Q2 2026 Civeo Corp Earnings Call

July 30, 2026

Speaker #1: Greetings, and welcome to the Civeo Corporation's second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

Operator 2: Greetings, welcome to the Civeo Corporation's Q2 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Regan Nielsen, Vice President, Corporate Development. You may begin.

Speaker #1: If anyone requires operator assistance during the conference, please press *0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Regan Nielsen, Vice President Corporate Development.

Speaker #1: You may begin.

Speaker #2: Thank you, and welcome to Civeo's second quarter 2026 earnings conference call. Today, our call will be led by Bradley Dodson, Civeo's President and Chief Executive Officer, and Collin Gerry, Civeo's Chief Financial Officer and Treasurer.

Regan Nielsen: Thank you. Welcome to Civeo's Q2 2026 earnings conference call. Today, our call will be led by Bradley Dodson, Civeo's President and Chief Executive Officer, and Collin Gerry, Civeo's Chief Financial Officer and Treasurer. Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain anything other than historical information, please note that we're relying on the safe harbor protections afforded by federal law. These forward-looking statements speak only as of the date of our earnings release and this conference call. We undertake no obligation to update or revise these statements, except as required by law. Any such remarks should be read in the context of the many factors that affect our business, including risks and uncertainties disclosed in our Forms 10-K, 10-Q, and other SEC filings. I'll now turn the call over to Bradley.

Speaker #2: Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain anything other than historical information, please note that we're relying on the safe harbor protections afforded by federal law.

Speaker #2: These forward-looking statements speak only as of the date of our earnings release and this conference call. We undertake no obligation to update or revise these statements, except as required by law.

Speaker #2: Any such remarks should be read in the context of the many factors that affect our business, including risks and uncertainties, disclosed in our Forms 10-K, 10-Q, and other SEC filings.

Speaker #2: I'll now turn the call over to Bradley.

Speaker #3: Thank you, Regan, and thank you all for joining us today. On our second quarter 2026 earnings call, I'll start with the key takeaways for the quarter, then summarize our consolidated and regional performance; after that, Collin will provide further financial and segment-level detail; and I'll conclude our prepared remarks with our outlook for 2026.

Bradley Dodson: Thank you, Regan. Thank you all for joining us today on our Q2 2026 earnings call. I'll start with the key takeaways for the quarter, then summarize our consolidated and regional performance. After that, Collin will provide further financial and segment-level detail. I'll conclude our prepared remarks with our outlook for 2026. We will then open the call for questions. There are four key takeaways for the call today. First, North American growth represents a tangible opportunity set for Civeo. Our bid pipeline remains robust with more than $1.5 billion in total contract value, in line with what we disclosed last quarter.

Speaker #3: We will then open the call for questions. There are four key takeaways for the call today. First, North American growth represents a tangible opportunity set for Civeo.

Speaker #3: Our bid pipeline remains robust, with more than $1.5 billion in total contract value in line with what we disclosed last quarter. While the pace and timing of these opportunities are dependent on customer final investment decisions, we remain focused on what we can control.

Bradley Dodson: While the pace and timing of these opportunities are dependent on customer final investment decisions, we remain focused on what we can control, maintaining a sharp business development focus, preparing our assets and operating platform to execute, and preserving the financial flexibility to pursue the right opportunities as they advance. Second, the convertible debt offering we completed after the quarter end provides Civeo with the financial firepower to play offense. It gives us the flexibility to pursue the opportunity set I just described. We raised lower cost, fixed-rate capital and completed the first phase of our shareholder return commitment. Third, Australia remains the strength of our business, although the Q2 results reflected near-term softness from cost inflation and customer caution, tied principally to the fuel cost and availability amid ongoing Middle East seaborne trade dislocation.

Speaker #3: Maintaining a sharp business development focus, preparing our assets, and operating platform to execute, and preserving the financial flexibility to pursue the right opportunities as they advance.

Speaker #3: Second, the convertible debt offering we completed after the quarter end provides Civeo with the financial firepower to play offense. It gives us the flexibility to pursue the opportunity set I just described.

Speaker #3: We raised lower-cost, fixed-rate capital and completed the first phase of our shareholder return commitment. Third, I'll show you remains the strength of our business, although the second quarter results reflected near-term softness from cost inflation and customer caution tied principally to fuel costs and availability amid ongoing Middle East seaborne trade dislocation.

Speaker #3: With metallurgical coal prices in the $220-plus range, the underlying operating environment is healthy and we see upside as this temporary noise dissipates. Lastly, in our base oil sands business, we believe there is more upside than downside from the current activity levels.

Bradley Dodson: With metallurgical coal prices in the $220-plus range, the underlying operating environment is healthy, and we see upside as this temporary noise dissipates. Lastly, in our base oil sands business, we believe there is more upside than downside from the current activity levels. Our confidence in the long-term outlook for the business is supported by the increasing focus from the federal and Alberta governments and the oil sands producers on advancing pipeline and carbon capture infrastructure projects. I'll now start with our operational results for the quarter. On a consolidated basis, the Q2 results and operating drivers were in line with our expectations. In Australia, we had solid occupancy in our own villages and continued to focus on mitigating inflationary pressures, largely brought by the Middle East conflict and labor availability.

Speaker #3: Our confidence in the long-term outlook for the business is supported by the increasing focus from the federal and Alberta governments and the oil sands producers on advancing pipeline and carbon capture infrastructure projects.

Speaker #3: I'll now start with our operational results for the quarter. On a consolidated basis, the second quarter results in operating drivers were in line with our expectations.

Speaker #3: In Australia, we had solid occupancy in our own villages and continued to focus on mitigating inflationary pressures largely brought by the Middle East conflict and labor availability.

Bradley Dodson: Australian platform remains well contracted, generates strong cash flow, and is positioned to benefit when fuel market conditions normalize. In Canada, the Q2 results were as expected, and our bidding activity remains robust. We continue to manage the base oil sands business for current demand while preserving the capacity to benefit from future infrastructure activity. Now turning to capital allocation. We continue to make progress on our share buyback commitments. We completed the April 2025 commitment to repurchase 20% of the company just after the end of the Q2. It was done in conjunction with a convertible debt offering in July 2026, where we bought back 660,000 shares. We continue to believe Civeo shares are undervalued, and the transaction reinforces this conviction. We did not issue common equity at today's price and retired approximately $22.3 million of stock concurrent with the offering.

