type=chunk) - The call was webcast on Civeo's website (www.civeo.com) and accessible via dial-in, with a replay available afterward[17](index=17&type=chunk) Company Information This section provides an overview of Civeo Corporation, its forward-looking statements, and definitions of non-GAAP financial measures [About Civeo](index=3&type=section&id=About%20Civeo) Civeo Corporation is a leading provider of hospitality services in Australian natural resource regions and Canadian oil sands, offering comprehensive lodging and support services for workers across 28 owned and 24 customer-owned locations - Civeo Corporation is a leading provider of hospitality services in Australian natural resource regions and the Canadian oil sands[18](index=18&type=chunk) - Services include long-term and temporary accommodations, food services, housekeeping, facility management, laundry, water/wastewater treatment, power generation, communications, security, and logistics[18](index=18&type=chunk) - Civeo owns and operates **28 lodges/villages** with approximately **27,500 rooms** and provides services at **24 customer-owned locations** with approximately **19,500 rooms**[18](index=18&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains standard disclosures regarding forward-looking statements, emphasizing that they are subject to various risks and uncertainties that could cause actual results to differ materially from expectations, and Civeo disclaims any obligation to update them - The news release contains forward-looking statements inherently subject to risks and uncertainties, including those related to future plans, outlook, guidance, and strategic priorities[19](index=19&type=chunk) - Risks include general industry conditions, supply/demand for natural resources, commodity price fluctuations, contract terminations, currency exchange rates, inflation, acquisitions, labor shortages, and regulatory changes[19](index=19&type=chunk) - Civeo expressly disclaims any intention or obligation to revise or update any forward-looking statements, except as required by law[19](index=19&type=chunk) [Non-GAAP Financial Information](index=3&type=section&id=Non-GAAP%20Financial%20Information) This section defines non-GAAP financial measures such as EBITDA, Adjusted EBITDA, free cash flow, net debt, bank-adjusted EBITDA, and net leverage ratio, clarifying that they supplement GAAP results and may not be comparable across companies - **EBITDA**, **Adjusted EBITDA**, **free cash flow**, **net debt**, **bank-adjusted EBITDA**, and **net leverage ratio** are non-GAAP financial measures[20](index=20&type=chunk) - These measures supplement and should be read together with GAAP financial results, not as an alternative or substitute[20](index=20&type=chunk) - Non-GAAP financial information may not be comparable to similarly titled measures of other companies due to lack of standardization[20](index=20&type=chunk) Consolidated Financial Statements This section presents Civeo's unaudited consolidated statements of operations, balance sheets, and cash flows [Unaudited Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Civeo's unaudited consolidated statements of operations show a net loss for both the three and six months ended June 30, 2025, compared to net income in the prior year periods, driven by decreased revenues and increased expenses Unaudited Consolidated Statements of Operations | Metric (in thousands USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $162,694 | $188,713 | $306,738 | $354,833 | | Operating income (loss) | $2,800 | $13,112 | ($2,716) | $11,331 | | Net income (loss) attributable to Civeo Corporation | ($3,314) | $8,227 | ($13,156) | $3,094 | | Diluted EPS | ($0.25) | $0.56 | ($0.98) | $0.21 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Civeo's total assets increased significantly, primarily due to an increase in property, plant and equipment, and other intangible assets, while total liabilities also rose substantially, mainly from long-term debt Condensed Consolidated Balance Sheets | Metric (in thousands USD) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total current assets | $139,209 | $110,453 | | Property, plant and equipment, net | $265,138 | $204,897 | | Total assets | $508,839 | $405,072 | | Total current liabilities | $92,238 | $92,646 | | Long-term debt | $168,672 | $43,299 | | Total liabilities | $299,401 | $168,074 | | Total shareholders' equity | $209,438 | $236,998 | - **Cash and cash equivalents** increased from **$5,204 thousand** at December 31, 2024, to **$14,638 thousand** at June 30, 2025[24](index=24&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, Civeo reported negative cash flow from operating activities, significant cash used in investing activities primarily due to acquisitions, and substantial cash provided by financing activities from revolving credit borrowings Unaudited Consolidated Statements of Cash Flows | Cash Flow Activity (in thousands USD) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash flows provided by (used in) operating activities | ($10,758) | $38,343 | | Net cash flows used in investing activities | ($74,444) | ($129) | | Net cash flows provided by (used in) financing activities | $92,244 | ($34,112) | | Net change in cash and cash equivalents | $9,434 | $4,112 | | Cash and cash equivalents, end of period | $14,638 | $7,435 | - Acquisitions and related payments accounted for **$64,948 thousand** in cash used in investing activities for the six months ended June 30, 2025[26](index=26&type=chunk) - Revolving credit borrowings (net) provided **$119,223 thousand** in cash for financing activities during the six months ended June 30, 2025[26](index=26&type=chunk) Segment and Operating Data This section provides detailed financial and operational data for Civeo's Australian and Canadian segments, including revenue disaggregation by service type [Segment Financial Performance](index=7&type=section&id=Segment%20Financial%20Performance) Civeo's segment data for Q2 2025 shows revenue growth and increased Adjusted EBITDA in Australia, while Canada experienced significant declines in both revenues and profitability, shifting to an operating loss Segment Financial Performance by Region | Metric (in thousands USD) | Australia Q2 2025 | Australia Q2 2024 | Canada Q2 2025 | Canada Q2 2024 | | :-------------------- | :---------------- | :---------------- | :------------- | :------------- | | Revenues | $112,672 | $108,608 | $50,022 | $79,527 | | EBITDA | $23,612 | $21,551 | $6,963 | $17,154 | | Adjusted EBITDA | $23,663 | $21,605 | $7,452 | $17,337 | | Operating income (loss)| $14,573 | $13,856 | ($1,915) | $6,854 | - Australia's revenues increased by **3.7% YoY**, and **Adjusted EBITDA** increased by **9.5% YoY** in Q2 2025[28](index=28&type=chunk) - Canada's revenues decreased by **37.1% YoY**, and **Adjusted EBITDA** decreased by **57.0% YoY** in Q2 2025[28](index=28&type=chunk) [Supplemental Quarterly Operating Data](index=8&type=section&id=Supplemental%20Quarterly%20Operating%20Data) Supplemental operating data highlights increased billed rooms and accommodation revenue in Australia, while Canada saw substantial decreases in billed rooms and accommodation revenue, reflecting ongoing challenges in the Canadian oil sands region Supplemental Quarterly Operating Data by Region | Metric | Australia Q2 2025 | Australia Q2 2024 | Canada Q2 2025 | Canada Q2 2024 | | :-------------------------------------- | :---------------- | :---------------- | :------------- | :------------- | | Accommodation revenue (thousands USD) | $52,682 | $48,914 | $42,590 | $72,259 | | Food and other services revenue (thousands USD) | $59,990 | $59,694 | $6,998 | $6,912 | | Billed rooms | 690,506 | 625,353 | 449,970 | 752,364 | | Average daily rates (USD) | $76 | $78 | $94 | $96 | - Australian billed rooms increased by **10.4% YoY**, while Canadian billed rooms decreased by **40.2% YoY** in Q2 2025[29](index=29&type=chunk) - The Australian dollar weakened against the U.S. dollar (**0.641** in Q2 2025 vs **0.659** in Q2 2024), while the Canadian dollar also slightly weakened (**0.723** in Q2 2025 vs **0.731** in Q2 2024)[29](index=29&type=chunk) [Supplemental Operations by Service Type by Region](index=10&type=section&id=Supplemental%20Operations%20by%20Service%20Type%20by%20Region) Civeo provides a supplemental view of revenues disaggregated by service type, showing a year-over-year increase in asset-light (Catering and Facility Management) revenues for Australia and a decrease for Canada, while asset-intensive (Accommodations and Infrastructure) revenues increased in Australia and decreased in Canada - The disclosure disaggregates embedded Catering and Facility Management revenues from Accommodation and other services revenues for owned villages and lodges[33](index=33&type=chunk) Supplemental Operations by Service Type and Region | Revenue Type (in thousands USD) | Australia Q2 2025 | Australia Q2 2024 | Canada Q2 2025 | Canada Q2 2024 | | :-------------------------- | :---------------- | :---------------- | :------------- | :------------- | | Asset Light: Catering and Facility management | $82,633 | $80,697 | $29,952 | $44,732 | | Asset Intensive: Accommodations and Infrastructure | $30,039 | $27,911 | $20,070 | $34,795 | | Total revenues | $112,672 | $108,608 | $50,022 | $79,527 | Non-GAAP Reconciliations This section provides reconciliations for non-GAAP financial measures including EBITDA, Adjusted EBITDA, net debt, and net leverage ratio, along with guidance reconciliations [EBITDA and Adjusted EBITDA Reconciliation](index=12&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) This section provides a reconciliation of EBITDA and Adjusted EBITDA to net income (loss) attributable to Civeo Corporation, highlighting adjustments for impairment, asset dispositions, cost-saving initiatives, share-based compensation, and shareholder activist costs - **EBITDA** is defined as net income (loss) attributable to Civeo Corporation plus interest, taxes, depreciation, and amortization[36](index=36&type=chunk) - **Adjusted EBITDA** further excludes certain unusual or non-operating items such as impairment of long-lived assets, net gain/loss on asset disposition, cost saving initiatives, share-based compensation, and shareholder activist costs[36](index=36&type=chunk) EBITDA and Adjusted EBITDA Reconciliation | Metric (in thousands USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to Civeo Corporation | ($3,314) | $8,227 | ($13,156) | $3,094 | | EBITDA | $20,743 | $31,221 | $31,835 | $46,726 | | Adjusted EBITDA | $25,008 | $31,917 | $37,663 | $49,719 | [Net Debt and Net Leverage Ratio Reconciliation](index=13&type=section&id=Net%20Debt%20and%20Net%20Leverage%20Ratio%20Reconciliation) This section reconciles net debt, bank-adjusted EBITDA, and net leverage ratio, providing insight into the company's indebtedness and compliance with credit agreement covenants - **Net debt** is calculated as total debt less cash and cash equivalents[37](index=37&type=chunk) - **Bank-adjusted EBITDA** includes adjustments to Adjusted EBITDA for acquisition pro-forma EBITDA, interest income, and certain cost-saving and shareholder activist costs not allowed by the credit facility[37](index=37&type=chunk) Net Debt and Net Leverage Ratio Reconciliation | Metric | As of June 30, 2025 | | :-------------------------------------------------------- | :------------------ | | Total debt (thousands USD) | $168,672 | | Less: Cash and cash equivalents (thousands USD) | $14,638 | | Net debt (thousands USD) | $154,034 | | Adjusted EBITDA for the twelve months ended June 30, 2025 (thousands USD) | $67,881 | | Bank-adjusted EBITDA (thousands USD) | $75,904 | | Net leverage ratio | 2.0x | - Civeo is required to maintain a **net leverage ratio below 3.0x** quarterly to remain in compliance with its credit agreement[38](index=38&type=chunk) [Guidance Reconciliation](index=14&type=section&id=Guidance%20Reconciliation) This section provides a reconciliation of estimated EBITDA and Adjusted EBITDA to estimated net loss for the full year ending December 31, 2025, supporting the company's financial guidance Full Year 2025 Guidance Reconciliation | Metric (in millions USD) | Year Ending December 31, 2025 (estimated) | | :-------------------- | :---------------------------------------- | | Net loss | ($19.2) - ($11.2) | | EBITDA Range | $78.3 - $88.3 | | Adjusted EBITDA Range | $86.0 - $96.0 | - Adjustments to **EBITDA** for guidance include shareholder activist costs, cost-saving initiatives, and share-based compensation[39](index=39&type=chunk) Contact Information This section provides contact details for investor relations inquiries - For investor relations, contact **Regan Nielsen, Vice President, Corporate Development & Investor Relations**, at **713-510-2400**[40](index=40&type=chunk)

