Civeo Corp Aktie

Greetings, and welcome to the Civeo Corporation Third Quarter 2026 Earnings Call. [Operator Instructions] 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 and Investor Relations. Thank you, sir. You may begin.

Thank you, and welcome to Civeo's Third 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.

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 in 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.

Thank you, Regan, and thank you all for joining us today on our third 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 details. And I'll conclude our prepared remarks with our updated 2026 guidance and a preliminary qualitative look for 2027 by region. We will then open the call for questions.

There are 4 key takeaways for the call today. First, we had a solid third quarter, and we are raising our full year guidance. Revenue grew by 13% year-over-year, adjusted EBITDA grew by 5% and operating cash flow nearly doubled to $26.4 million.

On the strength of our year-to-date performance, we are raising our 2026 revenue guidance to $710 million to $720 million and our adjusted EBITDA guidance to $89 million to $92 million.

The second key takeaway is Canada delivered. Revenue in the region grew 38% year-over-year, driven by stronger-than-expected turnaround activity in the oil sands region and our integrated services contract in Ontario.

Some of that turnaround work was originally scheduled for the fourth quarter and was completed in the third. Adjusted EBITDA grew by 47%, outpacing revenue growth.

The third key takeaway is available accommodation capacity in Western Canada is being absorbed. Since the end of the second quarter, we have secured contracts with a diverse set of customers for the deployment of approximately 700 mobile camp fleet rooms across Canada.

These are the first meaningful mobile fleet awards we have had in several years, and they follow a 6-year lodge contract renewal we announced in July. For the first time in several years, the conversation with customers in the region is shifting from price concessions to asset availability.

The fourth key takeaway is Australia remains the cash flow foundation of the business and is operating in an unusual environment. Metallurgical coal prices are above $250 a ton, yet our customers are behaving as they would at much lower prices because of elevated diesel costs, broader inflation and higher royalties at these price levels are compressing margins.

Our owned village occupancy is solid, just softer than we would have expected at these commodity prices. We expect that to persist through the end of the year and into 2027, and we are managing the business accordingly. I'll start with our operational results for the quarter.

On a consolidated basis, the third quarter results exceeded our expectations driven by Canada. Adjusted EBITDA was $30.1 million, up 5% year-over-year, with the Canadian improvement and a stronger Australian dollar more than offsetting softer occupancy at our Australian-owned villages.

Going to the regions. In Australia, revenue increased 4% year-over-year in U.S. dollars entirely as a result of stronger Australian dollar. In local currency, the revenue declined approximately 4%, reflecting lower occupancy in our Bowen Basin villages, partially offset by contractual rate increases across our integrated services contracts and increased shutdown activity.

Our integrated services business continues to perform well and remains on track toward our goal of a run rate of AUD 500 million in annual services revenues by the year-end 2027.

The owned villages business is well contracted and continues to generate strong cash flow, but we are not seeing activity levels that we would expect from customers at these coal prices, and I'll come back to why in the outlook section.

Lastly, Civeo was recently recognized by Restaurant and Catering Australia in the industrial catering category, winning the state awards in Western Australia, Queensland and South Australia and sweeping the top 3 places nationally, taking care of people with a safe environment, welcoming service and award-winning food sets Civeo apart.

Moving to Canada. Billed rooms increased 35% year-over-year. Turnaround activity in our oil sands lodges was stronger than anticipated, and our Ontario integrated services contract contributed a full quarter of revenues. The cost structure we reset in 2025 is holding as volume returns.

Adjusted EBITDA was up 47% on 38% increase in revenue, even as our revenue mix shifted towards integrated services, which carries inherently lower margins. Now turning to the macro environment. In Australia, the met coal price is supportive of customer behavior is being driven by costs rather than revenue.

In Canada, oil sands producers remain disciplined, but activity has been steadier than many expected, and infrastructure spending momentum in the country is increasingly tangible.

LNG Canada's Phase 2 final investment decision was an important first step for projects of national interest in Canada, and we are optimistic that other infrastructure will similarly move forward in Canada and the United States.

That said, we are not in the business of forecasting FID timing. Our job is to put Civeo in the best position to support our customers when they do make those decisions. Turning to capital allocation. We completed the April 2025 authorization to repurchase 20% of the company in July in conjunction with our convertible notes offering. And we are approximately 50% of the way through the subsequent 10% authorization.

Year-to-date, we have returned $36.7 million to shareholders through repurchases, which more than satisfies our intention for 2026 under our framework of returning at least 75% of annual free cash flow. With shareholder returns on track for the year, our capital allocation emphasis in the near term has shifted towards preparing our Canadian assets for deployment on contracts we have won and opportunities we see in front of us.

That is reflected in our increased capital expenditure guidance, which I'll discuss in the outlook section. We will remain opportunistic on repurchases, but our priority right now is putting assets to work at attractive returns.

As a reminder, we have repurchased approximately 26% of our shares outstanding since the beginning of 2025. Stepping back, the third quarter offers an early look at what this platform can do as demand returns in Canada. Adjusted EBITDA grew faster than revenue and operating cash flow followed.

We have a well-contracted Australian business, a Canadian business with a disciplined cost structure and improving utilization and a growing opportunity set of North American infrastructure work and the balance sheet to support all 3.

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

Thank you, Bradley, and thank you all for joining us this morning. Looking at the income statement, Baby reported total revenues in the third quarter of $193.1 million compared to $170.5 million in the third quarter of 2025, an increase of 13%.

Net income for the quarter was $5.2 million or $0.50 per diluted share compared to a net loss of $0.5 million or a net loss per share of $0.04 in the prior year period. During the quarter, Civeo generated adjusted EBITDA of $30.1 million compared to $28.6 million in the third quarter of 2025, an increase of 5%.

Operating cash flow was $26.4 million compared to $13.8 million in the prior year period. The $22.6 million year-over-year increase in consolidated revenue was driven primarily by Canada, which contributed $17.6 million of the increase on higher lodge occupancy and the Ontario integrated services contract.

The remaining approximately $5 million came from Australia, where the stronger Australian dollar added approximately $9.6 million to reported revenues and more than offset a decline in local currency revenue. Adjusted EBITDA increased $1.4 million year-over-year.

Canada contributed $3.5 million of the improvement and the stronger Australian dollar added approximately $1.7 million. These were partially offset by lower adjusted EBITDA in Australia on a constant currency basis, reflecting the lower occupancy on our higher-margin owned villages in the Bowen Basin that Bradley discussed.

Let's now turn to the third quarter results for our 2 segments. I'll begin with Australia. Third quarter revenues from our Australian segment were $129.5 million, up 4% from $124.5 million in the third quarter of 2025. Adjusted EBITDA was $23.2 million compared to $25 million in the prior year period.

The stronger Australian dollar increased revenues and adjusted EBITDA by $9.6 million and $1.7 million, respectively. In local currency, Australia revenue declined approximately 4%. Lower occupancy in our Bowen Basin villages was partially offset by contractual rate increases across our integrated services contracts and increased shutdown activity in that business.

Integrated services revenue was $73.1 million, up 11% in U.S. dollars and up approximately 2% in local currency. Australian owned village billed rooms in the quarter were approximately 669,000 compared to approximately 763,000 in the third quarter of 2025. Our average daily rate for Australian owned villages was $84 compared to $77 in the prior year period, with the increase primarily reflecting the stronger Australian dollar and local currency rate was up approximately 2%.

Turning to Canada. Third quarter revenues were $63.6 million compared to $46 million in the third quarter of 2025, an increase of 38% or approximately 40% in local currency. Adjusted EBITDA was $11.1 million compared to $7.6 million in the prior year period, an increase of 47%. The year-over-year increase in revenues was driven by higher occupancy at our oil sands lodges, reflecting stronger-than-expected turnaround activity and the new integrated services contract in Ontario.

Adjusted EBITDA grew faster than revenue, reflecting higher occupancy against the cost base we reset in 2025, partially offset by revenue mix that shifted towards integrated services, which carries lower margins by nature. Canadian billed rooms totaled approximately 516,000 compared to approximately 383,000 in the prior year quarter, an increase of 35%.

Our average daily rate was $97 compared to $100 in the prior year period, primarily reflecting the mix of turnaround-related volume at contracted rates. As Bradley noted, utilization in the region is improving, we have now contracted approximately 700 mobile fleet rooms for deployment.

As available capacity tightens, we are approaching contract renewals and renewal awards with rate in mind, and we expect average daily rate to reflect that over time.

Looking at our capital structure. As of September 30, 2026, we had $126.9 million of availability under our revolving credit facility. Total debt was $217.5 million, and net debt was $196 million, an increase of approximately $5 million from June 30, reflecting the share repurchase completed concurrent with the convertible notes offering, partially offset by cash generated from operations.

Our total net leverage ratio was 2.1x. As a reminder, in July, we issued $115 million of 4.5% convertible senior notes due 2031. The notes replaced higher cost floating rate revolver borrowings with 5-year fixed rate unsecured capital, lowering our near-term cost of capital and giving us the flexibility to pursue the growing global opportunity set.

The conversion price is approximately $40.51 per share. Our current intent is to settle the principal in cash and together with the concurrent repurchase of approximately 660,000 shares, the transaction is not expected to result in net share dilution unless our share price is above approximately $53 at settlement.

Turning to capital allocation. Capital expenditures for the third quarter were $5.4 million compared to $5.6 million in the prior year period and were primarily related to maintenance spending on our lodges and villages. Year-to-date, we have invested $13.2 million in capital expenditures, down 14% from the prior year period. As Bradley will discuss, we expect fourth quarter capital spending to step up as we prepare Canadian assets for deployment.

In July, concurrent with the convertible notes offering, we repurchased approximately 660,000 common shares for approximately $22.3 million, completing the 20% authorization and bringing the subsequent 10% authorization to approximately 50% complete.

Year-to-date repurchases totaled $36.7 million. We will continue to take a disciplined and opportunistic approach to capital allocation. Our framework of returning at least 75% of annual free cash flow to shareholders through repurchases is unchanged, and we have more than satisfied it for 2026.

Going forward, our focus is on maintaining the balance sheet flexibility to fund high-return deployments as contracts are awarded without compromising our strong balance sheet or our commitment to shareholder returns. We remain comfortable operating with total net leverage in the 2x range.

And with that, I'll turn it back over to Bradley.

Thank you, Collin. I would now like to turn to our full year 2026 guidance, our regional assumptions for the fourth quarter and a preliminary look at 2027. We are raising our full year 2026 revenue and adjusted EBITDA guidance.

Updated 2026 revenue guidance is $710 million to $720 million, up from $675 million to $700 million and updated adjusted EBITDA guidance is $89 million to $92 million, up from previous guidance of $85 million to $90 million.

We are also increasing our full year 2026 capital expenditure guidance to a range of $30 million to $35 million, which previously was $25 million to $30 million. The increase relates to preparing Canadian assets for deployment on tangible near-term opportunities, including the mobile fleet contracts we have secured since the end of the second quarter.

As usual, we expect the fourth quarter to be sequentially lower than the third, reflecting the end of turnaround season and holiday seasonality in Canada, along with normal December seasonality in Australia. This year, some of the turnaround work we expected in the fourth quarter was completed in the third, which is reflected in our updated guidance.

Our full year guidance also includes approximately $1 million of make-ready and mobilization expenses in the fourth quarter for new customer contracts in Canada. The related revenue will be recognized over the term of those contracts and largely in 2027.

I will now provide the regional outlooks and corresponding underlying assumptions by region. In Australia, metallurgical coal prices are above $250 a ton, which historically would translate into expanding production, more contractor activity and higher occupancy in our villages. That is not what we are seeing.

Our customers are operating conservatively because their cost structure has moved against them. Diesel remains elevated, labor and other input costs are inflated. And under Queensland progressive royalty regime, a larger share of each dollar at these prices goes to the state.

The result is that producers are focused on cost discipline rather than growth and occupancy in our own villages, while solid, is lower than these prices would normally support. For the fourth quarter, we expect owned village occupancy to be modestly softer than the third quarter, reflecting normal fourth quarter seasonality.

Our owned village portfolio remains well contracted, and we continue to focus on mitigating inflationary pressures in our own cost base. In our integrated services business, we continue to build on contractual rate increases and shutdown activity, and we remain on track toward our goal of a run rate of AUD 500 million in annual services revenue by the year-end 2027.

In Canada, we expect billed rooms in the fourth quarter to step down from third quarter levels, consistent with the seasonal pattern I described, and we expect revenue growth in the back half of 2026 to be approximately 30% year-over-year in local currency, up from the approximately 20% we outlined last quarter.

That revenue growth is driven by continued execution in our base business, the Ontario integrated services contract and stronger-than-expected turnaround season. On our mobile fleet, the approximately 700 rooms we have contracted are expected to deploy in late 2026 and the first quarter of 2027 with no meaningful contribution to 2026 revenues.