Speaker #3: The Australian platform remains well contracted, generates strong cash flow, and is positioned to benefit when fuel market conditions normalize. In Canada, the second quarter results were as expected, and our bidding activity remains robust.

Speaker #3: We continue to manage the base oil sands business for current demand while preserving the capacity to benefit from future infrastructure activity. Now turning its capital allocation, we continue to make progress on our share buyback commitments.

Speaker #3: We completed the April 2025 commitment to repurchase 20% of the company just after the end of the second quarter. It was done in conjunction with a convertible debt offering in July 2026, where we bought back $660,000 shares.

Speaker #3: We continue to believe Civeo shares are undervalued and the transaction reinforces this conviction. We did not issue common equity at today's price and retired approximately 22.3 million dollars of stock concurrent with the offering.

Speaker #3: At the same time, the North American opportunity set has become more actionable. We chose to raise capital when the market was open and the terms were attractive.

Bradley Dodson: At the same time, the North American opportunity set has become more actionable. We chose to raise capital when the market was open and the terms were attractive. The proceeds from the offering were immediately used to fund the concurrent share repurchase and repay revolver borrowings, restoring capacity under our secured bank facility while lowering the company's near-term cost of capital. However, the strategic intent of the convertible debt offering was to meaningfully enhance our financial flexibility to capitalize on the growth opportunities ahead. Stepping back, while we cannot control when customers make final investment decisions, we are taking steps to ensure Civeo is prepared to respond when they do. We have a growing and diversified opportunity set, available assets, proven operating capabilities, and a business development team focused on converting that activity into committed work.

Speaker #3: The proceeds from the offering were immediately used to fund the concurrent share repurchase, and repay revolver borrowings restoring capacity under our secured bank facility while lowering the company's near-term cost of capital.

Speaker #3: However, the strategic intent of the convertible debt offering was to meaningfully enhance our financial flexibility to capitalize on the growth opportunities ahead. Stepping back, while we cannot control when customers make final investment decisions, we are taking steps to ensure Civeo is prepared to respond when they do.

Speaker #3: We have a growing and diversified opportunity set, available assets, proven operating capabilities, and a business development team focused on converting that activity into committed work.

Speaker #3: We believe that combination of operational readiness, capital discipline, and balance sheet flexibility positions Civeo well to create long-term value as these opportunities advance. With that, I'll turn the call over to Collin.

Bradley Dodson: We believe that combination of operational readiness, capital discipline, and balance sheet flexibility positions Civeo well to create long-term value as these opportunities advance. With that, I'll turn the call over to Collin.

Speaker #4: Thank you, Bradley. And thank you all for joining us this morning. Starting with the income statement, today we reported total revenues in the second quarter of $180 million.

Collin Gerry: Thank you, Bradley. Thank you all for joining us this morning. Starting with the income statement, today we reported total revenues in Q2 of $180 million, compared to $162.7 million in Q2 of 2025, an increase of approximately 11%. Net loss for the quarter was $2.5 million, or $0.23 per diluted share, compared to a net loss of $3.3 million, or $0.25 per diluted share in the prior year period. During the quarter, Civeo generated adjusted EBITDA of $23.8 million, compared to $25 million in Q2 of 2025. Operating cash flow was $11.6 million, compared to $-2.3 million in the prior year period. The $17.3 million year-over-year increase in consolidated revenues was primarily driven by foreign exchange, with most of the Australian revenue increases attributed to the stronger Australian dollar.

Speaker #4: Compared to $162.7 million, in the second quarter of 2025, an increase of approximately 11%. Net loss for the quarter was $2.5 million, or 23 cents per diluted share.

Speaker #4: Compared to a net loss of $3.3 million, or 25 cents per diluted share in the prior year period. During the quarter, Civeo generated adjusted EBITDA of $23.8 million, compared to $25 million in the second quarter of 2025.

Speaker #4: Operating cash flow was $11.6 million, compared to negative $2.3 million in the prior year period. The $17.3 million year-over-year increase in consolidated revenues was primarily driven by foreign exchange, with most of the Australian revenue increases attributed to the stronger Australian dollar. The remaining growth reflected contributions from acquired villages and increased integrated services activity in Australia, as well as higher occupancy in the new integrated services contract in Ontario, Canada.

Collin Gerry: Remaining growth reflects contributions from acquired villages and increased integrated services activity in Australia, as well as higher occupancy in the new integrated services contract in Ontario and Canada. Adjusted EBITDA decreased $1.2 million year-over-year, primarily due to start-up costs associated with the new integrated services contract in Ontario and transitory cost inflation in Australia, partially offset by the favorable impact of the stronger Australian dollar. Let's now turn to the Q2 results for our two segments. I'll begin with Australia. Q2 revenues from our Australian segment were $125.4 million of 11% from $112.7 million in Q2 of 2025. Adjusted EBITDA was $22.6 million, compared to $22.3 million in the prior year period. The year-over-year revenue increase was driven almost entirely by the stronger Australian dollar.

Speaker #4: Adjusted EBITDA decreased 1.2 million year-to-year. Primarily due to startup costs associated with the new integrated services contract in Ontario, and transitory cost inflation in Australia, partially offset by the favorable impact of the stronger Australian dollar.

Speaker #4: Let's now turn to the second quarter results for our two segments. I'll begin with Australia. Second quarter revenues from our Australian segment were $125.4 million, up 11% from $112.7 million in the second quarter of 2025.

Speaker #4: Adjusted EBITDA was $22.6 million, compared to $22.3 million in the prior year period. The year-to-year revenue increase was driven almost entirely by the stronger Australian dollar, increased integrated services activity and contributions from the acquired villages, were largely offset by softer owned-op village occupancy, while transitory cost inflation pressured adjusted EBITDA.

