Civeo Corporation Q1 FY2026 earnings call

• Key takeaways: Delivered strong start to 2026 with 20% revenue growth and 78% adjusted EBITDA growth; executing disciplined capital allocation strategy; confident in revenue trajectory and raising lower end of revenue guidance; cost impacts from Iran conflict likely affect margins.
• Operational results: Consolidated revenue and adjusted EBITDA up year-over-year; Australia performance strong with contribution from acquired villages and integrated services growth; Canada had higher occupancy and margin expansion; macro environment dynamic with volatile prices and disciplined customer spending; capital allocation: repurchased shares, amended and extended credit agreement.
• Outlook: Raised low end of revenue guidance to $675 million to $700 million; maintaining adjusted EBITDA guidance of $85 million to $90 million; Australia: metallurgical coal prices healthy but diesel prices affecting customer cost efficiency; Canada: turnaround activity shift to later in year, early execution on Ontario correctional facilities contract, active pursuit of additional opportunities.

Consolidated revenue for the quarter was $172.7 million, up 20% from $144 million in the first quarter of 2025. Adjusted EBITDA was $22.5 million, up 78% from $12.7 million in the prior year period. Australia: First quarter revenues were $123 million, up 19% from $103.6 million in the prior year quarter. Adjusted EBITDA was $21.8 million compared to $19 million in the prior year period. Billed rooms were approximately 676,000 compared to approximately 626,000 in the first quarter of 2025. Daily room rate for Australian-owned villages was $83, compared to $75 in the prior year period. Canada: First quarter revenues were $49.6 million, compared to $40.4 million in the first quarter of 2025. Adjusted EBITDA was $5.2 million, compared to negative $0.8 million in the prior year period. Billed rooms totaled approximately $434,000 compared to approximately $359,000 in the prior year report. Daily room rate was $99 compared to $93 in the prior year period.

• Raised the low end of revenue guidance for 2026 to $675 million to $700 million from prior range of $650 to $700 million, reflecting momentum in Australian integrated services platform and recovery in Canadian business.
• Maintaining adjusted EBITDA guidance of $85 million to $90 million for 2026 due to higher input costs, inflationary pressures, and customer cost discipline.
• Expecting capital expenditures for 2026 to be in the range of $25 million to $30 million.

• Cost impacts of ongoing conflict in Iran and associated dislocations of global energy and raw materials trade likely impact margins. Australia's dependence on normalized global seaborne energy trade for diesel and other fuels may lead to inflationary impacts on adjusted EBITDA.

Q: Good morning, everybody. Hey, how are you, Bradley? So when we think about the U.S. market and Canada as well, one of your competitors, at least one of the big accommodations players in North America, just lost a bunch of capacity. And it seems like the data center demand is extremely strong and the supply is extremely low. So I'm curious how you're thinking about that opportunity, anything you can share on traction of maybe mobilizing assets in the U.S. market and starting to gain traction in that market.

A: We continue to be extremely active in terms of bidding into those markets. All of our available assets are in Western Canada. So proximity to where the assets are now helps our bidding posture because transportation costs to move assets into where the customer needs them it is a material portion of delivering a room ready for occupancy. So where I was alluding to, we continue to be, we believe we're better positioned in the northern U.S. and Canada and Alaska to redeploy those assets. In terms of overall activity, it's as busy as we've seen it. As I mentioned, we've got 2,500 mobile camp rooms. We've bid those out multiple times. And then we're seeing increased interest in our multi-story lodge rooms to be re-employed as well.

Q: And have you seen from customers yet, I might actually ask you this last quarter, but have you seen from customers any kind of concerns about availability? I mean, we're seeing it clearly on the power side around data centers and pricing becomes less important than access to power, in your case, accommodations. But are you seeing any of that concern from your customers yet? And if not, do you think it's close?

