[Civeo First Quarter 2025 Results](index=1&type=section&id=Civeo%20Reports%20First%20Quarter%202025%20Results) [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Results) The company reported a Q1 net loss of $9.8 million, as strong Australian results were offset by Canadian headwinds Q1 2025 vs. Q1 2024 Financial Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $144.0 million | $166.1 million | | Net Loss | $9.8 million | $5.1 million | | Diluted EPS | ($0.72) | ($0.35) | | Adjusted EBITDA | $12.7 million | $17.8 million | | Operating Cash Flow | ($8.4 million) | $6.0 million | - Topline growth in Australia was supported by a recent contract award, while **Canadian operations were impacted by intensifying macroeconomic headwinds**[3](index=3&type=chunk) - Civeo returned **$6.8 million to shareholders** in Q1 2025 through share repurchases ($3.3M) and dividends ($3.5M)[7](index=7&type=chunk)[14](index=14&type=chunk)[29](index=29&type=chunk) - The company is rebalancing its capital return mix to **prioritize share repurchases** as the sole vehicle for returning capital[3](index=3&type=chunk) - Progress continues on the acquisition of four Australian villages, with the transaction **expected to close in Q2 2025**[7](index=7&type=chunk)[10](index=10&type=chunk) [Business Segment Results](index=1&type=section&id=Business%20Segment%20Results) [Australia Segment](index=1&type=section&id=Australia) The Australian segment saw a 13% revenue increase to $103.6 million, though a weaker AUD kept Adjusted EBITDA flat Australia Segment Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $103.6 million | $91.7 million | | Operating Income | $12.6 million | $7.3 million | | Adjusted EBITDA | $20.5 million | $20.3 million | - The revenue increase was primarily driven by a new **six-year A$1.4 billion integrated services contract**[9](index=9&type=chunk) - A weakened Australian dollar relative to the U.S. dollar **decreased Q1 2025 revenues by $4.9 million** and Adjusted EBITDA by $1.0 million[8](index=8&type=chunk) - The acquisition of four villages in the Australian Bowen Basin is **expected to close in the second quarter of 2025**, subject to regulatory approvals[10](index=10&type=chunk) [Canada Segment](index=2&type=section&id=Canada) The Canadian segment experienced a severe downturn with revenues falling 40% and Adjusted EBITDA turning negative Canada Segment Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $40.4 million | $67.2 million | | Operating Loss/Income | ($10.0 million) | $1.7 million | | Adjusted EBITDA | ($0.2 million) | $5.7 million | - The **40% revenue decrease** was driven by lower billed rooms due to customer spending reductions and a lodge sale[12](index=12&type=chunk) - The company **reduced its Canadian employee headcount by approximately 25%** in Q1 2025, incurring a restructuring charge of about $1.0 million[13](index=13&type=chunk) - Further cost-cutting actions are planned, including **cold shutting two lodges** and streamlining the North American cost structure[13](index=13&type=chunk) [Financial Condition and Capital Allocation](index=2&type=section&id=Financial%20Condition%20and%20Capital%20Allocation) [Financial Condition](index=2&type=section&id=Financial%20Condition) The company maintained a solid liquidity position of $162.2 million with a net leverage ratio of 0.8x Financial Position as of March 31, 2025 | Metric | Value | | :--- | :--- | | Total Liquidity | $162.2 million | | Total Debt | $87.4 million | | Net Debt | $59.0 million | | Net Leverage Ratio | 0.8x | - In Q1 2025, Civeo **repurchased approximately 153,000 shares for about $3.3 million**[14](index=14&type=chunk) - Capital expenditures were **$5.3 million in Q1 2025**, compared to $5.6 million in Q1 2024, primarily for maintenance[14](index=14&type=chunk) [Updated Capital Allocation Framework](index=2&type=section&id=Updated%20Capital%20Allocation%20Framework) Civeo shifted its capital strategy to prioritize share buybacks, increasing authorization and suspending its dividend - The share repurchase program authorization was **increased to 20% of the company's total shares**[16](index=16&type=chunk) - Civeo intends to use **100% of free cash flow** to complete the