Group 1: Momentum Investing Overview - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] - Investors are attracted to fast-moving stocks, but determining the right entry point can be challenging, as stocks may lose momentum if their valuations exceed future growth potential [2] Group 2: Investment Strategy and Stock Selection - Investing in bargain stocks that have recently shown price momentum can be a safer approach; the Zacks Momentum Style Score is useful for identifying such stocks [3] - Civeo (CVEO) is highlighted as a strong candidate due to its recent price momentum, with a four-week price change of 5.8% [4] - CVEO has demonstrated significant long-term performance, gaining 26.8% over the past 12 weeks, and has a beta of 1.36, indicating higher volatility compared to the market [5] Group 3: Valuation and Earnings Estimates - CVEO has a Momentum Score of B, suggesting it is an opportune time to invest in the stock [6] - The stock has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [7] - CVEO is trading at a Price-to-Sales ratio of 0.49, indicating it is relatively undervalued, as investors pay only 49 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides CVEO, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to various investing styles, which can help identify potential winning stocks [9]

Group 1 - Civeo Corporation (NYSE: CVEO) is highlighted as a unique company in the market, particularly interesting for its focus on cash flow generation in the oil and natural gas sector [1] - The company is part of a broader investment service and community that emphasizes cash flow and the potential for value and growth in the oil and gas industry [1] Group 2 - The investment service offers subscribers access to a 50+ stock model account, detailed cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [2] - A promotional offer is available for a two-week free trial, encouraging new users to engage with the oil and gas investment community [3]

Group 1 - The article introduces "The Buy Side" as a new contributing analyst to Seeking Alpha, emphasizing the opportunity for individuals to share investment ideas and get published [1] - "The Buy Side" focuses on long-term value investing, utilizing a disciplined, fundamentals-driven approach to identify undervalued businesses [2] - The mission of "The Buy Side" is to build and preserve generational wealth by investing in high-quality companies at attractive prices, particularly in resilient sectors [2] Group 2 - The investment strategy involves screening around 10,000 publicly listed companies to find dominant players with strong free cash flows and shareholder-aligned management teams [2]

Core Insights - Civeo Corporation (CVEO) reported Q1 2025 financial results that fell short of expectations, with revenue of $144.0 million, adjusted EBITDA of $12.7 million, and an adjusted EPS of ($0.72) [1] - The company's consolidated revenue underperformance was attributed to weakness in pricing and billed rooms volume in the Canadian segment, despite strong performance in the Australian segment [1] Financial Performance - Civeo's reported revenue of $144.0 million was below both Stonegate's estimate of $150.7 million and consensus estimate of $148.1 million [1] - Adjusted EBITDA of $12.7 million was slightly above Stonegate's estimate of $12.0 million but below the consensus estimate of $14.8 million [1] - The adjusted EPS of ($0.72) was better than Stonegate's estimate of ($0.84) but worse than the consensus estimate of ($0.43) [1] Guidance and Strategic Moves - Following a recent acquisition, Civeo revised its 2025 guidance, projecting revenue between $640 million and $670 million and adjusted EBITDA of $86 million to $96 million [8] - The company reported a net loss of $9.8 million alongside its Q1 results [8] - Civeo announced a share repurchase authorization for 10% to 20% of shares outstanding and has suspended its quarterly cash dividend [8]

Core Insights - Civeo Corporation reported a negative free cash flow of ($13.5M) in Q1 2025, a decline from $7.2M in the same period last year, primarily due to negative operating cash flow of ($8.4M) and capital expenditures of $5.3M [1][5] - The company reaffirmed its long-term free cash flow generation confidence, supported by a capital-light model and a high mix of recurring asset-light services revenue [1] - Civeo increased its share repurchase authorization from 10% to 20% of shares outstanding and plans to use 100% of free cash flow to complete the program, having repurchased 153,000 shares for approximately $3.3M in the quarter [1][5] Financial Performance - Civeo reported revenues of $144.0M and a net loss of $9.8M, with an Adjusted EBITDA of $12.7M [5] - The company revised its 2025 guidance, projecting revenues between $620M and $650M and Adjusted EBITDA of $75M to $85M [5] - Net debt increased by $20.9M quarter-over-quarter to $59.0M, resulting in a net leverage ratio of 0.8x [1]