The capital we are spending in the fourth quarter is what gets those rooms ready to go to site. I will now provide a preliminary outlook on 2027. In Australia, our current view is that the dynamics we are seeing today will continue into early 2027. We're not concerned about the health of the business. It is well contracted, generates strong cash flow and has a growing integrated services platform.

But with inflation and royalty pressure at the current met coal prices, we are not seeing the customer activity we would expect, and that situation remains volatile. We may see more of the same, and we will be in a position to better characterize 2027 on our fourth quarter earnings call.

In Canada, we expect 2027 to be better than 2026. Oil sands activity has been steadier than many expected. Our customers are increasingly focused on securing accommodation capacity. We expect lodge occupancy in 2027 to be up compared to 2026. We also entered 2027 with contracted mobile fleet revenue for the first time in several years.

And as available capacity in the region continues to tighten, we expect rates to improve, and we are approaching renewals and new awards accordingly. We are very busy and the mix of projects continues to shift as some slow down and others accelerate as is the way with large projects of this kind.

Our bidding activity spans LNG, Canadian energy infrastructure, mining and power and data center-related projects. These opportunities remain dependent on customer final investment decision and the timing of meaningful financial contribution remains out of our control.

What we can control is being ready, and that is where we are spending our time and our capital. 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 approximately 2,000 mobile camp rooms strategically located in Western Canada that are readily available for deployment, along with approximately 6,000 to 7,000 oil sands lodge rooms that could be redeployed for the right project.

These purpose-built assets are well suited for projects in the Northern United States, Canada and Alaska. We also have the balance sheet strength and financial flexibility to tailor the right solution to each customer project, whether that requires deploying existing capacity, investing in incremental capital or combining combinations with integrated services.

Regarding capital allocation, our framework is unchanged. We intend to return at least 75% of annual free cash flow to shareholders through our share repurchases. We have more than satisfied that for 2026. We will remain opportunistic.

In the near term, our priority is funding the deployment of our Canadian assets on contracted work and preserving capacity to pursue the right projects as they advance. We remain comfortable with our total leverage ratio of approximately 2x net leverage.

Overall, our outlook reflects a resilient Australian platform operating through a cost-driven soft patch, a Canadian business with real momentum and improving utilization and a North American opportunity set that we're now converting into contracted work.

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.

[Operator Instructions] Our first question comes from the line of Stephen Gengaro with Stifel.

I like the evening release, by the way. It's efficient. The -- I think my first question, I mean, it's not surprisingly, but when you are looking at these incremental opportunities to put rooms to work, and you've kind of laid it out well in your presentations.

What type of terms and kind of economic paybacks should we be thinking about? And is there any big difference between the different end markets when it comes to what you're seeing in the bidding process?

Thank you for the question. I'll lead off and ask Tom to add some color. In terms of the economic returns. We mentioned that we increased the CapEx guidance. We're putting some -- we have some expenses in the fourth quarter, getting the mobile camps ready to go on the contracts that we've won.

But all that expenditure, whether it be the mobilization costs that go through the P&L or the incremental CapEx to get the assets ready will all be captured well within the contract with less than a 1-year payback. The revenues typically come through on a pro rata basis over the term of the contract.

As it relates to term on the mobile camps, typically, these are being mobilized for 2 to 3 years for most projects, although one of the projects we won is a short-term project. It's a nice little payback for a winter drilling program, but it has the opportunity that they may keep the assets for another year after that.

So the economics on the initial drilling season project in Canada hold together, and we've got upside if the project gets extended. In terms of rate, I'll be quite honest. We're agnostic to the end market.

The mobile camps, in particular, they're great for construction projects. They're great for remote construction projects where you need to house 300 to 1,000 people in the location where you can't -- where you don't have the housing infrastructure there.

Now the customer pays for the mobilization of the assets, the installation of the assets, they rent the assets for the term of the contract. They pay for the hospitality services while the people are staying there and then they pay for the demobilization.

So it can be for shorter-term projects that can be expensive on a per person per day basis. But I would say we're agnostic. As Collin put in his comments, the market is tightening up. We've put 700 rooms or will be putting 700 rooms to work.

We've got another 2,000 mobile camp rooms that we can and are ready to deploy. But that first 700, it starts to tighten things up. And when you see things like the Coastal GasLink pipeline and its FID and not moving forward, there are other pipeline projects that are in play, whether it be PRGT or PacificLink, this will tighten up the market.

And it will head towards -- it has to head towards new build pricing. Other players in the market have said that from where we are today to new build pricing, prices need to double. I think they need to at least double.

So there's upward bias to pricing on mobile camp rooms. In terms of end market, I'll ask Collin to provide some color. I don't see a material difference between pricing, whether it's on a mining project or on a pipeline or on another infrastructure project because the assets are fungible.

So we're going to price them accordingly. I'll let Colin comment.

Yes. Thanks, Bradley. I agree wholeheartedly. We love all our customers. And regardless of what the end market is, pricing is the same. I would say just a little bit of supplement to what you said is Economics and pricing is a function of commitments. So longer-term commitments are going to have better pricing and better economics from the customer perspective. Shorter term work tends to carry higher prices.

And the only other supplement I'd add is that, as we mentioned, the first 700 beds have been contracted here. In all transparency, the underlying economics within those contracts are not reflective of where we think the market is going, rather a little bit close to where the market has been.

So we are seeing -- we are kind of in the middle of transition. We need demand to continue and utilization to continue to tighten to see that dynamic where you see economics improve that premonition.

Great. And I might have missed this, so I apologize, but remind me, there's 2,700 mobile rooms, of which 700 just got contracted. And then what other incremental capacity do you have that's deployable?

Bradley, I'll take a shot. Yes, go ahead, Bradley.

No, go ahead, Collin.

I was going to say it's 6,000 to 7,000 installed lodge rooms that have a variety of different installation base. Some of those are single story or a small fraction of those are single story that can be mobilized and kind of taken off the lodges.

Others are triple story, which are more advantageous with projects that have footprint constraints. And so that's the additional capacity on top of the 2,700 mobile fleet that's kind of in the yard, so to speak.

Our next question comes from the line of Jim Rollyson with Raymond James.

Just following up with Stephen's questions. Bradley, so if new builds are double plus in pricing relative to kind of where you've been running, I presume the remaining couple of thousand mobile rooms and the 6,000 to 7,000 lodge rooms would go at some price level in between today and double plus.

Maybe just kind of help think through how you approach pricing as you scale the existing rooms out first, assuming all the demand actually comes through as we expect.

It's a good question. I think Collin alluded to it which is -- and made a very good addition, which is term matters. So if we've got a mobile camp opportunity where it is shorter term, that's going to be pricier.

One, the mob and demob on a per person per day basis is going to be a higher percentage of the total cost to the customer. As we think about pricing, as we've said in the past, look, the sooner the customers commit to rooms, the better pricing they're going to get.

As Colin alluded to, these are good pricing. It's in line with what we've talked about before. It's the mobile camp work typically in a softer market, or kind of a middle market is about a 20% margin. If you look back at our historical results, particularly as the assets stay out on rent longer.

In other words, the project takes longer to complete or has an extension, those margins can go to 35%. And so I can't predict exactly where pricing is going to go. It certainly has an upward bias and customers that come with term in the near -- longer-term opportunities in the interim, we are going to get better pricing.

But it -- look, as we've said in the past, the Coastal GasLink project is probably a 2,000 to 3,000 bed project in totality. That's not to say that we're going to win all that. Obviously, we just said we only have 2,000 beds of mobile camps.

We can't win all of that. I don't expect us to win all of that. But just if that -- as that -- not if, as that moves forward, that tightens up the market significantly, both us and our competitors. You look at PRGT, that needs 7,000-plus beds. That in and of itself, based on what I think is out there publicly is that absorbs all the available in and of itself absorbs all the available mobile camp rooms in Western Canada.

So those 2 projects alone before you even start talking about an additional pipeline or other infrastructure projects will tighten up the market. And so first in the door with churn is going to get better pricing. Collin, do you have anything you want to add?

No, I would just supplement that it's been a long time. And quite frankly, I don't know if I can remember over the past 12 years, an environment like this where we're kind of having to think along those strategic lines that we just described, Jim.

And so as this market evolves, I think as Bradley was pointing to, with all these projects kind of only a proportion of the projects go at the same time, almost by definition, the industries into a new build cycle.

And it will be really interesting to see how that plays out. And we got -- we talk about it strategically a lot, like what is our strategy for pricing and seeking turn, which projects are we going after.

And we'll have more color for you on that as 2027 evolves. And at the end of the day, I do want to also highlight a lot of this stuff is FID dependent. So the demand does need to materialize in the way that many of us in the industry are seeing right now.

Yes. The big picture trends from the way behavior in Canada has shifted would seem to be lining up for that to happen. Maybe the folks in Alaska need to get their act together or they're going to be looking at new build pricing.

Just switching gears for a minute, data centers in the U.S. haven't really been a big part of your business just because you haven't been down in the U.S. much. and some of your competitors that have capacity there have been kind of soaking up all that work.

But as that runs out of capacity, just kind of curious to get an update on what you're seeing on that side, given that it seems like that is also going to new builds just because of capacity constraints.

Colin, do you want to take the lead on this?

Yes, sure. The U.S. market has been exceptionally dynamic over the past, call it, 9 months, going from kind of 0 to 120 miles an hour and then back to 30 and 90 and in between. Not a week goes by that we don't have some portion of our bidding and pursuits team laser-focused on a new U.S. opportunity of material size.

We're in the market. We're talking to people about it. I would characterize the market though is very -- a little bit chaotic, if I'm being totally honest. I think a lot of the existing capacity was absorbed at good prices for the customers.

The customers got a good deal and so did the providers. And now we're into a new build cycle, as you pointed out, Jim, in the U.S. And I think there's also a lot more competition coming out of the wood work. And so it's very idiosyncratic to certain projects. We're seeing terms and conditions that might not meet our standards in some cases going around, but then in other projects that are very attractive.

As it is very clear, we haven't won anything. We are in the market. It would likely require us to build some new build capacity in the U.S. because I think our Canadian fleet is probably better left chasing the work that's in front of it in Canada.

So yes, this has been the proverbial Lucy and the football for us for the better part of the year, but it's still exceptionally vibrant and very active, and we're going to try to win some stuff here, but certainly no promises. I don't know, Bradley, if you have anything to add to that.

No, I think that's right. Look, our competitors that have won work have done a really good job. Many of them had assets that were from a proximity basis either in the data center market or adjacent to. And mobilization of our assets, while they're modular, putting them on a truck and shipping them thousands of miles is very feasible. It's very doable, but it has a cost.

And so we've been at a transportation disadvantage. As Collin mentioned, we're -- based on what we see, we think most of the available capacity, existing capacity has been absorbed. And so the data center market is headed towards new build pricing.

Our assets because of location and quite frankly, the manner in which they're constructed and operated are much better in colder climates. So our focus has been mostly on the Northern U.S. We'll continue to bid on Texas work.

As Collin mentioned, that may be new build assets for us. We have relationships with the manufacturers to purchase those should we get a contract, but it will be with the contract. We will not be doing it speculatively. And so we continue to follow it.

I think you've seen it in the press, there have been for every 10 opportunities, probably 8 of them have been -- have not materialized for -- as it relates to data centers for one reason or another, whether it be permits, whether it be water availability, power availability, et cetera. And then obviously, we've got November 3 right here upon us, and there are a lot of ballot items that are questioning whether the locality -- the local municipalities want to have these projects.

So we continue to follow it. It's a huge opportunity. I think from here, it's going to move slower than anticipated, but it's a material opportunity for us, and we're pursuing it.

Our next question comes from the line of Greg Gibas with Northland Securities.

Congrats on the results. I wanted to maybe just follow up quickly on the time line for deployment for those 700 mobile fleet rooms that you secured contracts for. And wondering if you could perhaps discuss the puts and takes of the guidance increase and then how that accounts for maybe incremental -- that incremental deployment versus maybe continued softness in Australia versus underlying strength with oil sands. Anything you can kind of discuss there would be helpful.

Yes. I'll lead off and then ask Collin to correct and amplify my comments. In terms of third quarter to fourth quarter, as we put in the prepared comments, we did see some Canadian turnaround activity be pulled forward into the third quarter from what we had originally expected in the fourth.

In addition to that, in our prepared comments, we said we had about -- we have about $1 million of expenses that are related to these mobilizations of the mobile camp. So the fourth quarter is going to be softer than we thought 90 days ago, but that was really pulled into the third quarter and is reason one.