Collin Gerry: Increased integrated services activity and contributions from the acquired villages were largely offset by softer owned village occupancy, while transitory cost inflation pressured adjusted EBITDA. Australian owned village billed rooms in the quarter were approximately 675,000, compared to approximately 691,000 in Q2 of 2025. Our average daily rate for Australian owned villages was $85, compared to $76 in the prior year period, with the increase primarily reflecting strengthening of the Australian dollar relative to the US dollar. Turning to Canada. Q2 revenues were $54.6 million, compared to $50 million in Q2 of 2025. Adjusted EBITDA was $6 million, compared to $6.9 million in the prior year period. The year-over-year increase in revenues was driven by higher occupancy and the new integrated services contract in Ontario.

Speaker #4: Australian-owned village build rooms in the quarter were approximately $675,000, compared to approximately $691,000 in the second quarter of 2025. Our average daily rate for Australian-owned villages was $85, compared to $76 in the prior year period, with the increase primarily reflecting strengthening of the Australian dollar relative to the US dollar.

Speaker #4: Turning to Canada, second quarter revenues were $54.6 million, compared to $50.0 million in the second quarter of 2025. Adjusted EBITDA was $6.0 million, compared to $6.9 million in the prior year period.

Speaker #4: The year-to-year increase in revenues was driven by higher occupancy and the new integrated services contract in Ontario. The decrease in adjusted EBITDA was primarily driven by startup costs associated with that new contract, which we expect to be temporary.

Collin Gerry: The decrease in adjusted EBITDA was primarily driven by start-up costs associated with that new contract, which we expect to be temporary. Canadian billed rooms totaled approximately 458,000, compared to approximately 450,000 in the prior year quarter. Our average daily rate was $96, compared to $94 in the prior year period. Looking at our capital structure as of 30 June 2026, total liquidity was approximately $82 million. Total debt was approximately $209 million. The net debt was approximately $191 million, a decrease of approximately $8 million from 31 March 2026, resulting in a net leverage ratio of approximately 2.1 times. These figures are as of quarter end and therefore precede the convertible notes offer. In July, the company issued $115 million aggregate principal amount of 4.5% convertible senior notes due 2031, including the full exercise of the initial purchaser's option.

Speaker #4: Canadian build rooms totaled approximately $458,000, compared to approximately $450,000 in the prior year quarter. Our average daily rate was $96, compared to $94 in the prior year period.

Speaker #4: Looking at our capital structure, as of June 30, 2026, total liquidity was approximately $82 million. Total debt was approximately $209 million, and net debt was approximately $191 million.

Speaker #4: A decrease of approximately $8 million from March 31, 2026, resulting in a net leverage ratio of approximately 2.1 times. These figures are as of quarter end, and therefore precede the convertible notes offered.

Speaker #4: In July, the company issued $115 million aggregate principal amount of 4.5% convertible senior notes due 2031. Including the full exercise of the initial purchaser's option, we used the net proceeds to fund the concurrent share repurchase and repay borrowings under the revolving credit facility.

Collin Gerry: We used the net proceeds to fund the concurrent share repurchase and repay borrowings under the revolving credit facility, restoring undrawn capacity. Turning to capital allocation. Capital expenditures for Q2 were $3.7 million, compared to $4.5 million in the prior year period, and were primarily related to maintenance spending on our lodges and villages. Subsequent to quarter end and concurrent with the convertible notes offering, we repurchased 660,297 common shares for approximately $22.3 million. Approximately 111,000 shares completed the April 2025 authorization to repurchase 20% of the company, and the remaining approximately 549,000 shares were applied for the subsequent 10% authorization, bringing that authorization to approximately 50% complete. The notes have a 4.5% fixed coupon, mature on 1 August 2031, and have an initial conversion price of $40.51 per share, representing a 20% premium to the 1 July closing price.

Speaker #4: Restoring undrawn capacity. Turning to capital allocation, capital expenditures for the second quarter were $3.7 million, compared to $4.5 million in the prior-year period, and were primarily related to maintenance spending on our lodges and villages.

Speaker #4: Subsequent to quarter end and concurrent with the convertible notes offering, we repurchased 660,297 common shares for approximately $22.3 million. Approximately 111,000 shares completed the April 2025 authorization to repurchase 20% of the company, and the remaining approximately 549,000 shares were applied to the subsequent 10% authorization, bringing that authorization to approximately 50% complete.

Speaker #4: The notes have a 4.5% fixed coupon mature on August 1, 2031, and have an initial conversion price of $40.51 per share, representing a 20% premium to the July 1 closing price.

Speaker #4: Our current intent is to satisfy the principal amount in cash. As a result, shares would be issued only for conversion value above the $40.51 conversion price, if any, and we retain the flexibility to settle in cash, shares, or a combination based on the circumstances at the time.

Collin Gerry: Our current intent is to satisfy the principal amount in cash. As a result, shares would be issued only for conversion value above the $40.51 conversion price, if any, and we retain the flexibility to settle in cash, shares, or combination based on the circumstances at the time. Together with the concurrent share repurchase, the transaction is not expected to result in net share dilution unless the convertible debt settles with a share price of approximately $53 per share or higher. If the North American growth opportunity set takes longer to develop, we will still benefit from five years of lower cost fixed rate capital and no common share issuance below the converting price. We will continue to take a disciplined and opportunistic approach to capital allocation. Our framework is to return at least 75% of annual free cash flow to shareholders through share repurchases.

Speaker #4: Together with the concurrent share repurchase, the transaction is not to expect it to result in net share dilution, unless the convertible debt settles with the share price of approximately $53 per share.

Speaker #4: Or higher. If the North American growth opportunity set takes longer to develop, we will still benefit from 5 years of lower-cost fixed-rate capital and no common share issuance below the conversion price.

Speaker #4: We will continue to take a disciplined and opportunistic approach to capital allocation. Our framework is to return at least 75% of annual free cash flow to shareholders, through share repurchases.

Speaker #4: Including the share repurchased as part of the convertible note offering, we have repurchased roughly $36.7 million worth of shares on a year-to-date basis, which we believe more than satisfies our intentions for 2026.