Part I -- FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements%3A) Civeo Corporation reported a net loss of **$9.8 million** for Q1 2025, a significant increase from the **$5.1 million** net loss in Q1 2024, driven by a **13%** year-over-year revenue decline to **$144.0 million** - The company provides hospitality services, including catering, lodging, and facility management, to remote workforces in the natural resource sectors of Australia and Canada[19](index=19&type=chunk) Consolidated Statements of Operations Highlights (Q1 2025 vs. Q1 2024) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | $144.0 million | $166.1 million | | **Operating Loss** | ($5.5 million) | ($1.8 million) | | **Net Loss Attributable to Civeo** | ($9.8 million) | ($5.1 million) | | **Diluted Net Loss Per Share** | ($0.72) | ($0.35) | Consolidated Balance Sheet Highlights (As of March 31, 2025) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $28.4 million | $5.2 million | | **Total Assets** | $423.8 million | $405.1 million | | **Long-term debt** | $87.4 million | $43.3 million | | **Total Liabilities** | $203.0 million | $168.1 million | | **Total Shareholders' Equity** | $220.7 million | $237.0 million | Consolidated Statements of Cash Flows Highlights (Q1 2025 vs. Q1 2024) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | ($8.4 million) | $6.0 million | | **Net cash provided by (used in) investing activities** | ($5.1 million) | $1.2 million | | **Net cash provided by financing activities** | $36.6 million | $6.6 million | - In Q1 2025, the company repurchased **153,100 shares** for **$3.3 million** and paid a quarterly dividend of **$0.25 per share**[60](index=60&type=chunk)[62](index=62&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the decline in performance primarily to lower activity in its Canadian segment, partially offset by revenue growth in the Australian segment, while navigating a challenging macroeconomic environment and prioritizing share repurchases over dividends [Overview and Macroeconomic Environment](index=19&type=section&id=Overview%20and%20Macroeconomic%20Environment) The company's performance is closely tied to the natural resources sector, with demand sensitive to commodity prices, while managing inflation, labor shortages, and a pending acquisition in Australia - Demand for hospitality services is driven by operations of natural resource projects and is sensitive to commodity price expectations for met coal, oil, iron ore, and LNG[80](index=80&type=chunk) - On February 18, 2025, the company entered an agreement to acquire four villages with **1,340 rooms** in Australia's Bowen Basin for **A$105 million**, with the deal expected to close in Q2 2025[93](index=93&type=chunk) - The company is managing inflation risk through negotiated service scope changes and contractual protections, but continues to face pressure on labor, food, and fuel costs[94](index=94&type=chunk) - Expected capital expenditures for 2025 are projected to be in the range of **$20 million to $25 million**[100](index=100&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) For Q1 2025, Civeo's consolidated revenues fell **13%** to **$144.0 million**, operating loss widened to **$5.5 million**, and net loss increased to **$9.8 million**, primarily due to lower Canadian activity and non-recurring prior-year gains Consolidated Results of Operations (Q1 2025 vs. Q1 2024) | Metric (in millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $144.0 | $166.1 | ($22.1) | | **Operating Loss** | ($5.5) | ($1.8) | ($3.7) | | **Net Loss Attributable to Civeo** | ($9.8) | ($5.1) | ($4.7) | - The decrease in revenue was primarily driven by lower billed rooms at Canadian oil sands lodges and reduced occupancy at the Sitka Lodge as LNG facility construction nears completion[106](index=106&type=chunk) - The Q1 2024 results included a **$6.1 million** net gain from the sale of the McClelland Lake Lodge and a **$7.8 million** impairment charge, which impacted year-over-year comparisons[105](index=105&type=chunk) [Segment Results of Operations](index=25&type=section&id=Segment%20Results%20of%20Operations) The Australian segment's revenue grew **13%** to **$103.6 million** in Q1 2025, while the Canadian segment's revenue plummeted **40%** to **$40.4 million** due to significantly lower occupancy Australian Segment Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $103.6 million | $91.7 million | | **Gross Margin %** | 26.0% | 27.9% | | **Total Billed Rooms** | 625,636 | 613,936 | - Australian revenue growth was driven by new business in integrated services villages in Western Australia, despite a **4.5%** weakening of the AUD against the USD[117](index=117&type=chunk) Canadian Segment Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $40.4 million | $67.2 million | | **Gross Margin %** | 6.8% | 14.7% | | **Total Billed Rooms** | 358,697 | 610,032 | - The Canadian revenue decline was caused by lower billed rooms at oil sands lodges and reduced occupancy at Sitka Lodge as the Kitimat LNG facility nears completion[120](index=120&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, Civeo had total available liquidity of **$162.2 million**, used **$8.4 million** in cash from operations, amended its credit agreement, and suspended quarterly dividends to prioritize share repurchases Liquidity Position | Metric (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unused Availability | $133.8 | $197.0 | | Cash and cash equivalents | $28.4 | $5.2 | | **Total available liquidity** | **$162.2** | **$202.2** | - In March 2025, the Board increased the common share repurchase program authorization to **10%** of outstanding shares, which was further increased to **20%** in April 2025[131](index=131&type=chunk) - In April 2025, the Board suspended quarterly dividends to prioritize returning capital to shareholders through ongoing share repurchases[136](index=136&type=chunk) - The company amended its Syndicated Facility Agreement on March 24, 2025, to increase the Australian revolving commitments by **$20.0 million** to an aggregate of **$55.0 million**[132](index=132&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are exposure to changes in interest rates on its floating-rate debt and foreign currency exchange rate fluctuations - A **100 basis point** increase in floating interest rates would increase annual consolidated interest expense by approximately **$0.9 million**, based on debt levels at March 31, 2025[139](index=139&type=chunk) - A hypothetical **10%** adverse change in the value of the Canadian and Australian dollar relative to the U.S. dollar would result in translation adjustments of approximately **$11 million** and **$23 million**, respectively, recorded in other comprehensive loss[140](index=140&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management concluded that its disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during Q1 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[141](index=141&type=chunk) - There were no changes in internal control over financial reporting during Q1 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[142](index=142&type=chunk) Part II -- OTHER INFORMATION [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various pending claims and lawsuits, but management believes the ultimate liability will not materially adversely affect its financial position or results - Civeo is a party to various pending or threatened claims and lawsuits concerning its commercial operations, products, and employees[144](index=144&type=chunk) - Management believes that any ultimate liability from these proceedings, not covered by indemnity or insurance, will not have a material adverse effect on the company's financial condition[144](index=144&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) Changes in U.S. or foreign trade policies, including tariffs and protectionist measures, could adversely impact the company's future net income, cash flows, and financial condition - Changes in U.S. or foreign trade policies, such as tariffs and other restrictive measures, pose a risk to the company's future net income and cash flows[146](index=146&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, Civeo repurchased a total of **177,013 common shares**, including **153,092 shares** under its publicly announced program at an average price of **$21.75 per share** Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Jan 2025 | — | $ — | — | | Feb 2025 | 23,921 | $26.96 | — | | Mar 2025 | 153,092 | $21.75 | 153,092 | | **Total** | **177,013** | **$21.75** | **153,092** | - The Share Repurchase Program was increased in March and April 2025, authorizing the repurchase of up to **20%** of total common shares outstanding (approx. **2,690,000 shares**)[150](index=150&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) There was no information to report under this item for the period - None[149](index=149&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including an Asset Sale and Purchase Agreement, an amendment to the Syndicated Facility Agreement, and required certifications - Filed exhibits include the Asset Sale and Purchase Agreement dated Feb 18, 2025, and the Third Amendment to Syndicated Facility Agreement dated March 24, 2025[151](index=151&type=chunk)