Reason two is a good reason, which is we're deploying mobile camp rooms. In terms of the puts and takes in the fourth quarter and going into 2027, I think in the fourth quarter, it's fairly locked in. I think as it relates to mobilization expenses, the team does a great job.

I'm not terribly worried about there's going to be additional costs we weren't anticipated of any material size. Those assets are going to work. I can think of Greg, one in particular, it's mobilizing as we speak.

A second one is mobilizing as we speak. Some of them are starting in November because that's one that, as I mentioned earlier, one of them is a drilling project. That's going to be one that will take advantage of the winter drilling season in Canada.

So I expect that by -- certainly by mid-first quarter, those 700 will be out and working. Puts and takes in the fourth quarter, I don't worry about occupancy at the lodge and village level of any material basis. It could be plus or minus 3%, but I think we're pretty locked in on near-term occupancy going into 2027, puts and takes on the base of operations in Canada, it's always turnaround activity.

And also in Canada, we do -- as Collin mentioned, we mentioned in our prepared comments, the funnel of opportunities to put mobile camps to work is significant.

It will be a matter of when they -- as we mentioned, when they reach FID, once they reach FID, accommodations is usually something that gets contracted fairly shortly thereafter because it then becomes a fairly significant gating item to starting the projects.

So I think that, that will be a key to Canada. But I think what it's really doing, particularly as it relates to some of these infrastructure projects, I see more wins in 2027. I think that they will have some revenue in 2027, but what it's really doing is setting up 2028 to be a stronger year.

As it relates to Australia, I think from where we are right here, we're going to see some continued softness relative to what you'd expect given met coal prices. And that will likely continue certainly for the first half of 2027.

We'll continue to refine our picture as we give formal guidance on the fourth quarter call in February. And then in Australia, we've got -- the bidding activity on integrated services is very strong in terms of the opportunity set. And so we do believe we're going to achieve our 555 plan and reach $500 million of annual run rate revenue in 2027.

And then it's going to be controlling costs in Australia. Unemployment is still tight. Inflation is still there. We're a labor-intensive business, getting people, retaining people is key. And so that's what I see the puts and takes, and I'll let Collin add some color.

I'll add a little bit of color. In Canada, I agree with everything that Bradley said as it relates to the fourth quarter. I'll just remind our listeners that December in both regions is a rough month for us. We have -- particularly in Canada where you have higher utility bills with the weather and occupancy does go quite a bit lower over the holidays. But that's an annual issue.

As I think about 2027, the only thing I would supplement is that, as Bradley said in his prepared remarks, we are expecting in Canada, the lodges to be up I would characterize that as more of a baseline level of occupancy. That's not necessarily driven by turnarounds.

We had a pretty good decent turnaround year this year. In fact, the strength in the third quarter of this year, as we pointed out, was largely turnaround driven. So the lodge will be up, and that's driven by baseline occupancy. What's the variable and the unknown is what the turnarounds look like in Canada versus this year.

If they're similar in size and scope that we saw this year, then the lodge occupancy will be nicely up, if not only modestly up. So we'll refine that, and we're going to work with our customers to understand their plans as we go into 2027.

But I think in almost all cases, we expect the lodge occupancy to be up, which is certainly positive trend. In Australia, I agree with everything Bradley just said, particularly on our own villages, that kind of dislocation between met coal prices and our occupancy lingering a little bit longer than we had hoped and expected.

But I would also point out that we've got a great team in Australia. They've been growing the revenue side on the integrated services side so well for the last 4 to 5 years. And there's still a very robust market set of opportunity out there.

And the awards that we just announced today speaks to the customer relationships and the operational kind of integrity in how we attack the market. And I think that, that is yielding a lot of results, and we're getting a lot of attention from customers.

And so we're really proud of that team, and we're really excited of where we're going to take that over the next 2 or 3 years.

Okay. That's helpful. Appreciate the detail there. And you maybe beat me a little to it, but I wanted to ask just as it relates to the owned village occupancy in the Bowen Basin. Clearly, remaining softer despite what healthy commodity prices would dictate normally.

Could you just maybe speak to what you're hearing from the customer base, like kind of add some context to their thinking and perhaps remind us the nuances of timing as it relates to producer budget time frames in Australia and perhaps how quickly you would expect these customers to move if there was a demand driver unlock like diesel prices?

Good question. What we're seeing right now in many cases is we're not losing work. We're not losing market share in Australia. What you have as a hypothetical or an illustrative example, we'll have a customer who's got a contract, a multiyear contract for 500 beds, but they've been running at 600 because they have the need for it and they've been taking the extra 100 beds at casual rates, which are higher.

You're seeing because of the inflationary pressure, maybe they cut back 20 or 30 or 50 beds out of that incremental 100 above their contracted level. That's what we're seeing. They're not -- these people are not going to a competitor. The customer is not going to a competitor. They're staying with us. They are contracted, in many cases, on a multiyear basis.

They're just trimming on the edges. But we've got a bunch of great customers. And right now, the mentality is everyone is trimming. As many will know, Australia is on a June to June fiscal year.

So to your point, we'll start seeing what 2027 looks like as we get into March, April of next year as they finalize their budgets for their fiscal June 2028. So we'll have better color as we go into probably the -- certainly, we might have some color on the first quarter '27 call, certainly have better color on the second quarter call, our second quarter call.

And so there are growth projects with our customers. They are looking -- they're not putting pencils down. But right now, I think it makes complete sense. It's not the environment to push the accelerator right now because met coal prices are good.

But that's a print rate for top rate quality met coal. Not all of them have that, not all of them realize that price. The biggest pieces are really a double whammy between inflation broadly defined, which is -- diesel is a huge piece of it, but there's also wage inflation, et cetera, that's impacting them.

And the second piece is royalties. The royalty regime in Queensland was changed, which is where the Bowen Basin is, was changed back in 2022, if I recall correctly. And it significantly increased the royalty rates and our customer base has been very vocal about that and how that's impacting them.

So I think this is a soft spot. It will -- as you pointed out, likely continues through the first half of the year. And then we'll see if there are other factors that impact things, if inflation starts to come in a little bit, that will be helpful. If there is some relief on diesel prices, that would be helpful.

That would be a big help if we can see some moderation in diesel prices. I think that would -- and really, it's not just, okay, diesel prices have come in, it's the customers believing that they're going to stay there is the other piece.

Our next question comes from the line of Steve Ferazani with Sidoti & Company.

Bradley, I mean, covering you for a while is the most optimistic I've heard you on Canada, and that excludes even the mobile camp opportunities. Obviously, the turnarounds were much healthier. I know you don't have a ton of visibility going into the quarter, but certainly much healthier than we were modeling. It sounds like you're optimistic for occupancies next year.

I'm trying to -- I mean, I can figure -- speculate on the obvious reasons for this, but I just want to hear from you in terms of how much is that higher oil pipe prices driving greater activity. They have more cash flow. They can go ahead with turnarounds and maybe they were larger turnarounds that were pushing off previously.

But you have the other piece of clearly, there's oil sands consolidation going on. Can you talk about those 2 factors and how that might be influenced in what you're seeing in terms of turnarounds and occupancy?

I think the turnarounds this year, part of it is we had a strong turnaround with one customer in particular. Most of the customers are trying to extend their turnaround times. So it used to be that everybody would do a turnaround every year of varying degrees.

Some customers would alternate between a big turnaround 1 year and a little bit smaller one in the next. A lot of them are trying to push that out to either an 18-month cadence or a 2-year cadence.

And so that's the piece we -- as we go into 2027, we've got to understand better. I think oil prices are certainly helpful. It's certainly helpful to their P&Ls and their cash flows.

But I don't believe that, that is something that is truly driving spending right now. I think what's driving spending right now is renewed optimism in the overall industrial complex in Canada and reinvesting in Canada.

And while it's very early days to see if there's more egress capacity that can be constructed and implemented that would -- that really give the oil sands customers comfort, belief that they can increase production and they will be able to get it to market. I think that's the next piece that will really drive things. Near-term oil prices are always helpful at higher levels are always helpful.

I don't think that's necessarily what's driving things right now. I think it's, again, trying to get prepared increased optimism on the long term and some customer-specific things as they work to shift and improve their production.

So I do think Collin really characterized it really well, which is a lot of this is baseline improvement and then that gives us optimism on occupancy at least being modestly up from here in Canada next year.

And then if turnaround activity is equal to stronger next year than this year, then that would be additive.

Got it. Got it. That's very helpful. And flipping over to Australia, it sounds like there's 2 very different markets going on. I know that your integrated service is more tied to Western Australia, different commodities but same inflationary pressures. Clearly, you're way more optimistic and you're having more success in Western Australia.

You mentioned the royalty structure impact. But just why is Western Australia, you're getting the rate contracted rate increases? Do you see opportunities to grow that versus what you're seeing in the Bowen Basin?

It's a good question, and we should clarify. We get annual rate increases related to CPI in both the services business and in our owned villages.

It was just -- our prepared comments are really hitting on that it was fairly notable in terms of that being part of the pickup in the services revenues. The opportunity set for the services business, you are exactly right. The majority of our services business in Australia does come out of WA, but we're starting to diversify that.

We had won previously and are operating in South Australia. We won our first contract in the Northern Territory. So we'll be entering into that market. We are also -- we recently won our first services contract in Queensland, which is working for a customer we've worked for, for a long time on the owned village inside.

The opportunity set is across that. So I would actually say that of the near-term opportunity set, most of it is outside of Queensland in terms of potential total contracted value. So continue to diversify that business. I think the catering awards are going to help because we beat out the big guys. We beat them head-to-head on culinary capability. And there are kind of 3 or 4 things that we can do really well to take care of people, make sure they've got a safe, clean environment. They've got good food and a service level and a safety level that the customer appreciates.

But this is a kind of a third-party validation of at least one component of that. And so I think that's going to help us in the marketing going forward.

So on that side, it's not necessarily that activity has to increase. A lot of it's market share gains and new awards and winning contracts.

That's right, certainly on the services side.

Our next question comes from the line of Dave Storms with Stonegate Capital Partners.

Just want to maybe start with the Canada integrated services and the margin profile there. I know it increased quarter-over-quarter, but it's still down compared to historical levels. Just curious as to how much of this is maybe still Ontario ramping or if there's anything else in there that we should think about?

It is Ontario ramping. It is -- we're working to get our feet underneath us there and expect that by the first quarter, we should see certainly improvement in the first quarter and better in the second quarter as we get our feet underneath us there.

But it is specifically Ontario and us not being our best. Some of it is contract related. Some of it is performance related.

Understood. Appreciate that. And then maybe sticking with integrated services, but moving to Australia. Collin, I know you mentioned that you guys have a couple of initiatives that you want to roll out. But when we're just thinking about the mechanics to get to that 555 plan, is the priority there going to be on maybe higher spend per room?

Is it going to be more rooms taking advantage of the integrated services? Is it obviously, with room growth, you get closer to that goal? Just trying to think about the logistics that you're hoping to accomplish over the next 5 quarters reach.

Yes. Sorry, go ahead, Collin.

I was going to -- I think we might need one point of clarification. So the 555 plan is unique to the integrated services component of Australia and does not include the owned villages. So with that, really, it's about winning new work from existing and new customers who are either developing or re-tendering or growing their existing operations in the various parts of Australia.

As somebody else pointed out earlier, our kind of bedrock of that business has been in Western Australia. But we -- and as Bradley was pointing out, we have been pretty successful here recently in making inroads into other regions of Australia, including for the integrated services side, including our backyard in Eastern Australia, but also the South and North.

So it's really about new contracts with existing and new customers and the room count conversation is more something that is associated with our own diligence. I think I'm playing back your question correctly, but if I misinterpret it, maybe there's some clarification.

Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Dodson for final comments.

Thank you, and thank you all for joining the call today. We really appreciate your interest in Civeo, and we look forward to speaking to you on the fourth quarter and full year 2026 earnings call in early 2027. Take care.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Greetings, and welcome to the Civeo Corporation's Second Quarter 2026 Earnings Call. [Operator Instructions] 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.

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. 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.

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 and 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. We will then open the call for questions.

There are 4 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. While the pace and timing of these opportunities are dependent on customer and 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 for 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 that 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 second quarter 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. 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 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 second quarter results and operating drivers were in line with our expectations. In Australia, we had solid occupancy in our owned villages and continue to focus on mitigating inflationary pressures largely brought by the Middle East conflict and labor availability.

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. We continue to manage the base oil sands business for current demand while preserving 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 second quarter. 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. 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.

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

Thank you, Bradley. Thank you all for joining us today. Starting with the income statement. Today, we reported total revenues in the second quarter of $180 million 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 $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 the second quarter of 2025.

Operating cash flow was $11.6 million compared to a 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. 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 second quarter results for our 2 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.

