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

Civeo Corporation reported third-quarter 2025 revenue of $170.5 million and adjusted EBITDA of $28.8 million, reflecting continued operational strength and strategic execution across its global workforce accommodation business. The results compare to Stonegate Capital Partners' estimates of $175.9 million for revenue and $27.7 million for adjusted EBITDA, with the year-over-year EBITDA increase driven by Australian market strength and successful cost-cutting initiatives in Canada.

The Canadian segment demonstrated remarkable efficiency improvements despite challenging market conditions. Revenue declined to $46.0 million from $57.7 million in the third quarter of 2024, but adjusted EBITDA improved significantly to $8.0 million compared to $3.4 million in the prior year period. This performance occurred despite a 20% decline in billed rooms, highlighting the effectiveness of cost rationalization measures that included headcount reductions, closure of underutilized lodges, and streamlined field operations. These actions drove a 35% increase in gross margin to 22.5%, positioning the Canadian operations for improved profitability even in a lower-demand environment.

Australia remained the primary growth driver for Civeo, with revenue increasing 7% year-over-year to $124.5 million and adjusted EBITDA rising 19% to $26.7 million. The strong 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. 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, with Civeo executing on its accelerated share repurchase program by buying back 1.05 million common shares during the quarter. 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, demonstrating commitment to shareholder returns.

The company tightened 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. For the fourth quarter, management expects Australian occupancy to remain strong but soften modestly due to seasonality and met coal market weakness, while Canadian performance continues to benefit from efficiency gains. Looking ahead to 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.

Stonegate Capital Partners' valuation analysis, available at https://www.stonegateinc.com, utilizes both discounted cash flow and EV/EBITDA comparison methodologies. The DCF analysis produces a valuation range of $26.73 to $31.19 with a mid-point of $28.79, while the EV/EBITDA valuation results in a range of $27.82 to $31.58 with a mid-point of $29.70, indicating potential upside from current trading levels. The company ended the quarter with net debt of $176 million, a net leverage ratio of 2.1x, and liquidity of approximately $70 million, providing financial flexibility to navigate market conditions while continuing strategic initiatives.