Civeo's Q3 2025: Contradictions Emerge on Australia Staffing, Trade Impact, Revenue Outlook, and Mobile Camp Strategy

Date of Call: October 31, 2025

Financials Results

• Revenue: $170.5M (Q3 2025 total revenues)
• EPS: Net loss $0.5M, or $(0.04) per diluted share (Q3 2025)

Guidance:

• Full-year 2025 revenue guidance $640M–$655M; adjusted EBITDA $86M–$91M; CapEx $20M–$25M.
• Australia: Q4 owned-village occupancy expected modestly softer; integrated services on track to AUD 500M revenue by 2027.
• Canada: Q4 billed rooms expected roughly in line with Q3; 2026 lodge occupancy expected flat to slightly up vs 2025; focus on mobile-camp deployments with material impact likely in 2027.
• Capital allocation: complete current buyback using ≥100% annual FCF; thereafter use ≥75% annual FCF for buybacks; comfortable with ~2x net leverage.

Business Commentary:

* Share Repurchase and Capital Allocation: - Civeo repurchased approximately 1 million shares in Q3, bringing their year-to-date return of capital to shareholders to $52 million. - The company completed 69% of their new buyback authorization by September 30, 2025. - Share repurchases are considered a compelling use of capital, especially during market volatility.

• Australian Market Expansion:
• Revenues in Australia increased by 7% year-over-year, with adjusted EBITDA growing by 19%.
• This growth was primarily due to the integration of recently acquired villages in the Bowen Basin and the expansion of integrated services.

• Despite near-term headwinds, strong contract positions and continued focus on the integrated services business are expected to support cash flow.

• Canadian Cost Cutting and Efficiency:

• Civeo's Canadian segment saw adjusted EBITDA increase to $8 million from $3.4 million in the third quarter of 2024.
• The increase was driven by cost reduction measures, including significant headcount reductions and lodge closures.

• The focus on cost cutting was in response to changed customer strategies and macroeconomic uncertainties.

• Updated 2025 and 2026 Guidance:

• Civeo's 2025 revenue guidance was tightened to $640 million to $655 million, with adjusted EBITDA guidance of $86 million to $91 million.
• For 2026, the company expects Australian business to remain consistent with 2025, with potential for increased mobile camp utilization in Canada and the U.S.
• The outlook reflects expectations of stabilization in lodge occupancy in Canada and potential infrastructure projects in North America.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted progress on buybacks (69% of authorization completed), Australia revenue +7% YOY and adjusted EBITDA +19% from the acquisition, Canadian gross profit +35% from cost cuts, tightened FY25 guidance and clear capital-allocation policy — signaling operational progress and confidence.

Q&A:

• Question from Stephen Gengaro (Stifel, Nicolaus & Company): When you package the guidance you gave for '26 together, it feels flattish year-over-year — is that in the ballpark of what you're seeing?
  Response: Management expects 2026 to be up year-over-year, driven by integrated services growth and the full-year impact of the May 2025 Australian village acquisition, with upside potential from mobile-camp deployments if project FIDs occur.

• Question from Stephen Gengaro (Stifel, Nicolaus & Company): On mobile camp assets and redeployment, are you talking about Canada and the U.S.? Are opportunities like lithium mining and data centers in the opportunity set?
  Response: Yes—~2,500 readily deployable mobile rooms plus ~1,000 redeployable from lodges; very active bidding across LNG, pipelines, infrastructure in Canada and opportunities in the U.S. including data centers.

• Question from Stephen Gengaro (Stifel, Nicolaus & Company): Long-term capital allocation: preference for expansion/acquisitions versus buybacks?
  Response: Committed to completing current buyback (~20% of shares, ~2.6M) using ≥100% annual FCF; will consider accretive bolt-on M&A if attractive but will maintain ~2x leverage target.

• Question from Steve Ferazani (Sidoti & Company): On Australia growth to $500M in integrated services, can you discuss opportunities/challenges and whether M&A is required?
  Response: Management believes the AUD 500M target is achievable organically by 2027 via market-share gains, geographic expansion and a strong pipeline; M&A could accelerate but is not required.

• Question from Steve Ferazani (Sidoti & Company): Timing for mobile camp opportunities — is this more of a 2027/2028 story or are there real chances in 2026?
  Response: Some contribution expected in 2026 (likely second-half weighted); material impact anticipated in 2027 if customers reach FIDs and Civeo wins bids.

• Question from Steve Ferazani (Sidoti & Company): With CapEx down two years in a row, should we view ~$25M as the ongoing level absent large project wins?
  Response: Yes; ~$25M is a reasonable consolidated annual run rate with higher spending only tied to customer commitments or growth projects.

• Question from Steve Ferazani (Sidoti & Company): Do 2–4 year mobile camp projects require significant incremental CapEx?
  Response: If projects are evenly spaced, incremental CapEx ~$5M–$10M; if all start simultaneously, ~$25M–$30M; initial work uses existing 2,500–3,500 rooms.

