Bristow Group Inc. (VTOL) Earnings

Management highlights

Good day, welcome to the call. Company delivered zero air accidents in Q1. Affirmed 2026 financial guidance with adjusted EBITDA growth ~25% y/y. Q1 total revenues 11.4 million higher than Q4 2025 due to government services and OES. Adjusted EBITDA 0.9 million lower in Q1. OES revenues higher due to increased rates/utilization, but adjusted operating income lower. Government services revenues higher due to contract transition. Other services revenues lower. Mentioned three global megatrends: increased defense spending, importance of energy security, electrification of transportation.

Guidance

Affirmed 2026 total revenues guidance 1.6 billion - 1.7 billion and adjusted EBITDA guidance 295 million - 325 million. OES 2026 revenues 1 billion - 1.1 billion, adjusted operating income 225 - 235 million. Government services 2026 revenues 440 - 460 million, adjusted operating income 70 - 80 million. Other services 2026 revenues 130 - 150 million, adjusted operating income 20 - 25 million.

Segment performance

OES segment: Revenues were 6.9 million higher in Q1 vs Q4 2025. 2026 revenues guidance range 1 billion - 1.1 billion, adjusted operating income guidance 225 - 235 million. Adjusted operating income 0.7 million lower due to higher operating expenses and lower earnings from unconsolidated affiliates. Government services segment: Revenues 7.8 million higher. 2026 revenues guidance 440 - 460 million, adjusted operating income 70 - 80 million. Adjusted operating income 1.9 million higher. Other services segment: Revenues 3.2 million lower. 2026 revenues 130 - 150 million, adjusted operating income 20 - 25 million. Adjusted operating income decreased by 2.9 million due to lower seasonal revenues.

Risks & headwinds

Geopolitical conflicts and tensions. Fuel price and availability issues. Tight equipment supply for offshore helicopters.

Analyst Q&A

• Q: Maybe on the fuel prices here, you know, especially more so on the kind of the jet fuel price and availability. Just curious if that's affecting your business either directly or indirectly and and your expectations as you go through the year.

  A: Obviously, a lot of attention, and rightly so, around the aviation jet fuel market globally. Fortunately, Bristow is naturally hedged as fuel is a pass-through in the vast majority of our business. For example, in all of our OES contracts, there is a pass-through of fuel costs to the end customer. There is one of our government contracts that has a slight lag in the reset mechanism, but that's more of a timing issue. So again, naturally protected through our pass-through mechanisms. The one area of the business which is a bit different is the commercial airline that we own and operate in northern Australia. There, our recovery mechanisms are more around increasing rates and imposing, as we recently have, a fuel levy on ticket sales. In terms of supply of that aviation fuel, thankfully, we've had ample supply to date, and our suppliers assure us that we should continue to do so. That's obviously something we'll continue to monitor. And in a scenario where there may be some rationing, we think as a provider of critical transportation services and search and rescue services that we should receive priority. But again, availability has not been an issue to date. and we are naturally hedged and protected through the pass-through mechanisms in our customer contracts.

• Q: As we think about trends in global defense spending, you're highlighting the opportunity for Bristow. Historically, we've probably known you as a civilian search and rescue operator. But as we think about Bristow fitting into the broader defense spending cycle perspectives, can you just highlight maybe where and how that conversation is going to evolve?

  A: We believe there are really multiple avenues of potential benefit for us. First of all, as you mentioned, in our core civilian Coast Guard search and rescue services, where we are the market leader in that segment, what we're seeing in a lot of conversations, particularly out of Europe right now, is as those countries have committed to increase their defense spending, usually tied to percentages of GDP, they're looking for ways to balance their overall budgets. And one of the ways they could potentially do that is after spending more money on tanks and missiles, potentially outsourcing some of the civilian services like the Coast Guard. So we're having conversations with more countries, again, particularly in Europe, about potentially outsourcing their civilian services, which could be a source of growth for our core search and rescue business. In addition to that, we already provide other aviation services to militaries and government customers, such as troop movements and ISR or intelligence surveillance and reconnaissance missions. We think those mission profiles will be an additional source of growth for Bristow as we look to expand our capabilities and expand our customer base that we're servicing by providing that broader spectrum of services.

• Q: Can you update us on the OES contract resets in the U.S.?

  A: Here in the U.S., we have now reset, effective in the beginning of this year, our largest OES contract in the U.S. Gulf. There are others that will reset over the course of this year. More broadly speaking, across our global portfolio, we expect by the end of this calendar year that essentially all of our OES, our legacy OES contracts will have reset, so we'll have the benefit of that and, of course, more of a full-year benefit in 27 and beyond.

• Q: Can you elaborate on the specific operational financial considerations that led to the decision to retire the S-76D helicopters earlier than expected?

  A: This decision was primarily based on operational considerations including repairs and maintenance coverage with the OEM and our ability to procure parts and inventory needed to support the suite. It has a small installed base, and it's been difficult to continue to keep those lines, so to meet our customers' needs, we've had to make a change.

• Q: So it's an interesting concept laying out these megatrends that Bristow might be in position to participate in over the coming years. Can you just discuss your thoughts around the timing of the opportunities and really how you're balancing them with just the continued tight equipment supply and really the ever-changing geopolitical landscape?

  A: From a timing standpoint, I'd say that these are really already tangible in many ways. For example, the progress that's being made on the projects for the advanced air mobility initiatives that are out there. In addition to that, energy security is, I think, again, very tangible for everyone in the world right now and the importance of where your resources for supply are coming from. And then around the defense spending and government opportunity, again, I think very tangible just with the way Headlines and developments are occurring in the world and the conversations that we're having with both existing and potential customers about new ways to support them. So already tangible, but we expect traction and momentum really to increase in the latter part of this year. And then we see this as a multi-year opportunity set. So we see it as being quite durable in terms of opportunities to continue to grow the business. In the context of the tight supply market that you mentioned, I think that will always be a challenge in how you have enough supply to meet an increased demand. Thankfully, I think we're well positioned in the sense of being the largest operator in the space, having the largest fleet globally. It does present us with both challenges as well as opportunities to optimize the portfolio and where the assets are and are they generating the best return potential for that potential asset. And then I think, again, we have a competitive advantage in the sense of financial flexibility that we have. It's really a differentiator versus our competitors in the market. So that allows us, you know, we can bring in aircraft on lease. We can also purchase them when that makes more sense. And being, you know, the biggest operator for most of our key OEMs on the vertical aircraft side, I think we're as well, if not better positioned than anyone to capitalize on that.