Civeo Corporation's 2Q25 Performance Highlights Challenges and Opportunities
TL;DR
Civeo Corporation's strategic acquisition in Australia and share repurchases position it for potential market advantage despite Canadian segment challenges.
Civeo Corporation reported 2Q25 revenue of $162.7M and Adj. EBITDA of $25.0M, with Australian growth offsetting Canadian declines, and detailed future revenue targets.
Civeo's focus on cost reduction and strategic acquisitions aims to stabilize operations, promising a more sustainable future for its workforce and communities.
Civeo's Australian segment shines with a 10% EBITDA growth, showcasing resilience and strategic growth amidst global economic pressures.
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Civeo Corporation (NYSE: CVEO) reported its 2Q25 financial results, revealing a complex picture of challenges and strategic advancements. The company posted revenue, Adj. EBITDA, and Adj. EPS of $162.7M, $25.0M, and ($0.25), respectively, slightly below consensus estimates. The performance underscores the impact of macroeconomic headwinds in Canada, contrasted with growth in the Australian segment.
The acquisition of four villages in Australia’s Bowen Basin, closed on May 7, 2025, marks a significant strategic move for CVEO. These assets contributed $4.9M in revenue and $3.5M in EBITDA over the final two months of the quarter, with expectations of ~$30M in annualized revenue and ~$11M in EBITDA. This acquisition is a cornerstone of CVEO's strategy to leverage margin opportunities through integration, as highlighted by management.
In Canada, the company faced a 37% year-over-year decline in revenues to $50.0M, with Adj. EBITDA decreasing to $7.5M from $17.3M. The downturn is attributed to weaker oil sands activity and customer cost focus, prompting CVEO to implement cost reduction measures, including the closure of two lodges and restructuring costs of ~$3.0M.
Conversely, the Australian segment showed resilience, with revenue rising 4% year-over-year to $112.7M and Adj. EBITDA growing 10% to $23.7M. This growth was driven by higher billed rooms and robust performance from owned villages and integrated services. Recent contract wins, including a new three-year integrated services agreement (A$64M) and a four-year A$250M renewal, underscore the segment's strength and CVEO's focus on integrated services as a core growth priority.
Capital allocation strategies remain a focal point, with net debt increasing to $154M in 2Q25, reflecting the acquisition and share repurchases. CVEO repurchased ~883K shares, approximately 7% of shares outstanding, advancing its goal to use no less than 100% of annual FCF toward completing a 20% buyback plan.
Looking ahead, CVEO reiterated its FY25 guidance, expecting revenue of $640M–$670M and Adj. EBITDA of $86M–96M. Management anticipates modest improvement in 2H25 results, driven by the full quarter impact of acquired assets, cost initiatives in Canada, and stable occupancy in Australia. The company's valuation, based on DCF and EV/EBITDA analyses, suggests a mid-point range of $28.03 to $29.57, indicating potential for investor interest.
Curated from Reportable