new authorization and at least 75% annually thereafter[16](index=16&type=chunk) - In connection with the focus on repurchases, the Board of Directors has **suspended the company's quarterly cash dividend**[17](index=17&type=chunk) [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) [Revised 2025 Outlook](index=3&type=section&id=Revised%202025%20Outlook) Civeo lowered its full-year 2025 guidance for revenue, Adjusted EBITDA, and capital expenditures Full Year 2025 Guidance Update | Metric | Previous Guidance | New Guidance | | :--- | :--- | :--- | | Revenues | $630M - $660M | $620M - $650M | | Adjusted EBITDA | $80M - $90M | $75M - $85M | | Capital Expenditures | $25M - $30M | $20M - $25M | - This revised outlook **excludes the impact of the Australian asset acquisition**, which is anticipated to close by the end of Q2[19](index=19&type=chunk) [Financial Statements and Reconciliations](index=5&type=section&id=Financial%20Statements%20and%20Reconciliations) [Unaudited Consolidated Statements of Operations](index=5&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company reported a Q1 2025 operating loss of $5.5 million and a net loss of $9.8 million on lower revenues Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $144,044 | $166,120 | | Operating loss | $(5,516) | $(1,781) | | Net loss | $(9,850) | $(5,196) | | Net loss per share, diluted | $(0.72) | $(0.35) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets were $423.8 million, while long-term debt increased to $87.4 million Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $134,439 | $110,453 | | Total assets | $423,752 | $405,072 | | Long-term debt | $87,367 | $43,299 | | Total liabilities | $203,014 | $168,074 | | Total shareholders' equity | $220,738 | $236,998 | [Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2025 saw a net cash outflow from operations of $8.4 million, a reversal from a $6.0 million inflow in Q1 2024 Q1 2025 Cash Flow Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash flows (used in) operating activities | $(8,445) | $5,985 | | Net cash flows (used in) investing activities | $(5,104) | $1,165 | | Net cash flows provided by financing activities | $36,625 | $6,614 | | Net change in cash and cash equivalents | $23,168 | $13,429 | [Segment Data](index=8&type=section&id=SEGMENT%20DATA) Segment data highlights the performance divergence, with Australia generating positive EBITDA and Canada reporting a loss Q1 2025 Segment Performance (in thousands) | Segment | Revenues | Adjusted EBITDA | | :--- | :--- | :--- | | Australia | $103,646 | $20,485 | | Canada | $40,398 | $(228) | | Corporate, other and eliminations | — | $(7,602) | | **Total** | **$144,044** | **$12,655** | [Supplemental Quarterly Segment and Operating Data](index=9&type=section&id=SUPPLEMENTAL%20QUARTERLY%20SEGMENT%20AND%20OPERATING%20DATA) Australia's billed rooms increased in Q1 2025, while Canada experienced a significant drop from the prior year Q1 2025 vs Q1 2024 Operating Metrics | Metric | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | Billed rooms | Australia | 625,636 | 613,936 | | Average daily rates | Australia | $75 | $77 | | Billed rooms | Canada | 358,697 | 610,032 | | Average daily rates | Canada | $93 | $98 | [Supplemental Operations by Service Type](index=11&type=section&id=SUPPLEMENTAL%20OPERATIONS%20BY%20SERVICE%20TYPE%20BY%20REGION%20DATA) Asset-light services generated $102.3 million in revenue, accounting for approximately 71% of the company's total Q1 2025 Revenue by Service Type (in thousands) | Service Type | Australia | Canada | Total | | :--- | :--- | :--- | :--- | | Asset Light: Catering and Facility management | $76,659 | $25,649 | $102,308 | | Asset Intensive: Accommodations and Infrastructure | $26,987 | $14,749 | $41,736 | | **Total revenues** | **$103,646** | **$40,398** | **$144,044** | [Non-GAAP Reconciliations](index=12&type=section&id=NON-GAAP%20RECONCILIATIONS) This section reconciles non-GAAP measures like Adjusted EBITDA and Free Cash Flow to their GAAP equivalents Q1 2025 EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net loss attributable to Civeo Corporation | $(9,842) | | Plus: Income tax, D&A, Interest | $20,960 | | **EBITDA** | **$11,092** | | Plus: Restructuring costs | $964 | | Plus: Share-based compensation | $599 | | **Adjusted EBITDA** | **$12,655** | Q1 2025 Free Cash Flow Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net Cash Flows Used in Operating Activities | $(8,445) | | Less: Capital expenditures | $(5,271) | | Plus: Proceeds from dispositions | $167 | | **Free Cash Flow** | **$(13,549)** |