• Question from David Storms (Stonegate Capital Partners): How do you feel about current staffing levels in Australia and potential bottlenecks as you scale integrated services?
  Response: Staffing remains a challenge—especially chefs—but is improving; international recruitment programs are helping and management is confident they can staff wins.

• Question from David Storms (Stonegate Capital Partners): Could Canadian field-level cost-cutting actions be applied in Australia to drive similar margin expansion?
  Response: No; Canadian actions (cold closures, headcount streamlining) were specific to that market and its cost structure—Australia has different dynamics, though continuous efficiency efforts remain.

• Question from David Storms (Stonegate Capital Partners): How much more cost-cutting should we expect in Canada, and might margins be given back if activity increases?
  Response: Easier cost cuts are done; management will complete tougher initiatives soon but is shifting focus to growing revenue—margins could change as activity recovers, reflecting new oil-sands dynamics.

Contradiction Point 1

Staffing Challenges in Australia

It highlights differing perspectives on the ease of finding qualified staff in Australia, potentially impacting operational efficiency and future growth plans.

How do you assess current staffing levels in Australia in relation to potential bottlenecks in achieving that goal? - David Storms (Stonegate Capital Partners)

2025Q3: Staffing in Australia continues to be a challenge, especially around chefs. We've made some progress with international recruitment, but it remains a focus. - Bradley Dodson(CEO)

Are you concerned about CapEx in Australia due to China's economic slowdown? - Steve Ferazani (Sidoti)

2024Q4: We are committed to this market, and we can find the staff we need to support the work we win. - Bradley Dodson(CEO)

Contradiction Point 2

Trade Impact on Business

It involves differing statements on the impact of trade uncertainties on the company's business, which could influence investor perceptions.

Does the 2026 guidance indicate roughly flat year-over-year growth? - Stephen Gengaro(Stifel, Nicolaus & Company, Incorporated, Research Division)

2025Q3: We have been watching the international trade situation closely. Thus far, the impact has been minor, primarily on food costs in Canada. We're keeping an eye on whether trade uncertainty affects our customers' spending on rooms. However, we haven't seen any material impact on our business. - Bradley J. Dodson(CEO)

Do recent U.S. trade deals justify revising guidance? Could guidance be biased toward the upside or downside? - David Joseph Storms(Stonegate Capital Partners, Inc., Research Division)

2025Q2: While our base occupancy rates in our Canadian lodges have been steady, our overall occupancy has been declining throughout the quarter as units are being returned to us due to reduced turnaround activity. - Bradley J. Dodson(CEO)

Contradiction Point 3

Revenue and Growth Expectations

It involves the company's outlook on revenue and growth expectations, which are crucial for investors and stakeholders.

Does the guidance for 2026 suggest a roughly flat year-over-year trend? - Stephen Gengaro(Stifel, Nicolaus & Company, Incorporated, Research Division)

2025Q3: We expect Australian village occupancy to be modestly softer to flat year-over-year with the benefit of the full benefit of the 4 villages we acquired in May. - Bradley Dodson(CEO)

How much of the capital allocation framework change is due to macroeconomic uncertainty versus internal value creation goals? Will you reconsider the change when the macroeconomic outlook becomes clearer? - Stephen Gengaro(Stifel)

2025Q1: We expect revenue for the quarter to be in the range of $335 million to $375 million, with adjusted EBITDA margin of 25% to 27%. - Bradley Dodson(CEO)

Contradiction Point 4

Mobile Camp Utilization

It concerns the company's strategy and expectations regarding mobile camp utilization, which impacts operational and financial planning.

Regarding mobile camp assets and redeployment in Canada and the U.S., are you considering newer energy opportunities in the U.S. related to lithium mining and data centers, and are these opportunities part of your current focus? - Stephen Gengaro(Stifel, Nicolaus & Company, Incorporated, Research Division)

2025Q3: Looking at Canada, we have approximately 2,500 mobile camp rooms that are readily deployable and another roughly 1,000 that are currently attached to our oil sands lodges, redeployable anywhere in North America. - Bradley Dodson(CEO)

To what extent is the capital allocation framework change driven by macro uncertainty affecting dividends versus internal value creation perspectives? Will you revisit this when the macro environment becomes clearer? - Stephen Gengaro(Stifel)

2025Q1: Our mobile camp business is being impacted by lower oil prices, resulting in reduced demand in both Canada and Australia. - Bradley Dodson(CEO)

Contradiction Point 5

Revenue Growth Expectations in Australia

It involves differing expectations for revenue growth in the Australian market, which could impact investor expectations and strategic planning.

What are the growth opportunities in Australia? How do you assess your current staffing levels in Australia? Should M&A be part of the strategy? - Steve Ferazani (Sidoti)

2025Q3: We feel good about hitting the $500 million revenue target for integrated services by 2027 organically. - Bradley Dodson(CEO)

What types of deals is Civeo pursuing, and where are the opportunities? - Stephen Gengaro (Stifel)

2024Q4: Our long-term organic growth opportunity is to grow in the original five markets, and we believe we can get to $500 million in annualized revenue organically in the Australian market by 2027. - Bradley Dodson(CEO)