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. Increased integrated services activity and contributions from the acquired buildings were largely offset by softer owned village occupancy while transitory cost inflation pressure adjusted EBITDA. Australian owned village billings 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 U.S. dollar. Turning to Canada. Second quarter revenues were $54.6 million compared to $50 million in the second quarter 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. 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 June 30, 2026, total liquidity was approximately $82 million. Total debt was approximately $209 million, and net debt was approximately $191 million, a decrease of approximately $8 million from March 31, 2026, resulting in a net leverage ratio of approximately 2.1x. These figures are as of quarter end and therefore, preceded the convertible notes offering. 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 purchasers option.

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 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. 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 August 1, 2031, and have an initial conversion price of $40.51 per share, representing a 20% premium to the July 1 closing price.

Our current intent is to satisfy the principal amount in cash. As a result, shares will be issued only for conversion valued 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 5 years of lower cost fixed rate capital and no common share issuance below the conversion 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. 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 return 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.

Thank you, Collin. 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. 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. In Australia, metallurgical coal prices remain in the range of $220 per tonne 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. Our owned village portfolio remains well contracted, and 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 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. 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.

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. 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 our ongoing commitment to the 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 United States, Canada and Alaska. 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 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. 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.

[Operator Instructions]

Our first question today comes from Stephen Gengaro of Stifel.

So I had a few things I wanted to ask, just because you just talk 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. Are they better -- like how do we think about the applications that those 2 buckets of rooms are better suited for? Like are the mobile rooms, they have a unique application? Or can they be kind of adapted to kind of a more permanent need like the oil sands lodges?

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 multistory 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 multistory rooms.

Our -- 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. So that's why we highlighted in the prepared comments, the Northern U.S., Canada and Alaska. It really depends project by project what the project proponent is looking for. The mobile camp rooms are very well suited for 2- to 4-year projects. Below 2 years, it becomes -- the cost of transportation installation and then dismantle and trans out becomes a bigger cost to the total accommodations budget. So I don't know if that answers your question, Stephen, but that's how I...

No, that's very helpful. The second one was around, I mean you had kind of alluded to this the pipeline of opportunities in North American data centers was kind of part of the equation. 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 there's -- it'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?

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 is dependent on the customer. 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 year-end.

The question is, how close is it to now? Bringing to the question: Is there an opportunity to generate revenues in 2026 and/or how much revenue benefit are we going to get for the full year 2027? But 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, new version will also have this is that the opportunity set just in Canada and Alaska is meaningful between LNG opportunities, [ high-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 set 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. So 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 you can put more rooms to work under a take-or-pay basis.

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. 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.

Right. Okay. And just one follow-up. The full year guide is 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? Is it -- or how do we think about that?

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. Australia is a component of it in terms of kind of what we would call casual occupancy. So customers using rooms above their take-or-pay commitments. 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.

The next question is from Steve Ferazani of Sidoti.

Bradley, just in terms of your outlook for Australia, can you sort of break it down? I know your accommodations and your integrated services are really in 2 different areas. Can you talk about the differences from what you're seeing on those 2 sides? And 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?

Yes. 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 it's not -- it's 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 the $180 a ton, plus or minus.

And this year, they spent most of the year above $220. And -- but I do think the uncertainty around availability and cost of diesel has been significant. The overall unemployment in Australia is low. And so as a result, there are a couple of headwinds there. But overall, our city-owned village occupancy is very strong. So I would say that if we -- 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 Queensland. The opportunity set to grow that organically remains strong. We've grown that business pretty successfully over the last 7 years. And we're in the crosshairs of the bigger players who are taking notice.

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 AUD 500 million of revenues out of that business by next year. That goal still seems very achievable, and we have the opportunity set to do it.

Excellent. I 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 this year? Or are there still heightened concerns?

I don't want to jinx it, to be quite honest, but the -- there's been a fair amount of rain in Alberta. So Alberta wildfires seem to be less of a concern. Obviously, there's still concerns in B.C. and Ontario, 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. But as I noted to Stephen's question, that is kind of part of the variability in the guidance.

Excellent. That's helpful. And then last one, it looks like at least 2 significant Canadian LNG projects at least appear in the media to be exceptionally close to FID. 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? I mean, what are we looking at? If those 2 went FID shortly they would both likely impact 2027 if you won the contracts, correct?

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 order if the that's in order and then 90 days after that. So you're kind of looking at 4 to 6 months between FID and contract award for what we do.

Then the third piece is mobilization because we can -- they can reach FID, we can our portion or a contract, but then it depends on when do they want us to mobilize. But given the time lines that are currently provided by those customers, I would say that they will meaningfully add to 2027 if they were to move forward. But they -- as we are 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 regardlessly.

And so I would say they're 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 hasn't already. But as I mentioned 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.

If I can supplement the third variable that can come along with some of these major pipeline projects, which is the weather window. And so it's not impossible, but it is more expensive to mobilize camps in the winter at the B.C. mountains. And so depending on whether -- so all these kind of variables have to line up. 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, not to be -- winter can be done.

But -- so there's a couple of unknowns, but I would say that all the kind of prework. 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.

The next question is from Dave Storms of Stonegate.

I wanted to stick in North America and especially in Canada, you mentioned in your prepared remarks that you're preserving capacity in Alberta due to some of the tailwinds you've already mentioned. Maybe just what does 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? 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?

Yes, 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. 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 prefunding things before we've been awarded, but by the same token, trying not to be flat-footed when things do get awarded. And then Dave, if I could ask you to repeat the second part of the question.

No, I think that covered the second part of the question that you're not prefunding or being speculative. So we shouldn't expect a significant impact to margins from the smaller waiting.

Yes. I mean I think it is notable that the vast majority, really, just use 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. So the customer is going to pay for transportation installation of the assets, which typically is lower margin work. And 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.

And then at the end, they will pay for the dismantle and trans out of the assets. The start-up pieces of these projects are the trans and install. Those are lower margin at 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 services, which does on a combined basis, have a higher margin.

That's very helpful. And then maybe just one more sticking in Canada and North America. The Ontario contract, there was mentioned that there's some start-up costs associated with that. 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? Anything there?

We continue to be very active on the integrated service from a business development standpoint, particularly in Eastern Canada, trying to build off of the First Nation partnerships that we 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 the platform acquisition. So we're actively looking for that opportunity, and that could be additive here in the next 12 months.

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

Thank you very much, and thank you, everyone, for joining the call today. We greatly appreciate your interest in Civeo. We look forward to speaking to you on our third quarter earnings call expected in late October.

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

Greetings, and welcome to the Civeo Corporation First Quarter 2026 Earnings Call. [Operator Instructions]As a reminder, this conference is being recorded. It is now my pleasure to introduce Regan Nielsen, Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, and welcome to Civeo's First 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. 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 SE filings. I'll now turn the call over to Bradley.

Thank you, Regan, and thank you all for joining us today on our first quarter 2026 earnings call. I'll start with some key takeaways for the quarter and 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. We will then open the call for questions.

There are 4 key takeaways from call today. First, we delivered a strong start to 2026, outperforming our expectations. For the quarter, consolidated revenue was up 20% and adjusted EBITDA was up 78%. Revenue growth was driven by a mixture of improved occupancy across the Canadian assets in both the oil sands and LNG markets. Continued growth in our Australian Integrated Services business, contributions from acquired villages in Australia, improvements in our mobile camp fleet utilization. We also benefited from foreign currency improvements. This was all complemented by strong incremental margins in Canada as a result of our cost reduction initiatives that we took last year.

The second key takeaway is we continue to execute on our disciplined and balanced capital allocation strategy, returning capital to shareholders, while enhancing Civeo's financial flexibility. Third, we remain confident in the revenue trajectory of the business as a whole and are raising the lower end of our revenue guidance. The midpoint of the revised guidance implies 8% revenue growth for the year. Our confidence stems from continued momentum in the Australian integrated services platform and an increasingly robust bid pipeline for North America asset and service deployment. As of today, we are actively bidding on projects with total contract values in excess of $1.5 billion, which is the strongest we've seen to date.

Well, much of this growth is dependent on customer reaching final investment decisions, which is outside of our control. We are excited about the opportunities that these present for later in 2026 and going into 2027. The last key point, the cost impacts of the ongoing conflict in Iran and associated dislocations of the global energy and raw materials trade will likely have an impact on our margins. Australia is highly dependent on normalized global seaborne energy trade for diesel and other fuels.

As a result of this, the potential associated impact on inflation, energy prices and the impacts of those variables on our customers' activity, we are anticipating temporary inflationary impacts to our adjusted EBITDA and thus, we are maintaining our initial guidance of $85 million to $90 million of adjusted EBITDA for 2026. I'll start with some operational results for the quarter. On a consolidated basis, our first quarter results reflect strong year-over-year growth with revenues increasing 20% and adjusted EBITDA increasing 78% compared to the prior year period.

In Australia, performance was strong for the first quarter, supported by the full quarter contribution from the villages we acquired in May 2025 as well as continued revenue growth in our integrated services business. In Canada, we delivered strong year-over-year improvement with higher occupancy across key lodges and meaningful margin expansion. Importantly, this reflects both improved activity levels and the continued benefit of structural cost improvements we implemented last year. From a macro perspective, our operating environment remains dynamic. Money prices, including oil and metallurgical coal have been volatile and customer spending remains disciplined in both Australia and Canada.

We are focused, therefore, on maintaining our flexibility as conditions continue to evolve. In Australia, met coal prices currently in the $230 per ton range, which is up approximately 25% from the second half of last year. Last quarter, we were optimistic that healthy commodity prices would drive higher occupancy in our villages in the back half of 2026. However, as the ongoing disruption to global supply chains as a result of the more in the Middle East, has likely to shift the timing of any such uplift into 2027.

On the oil side, prices are undoubtedly higher. Activity levels have not changed, as our customers' planning requires much longer-term perspectives in terms of improved oil prices to adjust their activity levels. Said differently, there is too much uncertainty in the oil market for our customers to change spending plans at this time and as such, cost discipline remains their priority. From a timing perspective, we will likely see a deferral of turnaround activity in Canada from what normally occurs in the second quarter into later in this year.

Turning to capital allocation. During the quarter, we repurchased approximately 500,000 shares, representing approximately 4% of Civeo's shares outstanding at year-end 2025. We have now completed approximately 96% of our current authorization and remain committed to completing it as soon as practical. As a reminder, upon the completion of this current authorization, we have an additional authorization in place for repurchase up to 10% of the company's outstanding shares. Also during -- in April, we amended and extended our credit agreement, increasing the company's total revolving capacity and extending the maturity of our -- April 2030.

This further enhances Civeo's liquidity and provides additional flexibility as we evaluate capital payment opportunities going forward. Stepping back, before I turn it over to Collin, I want to reiterate my tremendous confidence in Civeo's future. The bid pipeline in North America is robust with levels of inbound inquiries for beds and services that I haven't seen since oil sand stays in the early 2000. Like then, this demand is highly dependent on highly project-dependent, meaning dependent on positive final investment decisions. However, unlike the 2015 to 2020 time frame when North America growth was almost exclusively pended on one major LNG project, this time is especially exciting, given the variety and volume of different projects.

While we recognize growth will not be linear, we are confident in our ability to weather the changes as they arise, just if we are navigating today's energy dislocation. I am confident that our values of service, quality and excellence, coupled with our world-class asset base and asset availability position Civeo well for the opportunities ahead. What we do best is take care of people. If the industry demand materializes to even a fraction of what's outstanding today, there will be a lot more people for us to take care of. This is an exciting time for Civeo. We are more confident than ever in our actions, positioning and prospects for growth and value creation.

With that, I'll turn it over to Collin.

Thank you, Bradley. Thank you all for joining us this morning. Turning to the income statement. Today, we reported total revenues in the first quarter of $172.7 million compared to $144 million in the first quarter of 2025, an increase of approximately 20%. Net loss for the quarter was $3.8 million or $0.34 per diluted share compared to a net loss of $9.8 million or $0.72 per diluted share in the prior year period. During the quarter, we had generated adjusted EBITDA of $22.5 million compared to $12.7 million in the first quarter of 2025, an increase of 78%.

Operating cash flow in the quarter was negative $9.7 million, primarily reflecting expected seasonal working capital outflows in the first quarter. The year-over-year increase in revenue was primarily driven by higher activity levels in both Australia and Canada. Including the contribution from the villages we acquired in May 2025 in Australia and higher occupancy across key lodges in Canada. The year-over-year increase in adjusted EBITDA was primarily driven by higher occupancy and improved margins in Canada as well as increased contributions from the Australian villages acquired in May of 2025.