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were $151 million, with a net loss of $15.1 million or $1.1 per diluted share, compared to a net loss of $17.1 million for the full year 2024 [12][13] - Adjusted EBITDA for Q4 2024 was $11.4 million, a decrease from the previous year, primarily due to lower build rooms in Canadian lodges [12][13] - For the full year 2024, adjusted EBITDA was $79.9 million, down from $106.5 million in 2023, largely due to the sale of McClellan Lake Lodge and reduced LNG-related activity in Canada [13][12] Business Line Data and Key Metrics Changes - Australian segment revenues increased by 23% to $110 million in Q4 2024, driven by increased integrated services activity [14][5] - Adjusted EBITDA for the Australian segment was $22.2 million, up 3% from the previous year [15] - Canadian segment revenues decreased to $40.7 million from $72.7 million in Q4 2023, with adjusted EBITDA dropping to negative $4.7 million [16][17] Market Data and Key Metrics Changes - In Australia, occupancy levels remain strong, with 637,000 built rooms in Q4 2024, relatively flat compared to the previous year [15] - Canadian build rooms totaled 360,000 in Q4 2024, down from 617,000 in the same quarter of the previous year, reflecting reduced customer spending [16][17] - Daily room rates in Australia increased to $77 from $74, while Canadian rates decreased slightly to $94 from $95 [16][17] Company Strategy and Development Direction - The company is focusing on diversifying revenue streams and expanding its asset-light business, particularly in Australia [10][11] - A recent acquisition of four villages in the Australian Bowen Basin is expected to be immediately accretive to cash flow and enhance revenue stability [5][6] - In Canada, the company is rightsizing its operations due to reduced capital spending and is looking to expand geographically to mitigate dependency on oil sands activity [7][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unfavorable conditions in Canada but remains optimistic about medium to long-term growth opportunities, including potential LNG projects and government policy shifts [8][27] - The company expects to incur one-time restructuring costs of approximately $3 million in Q1 2025 to adjust its Canadian operations [7][26] - Initial guidance for 2025 includes revenues of $630 million to $660 million and adjusted EBITDA of $80 million to $90 million, reflecting recent market changes [20][21] Other Important Information - The company returned approximately $44 million to shareholders in 2024, representing about 65% of free cash flow [8][19] - A quarterly cash dividend of $0.25 per common share was declared, payable on March 17, 2025 [20] Q&A Session Summary Question: Details on asset light versus asset intensive businesses - The asset intensive side includes catering and facility management at owned assets, which is a growth area [33][35] Question: Seasonal distribution expectations for 2025 - A normal seasonal distribution is expected, with 60% to 65% of full-year EBITDA generated in the second and third quarters [36] Question: Visibility of Canadian revenue streams - Historically, turnaround activity accounts for about 25% to 30% of total room nights in Canada, which is expected to continue [38] Question: Long-term impact of political uncertainty in Canada - Management views the current customer behavior as a long-term shift, necessitating adjustments to the cost structure [44][45] Question: Impact of economic conditions in Australia on CapEx - Despite softening prices, customer demand for rooms remains strong, supported by long-term contracts [48][49] Question: Acquisition details and market conditions - The acquisition was favorable due to cash payment capability and straightforward execution, but not all market assets are priced similarly [55]