Financial Data and Key Metrics Changes - Total revenues for the first quarter were $144 million, with a net loss of $9.8 million or $0.72 per diluted share [12] - Adjusted EBITDA was $12.7 million, with negative operating cash flow of $8.4 million [12] - The decrease in adjusted EBITDA compared to the previous year was primarily due to reduced build rooms in Canadian lodges [12] Business Line Data and Key Metrics Changes - Australian segment revenues increased by 13% year over year to $103.6 million, with adjusted EBITDA remaining relatively flat at $20.5 million [13] - Canadian segment revenues decreased to $40.4 million from $67.2 million in the previous year, with adjusted EBITDA at negative $200,000 [15] Market Data and Key Metrics Changes - In Australia, revenues increased by 18% on a constant currency basis, driven by increased activity in integrated services [8] - Canadian build rooms decreased to 359,000 from 610,000 in the previous year due to customer spending reductions [15] Company Strategy and Development Direction - The company has increased its share repurchase authorization from 10% to 20% of total shares outstanding and suspended the quarterly dividend to enhance long-term shareholder value [6][20] - The focus is on optimizing the cost structure in Canada and enhancing operational efficiency [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted that the Canadian division is facing economic and political uncertainty, impacting performance [25] - The company expects to continue generating free cash flow, despite challenges, and remains confident in its ability to execute the updated capital allocation framework [26] Other Important Information - The company plans to allocate 100% of annual free cash flow to share repurchases until the expanded authorization is completed [6] - Capital expenditures for the first quarter were $5.3 million, down from $5.6 million in the previous year [17] Q&A Session Summary Question: What is the rationale behind the changes to the dividend and capital allocation? - Management indicated that the decision was based on extensive shareholder engagement and the realization that the dividend was not being valued, thus shifting capital to share repurchases made more sense [29] Question: What are the benefits of the joint venture with the Six Nations in Canada? - The joint venture is crucial for winning work in Canada, as First Nation relationships are often necessary for bidding on projects [31] Question: Are there any larger infrastructure projects expected to generate revenue in the next few years? - Potential opportunities include additional pipeline projects and carbon sequestration initiatives in Alberta [37] Question: How is the company addressing cost-cutting measures? - The consulting firm is reviewing the North American cost structure to optimize expenses in response to the changing outlook for the Canadian business [38] Question: What is the outlook for free cash flow in the coming years? - Management remains optimistic that free cash flow will improve in the future, despite current guidance being lower due to market conditions [56]

Group 1 - Civeo reported a quarterly loss of $0.72 per share, which was better than the Zacks Consensus Estimate of a loss of $0.78, but worse than a loss of $0.26 per share a year ago, indicating an earnings surprise of 7.69% [1] - The company posted revenues of $144.04 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.91%, and down from $166.12 million in the same quarter last year [2] - Civeo shares have declined approximately 11.6% since the beginning of the year, compared to a decline of 5.5% for the S&P 500 [3] Group 2 - The earnings outlook for Civeo is mixed, with the current consensus EPS estimate for the coming quarter at $0.24 on revenues of $166.34 million, and for the current fiscal year at -$0.25 on revenues of $652.81 million [7] - The Hotels and Motels industry, to which Civeo belongs, is currently ranked in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]