DALLAS, TX -- July 31, 2026 -- Civeo Corporation (NYSE: CVEO): Stonegate Capital Partners Updates Coverage on Civeo Corporation (NYSE: CVEO). CVEO reported revenue and adj EBITDA of $180.0M and $23.8M, versus our estimates of $173.1M and $21.3M and consensus revenue of $172.2M. Net loss improved to $2.5M from $3.3M, operating cash flow of $11.6M versus $(2.3)M confirmed the 1Q outflow was seasonal, and capex of $3.7M remained maintenance related. The y/y decline in Adj. EBITDA from $25.0M reflects a $3.2M activist cost addback in the prior period and timing items, with unadjusted EBITDA up y/y and 1H26 Adj. EBITDA up 23% to $46.3M.
Canadian Segment: In our view, the LNG and Alberta infrastructure opportunities remain the segment's more important development, with data center bidding the key driver in the U.S. Revenue increased 9% y/y to $54.6M and billed rooms rose to 458.0k from 450.0k, as LNG occupancy and a 45% increase in integrated services revenue, driven by the Ontario contract, offsetting core oil sands rooms lost to turnarounds. With elevated oil prices making downtime too costly to schedule, customers deferred certain turnaround work into 3Q, which management attributed to the increased opportunity cost of downtime amid elevated oil prices. Adj. EBITDA of $6.0M versus $6.9M last year reflects Ontario start-up costs. At this point we believe the earliest we could see initial mobile camp deployment would be 4Q, with the fleet oriented toward the LNG, Alberta, Alaska, and data center builds, and we expect incremental detail as FIDs are announced.
Australian Segment: Australia remained the core earnings contributor, with revenue up 11% y/y to $125.4M and Adj. EBITDA of $22.6M. The stronger Australian dollar contributed $12.2M and $2.2M of those figures, leaving revenue roughly flat in local currency. The counterbalance is that customers sell met coal in USD but pay wages and diesel in AUD, so the same appreciation squeezes their margins, and two months of diesel uncertainty has them holding headcount despite ~$220/ton met coal pricing. The recovery looks pushed into 2027, where cooling inflation, normalizing diesel prices and sustained met coal pricing could support the occupancy inflection.
Capital Allocation: CVEO issued $115.0M of 4.50% convertible senior notes due 2031 in July to lock in fixed-rate capital below its revolver cost ahead of pipeline funding needs, using proceeds to repurchase 660,297 shares for ~$22.3M and repay the revolver. Cash settlement of principal plus the concurrent repurchase make the offering anti-dilutive below ~$53, despite the ~$40.51 conversion price, as the shares bought back exceed those the notes would initially add. With approximately half of the new 10% authorization utilized and the North American opportunity set building, we expect management to be judicious with remaining capacity, weighing further repurchases against growth deployment. Net debt declined $7.9M to $190.9M, and leverage of 2.1x versus a 3.0x covenant leaves the revolver free for camp mobilization.
Guidance and Outlook: CVEO maintained FY26 guidance of $675-$700M in revenue, $85-$90M in Adj. EBITDA, and $25-$30M in capex. Management seems to be appropriately pacing investment to the ~$1.5B bid pipeline, rather than pre-building, and with FIDs possible by year-end and 4-6 months from FID to contract award, contributions turn meaningful after 1Q27 against a low-$90M 2027 base.
Valuation: We use both a DCF and EV/EBITDA comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $34.10 to $39.85 with a mid-point of $36.75. Our EV/EBITDA valuation results in a range of $32.47 to $41.10 with a mid-point of $36.79. Using a simple average this arrives at a 2027E valuation range of $33.29 to $40.48 with a price target at the mid-point of $36.77.
