Civeo Corporation Reports Strong Q3 2025 Results Driven by Australian Growth and Canadian Cost Initiatives

Stonegate Capital Partners has updated its coverage on Civeo Corporation following the company's third quarter 2025 financial results. Civeo reported revenue of $170.5 million and adjusted EBITDA of $28.8 million for the quarter, reflecting continued strength in Australian operations and the benefit of cost-cutting initiatives in Canada. The year-over-year EBITDA increase occurred despite revenue coming in slightly below consensus estimates of $173.5 million, while the company exceeded EBITDA expectations of $27.8 million.

The Canadian segment demonstrated remarkable improvement despite a 20% decline in billed rooms, generating $46.0 million in revenue and $8.0 million in adjusted EBITDA compared to $57.7 million and $3.4 million in the same quarter last year. This performance improvement stemmed from successful cost rationalization measures including headcount reduction, closure of underutilized lodges, and streamlining of field operations. These actions 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.

Australia remained the primary growth driver for Civeo, with revenues increasing 7% year-over-year to $124.5 million and adjusted EBITDA rising 19% to $26.7 million. The performance reflected a full quarter of contribution from the four Bowen Basin villages acquired in May 2025, which added approximately $8.4 million of incremental revenue. Civeo's Australian owned-village occupancy reached 763,000 billed rooms, representing an 18% year-over-year increase. The company continues to make steady progress toward its goal of achieving A$500 million in integrated services revenue by 2027, supported by strong margins and expanding geographic presence across Australia.

Capital allocation remained a key focus during the quarter, with Civeo executing on its accelerated share repurchase program by buying back 1.05 million common shares. Year-to-date, the company has returned approximately $52 million to shareholders, completing about 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. The company ended the quarter with net debt of $176 million, a net leverage ratio of 2.1 times, and liquidity of approximately $70 million.

Civeo tightened its full-year 2025 guidance to revenue of $640–$655 million and adjusted EBITDA of $86–$91 million, while maintaining capital expenditures at $20–$25 million. The company expects Australian occupancy to remain strong but soften modestly in the fourth quarter 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.