Looking at Australia specifically. 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. The increase in revenues was primarily driven by the contribution from the villages acquired in May 2025 as well as continued growth in our integrated services business. These gains were partially offset by modest softness in portions of the legacy owned village portfolio. The increase in adjusted EBITDA was primarily driven by the contribution from the acquired villages, partially offset by modest softness in the portions of the legacy as legacy village portfolio.

Australian build rooms in the quarter were approximately $676,000 compared to approximately $626,000 in the first quarter 2025. Our daily room rate for Australian owned villages was $83 compared to $75 in the prior year period, with the increase primarily reflecting the strengthening of the Australian dollar relative to the U.S. dollar. Turning to 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.

The year-over-year improvement was driven by higher occupancy across key lodges as well as the continued benefits cost reductions implemented during 2025. Canadian build rooms totaled approximately $434,000 compared to approximately $359,000 in the prior year quarter. Our daily room rate was $99 compared to $93 in the prior year period. Now if I turn to our capital structure, as of March 31, 2026, total liquidity was approximately $68 million. Total debt was $215 million and net debt was $199 million, resulting in a net leverage ratio of approximately 2.2x.

As Bradley mentioned, during the quarter, we amended and extended our credit group, increasing total revolving capacity to $285 million and extending the maturity to April 2030. This enhances our liquidity profile and provide additional flexibility to support both shareholder returns and potential high-return growth investments. Turning to capital allocation. Capital expenditures for the quarter were $4.1 million compared to $5.3 million in the prior year period and were primarily related to maintenance spend.

During the quarter, we purchased -- we repurchased approximately 500,000 shares at an average price of $28.06 for approximately $14.4 million. We will continue to take a disciplined and opportunistic approach to capital allocation, balancing shareholder returns with maintaining flexibility to support the business. As we think about the market in front of us today, we are seeing opportunities to deploy capital at attractive returns, and we're prior time to conserving dry powder to pursue those, while maintaining a strong balance sheet and balanced approach to shareholder returns. With that, I'll turn it back over to Bradley.

Thank you, Collin. I would now like to turn to our outlook for 2026. For the full year 2026, we are raising the low end of our revenue guidance to $675 million to $700 million from our prior range of $650 million to $700 million. This increase reflects continued momentum in our Australian integrated services platform and continued recovery in our Canadian business. While we are encouraged by the strong start to the year and the underlying revenue trajectory of the business, we are maintaining our adjusted EBITDA guidance of $85 million to $90 million for 2026.

This reflects the impact of higher input costs, particularly diesel as well as broader inflationary pressures associated with ongoing disruptions in the global energy markets. In addition, customer focus on cost discipline continues to influence activity levels and the timing of certain projects. As a result, despite improved revenue outlook, we are maintaining our adjusted EBITDA guidance and we feel is appropriate at this time. We also continue to expect capital expenditures for 2026 to be in the range of $25 million to $30 million.

I'll now provide additional color on our expectations by range. In Australia from a macro perspective, metallurgical coal prices remain at healthy economic levels. However, the recent increase to diesel prices has driven customers focus more on cost efficiency, which has tempered what we might otherwise have expected in terms of incremental upside to our initial occupancy guidance. As a result, activity levels continue to reflect a more conservative operating posture by our customers similar to what we would have expected in a sub $200 per ton met coal environment.

Importantly, we have not experienced any material operational impacts from diesel supply dynamics to date. While diesel prices have moderated some, we expect these dynamics to continue to limit near-term upside and activity levels relative to what we had initially contemplated when establishing our guidance range for 2026 and may delay any meaningful upside in occupancy. Based on current customer discussions in our contracted room nights, we continue to expect generally stable occupancy across our own billing portfolio through the balance of the year.

In our Australian Integrated Services business, we continue to see a solid set of growth opportunities as we advance towards our goal of AUD 500 million in annual rent services revenues by 2027. In Canada, we are encouraged by the strong start to the year with improved occupancy and continued benefits from the structural cost actions implemented during 2025. As we look to the remainder of the year, we are continuing to refine our expectations around Canadian turnaround activity. At this point, we're seeing some activity that we have previously expected would occur in the second quarter shift to later in the year.

As a result, we expect a more back half-weighted cadence of activity relative to our initial expectations, though overall activity levels remain consistent with our full year outlook. We're also -- we also began mobilization under our previously announced contract supporting correctional facilities in Ontario at the beginning of April, and we are pleased with the early execution on that contract. Importantly, this award represents a meaningful milestone for Civeo, marking our first integrated services contract in Eastern Canada and our entry into a new end market. We believe this is a strong proof of point for the stability of our integrated services platform in North -- scalability of our integrated services platform in North America.

We are actively pursuing additional opportunities to build on this momentum, further expanding and diversifying our ready base. More broadly, the oil sands activity remains stable to customer focus on cost discipline continues to influence commercial dynamics across the region. Looking ahead, we remain encouraged by the level of business development activity tied to North America infrastructure projects. Our team continues to see strong engagement across LNG, power and data center-related projects and we believe that we are well positioned to capture these opportunities as they progress. Civeo's well positioned to capitalize on opportunities of a potential infrastructure construction boom represents.

We have 2,500 mobile camp rooms, strategically located in Western Canada in both Alberta and British Columbia that are immediately ready to deploy. We also have the ability to redeploy approximately 7,000 of our oil sands logos for the appropriate infrastructure project. Given their location configuration of these assets, which were purpose-built for colder climates, these are best suited for projects in Northern -- in the Northern U.S., Canada and Alaska, where transportation from Alberta and PC will be less of a factor.

As the U.S. market for workforce accommodations absorbs and fully utilizes existing capacity, our assets will become even more attractive than new build assets. That said, these projects remain dependent on final investment decisions, and we continue to expect that any meaningful financial contribution will occur in 2027 and beyond. Overall, our outlook reflects a strong start to the year, combined with a continued focus on disciplined execution and maintaining financial flexibility while positioning the business for long-term value creation.

I'll now open the call for questions.

[Operator Instructions] And the first question comes from the line of Stephen Gengaro with Stifel.

So when we think about the U.S. market and the -- well, and as well, one of your competitors at least 1 of the big combinations players in North America just lock a bunch of capacity. And it seems like the data center demand is extremely strong and 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 to the U.S. market and starting to gain traction in that market.

In terms of the U.S. market and both data center opportunities as well as adjacencies to data centers around power, we continue to be extremely active in terms of bidding into those markets. As I made comments in the materials, 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 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 for those -- 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 bid those out multiple times. And then we're seeing increased interest in our multistory lodge rooms to be reemployed as well.

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?

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, be able to meet time frames and 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 has started to tighten up and concerns about availability are -- that theme is starting to come out in customer conversations.

And then maybe just one more, and this might be a little bit harder. But when we go back in time, right, and you've built out the oil sands. And I forget the exact numbers, but if you needed 1,000 folks to instruct the facility, develop the asset, the operating personnel was something less than that. I don't know if it's 50% or 60%, if I don't remember correctly, but when -- and your Canada business 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 3 or 4, 5 years of demand? And then the operating side is -- or is it not -- is it too early in the process to get that sense?

No, let me frame it this way. The opportunity set in North America right now is construction-related. And construction work is great, but it does have a finite life, right? So I see the next 3 to 5 years, there with the current bidding pipeline or opportunity set. It looks like it's going to be strong for 3 to 5 years. But to your point, whether it's a data center, an LNG facility and oil sands, mine, a pipeline, once construction is complete, there's not a need for accommodations anymore. so 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 this large by a factor of 2 or 3, and we've seen since the early 2000s. And it is going to be construction related. So we -- it's deploy assets and earn a return on those assets. And then should the construction projects start to space out, then we could see a longer than 3- to 5-year period of demand for accommodations in North America for construction and that would be favorable for a longer-term utilization, particularly in the mobile camp.

Everything seems to be extending longer than we think, which is a positive, but that's great color.

The next question comes from the line of Stephen Ferazani with Sidoti Company.

This is Alex on for Steve. 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 1Q performance you would attribute to customer timing, AKA pull forward.

I would say very little was a pull forward there was 1 in the first quarter, a customer had an unexpected situation, which added some occupancy during the quarter. April has started off pretty strong. 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 has 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 2 implications. One, Q2 and Q3 are usually the time period in Canada when the customers do planned annual maintenance. As we've mentioned in the comments, we see that that's likely pushing out until 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 cost containment because they're not making -- well, other than trying to push production, they're not making changes to spending activity as if it's a $90 a barrel market.

Very helpful context. And then one more from us on Australia. 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?

Yes. Labor continues -- 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 higher. 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, what we can't have -- well, we don't have a full complement of 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 your head shaft at each location. We're recruiting foreign shafts to come in and work rotations for us, and that has helped some, but it's still -- we're still not to -- the labor costs that we'd like to have there.

The next question comes from the line of Dave Storms with Stonegate Capital Partners.

Going 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 going forward in the current environment? Or maybe just help us understand the question pool there.

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 of this market. The other factor that you have to keep in mind from a customer standpoint, it's not a factor for us and all slightly is that they sell their commodities in U.S. dollars and they've got largely all Australian dollar costs.

So got diesel costs, which are more impactful to our customers' cost structure than it is to ours. Coupled with if the Aussie dollar continues to appreciate, for instance, U.S. dollar, they will -- our customers will have effectively a cost structure increase without a revenue increase because -- Aussie dollar cost in U.S. dollar revenues. For us, we're naturally hedged. We're largely Australia. We're all Australian dollar revenues down there and Australia do 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 2 months and I expect that we'll -- that Australia will continue to see inflationary pressures for the balance of the year.

Understood. That's great color. Circling back to the U.S., and I recognize that this is maybe a bit of a crystal ball question. But you 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 maybe a field or a geography or a type of contract that you would expect to drop first maybe in earlier 2027? Or are they all just super different and kind of hard to judge.

Well, we always have to go off a lot of our customers tell us the time line is. And I think embedded in your question is, do we think that they're going to hit the time line. It's -- these are major investment projects, which historically have always had a tendency to push to the right. We continue to believe that there is a fair amount of work that will be led in 2026, so that will be announceable in 2026, but may not, as we made it -- I said in our prepared comments, may not materially get 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, first beds. So it could hit in 2026. But as we sit here on May 1, that's got to hit pretty soon. Oil camps can typically be deployed within 90 days and start earning money. But if it involves multistory, that's going to take longer.

Understood. Appreciate that. And then maybe just one more. 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 your customers to bring in that turnaround activity?

It's a tough question to answer. It's always possible for turnaround work to be pushed out. It's always a variability. It can even -- when you don't have the dislocations we're experiencing today, even in a more -- was a more normalized market. Customers can get in and have various idiosyncratic reasons to either accelerate or defer turnaround work. So I think we feel good about what's embedded in our guidance where Canada is going to face a smoother year this year in terms of the cadence of occupancy than we would historically see.

So the rule of thumb that we have given the market in the past multiple times was that 60%, 65% of annual EBITDA for us what happened 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 as to -- well, just flatter throughout the year as it relates, particularly to Canadian occupants.

Next question will come again from the line of Stephen Gengaro with Stifel.

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

It would be turnaround activity. It would be inflationary pressures in Australia, more so in Canada and then 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, now 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 -- this year, potentially mobilized this year. And then, as I mentioned, set up for a stronger 2027.

Great. 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 in 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 2 or 3 years versus a longer-term relationship and/or contract.

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 druthers, we would win work that has a longer duration. I would say, generally, what we're seeing today is 2- to 4-year projects. Some are a little bit longer, but I haven't seen a lot that are over 5 years. So these are construction projects and the need for accommodations is typically in that 2- to 4- to 5-year time frame.

Ladies and gentlemen, this concludes the Q&A session. I would like to hand the call back to Bradley Dodson for closing remarks.

Thank you so much. And thank you, everyone, for joining the call today. We appreciate your interest in Civeo, and we look forward to speaking to you on the second quarter earnings call, which would expect to happen late in July. Have a good day.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Greetings, and welcome to the Civeo Corporation Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Regan Nielsen, Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, and welcome to Civeo's Fourth Quarter and Full Year 2025 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 remarks speak only as of the date of our earnings release and this conference call. We undertake no obligation to update or revise these forward-looking 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 Form 10-K, 10-Q and other SEC filings.

I'll now turn the call over to Bradley.

Thank you, Regan, and thank you all for joining us today on our fourth quarter for the '25 earnings call. I'll start with a few key takeaways for the quarter and the year and then summarize our consolidated and regional performance that, Colin will provide further financial and segment level detail. And I'll conclude our prepared remarks with our initial guidance for 2026, along with the qualitative outlook by region, then open the call up for questions.

Here are the 4 key takeaways for the call today: one, significant progress on our share repurchase authorization, including we're purchasing 17% of our common stock during 2025 alone. And subsequent to year-end, we have repurchased an incremental approximately 500,000 shares, resulting in in reaching 95% completion of our current buyback authorization. Two, strong performance in Australia, driven by growth in our integrated services business and the contribution from our May 2025 Village acquisition. Third key point meaningful margin recovery in Canada as our cost reduction initiatives continue to bear fruit.