Collin Gerry: Including the shares repurchased as part of the convertible note offering, we have repurchased roughly $36.7 million worth of shares on a year-to-date basis, which we believe more than satisfies our intentions for 2026. Going forward, our focus remains maintaining the balance sheet flexibility to support the business and pursue high return growth opportunities. As the opportunity set develops, we intend to preserve sufficient capacity to fund the right projects without compromising our strong balance sheet or our commitment to shareholder returns. The convert improves that flexibility while lowering the fixed rate cost of capital on the refinanced borrowings. With that, I'll turn it back over to Bradley.

Speaker #4: Going forward, our focus remains maintaining the balance sheet flexibility to support the business and pursue high-return growth opportunities. As the opportunity set develops, we intend to preserve sufficient capacity to fund the right projects without compromising our strong balance sheet or our commitment to shareholder returns.

Speaker #4: The convert improves that flexibility while lowering the fixed-rate cost of capital on the refinanced borrowings. With that, I'll turn it back over to Bradley.

Speaker #1: Thank you, Colin. Turning now to our outlook for 2026. For the full year 2026, we are maintaining our revenue guidance range of $675 million to $700 million, and our adjusted EBITDA guidance range of $85 million to $90 million.

Bradley Dodson: Thank you, Colin. Turning now to our outlook for 2026. For the full year of 2026, we are maintaining our revenue guidance range of $675 to 700 million and our adjusted EBITDA guidance range of $85 to 90 million. We are also maintaining our capital expenditure guidance range of $25 to 30 million. I'll now provide additional color on our expectations by region. In Australia, metallurgical coal prices remain in the range of $220 per ton or better, which is supportive of a healthy underlying mine economics. However, elevated fuel costs and concerns around diesel availability have continued to cause customers to operate conservatively, limiting near-term occupancy upside and creating transitory cost pressure for Civeo. We expect these temporary macro-driven headwinds to persist through the end of the year, but we remain optimistic about improved conditions in 2027 and beyond.

Speaker #1: We are also maintaining our capital expenditure guidance range of $25 million to $30 million. I'll now provide additional color on our expectations by region.

Speaker #1: In Australia, metallurgical coal prices remain in the range of $220 per ton or better, which is supportive of healthy underlying mine economics. However, elevated fuel costs and concerns around diesel availability have continued to cause customers to operate conservatively.

Speaker #1: Limiting near-term occupancy upside and creating transitory cost pressure for Civium. We expect these temporary macro-driven headwinds to persist through the end of the year, but we remain optimistic about improved conditions in 2027 and beyond.

Speaker #1: Our owned village portfolio remains well contracted, and our integrated services business continues to advance towards our goal of reaching a run rate of $500 million Australian in annual services revenue by the year-end 2027.

Bradley Dodson: Our owned village portfolio remains well contracted. Our integrated services business continues to advance towards our goal of reaching a run rate of AUD 500 million in annual services revenue by the year-end 2027. In Canada, we expect approximately 20% year-over-year revenue growth in H2 2026 compared to H2 2025, driven by continued execution in our base business, growing success in our integrated services pursuits, turnaround activity that shifted from Q2 into Q3. We expect oil sands activity to remain stable and disciplined in the near term, we see more upside than downside from current levels as the broader infrastructure backdrop improves. More broadly, our business development team continues to see strong engagement across LNG, Canadian infrastructure, and power and data center-related projects. The bid pipeline remains robust at more than $1.5 billion in total contract value.

Speaker #1: In Canada, we expect approximately 20% year-over-year revenue growth in the second half of 2026, compared to the second half of 2025, driven by continued execution in our base business, growing success in our integrated services pursuits, and turnaround activity that shifted from the second quarter into the third quarter.

Speaker #1: We expect oil sands activity to remain stable and disciplined in the near term, but we see more upside than downside from current levels as the broader infrastructure backdrop improves.

Speaker #1: More broadly, our business development team continues to see strong engagement across L&G, Canadian Infrastructure, and Power and Data Center-related projects. The bid pipeline remains robust at more than $1.5 billion in total contract value.

Speaker #1: These opportunities remain dependent on customer final investment decisions, and the timing of meaningful financial contributions for Civeo remains largely outside of our control. Our recently completed convert gives us the flexibility to move quickly when these opportunities advance, without requiring us to compromise operating liquidity or ongoing commitment to the return of capital to shareholders.

Bradley Dodson: These opportunities remain dependent on customer final investment decisions. The timing of meaningful financial contributions for Civeo remains largely outside of our control. Our recently completed convert gives us the flexibility to move quickly when these opportunities advance without requiring us to compromise operating liquidity or our ongoing commitment to return of capital to shareholders. What differentiates Civeo is the combination of our team, our assets, our operating resume, and our financial flexibility. We have demonstrated that we can execute remote lodging and take care of people safely and reliably at scale, including in complex cold weather environments. We have 2,700 mobile camp rooms strategically located in Western Canada that are available for deployment, along with approximately 7,000 to 8,000 oil sands lodge rooms that could be redeployed for the right project. These are purpose-built assets well-suited for projects in the Northern US, Canada, and Alaska.

Speaker #1: What differentiates Civeo is the combination of our team, our assets, our operating resume, and our financial flexibility. We have demonstrated that we can execute remote lodging and take care of people safely and reliably at scale, including in complex cold-weather environments.

Speaker #1: We have 2,700 mobile camp rooms strategically located in western Canada, that are available for deployment, along with approximately 7,000 to 8,000 oil sands lodge rooms that could be redeployed for the right project.

Speaker #1: These are purpose-built assets, well-suited for projects in the northern United States, Canada, and Alaska. We also have the balance sheet strength and capital flexibility to tailor the right solution to each customer project.

Bradley Dodson: We also have the balance sheet strength and capital flexibility to tailor the right solution to each customer project, whether that requires redeploying existing capacity, investing in incremental capital, combining accommodations with integrated services. Overall, our outlook reflects a resilient Australian platform, improving diversification in Canada, a growing North American opportunity set. We remain focused on operating safely and efficiently, managing costs prudently, and allocating capital to the highest return opportunities as we position Civeo for long-term growth and value creation. We will now open the call for questions.

Speaker #1: Whether that requires redeploying existing capacity, investing in incremental capital, or combining accommodations with integrated services. Overall, our outlook reflects a resilient Australian platform, improving diversification in Canada, and a growing North American opportunity set.