A: I think you summed it up well at the latter part of your question. I think it is an incredibly dynamic market right now. And as we've gotten our IR deck, we see 35,000 to 50,000 room demand across North America, and that right now there isn't that much capacity. So I would say that it hasn't tipped over into that fear of availability broadly. There's certainly, with certain customer projects, particularly on the U.S. side of things, expediency, being able to meet timeframes for first beds is more important. than price, although price continues to be a consideration. So having available assets has a lot of value today. And to your point, the market is starting to tighten up and concerns about availability are, that theme is starting to come out in customer conversations.

Q: And then maybe just one more, and this might be a little bit harder, but when we go back in time right and you built out the oil sands and and i forget the exact numbers but if you needed a thousand folks to construct the facility and develop the asset the operating personnel was something less than that i don't know for 50 or 60 percent if i don't remember correctly but when and you're a cannabis it seems to be pretty baseload right now when you think about these other opportunities is there any way to think about that dynamic like if you deploy 2,000 rooms, there's three, four, five years of demand, and then the operating side is X, or is it too early in the process to get that sense?

A: Let me frame it this way. The opportunity set in North America right now is construction-related. Construction work is great, but it does have a finite life. So I see the next three to five years with the current bidding pipeline or opportunity set, it looks like it's going to be strong for three to five years. But to your point, whether it's a data center, an LNG facility, an oil sands mine, a pipeline, once construction is complete, there's not a need for accommodations anymore. Construction work is great. It's a great shot in the arm. We have an opportunity set, as we said in our prepared comments, that is as large by a factor of two or three than we've seen since the early 2000s. But it is going to be construction related. It's deploy assets and earn a return on those assets and then You know, should the construction projects start to space out, then we could see a longer than three to five year period of demand for accommodations in North America for construction. And that would be favorable for a longer term utilization, particularly the mobile camps.

Q: Hi. Good morning. This is Alex on for Steve. Thanks for taking questions. You alluded to this in the prepared remarks, but Maybe I could follow up a little bit just for clarity on how much of the strong Canadian, you know, 1Q performance you would attribute to customer timing, a.k.a. pull forwards.

A: I would say very little was a pull forward. There was one in the first quarter, a customer had an unexpected situation, which added some occupancy during the quarter. April has started off pretty strong. Well, we're done with April, but April was a pretty strong start to the second quarter. What we tried to allude to in the prepared comments was, look, oil's gone from 60 to 65 to, at times, close to 100. That's great for our customer base. They're focused on producing as much as they can into that price dynamic. but that does not, which has two implications. One, Q2 and Q3 are usually the time period in Canada when the customers do planned annual maintenance. As we mentioned in the comments, we see that that's likely pushing out into later in the year as opposed to being stronger in the second quarter as they focus on production. It also has them continue to be focused on on cost containment because they're not making, other than trying to push production, they're not making changes to spinning activity as if it's a $90 a barrel market.

Q: You know, you've continued to report strong and growing Australian services revenue Could you talk a little bit about what the labor market is like there now? Any challenges with staffing or any room to expand?

A: Yeah, availability of labor continues to be a struggle across our Australian business. Our HR team down there, they're hyper-focused on recruitment and retainment. It's one thing to get People hired, it's another thing to keep them in the business long term. And so labor costs are still our labor availability and therefore cost because we have to use temporary labor when we don't have full complement or full-time employees. Labor costs are something that we're focused on. So we're recruiting. One of the tough positions for our business is you're is your head chef at each location. We're recruiting foreign chefs to come in and work rotations for us, and that has helped some, but we're still not to the labor costs that we'd like to have there.

Q: Wanted to hold on Australia for a second here. We've talked in the past about 200 met coal being an important benchmark. I know you mentioned the challenged cost environment. Can you help us maybe understand a little better about how that push and pull looks now? Is 225 or 250 met coal a better benchmark now? going forward in the current environment? Or maybe just help us understand the push and pull there.