And lastly, the fourth key point, we are entering a 2026 with an improved cost structure and balance sheet strength, positioning Civeo to capitalize on anticipated North American infrastructure development opportunities. Moving on to the content. I'll start with capital allocation. During 2025, we repurchased 2.3 million common shares for approximately $54 million, representing 17% of our common shares outstanding at last year-end and significant progress towards completing our authorization to repurchase 20% of our outstanding shares.

Subsequent to year-end, we repurchased another 500,000 shares, resulting in 95% of completion of our current buyback authorization. As a reminder, our current capital allocation policy announced last April, Phase 1 included a 20% repurchase authorization, which is now substantially complete. Today, we also announced a new authorization to repurchase up to 10% of our outstanding shares which will come effective upon the completion of our existing authorization. As of December 31, 2025, our net leverage ratio was 1.9x, and we're comfortable with that. We remain committed to completing our current buyback authorization as soon as practical.

Turning now to the operational results for the quarter and the full year. Overall, the fourth quarter and full year results reflect disciplined execution in a challenging macroeconomic environment. On a consolidated basis, Civeo's fourth quarter 2025 revenues were up 7% year-over-year with adjusted EBITDA of 90%, a testament to our cost reduction efforts in Canada and the successful integration of our May 2025 Australian acquisition.

Moving to the segments. In Australia, we delivered record annual revenues in 2025, $460 million, reflecting growth in our integrated services business and the contribution from our May 2025 acquisition in the Bowen Basin. Revenue and adjusted EBITDA in Australia for the fourth quarter increased 9% year-over-year, driven primarily by the additional acquired villages and growth in our integrated services. Importantly, our integrated services business in Australia continues to scale and remains on track towards our goal of AUD 500 million in annual revenue by 2027.

In Canada, while overall lodge occupancy remained under pressure from customer spending discipline in the oil sands, our cost reduction initiatives undertaken in late 2024 and early 2025 drove substantial margin improvement. In the fourth quarter, Canadian revenues increased 4% year-over-year, while adjusted EBITDA improved from negative $5.4 million in the fourth quarter of 2024 to positive $3.4 million in the fourth quarter of. This performance reflects the structural cost actions we need last year.

Overall, we believe that we are executing on our strategic priorities in each region. Our Australian business continues to generate strong cash flow, supported by integrated services growth and expanded Village footprint. And our Canadian business is demonstrating improved profitability at current activity levels, while position for anticipated demand from North American infrastructure projects.

With that, I'll turn the call over to Collin.

Thank you, Brad, and thank you all for joining us this morning. Turning to the income statement. We reported total revenues in the fourth quarter of 2025 of $161.6 million, compared to $151 million in the fourth quarter of 2024, an increase of 7%. The year-over-year increase in revenues was primarily driven by higher activity in Australia including contributions from the May 2025 acquisition and growth in our integrated services business.

Net loss for the quarter of 2025 -- for the fourth quarter of 2025 was $6.5 million or $0.56 per diluted share compared to a net loss of $15.1 million or $1.10 per diluted share in the fourth quarter of 2024. During the fourth quarter, Civeo generated adjusted EBITDA of $21.7 million compared to $11.4 million in the fourth quarter of 2020, an increase of 90%. This increase in adjusted EBITDA was primarily driven by significant margin improvement in Canada resulting from the structural cost actions implemented earlier in 2025. The as well as contributions from the Australian acquisition and continued integrated services growth.

Operating cash flow in the fourth quarter of 2020 was $19.3 million compared to $9.5 million in the prior year quarter. For the full year 2025, we generated revenues of $638.8 million and adjusted EBITDA of $88.2 million. compared to revenues of $682.1 million and adjusted EBITDA of $79.9 million in 2024. The year-over-year revenue decline was primarily driven by lower activity levels in Canada, partially offset by Australian growth, including the contribution from the Bowen Basin acquisition, despite the revenue decline -- sorry, despite the revenue decline, the adjusted EBITDA increase of 10% was primarily driven by the cost reduction initiatives in Canada.

Turning to our segments. I want to first point out the change. Prior to the fourth quarter of 2025, corporate SG&A included corporate IT expenses managed on a worldwide basis that were not allocated to individual segments in Australia and Canada. To better align segment results to the profitability measure used by management, these SG&A costs are now allocated into Australia and Canada beginning with the fourth quarter and year ended December 31, 2025. For any for any prior period results discussed on this call, we have adjusted financial figures to conform to the updated 2025 presentation.

In Australia, fourth quarter revenues were $119.5 million, up 9% from $110 million in the fourth quarter of 2024. The -- adjusted EBITDA was $22.4 million, up 9% from $20.6 million in the prior year quarter. The year-over-year increase in revenues was primarily driven by the contribution from the 4 owned diligence acquired in May 2025 and and continued growth in our integrated services business. These gains were partially offset by modest softness in portions of our legacy owned village portfolio. This softness is reflected -- reflective of the sub $200 metal pricing environment that our customers will experience the majority of the back half of 2025.

The increase in adjusted EBITDA reflects the incremental contribution from the acquired villages and continued integrated services growth. Australian build rooms in the fourth quarter totaled approximately $705,000 compared to approximately $637,000 in the fourth quarter of 2024. Average daily rates were $76 compared to 77% in the prior year quarter. For the full year 2025, Australian revenues were $460.3 million compared to $427 million in 2024. Turning to Canada. Fourth quarter revenues were $42.1 million, compared to $40.7 million in the fourth quarter of 2024, an increase of 4%. Adjusted EBITDA was $3.4 million compared to negative $5.4 million in the prior year quarter. The year-over-year increase in revenues was primarily driven by higher average daily rates due to improved occupancy mix as build rooms were essentially flat year-over-year.

The significant improvement in adjusted EBITDA was driven by structural cost reduction initiatives implemented earlier in 2025, including overhead reductions, log rationalization and field-level cost alignment. Canadian build rooms in the fourth quarter totaled approximately $359,000 compared to approximately $360,000 in the fourth quarter of 2024. Average daily rates were $100 compared to $94 in the prior year quarter. For the full year 2025, Canadian revenues were $178.6 million compared to $245.1 million in 2024. Full year Canadian adjusted EBITDA was $17.1 million, compared to $18.2 million in 2024.

The decrease in revenues and adjusted EBITDA were primarily driven by lower oil sands activity with the adjusted EBITDA decline mitigated by the impact of cost reduction initiatives implemented in 2025. Looking at our capital structure. As of December 31, 2025, total liquidity was $90.4 million. Total debt was $182.8 million, and net debt was $168.4 million. Our net leverage ratio was 1.9x at year-end. Finally, capital allocation. Capital expenditures for the full year of 2025 were $20.2 million compared to $26.1 million in 2024. We Capital expenditures in both periods were primarily related to planned maintenance spending on our lodges and villages, Specifically, in 2025, $11.2 million was associated with maintenance CapEx and $9 million was related to growth projects including the reactivation of our Buffalo Lodge in Canada and WiFi infrastructure improvements in Australia. During 2025, we repurchased approximately 2.3 million shares for approximately $54 million, reducing our share count by approximately 17% during the year.

As Bradley mentioned, as of today, we have repurchased approximately 500,000 additional common shares year-to-date in 2026. And resulting in 95% completion of our current authorization. We will look to complete the current authorization as soon as practicable at which time we'll be able to transition into our new share repurchase authorization for up to 10% of our outstanding shares.

With that, I'll turn the call back over to Bradley.

Thank you, Collin. I'd like to now turn to our outlook for 2026. For the full year 2026, we expect revenues of between $650 million to $700 million. adjusted EBITDA of $85 million to $90 million. We are also giving initial CapEx guidance for 2026 of $25 million to $30 million. Looking at the regions. In Australia, metals coal prices weakened in the back half of 2021, contributing to modest activity softness in the fourth quarter of 2025 across our Bowen Basin owned village portfolio. .

Entering 2026, met coal pricing has improved, creating a more constructive economic environment. If prices remain above $200 a ton through the upcoming producer budgeting season, we can see improved activity levels in the back half of the year. base outlook assumes generally stable occupancy in our own villages with the full year impact of our May 2025 acquisition, largely offsetting potential softness in our legacy operations. Our integrated services business, we expect continued revenue growth as we advance towards our $500 million 2027 revenue goal.

In Canada, we expect oil sands activities to remain stable, but at subdued levels by historical standards, consistent with the spending discipline demonstrated by our customers throughout 2025, but importantly, we hit our 2026 with a structurally lower cost base, excuse me. Let me back up and say the key investor themes to watch for Civeo in 2026. One, continued strong results in our Australian business with occupancy upside and our own villages that call sentiment continues to improve in organic growth, and we continue organic growth in our ingrate services business. Two, in Canada, continued stabilization in occupancy in our oil sands lodges with upside from asset deployment for North American infrastructure construction data centers in the U.S. and LNG and power-related infrastructure in Canada. And lastly, continued return of capital to shareholders through the buyback authorization.

We believe 2026 will be a year focused on positioning the company to capitalize on anticipated infrastructure development in Canada and accelerating data center construction activity. While we do not expect these projects to materially impact 2026 results, we believe we are well positioned to support this demand as it develops.

Overall, we expect 2026 to reflect continued solid performance from Australia sale conditions in Canada and meaningful progress positioning the business for potential infrastructure development growth beginning in 2027 and beyond. We will now open the call for questions.

[Operator Instructions] And our first question will come from Stephen Gengaro with Stifel.

A couple of things for me. The first on the Canadian cost-cutting side, did you see the full impact of that in the back half of '25? Or is there -- is there more that will show up in the margins in '26?

We saw most of it. There'll be some continued full year impact in the first half of -- on a comparison basis in the first half of 2026. But the vast majority of it, we had signed by June 30 last year.

And then -- on the asset deployment potential for the assets that are available in Canada and potentially in the U.S. market. Can you talk a little bit about, I guess, 2 parts to the question. One is the types of conversations that are ongoing. And b, like when a decision is made, how long would it take to get assets deployed and start generating revenue and profits?

Once we -- so the status of the conversations are that we're providing detailed bidding proposals, both in Canada and in the U.S. and Canada. They're largely related to pipeline, LNG infrastructure, things like PRT silicas, CGL Phase II, LNGC Phase II and also Alaska LNG, and then in the U.S., it's all about data centers.

Speed to market -- sorry, I was getting to the second part of your question, in terms of speed to market, it depends on the asset deployment. If the asset deployment is from our mobile can fleet, we can begin to have rooms up and running within 3 to 4 months on the first phase and then phase in rooms over time. So we could have first meals within 3 to 4 months. on the -- if we're moving multi story, I would say that's 9 to 12 months, to get fee from getting the authorization to mobilize which includes a signed contract.

Great. No, that's helpful. And just 1 final one, Soe. You gave some of the CapEx levels and the EBITDA guide for 2026. Any big other moving pieces from a working capital perspective, we should be thinking about when we're trying to calibrate free cash flow. I would say, Working capital is a plus or minus. I think the 1 thing in looking at free cash flow, you have to remember is we've got about USD 20 million of cash taxes to assume got about $10 million of interest expense. That should get you there and then working capital should be plus or minus off of that. .

Our next question comes from Steve Ferazani with Sidoti & Company.

I want to follow up the last question, just thinking about how you're looking at capital allocation now that the 20% share repurchase is essentially complete. Your net leverage still under 2x. As we think about cash generation, at least until hopefully, eventual ramp-up on some of the mobile camp deployments. How do you think about cash flow generation? Does that go directly towards your 10% share repurchase authorization do you try to maintain 2x net leverage? How are you going to balance that? And is the #1 focus remaining share repurchases? Or does that change as the initial 20% is complete? .

There has been no change to the capital allocation framework that we laid out last April. We are completing Phase I here shortly with the initial repurchase -- we used more than 100% of free cash flow I might note. Our leverage has been -- has stayed in that 2 times range. And the second phase is to no less than 75% of annual free cash flow to continue to buy back stock. The 1 million share authorization will allow us to do -- that was leverage that would maintain leverage at 2x or less.

Correct. Okay. That's helpful. When we think about the CapEx for guidance for this year, you only spent about $20 million. I think you said $11 million was maintenance CapEx. You're guiding now for $25 million to $30 million. Are there any larger projects that pushed out from last year? Or how should we think about where the spending is going on that 25% to 30% range? .

