CES Energy Solutions (CEU) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of CAD 714.1 million, up 24.4% year-over-year, and record EBITDA of CAD 119.2 million, up 35% year-over-year, with a margin of 16.7%.

• U.S. revenue reached CAD 497 million (70% of total), and Canadian revenue was CAD 217.1 million, both driven by increased market share and service intensity.

• Net income for Q2 2026 was CAD 38.5 million, down 26% year-over-year due to higher finance costs and FX losses despite strong operational performance.

• Business model resilience demonstrated by record funds flow from operations and strong free cash flow, despite supply chain and cost pressures from geopolitical events.

• Returned CAD 25 million to shareholders in Q2 through dividends and share repurchases, and declared a quarterly dividend of CAD 0.055 per share.

Financial highlights

• Q2 revenue: CAD 714 million (+24% year-over-year); annualized run rate of CAD 2.9 billion.

• Adjusted EBITDA: CAD 119.2 million (16.7% margin), above guidance and prior year.

• Funds flow from operations: CAD 97 million (record), free cash flow: CAD 25 million.

• Total debt: CAD 513 million; total debt to adjusted EBITDA: 1.15x; net debt at June 30, 2026, was negative CAD 248.3 million, indicating a net cash position.

• Cash conversion cycle improved to 95 days (from 112 days in Q2 2025); working capital at 26% of annualized revenue.

Outlook and guidance

• Margin guidance maintained at 15.5%-16.5% due to ongoing market volatility, despite recent outperformance.

• Expects constructive end markets driven by global energy security concerns, LNG and AI-related power demand, and underinvestment in upstream oil and gas.

• U.S. land production chemicals identified as the primary near-term growth driver, with ongoing trials in heavy oil and offshore markets.

• Offshore and heavy oil projects expected to be long-term, with incremental margins higher than corporate average once scaled.

• Plans 2026 capital expenditures of CAD 100 million, split evenly between maintenance and expansion.