Speaker #1: We remain focused on operating safely and efficiently, managing costs prudently, and allocating capital to the highest return opportunities as we position Civeo for long-term growth and value creation.

Speaker #1: We will now open the call for questions.

Speaker #2: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Operator 2: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question today comes from Stephen Gengaro of Stifel. Please proceed with your question.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker #2: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question today comes from Stephen Gongario of Stiefel.

Speaker #2: Please proceed with your question.

Speaker #3: Thanks. Good morning, everybody.

Stephen Gengaro: Thanks. Good morning, everybody.

Speaker #4: Good morning, Stephen.

Bradley Dodson: Good morning.

Speaker #3: So I had a few things I wanted to ask, but just because you just talked about the available rooms, maybe I'll start there. The $2,700 mobile rooms and then I think you said $700 to $800, $700 to $8,000 lodges that are available, are they better how do we think about the applications that those two buckets of rooms are better suited for?

Stephen Gengaro: I had a few things I wanted to ask, but just because you just talked about the available rooms, maybe I'll start there. The 2,700 mobile rooms, and then I think you said 7,000 to 8,000 lodges that are available. How do we think about the applications that those two buckets or rooms are better suited for? Are the mobile rooms, do they have a unique application, or can they be kind of adapted to a more permanent need like the oil sands lodges?

Speaker #3: Are the mobile rooms do they have a unique application, or can they be kind of adapted to kind of a more permanent need like the oil sands lodges?

Speaker #1: The mobile camp rooms are well-suited for quick deployment. Principally, they're well-suited for camp sizes from 250 to 1,000 people, where you start getting into headcounts that are above 1,000.

Bradley Dodson: The mobile camp rooms are well-suited for quick deployment, principally. They're well-suited for camp sizes from 250 to 1,000 people. Where you start getting into headcounts that are above 1,000, generally the limitation is land availability. It becomes a much, much larger footprint where multi-story Lodge rooms that are currently installed in Alberta become more attractive, particularly if the project has sufficient term to justify the installation cost of multi-story rooms. All of those assets are either largely in Alberta or in British Columbia. From a project standpoint, we're going to be more competitive on a transportation cost basis closer to those areas. That's why we highlighted in the prepared comments, the Northern US, Canada and Alaska. It really depends project by project what the project proponent is looking for. Mobile camp rooms are very well suited for two to four-year projects.

Speaker #1: Generally, the limitation is land availability. It becomes a much, much larger footprint where multi-story lodge rooms that are currently installed in Alberta become more attractive, particularly if there is the project has sufficient term to justify the installation cost of multi-story rooms.

Speaker #1: All of those assets are either in, or largely in, Alberta or in British Columbia. So, from a project standpoint, we're going to be more competitive on a transportation cost basis closer to those areas.

Speaker #1: So that's why we highlighted in the prepared comments the northern US, Canada, and Alaska. It really depends project by project what the project proponent is looking for.

Speaker #1: Mobile camp rooms are very well suited for two- to four-year projects. For projects under two years, the cost of transportation, installation, dismantling, and moving out becomes a larger part of the total accommodations budget.

Bradley Dodson: Below two years, the cost of transportation, installation, and then dismantle and transport out becomes a bigger cost to the total accommodations budget. I don't know if that answers your question, Steven, but that's how I-

Speaker #1: So I don't know if that answers your question, Stephen, but that's how I think about it.

Stephen Gengaro: Yep. No, that's very helpful. The second one was around, and you had kind of alluded to this, the pipeline of opportunities and North American data centers was kind of part of the equation. Can you tell us what you're seeing on that front? I don't know if you're willing to kind of talk about there's almost 10,000 rooms total or maybe even a little bit more that you have available. Timing on when we may hear about some contracts, whether it be data center or other?

Speaker #3: Yeah. No, that's very helpful. The second one was around I think you had kind of alluded to this, the pipeline of opportunities and North American data centers was kind of part of the equation.

Speaker #3: Can you tell us what you're seeing on that front? And I don't know if you're willing to kind of talk about theirs—I don't know, it's almost 10,000 rooms total, or maybe even a little bit more, that you have available.

Speaker #3: Timing on when we may hear about some contracts, whether it be data center or other?

Speaker #1: As we highlighted a couple of times in the prepared comments, they all depend on customer final investment decision. Those all appear to be progressing in a positive fashion, but ultimately, it's dependent on the customer.

Bradley Dodson: As we highlighted a couple times in the prepared comments, they all depend on customer final investment decision. Those all appear to be progressing in a positive fashion, ultimately, it is dependent on the customer. That being said, I would expect that based on the current opportunity set, that something meaningful should reach FID and we should be in a position to be awarded contracts by year-end. The question is, how close is it to now? Bring into the question, is there an opportunity to generate revenues into 2026, and/or how much revenue benefit are we going to get for the full year 2027? As we look at them, I think what's interesting, we've tried to highlight this in the investor deck, which we had in the prior version.

Speaker #1: That being said, I would expect that based on the current opportunity set, that something meaningful should be reach FID and we should be in a position to be awarded contracts by the year-end.

Speaker #1: The question is, how close is it to now? Bringing into the question, is there an opportunity to generate revenues in 2026, and/or how much of a revenue benefit are we going to get for the full year 2027?

Speaker #1: But as we look at them, I think what's interesting—and we've tried to highlight this in the investor deck, which we had in the prior version and the new version will also have—is that the opportunity set just in Canada and Alaska is meaningful: between LNG opportunities, Highline Power, general infrastructure, and obviously Alaska LNG.

Bradley Dodson: New version will also have this, the opportunity set just in Canada and Alaska is meaningful, between LNG opportunities, transmission line power, general infrastructure, obviously Alaska LNG. That in and of itself would be an opportunity set that is extremely attractive and would rank as some of the best opportunity sets that we've seen over the last 5 to 10 years. You add in the fact that we have a data center opportunity set that we continue to pursue. That is something that is additive. We are looking for term on the commitment. Obviously, a project that has 3 to 5 years of term as opposed to 2 to 3 is more attractive, where we can put more rooms to work under a take or pay basis. That is more attractive.

Speaker #1: That in and of itself would be an opportunity set that is extremely attractive and would rank as some of the best opportunity sets that we've seen over the last five to ten years.

