DALLAS, TX -- May 4th, 2026 -- Civeo Corporation (NYSE: CVEO): Stonegate Capital Partners Updates Coverage on Civeo Corporation (NYSE: CVEO). CVEO reported revenue and adj EBITDA of $172.7M and $22.5M, respectively. This compares to our/consensus estimates of $154.6M/$154.7M and $16.3M/$16.8M, respectively. Net loss improved to $3.8M from $9.8M in 1Q25, while operating cash flow was $(9.7)M, reflecting typical seasonal working capital use. Capex remained modest at $4.1M and was primarily maintenance-related. The key takeaway is not simply the revenue beat; rather, 1Q showed better Canadian margin conversion, continued Australian services contribution, and improving North American infrastructure visibility, partially offset by cost inflation and customer discipline that kept FY26 EBITDA guidance unchanged.
Canadian Segment: In our view, Canada was the more important quarter-toquarter change. Revenue increased 23% y/y to $49.6M, Adj. EBITDA improved to $5.2M from $(0.8)M, and billed rooms increased to 433.6k from 358.7k. The improvement reflected higher lodge occupancy and benefits from 2025 cost actions, suggesting the segment is beginning to show better underlying margin support, not just activity-driven improvement. Management noted that some Canadian turnaround activity expected in 2Q is shifting later in 2026, which should create a smoother cadence than the historical 2Q/3Q EBITDA concentration while leaving full-year activity expectations intact.
Australian Segment: Australia remained the core earnings contributor, with revenue up 19% y/y to $123.0M and Adj. EBITDA of $21.8M. Results benefited from the May 2025 Bowen Basin acquisition, continued integrated services growth, and FX, with the stronger Australian dollar contributing $12.0M of revenue and $2.1M of Adj. EBITDA. Billed rooms increased to 675.5k from 625.6k, while ADR improved to $83 from $75. The key offset is that healthier met coal pricing is not yet translating into a clean near-term occupancy inflection. Management noted met coal pricing around $230/ton, but diesel, inflation/FX pressure, and customer cost discipline make the prior ~$200/ton activity threshold look closer to ~$225/ton in the current environment. As a result, Australia remains stable, but incremental owned-village upside appears more likely to emerge in 2027 than 2H26.
Capital Allocation: CVEO repurchased ~0.5M shares for $14.4M in 1Q26, completing approximately 96% of the April 2025 authorization, with an additional 10% authorization already approved. Net debt increased by $27.5M since yearend to $198.9M, and net leverage moved to 2.2x, primarily reflecting repurchase activity. Liquidity was $68.4M at quarter-end.
Guidance and Outlook: CVEO raised the low end of FY26 revenue guidance to $675-$700M from $650-$700M, maintaining an Adj. EBITDA of $85-$90M and capex of $25-$30M. The unchanged EBITDA outlook despite a higher revenue floor is the key investor debate. Management is appropriately separating top-line momentum in north America from margin headwinds in Australia, as diesel inflation, Australian labor costs, and customer cost discipline limit near-term flowthrough. Canada is also expected to have a smoother cadence than the historical pattern following a push back in turnaround activity due to elevated commodity prices.
Valuation: We use both a DCF and EV/EBITDA comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $31.50 to $37.00 with a mid-point of $34.04. Our EV/EBITDA valuation results in a range of $29.67 to $38.64 with a mid-point of $34.16
SOURCE: Stonegate, Inc.
