Civeo Corporation Reports Mixed Q3 Results with Australian Growth Offset by Canadian Challenges

Civeo Corporation reported third-quarter revenue of $170.5 million and adjusted EBITDA of $28.8 million, falling slightly below analyst expectations but showing significant year-over-year improvement in profitability. The accommodation provider's performance reflects divergent trends across its geographic segments, with Australia driving growth while Canada demonstrates operational efficiency gains despite lower activity levels.

The Australian business emerged as the primary growth driver, with revenues increasing 7% year-over-year to $124.5 million and adjusted EBITDA surging 19% to $26.7 million. This performance was largely attributable to the full-quarter contribution from four Bowen Basin villages acquired in May 2025, which added approximately $8.4 million in 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.

In contrast, Canadian operations generated $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. Despite a 20% decline in billed rooms, the segment showed significant improvement in profitability due to successful cost rationalization measures. These actions included headcount reductions, closure of underutilized lodges, and streamlining of field operations, which collectively drove a 35% increase in gross margin to 22.5%.

Civeo maintained strong capital discipline, with operating cash flow totaling $13.8 million and capital expenditures of $5.6 million, primarily related to maintenance of lodges and villages. 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. Capital allocation remained focused on shareholder returns, with the company executing its accelerated share repurchase program by buying back 1.05 million common shares during the quarter. Year-to-date, Civeo has returned approximately $52 million to shareholders, completing about 69% of its current authorization to repurchase 20% of total shares outstanding.

Looking ahead, 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 metallurgical coal market weakness. 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.

The company's performance highlights the importance of geographic diversification and operational efficiency in the accommodation services sector, particularly as resource-based economies face varying market conditions. Civeo's strategic focus on integrated services and geographic expansion positions it to capitalize on infrastructure development cycles while managing exposure to commodity price volatility. Stonegate Capital Partners maintains coverage on Civeo Corporation through their research platform available at https://stonegateinc.com/research.