Speaker #1: You add in the fact that we have a data center opportunity set that we continue to pursue—that is something that is additive. So, we are looking for term on the commitment.

Speaker #1: Obviously, a project that has three to five years of term as opposed to two to three is more attractive, or it can put more rooms to work under a take-or-pay basis.

Speaker #1: That is more attractive. I would say, overall, the inbounds we were receiving on data center or data center-related projects were feverish at the beginning of this year.

Bradley Dodson: I would say overall, the inbounds we were receiving on data center or data center-related projects were feverish at the beginning of this year. It has slowed some. That is not to mean that we are not pursuing those, but I would say the fervor for what we do related to that end market has softened a little bit. That being said, as we said in the comments, the overall opportunity set that we're pursuing is still extremely meaningful.

Speaker #1: It has slowed some. That is not, to me, that we are not pursuing those, but I would say the fervor for what we do related to that end market has softened a little bit.

Speaker #1: That being said, as we said in the comments, the overall opportunity set that we're pursuing is still extremely meaningful.

Speaker #3: Right. Okay. Thanks. And here's one final leap. The full-year guide is unchanged. When we think about the variability between the low end and the high end on EBITDA side, is that just kind of around some of the uncertainty in Australia that you mentioned because of some of the apprehension of the customers around higher costs and higher diesel costs?

Stephen Gengaro: Right. Okay, thanks. Just one follow. The full-year guide is unchanged. When we think about the variability between the low end and the high end on the EBITDA side, is that just kind of around some of the uncertainty in Australia that you mentioned because of some of the apprehension of the customers around higher costs and higher diesel costs? Is that the main variable, or how do we think about that?

Speaker #3: Is that the main variable, or is it or how do we think about that?

Bradley Dodson: It would be turnaround work in Canada, which we do have in Q3. To some degree, that shifted from Q2 to Q3, partially because of the conflict in the Middle East and our customer base wanting to focus on production given the higher oil prices. Australia is a component of it, in terms of what we would call casual occupancy, so customers using rooms above their take or pay commitments. It is also going to be timing of mobile camp projects. We are expecting that we're going to have some work in Q4.

Speaker #1: It would be turnaround work in Canada. Which we do have in the third quarter, to some degree, had shifted from Q2 to Q3, partially because of the conflict in the Middle East and our customer base wanting to focus on production given the higher oil prices.

Speaker #1: Australia is a component of it in terms of what we would call casual occupancy, so customers using rooms above their take-or-pay commitments.

Speaker #1: And then it is also going to be timing of mobile camp projects. We are expecting that we're going to have some work in the fourth quarter.

Speaker #3: Great. Okay. Thank you for all the detail.

Stephen Gengaro: Great. Okay. Thank you for all the detail.

Speaker #2: The next question is from Steve Ferrazzani of Sidoti. Please proceed with your question.

Operator 2: The next question is from Steve Ferazani of Sidoti. Please proceed with your question.

Speaker #4: Good morning, everyone. Bradley, just in terms of your outlook for Australia, can you sort of break it down? Because I know your accommodations and your integrated services are really in two different areas.

Steve Ferazani: Morning, everyone. Bradley, just on terms of your outlook for Australia, can you sort of break it down? I know your accommodations and your integrated services are really in two different areas. Can you talk about the differences from what you're seeing on those two sides? I know on the integrated services, it's not just been demand growth, but it's been market share growth. Your sort of opportunity outlook on that side over the next couple of years.

Speaker #4: Can you talk about the differences from what you're seeing on those two sides? And I know on the integrated services, it's not just been demand growth, but it's been market share growth.

Speaker #4: Your sort of opportunity outlook on that side over the next couple of years.

Bradley Dodson: Yeah. In terms of the owned villages, which are largely in Queensland, I would say that it's very solid occupancy. I think the piece that has been a little bit of a head-scratcher has been that met coal prices are materially better this year than they were last year. Most of last year, met coal prices were in $180 a ton plus or minus, and this year they've spent most of the year above $220. I do think the uncertainty around availability and cost of diesel has been significant. The overall unemployment in Australia is low. As a result, there are a couple headwinds there. Overall, our Civeo-owned village occupancy is very strong.

Speaker #1: Yeah. So, in terms of the owned villages, which are largely in Queensland, I would say that it's very solid occupancy. I think the piece that has been a little bit of a head-scratcher has been that coal prices are materially better this year than they were last year.

Speaker #1: Most of last year met coal prices were in the $180 a ton plus or minus. And this year, they've spent most of the year above 220.

Speaker #1: But I do think the uncertainty around the availability and cost of diesel has been significant. The overall unemployment in Australia is low, and as a result, there are a couple of headwinds there.

Speaker #1: But overall, our city-owned village occupancy is very strong. So I would say that if there is a resolution to the uncertainty surrounding diesel costs, that should set up, as we said in the comments, for a stronger 2027.

Bradley Dodson: I would say that if there is a resolution to the uncertainty surrounding diesel costs, that should set up for, as we said in the comments, for a stronger 2027, really across the village occupancy span. As it relates to the integrated services business, which as you pointed out, is largely in Western Australia, although we have locations that we serve in South Australia and in Queensland. The opportunity sets to grow that organically remains strong. We've grown that business pretty successfully over the last 7 years. We're in the crosshairs of the bigger players who are taking notice. We recognize that it's going to be tougher to win new work, but we are continuing to win new work. We still, as we've maintained our goal of reaching AUD 500 million of revenues out of that business by next year.

Speaker #1: Really across the village occupancy span. As it relates to the integrated services business, which, as you pointed out, is largely in Western Australia, although we have locations that we serve in South Australia.

Speaker #1: And in Queensland, the opportunity sets to grow that organically remain strong. We've grown that business pretty successfully over the last seven years, and we are in the crosshairs of the bigger players who are taking notice.

Speaker #1: So we recognize that it's going to be tougher to win new work, but we are continuing to win new work. And we still, as we've maintained our goal of reaching 500 million Australian of revenues out of that business by next year.

Steve Ferazani: Excellent.

Bradley Dodson: That goal still.

Speaker #1: That goal still.

Speaker #4: Very helpful.

Steve Ferazani: Very helpful.