Yes. Thanks. This is Collin. I'll take that one. The $11 million in maintenance this year is -- I don't want to say a low watermark, but that's a pretty low number for us. Repeatability is aspirational. We'll certainly track for that. But -- and I would also offer that historically, I think we try to -- at this stage of the year, we line out what the capital plan looks like. This have to have, and then there's should does -- and as the year goes on, that list is refined. And I think our track record is that we've done pretty well relative to guidance on the capital side as we really dial in the maintenance requirements throughout the year.

So that's kind of the spirit behind the increase, but I would also say that the $11 million in maintenance that we spent last year was largely driven by some pretty material cuts in Canada, and we may have to kind of get back to a normal run rate this year.

And I will also point out that this time last year, CapEx guidance in the same range.

That's right. Helpful. In terms of mobile camp opportunities versus where you stood 3 months ago, have you seen progress? Are you getting -- are you having more conversations? Are we getting a little bit closer? Can you provide some color?

Conversations continue, say opportunities are increasing. And whether I would say, for the most part, Well, in both markets, quite frankly, you're bidding on work that doesn't have full FID at the customer level yet. And so to a great degree. The wait and see is now clarification to your question. We're completing those with our clients, but moving on to waiting for them to get to that ID.

Does that differ at all in terms of the data center progress where maybe that can happen a lot faster than some of these really large infrastructure projects that require pretty significant funding?

As a general answer, yes, although there is potential that infrastructure projects could move soon around the line.

[Operator Instructions] And we'll go next to Dave Storms with Stonegate. .

Just want to start maybe with the Canadian market. There's been several geopolitical developments since we last spoke that have impacted oil prices. How has this changed in your conversations with customers? I know a lot of this is done after budgeting. Just curious as to anything materially has changed or customers are looking through that. .

I think it's too soon for we're making any material decisions as movement of oil. I don't expect them to do anything. It's certainly Canada as an oil producer certainly interesting in times of geopolitical uncertainty given the security of that resource. So it is maintained over a longer period of time, it could be positive. But in the short term, I don't expect any material changes.

Understood. And sticking with Canada, you signed that contract in Ontario. Is this a playbook for more to come? Or was this an opportunistic onetime contract? How would you characterize that?

Very pleased with the win in Ontario. It's our first work over there. It's on the integrated services side. So adding a new geography, increasing the integrated services contributions in Canada or North America as a whole. And yes, we would like to build off of it. excited by the first land, excited we'll convene with that opportunity and looking forward to expanding further. .

Understood. And then just 1 more for me. It sounds like you could be picking up some momentum through 2026, especially if met coal face above that 200 level, cost cutting continues. Should we expect a similar seasonal trend as usual? Or would you expect to see maybe a little bit more of a quarter-over-quarter and maybe not quarter-over-quarter, but a ramp going into 2027?

But kind of 2 questions there, if I'm hearing you correctly. One thing that we've kind of always been in the past at this time of the year because Canadian turnaround season, in particular, is strongest in the second and third quarters. We typically have 60% to 65% of our annual EBITDA in the middle half, if you will, in the second and third quarters. I think that will be slightly more muted Second and third quarters will still generate the majority of the cash flow as opposed to the first and the fourth, but I don't believe it will be as strong. So a more smooth EBITDA progression throughout the year.

Dave, is there anything further?

Apologies, I was on mute, good luck this quarter.

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

Thanks, Carrie, and thank you, everyone, for joining the call today. We appreciate your interest in Civeo. And we look forward to speaking to you on our first quarter earnings call planned for April. .

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Greetings, and welcome to the Civeo Corporation Third Quarter 2025 Earnings Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Regan Nielsen, Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, and welcome to Civeo's Third Quarter 2025 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 remarks speak only as of the date of our earnings release and this conference call.

We undertake no obligation to update or revise these forward-looking 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.

Thank you, Regan, and thank you all for joining us today on our third quarter 2025 earnings call. I'll start with some key takeaways for the quarter and then summarize our consolidated and regional performance. After that, Collin will provide further financial and segment level details. And I'll conclude with our prepared remarks -- I'll conclude our prepared remarks with our updated 2025 guidance and preliminary outlook -- qualitative outlook for 2026 by region. We'll then open the call up for questions. There are 3 key takeaways from the third quarter results: one, continued significant progress on the current share repurchase authorization.

Two, our Australia business continues to grow both in our owned villages and in our integrated services business; and three, the Canadian cost-cutting measures bear fruit, and our focus now turns to putting our mobile camp assets to work. I'll start with the significant progress we've made toward completing our expanded share repurchase authorization. During the quarter, Civeo repurchased approximately 1 million common shares, bringing our year-to-date return of capital to shareholders to $52 million. With this progress, we've completed 69% of our new buyback authorization as of September 30, 2025.

We remain confident that share repurchases are a compelling use of capital, especially during broad equity market volatility. Given the accelerated buybacks and our recently completed acquisition, our net leverage ratio as of September 30, 2025, was 2.1x, and we're comfortable with that. Our accelerated repurchase activity is consistent with our prior commitment to completing the current authorization as soon as practical. As previously stated, we intend to use no less than 100% of annual free cash flow to achieve this goal.

We've obviously spent more than that, and we'll continue to spend more than that in our 2025 free cash flow buybacks this year. Turning now to the operational results for the quarter. Overall, the third quarter results were consistent with our expectations and reflected our outlook conveyed on our prior earnings call. In Australia, we remain focused on growing our integrated services business and capitalizing on our newly acquired villages in the Bowen Basin. Revenues in the region increased 7% year-over-year and adjusted EBITDA grew 19%. Notably, we completed the integration of our recently acquired villages in the Bowen Basin.

So the third quarter of 2025 was the first full quarter financial impact from these 4 villages. Looking ahead, based on current customer discussions, we expect Australian occupancy in our owned villages to soften modestly in the fourth quarter due to typical fourth quarter seasonality with the holidays and softness in outlook for met coal pricing and demand exhibited by recently announced customer headcount reductions. Despite these near-term headwinds, we are confident in our Australian business. We have a strong contract position in our owned villages that will support good continued cash flow. In our integrated services business, we remain on track to reach our goal of AUD 500 million of revenue by 2027.

And we continue to seek opportunities to expand into non-resource natural resource markets. While conditions -- in Canada, while conditions in the region remain challenged given oil prices and ongoing macroeconomic headwinds, our ability to drive year-over-year gross profit expansion in the face of continued pressures is a testament to the success of our cost reduction strategy implemented to date. We have taken decisive action to position our Canadian business to be more profitable in response to changes in oil sands customer sentiment and operational strategies, and we are pleased with the benefits they are seeing as a result.

Initial actions have included an overall headcount reduction of approximately 25%, [indiscernible] certain underutilized lodges to reduce carrying costs and streamlining field-level operations to align with current demand levels. In the third quarter, this work allowed us to bring direct field level cost in Canada down 29% year-over-year, reduced indirect operating overhead costs by 23% and as a result, increased gross profit by 35%. From here for our Canadian business, our key focus is to capture the potential increase in demand for mobile camp assets in support of various Canadian infrastructure projects.

Overall, we are executing on our strategic priorities in each region. Our Australian business continues to do well with year-over-year growth in both the owned villages and integrated services. And while our Canadian -- while the Canadian headwinds remain, we know this market well, and we're working with our strategic partners to understand how we can continue to support them as they capitalize on evolving opportunities in the country. We are taking decisive action to apply our resources where our customers need them in the region. And as a result, we're positioning Civeo for long-term resilience and cash generation.

With that, I'll turn it over to Collin.

Thank you, Bradley, and thank you all for joining us this morning. Turning to the income statement. Today, we reported total revenues in the third quarter of $170.5 million with a net loss of $0.5 million or $0.04 per diluted share. During the third quarter, Civeo generated adjusted EBITDA of $28.8 million and operating cash flow of $13.8 million.

The year-over-year increase in adjusted EBITDA was primarily driven by the benefits of cost cutting in Canada, contributions from the Australian acquisition completed in May of 2025 and higher occupancy in the legacy Australian-owned vs. Third quarter revenues from our Australian segment were $124.5 million, up 7% from $116.6 million in the third quarter of 2024.

Adjusted EBITDA was $26.7 million, up 19% from the $22.5 million in the third quarter of 2025. The increase in revenues and adjusted EBITDA was primarily driven by the recently completed acquisition of 4 owned villages. The year-over-year increase was offset by the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and adjusted EBITDA by $3 million and $0.6 million, respectively.

Australian-owned village billed rooms in the quarter were 763,000 rooms, up 18% from the third quarter of 2024, primarily due to our recently completed acquisition. Our daily room rate for our Australian owned villages in U.S. dollars was $77 which decreased from $79 in the third quarter of 2024, primarily due to the weakening of the Australian dollar. Turning to Canada. We recorded revenues of $46 million compared to revenues of $57.7 million in the third quarter of 2024.

Adjusted EBITDA for the segment was $8 million, an increase from $3.4 million in the third quarter of 2024. As noted, the year-over-year adjusted EBITDA increase was primarily driven by the implementation of cost reduction measures offsetting lower billed rooms and revenues. During the third quarter, billed rooms in our Canadian lodges totaled 383,000, which was down from 484,000 in the third quarter of 2024. Our daily room rate for the Canadian segment in U.S. dollars was $100, flat with the third quarter of 2024.

Turning to our capital structure. Civeo's net debt as of September 30, 2025, was $176 million, a $22 million increase since the June quarter of 2025, attributable to the significant progress made on our share repurchase authorization in the quarter. Our net leverage ratio for the quarter was 2.1x as of September 30, 2025, with total liquidity of approximately $70 million. We have allocated $48.7 million to share repurchases year-to-date. We remain comfortable maintaining a net leverage ratio in the 2x range on a go-forward basis. As we look at capital allocation, on a consolidated basis, CapEx or capital expenditures for the third quarter of 2025 were $5.6 million, down from $7.5 million during the third quarter of 2024.

Capital expenditures in both periods were predominantly related to maintenance spending on our lodges and villages. As noted, during the third quarter of 2025, we repurchased approximately 1 million shares through our share repurchase program. We continue to believe that repurchasing Civeo shares presents a value-enhancing opportunity. We've made great progress on our current share repurchase authorization, and we will continue to opportunistically execute on our plan moving forward.

With that, I'll turn it back over to Bradley.

Thank you, Collin. I would now like to turn to a discussion of our full year 2025 guidance on a consolidated basis, including the underlying macro and regional assumption. We are tightening our full year 2025 revenue and adjusted EBITDA guidance. Updated 2025 revenue guidance is $640 million to $655 million of revenues and adjusted EBITDA guidance of $86 million to $91 million. We are maintaining our full year 2025 capital expenditure guidance of $20 million to $25 million. I'll now provide the regional outlooks and corresponding underlying assumptions.

In Australia, occupancy in our owned villages remains strong. 3 of our Bowen Basin villages continue to be effectively operating at full capacity, and we're seeing strong occupancy across the remainder of our owned village portfolio. Even when accounting for the expected impacts of weakening met coal prices and recent customer layoff announcements, we expect healthy, albeit modestly softer occupancy in our owned villages in the fourth quarter.

As it relates to our Integrated Services business, we are encouraged by the strong margin performance we have delivered throughout the year, and we will continue to focus on cost-effective execution. We expect to continue building on our strong momentum for the remainder of 2025 and beyond as we work towards our goal of achieving AUD 500 million of integrated services revenue by 2027. In Canada, we continue to navigate the difficult operating environment in the oil sands region, which is exacerbated by lower oil prices and broader macroeconomic uncertainty.

As a result, expected billed rooms in the fourth quarter of the year is expected to be relatively in line with third quarter. That said, we remain encouraged by the results of our Canadian cost-cutting initiatives to date and expect to continue to benefit from these going forward. I will now provide a preliminary outlook for 2026. In Australia, our outlook for 2026 is relatively similar to what we experienced in 2025 with potential for modest softness in our owned village occupancy due to commodity price volatility and customer layoff announcements.

That said, we expect that any softness in our legacy owned villages will be largely offset by the full year impact of our May 2025 Village acquisition. In our integrated services business, we expect to continue advancing towards our $500 million revenue goal for 2027 through our strong sales pipeline. In Canada, we expect the aforementioned headwinds in the oil sands region to continue to negatively impact lodge occupancy. However, at this point, it feels like occupancy is stabilizing such that we expect next year's lodge occupancy to be flat to slightly up in 2026 when compared to the full year of 2025. In the near term, our focus is on mobile camp deployment.

We are optimistic that we will see increased utilization of our mobile camps in North America towards the end of 2026. Our optimism is underpinned by strong bidding activity tied to continued public support at both the federal and provincial levels for infrastructure projects in Canada and increased demand in the U.S. for a wide range of infrastructure projects. Civeo's attractive asset base, demonstrated capabilities and strong relationships position us well to capture these growth opportunities as final investment decisions are made by our customers.

