DALLAS, TX -- October 31st, 2025 --  Civeo Corporation (NYSE: CVEO): Stonegate Capital Partners updates their coverage on Civeo Corporation (NYSE: CVEO). CVEO reported revenue and adj EBITDA of $170.5M and $28.8M, respectively. This compares to our/consensus estimates of $175.9M/$173.5M and $27.7M/$27.8M, respectively. The year-over-year EBITDA increase reflected continued strength in Australia and the benefit of cost-cutting initiatives in Canada. Operating cash flow totaled $13.8M, while capital expenditures were $5.6M, primarily related to maintenance of lodges and villages. The Company ended the quarter with net debt of $176M, a net leverage ratio of 2.1x, and liquidity of ~$70M. 

Company Updates:

Canadian Segment: Canadian operations generated $46.0M in revenue and $8.0M in adjusted EBITDA, compared to $57.7M and $3.4M in 3Q24. Despite a 20% decline in billed rooms, results improved due to successful cost rationalization measures. Actions included a headcount reduction, closure of underutilized lodges, and streamlining of field operations, which collectively drove a 35% increase in gross margin to 22.5%. Management expects Canadian lodge occupancy to stabilize and sees incremental upside from mobile camp utilization as infrastructure and LNG projects advance.

Australian Segment: The Australian business remained the primary driver of consolidated growth, with revenues up 7% year-over-year to $124.5M and adjusted EBITDA up 19% to $26.7M. The performance reflected a full quarter of contribution from the four Bowen Basin villages acquired in May 2025, which added ~$8.4M of incremental revenue. Civeo’s Australian owned-village occupancy reached 763K billed rooms, up 18% y/y. The Company also noted steady progress toward its goal of achieving A$500M in integrated services revenue by 2027, supported by strong margins and expanding geographic presence across Australia. Management continues to evaluate entry into non-resource end markets to diversify the growth base.

Capital Allocation: Civeo continued to execute on its accelerated share repurchase program, buying back 1.05M common shares during the quarter. Year-to-date, the Company has returned ~$52M to shareholders, completing ~69% of its current authorization to repurchase 20% of total shares outstanding. Management reiterated its intent to use no less than 100% of annual free cash flow to complete the current authorization and, thereafter, 75% toward ongoing buybacks.

Guidance and Outlook: Civeo tightened full-year 2025 guidance to revenue of $640–$655M and adjusted EBITDA of $86–$91M, maintaining capital expenditures at $20–$25M. The Company expects Australian occupancy to remain strong but soften modestly in 4Q25 due to seasonality and met coal market weakness, while Canadian performance continues to benefit from efficiency gains. For 2026, management anticipates relatively flat-to-up consolidated performance, supported by a full-year contribution from the Bowen Basin acquisition, further integrated services growth, and initial redeployment of mobile camp assets in North America as new infrastructure projects reach final investment decisions.

Valuation: We use both a DCF and EV/EBITDA comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $26.73 to $31.19 with a mid-point of $28.79. Our EV/EBITDA valuation results in a range of $27.82 to $31.58 with a mid-point of $29.70.

About StonegateStonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking, equity research and capital raising for public and private companies.

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