Speaker #1: Seems very achievable. And we have the opportunity set to do it.

Bradley Dodson: seems very achievable, we have the opportunity set to do it.

Speaker #4: Excellent. Excellent. Got to ask as we go into 3Q, are we worse are we past the worst concerns around wildfires? Do you think you've dodged it this year, or are there still heightened concerns?

Steve Ferazani: Excellent. Got to ask, as we go into Q3, are we past the worst concerns around wildfires? Do you think you've dodged it this year, or are there still heightened concerns?

Speaker #1: I don't want to jinx it, to be quite honest, but there was a fair amount of rain.

Bradley Dodson: I don't want to jinx it, to be quite honest.

Steve Ferazani: That's fair.

Speaker #4: That's fair.

Bradley Dodson: There was a fair amount of rain. There's been a fair amount of rain in Alberta wildfires seem to be less of a concern. Obviously, there's still concerns in BC and Ontario, which have been noted in the press. I think generally for Alberta, we're going to be okay. It looks like turnaround work in Q3 is going to progress. As I noted to Steven's question, that is part of the variability in the guidance.

Speaker #1: There's been a fair amount of rain in Alberta. So Alberta, wildfires seem to be less of a concern. Obviously, they're still concerns in BC and Ontario.

Speaker #1: Which have been noted in the press. But I think generally for Alberta, we're going to be okay. It looks like turnaround work in the third quarter is going to progress.

Speaker #1: But as I noted in response to Steven's question, that is part of the variability in the guidance.

Speaker #4: Excellent. That's helpful. And then last one, it looks like at least two significant Canadian LNG projects, at least appear in the media, to be exceptionally close to FID.

Steve Ferazani: Excellent. That's helpful. Last one, it looks like at least two significant Canadian LNG projects at least appear in the media to be exceptionally close to FID. Again, I am sure you do not want to jinx it, how quickly could that move forward if it gets to FID? How do you typically think about timing from FID to, you got to win the contract? What are we looking at? If those two went to FID shortly, they would both likely impact 2027 if you won the contracts, correct?

Speaker #4: And again, I'm sure you don't want to jinx it. But how quickly could that move forward if it gets to FID? I mean, how do you typically think about timing from FID to you got to win the contract?

Speaker #4: I mean, what are we looking at? If those two went to FID shortly, they would both likely impact 2027 if you won the contracts, correct?

Speaker #1: 100%. Particularly the way you phrased it. So for the rest of the audience, let me just be very clear. In that if those reach positive FID, I would think it would take them 90 days to then kind of get the rest of the steps in work at their ducks in order.

Bradley Dodson: 100%. Particularly the way you phrased it. For the rest of the audience, let me just be very clear in that, if those reach positive FID, I would think it would take them 90 days to get the rest of the steps in order, get their ducks in order. 90 days after that. You are kind of looking at 4 to 6 months between FID and contract award for what we do. The third piece is mobilization, because they can reach FID. We can win our portion or a contract, it depends on when they want us to mobilize. Given the timelines that are currently provided by those customers, I would say that they will meaningfully add to 2027 if they were to move forward.

Speaker #1: And then 90 days after that, to kind of looking at four to six months between FID and contract award for what we do, then the third piece is mobilization because we can reach FID.

Speaker #1: We can then our portion or a contract, but then it depends on when do they want us to mobilize. But given the timelines that are currently provided by those customers, I would say that they will meaningfully add to 2027 if they were to move forward.

Speaker #1: But as we're sitting here at the end of July, you put all those months together, you're going to miss kind of the first quarter of 2027, somewhat regardless.

Bradley Dodson: As we are sitting here at the end of July, you put all those months together, you are going to miss the Q1 of 2027 somewhat regardlessly. I would say they are going to be meaningful contributors to 2027. We had hoped maybe 4 months ago that they might be full-year contributors to 2027. I think that window is starting to close, if it has not already. As I mentioned to the prior question, we do believe that there will be some mobile camp mobilizations in the Q4, and that is included in guidance.

Speaker #1: And so I would say they're going to be meaningful contributors to 2027. We had hoped maybe four months ago that they might be full-year contributors to 2027.

Speaker #1: I think that window is starting to close, if it hasn't already. But, as I mentioned in response to the prior question, we do believe that there will be some mobile camp mobilizations in the fourth quarter, and that is included in guidance.

Speaker #3: So if I can supplement, there's a third variable that can come along with some of these major pipeline projects, which is the weather window.

Collin Gerry: If I can supplement. There is a third variable that can come along with some of these major pipeline projects, which is the weather window. It is.

Speaker #3: And so it's not impossible, but it is more expensive to mobilize camps in the winter and the BC mountains. And so depending on where that so all these kind of variables have to line up.

Steve Ferazani: Yep

Collin Gerry: not impossible, but it is more expensive to mobilize camps in the winter in the BC mountains. Depending on where the work, all these kind of variables have to line up. You have project timing, FID, contract award, there's also the weather window. When do they want to actually mobilize these camps? Summer is usually a little bit better. Winter can be done, there's a couple of unknowns. I would say that all the pre-work, it's not as if they're going to hit FID and then start talking to us about scope and execution plans. Those types of conversations are ongoing in the marketplace with us and our competitors.

Speaker #3: So you have project timing FID, contract award, but then there's also the weather window. When do they want to actually mobilize these camps? Summer is usually a little bit better.

Speaker #3: Not to be winter can be done, but so there's a couple of unknowns, but I would say that all the kind of pre-work, it's not as if they're going to hit FID and then start talking to us about scope and execution plans.

Speaker #3: Those types of conversations are ongoing in the marketplace with us and our competitors.

Speaker #4: Got it. Got it. Very helpful, guys. Thanks so much.

Steve Ferazani: Got it. Very helpful, guys. Thanks so much.

Speaker #1: Thank you. Appreciate it.

Bradley Dodson: Thank you. Appreciate it.

Speaker #2: The next question is from Dave Storms of Stonegate. Please proceed with your question.

Operator 2: The next question is from Dave Storms of Stonegate. Please proceed with your question.

Speaker #5: Good morning. And thank you for taking my questions. I wanted to stick in North America. And especially in Canada, you mentioned an impaired remarks that you're preserving capacity.