While several of these projects we are bidding on have estimated project approvals scheduled for 2026, we would not expect to see a material financial impact from these projects until 2027. In the immediate term, our focus remains squarely on managing what we can control, executing on our cost reduction initiatives, enhancing operational efficiencies and aligning our resource base with demand. We are confident that we have the right plan in place to continue mitigating these headwinds while orienting the business to capitalize on growth opportunities to drive increased cash flow from our Canadian operations.

Regarding capital allocation, we will continue to opportunistically repurchase shares and use no less than 100% of our annual free cash flow to complete our current share repurchase authorization. After this authorization is complete, we intend to use no less than 75% of annual free cash flow to buy back shares. We remain comfortable with our net leverage ratio in the 2x range moving forward.

With that, we're happy to take questions.

[Operator Instructions] And our first question will come from Stephen Gengaro with Stifel.

So Bradley, you might get mad at me for asking this. But when you package the guidance you gave for '26 together, it feels like it all sort of equates to something that's kind of flattish year-over-year. I mean, is that in the ballpark of what you're seeing?

No. I think it will be up year-over-year. Still working through the budgeting process. Obviously, it remains dynamic in both markets. In Australia, there have been customer announcements of headcount reductions, and that has impacted our outlook for some of our -- for our occupancy in our owned villages. But we have a very strong contract position. And so while we do see some softness in occupancy in our own villages, as I've said to investors previously, Australian-owned villages occupancy is modestly softer to flat year-over-year with the benefit of the full benefit of the 4 villages we acquired in May. So another 4 months of contribution from that.

We expect that integrated services will show top line growth [ 25 ] to [ 26 ] and continued strong margin performance. In Canada, as I mentioned, we expect lodge occupancy. It feels like it's stabilizing, but it's pretty dynamic right now. And so we'll certainly give an update in February when we do full year results on the fourth quarter call. But right now, as we sit here today on Halloween, I expect Canadian lodge occupancy to be flat to up [ 25 ] to [ 26 ].

And then the key will be if some of these infrastructure projects, and these are pipelines, LNG facilities, highline transmission projects and some infrastructure projects in the U.S. if these get -- if the projects get greenlighted by our customers and then we win the work, there's opportunity to put our mobile camps to work, which right now are really not contributing to the 2025 results. So overall, I expect '26 to be up and still trying to quantify what -- how much it will be up.

Great. The other question I had, you touched on this a little bit. When you talk about the mobile camp assets and the ability to redeploy, are you talking about Canada and the U.S.? And are you looking at things in the U.S. that are connected to some of these newer energy opportunities around lithium mining and maybe data center related. Are any of those things in your opportunity set?

Yes. I would -- you highlighted it, Stephen, and thank you for doing that. I would say that this is the busiest that I can remember in recent history in terms of our bidding activity in North America. We have approximately 2,500 mobile camp rooms that are readily deployable and another roughly 1,000 that are currently attached to our oil sands lodges that we could redeploy anywhere in North America. In Canada, it's mostly LNG related, pipeline related, infrastructure related in Western Canada and looking to also deploy them in Eastern Canada. We can also deploy them into the U.S., and the team is actively pursuing things like you mentioned, like data centers.

Great. And just one final one. When you think about capital allocation longer term, right, and you've done a great job returning a lot of capital. Is there a preference for incremental expansion/acquisitions versus buybacks? Or is it just going to be kind of on a project-by-project basis?

Well, we've committed to completing the current authorization to buy back 20% of the shares, which is about 2.6 million shares as soon as practicable and using no less than 100% of free cash flow -- annual free cash flow to do so. That being said, if there are opportunities that are economic that are supported by customer contracts and if there are attractive bolt-on acquisitions, we'll continue to look at that, obviously, continuing to weigh the fact that we want to stay around 2x levered or no more than that. And so right now, there are opportunities to deploy incremental capital for growth purposes, but nothing that will overextend the balance sheet.

And our next question comes from Steve Ferazani with Sidoti & Company.

Appreciate the detail on I wanted to ask about the growth opportunities in Australia because you noted the softening of met coal prices and some of the -- I think you highlighted chances to build out integrated services beyond the natural resources market. Can you talk a little bit about the opportunities and challenges in that market to hit that $500 million mark? It seems more difficult than it might have seemed a year ago. And does that need to include M&A? Or are there ways to do it outside of your more traditional met coal or iron ore markets?

Well, I didn't mean to leave you with the impression that it was more difficult. I feel as good about our ability to hit the $500 million target by 2027 today. In fact, I feel better about it today than I did a year ago. The team has done an amazing job of capturing new work with customers, capturing market share in some cases, expanding our customer base, expanding our geographic footprint within Australia and integrated services.

Originally, when we bought the Action Catering business, they were in Western Australia. We've now expanded that into South Australia and most recently expanded into Queensland, where our -- the vast majority of our own villages exist. So the ability to leverage that infrastructure is nice and important and to better serve existing Queensland customers. So I believe that we can hit the $500 million target with the kind of funnel of sales opportunities that the team has -- we can hit that hit target by 2027 in the resources market. Right now, I think we can do it organically.

Can could it be enhanced by acquisitions? Possibly. But in terms of -- it is going to get more difficult to win additional resources work because we're on the radar screen of bigger competitors now, plain and simple. So what we're trying to do is take what we believe to be our core competency, which is we think we take care of people well. We make sure that they're safe, that they're well fed and well rested and ready for the workday. So are there other verticals that we can do that in. And we're in the early stages of evaluating that. where we've got the team looking at it and hope that in, I'd say, the next year or 18 months, we'll have some progress there.

Excellent. On the mobile camp side, we can certainly see plenty of opportunities that appear to be out there, particularly in Canada, and I'm sure there's a lot we don't see that you're pursuing. The timing of it is always, I know, really challenging, particularly for the larger projects. Realistically, is this probably more of a 2027, 2028 and beyond story? Or are there real chances in 2026?

It will all depend on our customers getting to final -- positive final investment decisions sooner rather than later. Are some of them still striving to get to a positive FID by year-end 2025? Yes. Do you handicap and say that probably slip into the early '26 or the first half of '26, that's probably pretty reasonable. So it depends on when the projects get approved. Sooner is better, then why I'm confident in our competitive positioning, we still got to win the work then thereafter.

I think that right now, there will be some contribution from increased mobile camp work in 2026. It's likely second half weighted. And even if you handicap some of the expected timing of project approvals, 2027 looks like a good year. And to your point, beyond, these are largely construction projects that are expected to take 2 to 4 years to complete, and that would be a good utilization opportunity for our mobile camps.

Yes. Great. This looks like it will be your second year in a row where CapEx comes down. That being said, now that you've closed some of the Canadian lodges and you've had some larger investments like adding WiFi accessibility. When we think about CapEx moving forward, should -- outside of winning some large project awards, should this be the high level moving forward that you're investing this year?

No. I think it's always reasonable to think that CapEx is around USD 25 million on a consolidated basis. And to your point, because there's always -- we did some WiFi upgrades in Australia this year. There's still some work to be done there in terms of upgrading our WiFi. There's always one-off projects. I think the team globally is very pragmatic about deploying capital and CapEx. We go through a process that's kind of here's what the have to have are, here's what are the good to have and here's the nice-to-have items, and we prioritize those, both looking first and foremost on maintaining safe operating locations and then enhancing guest experience.

So I think [ 25 ] is a safe number to use year in, year out. It would include some discretionary items in that number usually. But from there, higher numbers than that would be dependent on customer commitments and growth projects.

And if I could just supplement on that, what Bradley mentioned the nice to haves. I just want to remind the audience the way that we think about that is today's nice-to-have's are tomorrow's have to have's, and they could be a little bit more expensive if you wait. And so that's the balance.

Great point. Yes. That's a very good point.

When we think about those mobile camp opportunities, particularly if they're 2 to 4 years, does that require significant CapEx?

Great question. To put some numbers around it. We've got, as I mentioned, 2,500 mobile camp rooms readily deployable, another 1,000 that we can pull off that are currently on our oil sands lodges. So of those 3 -- roughly 3,500 rooms, our bidding activity, we bid out those fourfold. Now we don't expect to win all of that work, but we're exceedingly busy.

Now there are probably half a dozen to a dozen infrastructure projects that we're tracking that could kick off in the next 12 to 18 months. It all depends on how those get sequenced. If they all hit at the exact same time, yes, we'll need some more CapEx. Will it be warranted? Absolutely. It will be...

I think I would complain about that.

No, I don't think they will. So to put kind of -- if things are evenly spaced, it's probably let's call it, $5 million to $10 million of incremental CapEx. If everything hits at once, it's probably $25 million to $30 million. But I think I am confident that if everything hit at once, people will be more excited about that than worried about the CapEx.

Yes, Steve, if we win a project, there's going to be a de minimis amount of capital but it's marginal relative to the project. The real capital outlay would be required if we had to start going out and buying new rooms in excess of the 2,500 to 3,500 that Bradley quoted.

Which would be a great problem.

[Operator Instructions]

And we'll go next to Dave Storms with Stonegate.

Just thinking through your goal of [ 500 ] in integrated services in Australia. How do you feel about your current staffing levels there? Just trying to think through what might be the bottlenecks as you march towards that goal.

Good question. I would say that staffing in Australia continues to be a challenge. Is it better than it was a couple of years ago? Absolutely. I think that's a combination of a general recovery in the country from COVID and the efforts of our team, our people and culture team in terms of recruitment. We're the biggest issue in -- for us is around chefs, but it's around labor in general.

And we've had a program for the better part of 5 years to recruit international chefs to come in to Australia. We're making some progress there. So I would say that it is -- continues to be a challenge, but one that is not getting necessarily worse, but it's still not back to pre-COVID levels. So we've made some adjustments to our rosters and our travel allowances that has helped with attracting and retaining people, but it remains a focus for our team. But I don't believe that it would be -- if we win work, we'll find the people.

Understood. That's great color. Thinking about the cost cutting in Canada, specifically the field level streamlining, how much of this could maybe be applicable to Australia? Could we see a similar margin expansion there if some of that was more plug and play? Or is that more specific to Canada, the cost cutting?

It's more specific to Canada. A lot of it is -- we made some big strides with cold closing a couple of locations, which helps the carrying cost there. There has been some streamlining of the operating level headcounts. So this is something, quite frankly, that we started executing on this time last year. As you know us well, Dave, I mean, we started to see occupancy in Canada in the second half of last year just start dropping as customers look to reduce maintenance work, overall cut headcounts and try and localize people as opposed to have them be fly in, fly out.

That's -- as I mentioned in our prepared comments, that feels like it's stabilizing at this point. Again, as we sit here today, we think Canadian lodge occupancy will be flat to up 2025 to 2026. And I think Australia there, it's a different cost structure. Obviously, the climate is very different between Northern Canada and Australia, particularly Queensland, and that presents a different cost structure. So always looking for efficiencies in our operations, and that is just always ongoing. It's not a one-and-done type thing. And -- but I don't think it's analogous between what we've done in Canada and what we could do in Australia.

Understood. That makes perfect sense. And that does kind of just bring me to my last question here. With you mentioning in your prepared remarks that it feels like Canada is stabilizing, how much more cost-cutting initiatives should we expect there? And is there, I guess, a potential for any of that margin to be given back as you maybe start getting a little busier in Canada?

Well, being tied to commodities and having cyclical upturns and downturns, cost cutting is something that our team is very -- it's just part of our DNA. You have to be able to make cost-cutting decisions. I think we moved quickly in the last half of last year and early part of this year. You saw how that bore fruit in the third quarter results. There are -- we will continue to work on our cost structure, but the easier things to get accomplished have been done.

Are there other things that take more work to implement? Yes, and we're working on those. I would hope we get them done by year-end or close to it, but this is an effort that there is a new reality in the Canadian oil sands in terms of activity levels, spending levels, occupancy levels. And we're adjusting to that. We're not expecting that this is going to be a temporary change. Customers are operating in a different fashion. They're getting rewarded by their investors for cutting costs and reducing CapEx. And ultimately, that means fewer people and fewer opportunities for occupancy in our lodges.

And if I could supplement, the focus for the last roughly year, maybe 9 months has absolutely been on the cost-cutting side. And what Bradley said, we're not done, but we are shifting focus. I mean the fundamental -- the best thing we can do for our Canadian business is grow revenue. On a go-forward basis. And so we do see opportunities, and we are pushing the team to focus on that bid pipeline that we have in place with -- while we round out our cost-cutting initiatives.

And this now concludes our question-and-answer session. I would like to turn the floor back over to Bradley Dodson for closing comments.

Thank you, and thank you, everyone, for joining the call today. We appreciate your interest in Civeo, and we look forward to speaking with you on our fourth quarter earnings call, which we expect to happen at the end of February.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.