Constellation Oil Services (COSH) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered strong operational and financial performance, with 99% fleet uptime, minimal idle time, and materially higher day rates, marking the end of a major transition cycle and supporting stronger earnings and cash generation.

• Completed key contract renegotiations and transitions, notably with Petrobras, adding $1.1 billion in backlog and extending rig commitments, providing visibility through 2028-2030.

• Uplisting to the Oslo Børs Main Market was achieved, expanding access to institutional investors and enhancing capital markets access and liquidity.

• Quarterly shareholder distributions were initiated, with a baseline commitment of $100 million for 2026 and $25 million per tranche, with multiple tranches approved or paid.

• Net operating revenue for Q1 2026 was $200.7 million, up 65% year-over-year from $121.7 million in Q1 2025, driven by new and extended offshore drilling contracts, primarily with Petrobras.

Financial highlights

• Net operating revenue reached $201 million, up $79 million year-over-year, driven by new contracts and managed fleet operations.

• Adjusted EBITDA was $97 million (48% margin), more than double Q1 2025's $44 million (36% margin), representing a 123% increase year-over-year.

• Net profit was $33 million, reversing a net loss of $24 million in Q1 2025.

• Operating cash flow was $29 million, with significant post-quarter cash collections improving the underlying figure.

• CapEx totaled $43 million, mainly for contract transitions, expected to normalize going forward.

Outlook and guidance

• EBITDA guidance for 2026 reaffirmed at $385 million, with management maintaining a conservative stance despite Q1 outperformance.

• 2026 revenue guidance is $740–$775 million, with adjusted EBITDA expected at $350–$385 million.

• Strong contract coverage and backlog provide earnings visibility through 2028-2030, with additional upside possible from new contracts.

• Capex for 2026 projected at $95–$110 million, with continued focus on operational efficiency and cost control.