Dave Storms: Morning, thank you for taking my questions.

Bradley Dodson: Morning.

Dave Storms: Wanted to stick in North America, especially in Canada. You mentioned in the prepared remarks that you're preserving capacity in Alberta due to some of the tailwinds that you've already mentioned. Maybe just what does preserving capacity look like on the ground? I'm assuming you're not mothballing anything. Is that just keeping really up to date on maintenance? Additionally, is there any additional notable CapEx or expenses that comes with this that might impact margins while we're waiting for some of those FIDs to be awarded?

Speaker #5: In Alberta, due to some of the tailwinds that you've already mentioned, maybe just what is preserving capacity look like on the ground? I'm assuming you're not mothballing anything, but is that just keeping really up to date on maintenance?

Speaker #5: And then additionally, is there any additional notable capex or expenses that comes with this that might impact margins while we're waiting for some of those FIDs to be awarded?

Speaker #1: Yeah. So let me address the first part, and I'll have to ask you to repeat the second part. But on the first part, our capacity comment was really more balance sheet related that we have the financial capacity to then have the mobilization expenses and manage through that piece of it.

Bradley Dodson: Yeah. Let me address the first part, and I'll have to ask you to repeat the second part. On the first part, our capacity comment was really more balance sheet related, that we have the financial capacity to then have the mobilization expenses and manage through that piece of it. That being said, in that first part of the question you mentioned, we are doing some work to prepare units for mobilization, just ongoing R&M to get things ready. Not huge expenditures or speculative spending, per se, but trying to be diligent and kind of thread that needle between not overextending and pre-funding things before we've been awarded. Dave, if I could ask you to repeat the second part of the question.

Speaker #1: That being said, to in that first part of the question, you mentioned we are doing some work to prepare units for mobilization. Just ongoing R&M to get things ready.

Speaker #1: Not huge expenditures or speculative spending. Per se, but trying to be diligent and kind of thread that needle between not overextending and pre-funding things before we've been awarded but by the same token, trying not to be flat-footed when things do get awarded.

Speaker #1: And then if Dave, if I could ask you to repeat the second part of the question.

Speaker #5: No, I think that covered the second part of the question—that you're not pre-funding or being speculative. So we shouldn't expect a significant impact to margins from this while we're waiting.

Dave Storms: No, I think that covered the second part of the question, that you're not pre-funding or being speculative, so we shouldn't expect a significant impact to margins from this while we're waiting.

Speaker #3: Yeah. I mean, I think it is notable that the vast majority, y, really, just use vast majority, of the opportunity set is a contract camp contract structure.

Bradley Dodson: Yeah, I think it is notable that the vast majority of the opportunity set is a contract camp contract structure, meaning that these are going to be dedicated camps to a customer, to a project. The customer is going to pay for transportation, installation of the assets, which typically is lower margin work. They will rent the assets on a take or pay basis for the term that they want the assets there. They'll pay for the hospitality services on a per person, per day basis as used. At the end, they will pay for the dismantle and transport out of the assets. The startup pieces of these projects are the transport and install. Those are lower margin, kind of 10% margin type work. That piece will be at the front end.

Speaker #3: Meaning that these are going to be dedicated camps to a customer, to a project. So the customer is going to pay for transportation, installation of the assets, which typically is lower margin work.

Speaker #3: Then they will rent the assets on a take or pay basis for the term that they want the assets there. They'll pay for the hospitality services on a per-person per day basis as used.

Speaker #3: And then at the end, they will pay for the dismantle and trans out of the assets. The startup pieces of these projects are the trans and install.

Speaker #3: Those are lower margin 10% margin, type work. So that piece will front, will be at the front end. Then once the camps are up and running, then you're kind of into the rent and the services, which does on combined basis have a higher margin.

Bradley Dodson: Once the camps are up and running, then you're kind of into the rent and the services, which does, on a combined basis, have a higher margin.

Dave Storms: That's very helpful. Thank you. Maybe just one more, sticking in Canada and North America. The Ontario contract, there was mentioned that there's some startup costs associated with that. Maybe just any comments on the overall North American integrated service businesses, if any of your opportunity pipeline could give a boost to the integrated service business. Anything there?

Speaker #5: That's very helpful. Thank you. And then maybe just one more stick in Canada and North America. The Ontario contract, there was mentioned that there's some startup costs associated with that.

Speaker #5: Maybe just any comments on the overall North American integrated service businesses, if any of your opportunity pipeline could see could give a boost to the integrated service business.

Speaker #5: Anything there?

Bradley Dodson: Continue to be very active on the integrated service from a business development standpoint, particularly in Eastern Canada, trying to build off of some First Nations partnerships that we've put in place there as well as the Ontario contract. We are looking to also augment our integrated services in North America in a similar fashion that we did it in Australia with platform acquisitions. We're actively looking for that opportunity and that could be additive here in the next 12 months.

Speaker #1: We continue to be very active on the integrated service from a business development standpoint, particularly in Eastern Canada, trying to build off some First Nation partnerships that we've put in place there, as well as the Ontario contract.

Speaker #1: We are looking to also augment our integrated services in North America in a similar fashion that we did it in Australia, with the platform acquisition.

Speaker #1: So we're actively looking for that opportunity and that could be additive here in the next 12 months.

Speaker #5: Understood. Thank you for taking my questions.

Dave Storms: Understood. Thank you for taking my questions.

Speaker #1: Thank you.

Bradley Dodson: Thank you.

Speaker #2: This concludes our question and answer session. I would like to turn the floor back over to Bradley Dodson for closing comments.

Operator 2: This concludes our question and answer session. I would like to turn the floor back over to Bradley Dodson for closing comments.

Speaker #1: Thank you very much. And thank you, everyone, for joining the call today. We greatly appreciate your interest in CVO. We look forward to speaking to you on our third-quarter earnings call expected in late October.

Bradley Dodson: Thank you very much. Thank you everyone for joining the call today. We greatly appreciate your interest in Civeo, and we look forward to speaking to you on our Q3 earnings call expected in late October.

Operator 2: Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines and have a wonderful day.

Q2 2026 Civeo Corp Earnings Call

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