A: It really depends customer by customer, both their inherent cost structure as it relates to production costs, as well as where their balance sheets are. I think where you're headed is generally correct. The old 200 is probably 225 in this market. The other factor that you have to keep in mind from a customer standpoint, it's not a factor for us and I'll explain why, is that they sell their commodities in U.S. dollars and they've got largely all Australian dollar costs. So我们've got diesel costs, which are more impactful to our customer's cost structure than it is to ours, coupled with if the Aussie dollar continues to appreciate, for instance, the U.S. dollar, our customers will have effectively a a cost structure increase without a revenue increase because it's obviously dollar costs and U.S. dollar revenues. For us, we're naturally hedged. We're largely Australian. We're all Australian dollar revenues down there and Australian dollar costs. So the concern really is how do fuel prices impact customer activity levels? And it's, I would say, early on. We've had effectively, two months, and I expect that Australia will continue to see inflationary pressures for the balance of the year.

Q: Circling back to the U.S., and I recognize that this is maybe a bit of a crystal ball question, but你mentioned there's a large volume of different types of contracts that could be gained in the U.S. between LNG, power, data centers. When you're looking across that universe, is there a maybe a field or a geography or a type of contract that you would expect to drop first, you know, maybe in the earlier 2027? Or are they all just super different and, you know, kind of hard to judge?

A: Well, we always have to go off what our customers tell us the timeline is. And I think embedded in your question is, do we think that they're going to hit the timeline? These are major questions. major investment projects, which historically have always had a tendency to push to the right. We continue to believe that there's a fair amount of work that will be let in 2026, that will be announceable in 2026, but may not, as we said in our prepared comments, may not materially hit us financially until going into 2027 and 2028. But the FID time period as we understand it now, the time to mobilize, the time to first meals and first beds, some of it could hit in 2026. But as we sit here on May 1st, that's got to hit pretty soon. Mobile camps can typically be deployed within 90 days and start earning money. But if it involves multi-story, that's going to take longer.

Q: You mentioned some of the turnaround activity in Canada being pushed out due to commodity prices. Just looking across your customers, is there a potential for that to be pushed out again further should commodity prices remain elevated? Or is there maybe a hard backstop in the Q3, Q4 that would require customers to bring in that turnaround activity?

A: It's a tough question to answer. It's always possible for turnaround work to be pushed out. It's always a variability. Even when you don't have the dislocations we're experiencing today, even in a more normalized market, customers can get in and have various idiosyncratic reasons to either accelerate or defer turnaround work. I think we feel good about what's embedded in our guidance. Canada is going to face a smoother year this year in terms of the cadence of occupancy than we would historically have seen. So the rule of thumb that we've given the market in the past multiple times was that 60, 65% of annual EBITDA for us would happen in Q2 and Q3, largely driven by turnaround activity ramping up in Canada. I would say this year it's going to look a lot more smooth. So closer to, you know, well, just flatter throughout the year as it relates particularly to Canadian Africans.

Q: Two follow-ups. One to the question你just answered. When we think about the difference between the high-end and low-end of guidance, is that primarily related to the turnaround activity?

A: It would be turnaround activity. It would be inflationary pressures in Australia, more so than Canada, and then to To a prior comment, it would also be if any project work kicks off this year. We've won a little bit of work for our mobile camp business, which we had budgeted for later in the year. So that speculative amount of work that we had budgeted, we feel much better about now. That project will kick off here in the next 60 days. That works in Alberta. So I would think it's Canadian turnaround activity Australian inflation, and when do we get any benefit from infrastructure projects that are won this year, that should mobilize this year, and then, as I mentioned, set up for a stronger 2027?

Q: And the second question, I'm not sure if you can answer this directly, but when we think about the types of projects you're bidding on in North America and aggregate Canada and U.S., are there types of projects that would tend to be longer term in nature? And would that... How do you balance maybe the term of the contract versus maybe something which could be a little more profitable for two or three years versus a longer term relationship and or contract?

A: Well, the... term of deploying assets for a construction project is that's a material consideration. And so obviously we would be, we had our brothers, we would win work that has a longer duration. I would说generally what we're seeing today is two to four year projects. Some are a little bit longer, but I haven't seen a lot that are over five years. These are construction projects, and the need for accommodations is typically in that two-to-four, two-to-five-year timeframe.