Constellation Oil Services (COSH) Q3 2025 earnings summary

Executive summary

• Adjusted EBITDA for the first nine months reached $143 million, with Q3 2025 at $44.2 million (32% margin), driven by strong execution, contract transitions, and new contract opportunities.

• Net revenue for Q3 2025 was $138.4 million, up year-over-year, with a contract backlog of $1.9 billion and full fleet coverage for 2025.

• Net loss for Q3 2025 was $13.7 million, compared to a net profit in Q3 2024, mainly due to higher operating costs and absence of prior year one-off gains.

• Comprehensive recapitalization in December 2024 included $650 million in new Senior Secured Notes and $75 million equity injection.

• Multiple contract extensions, new LOIs, and exclusivity agreements added $90-$150 million to backlog, with significant new contracts for Alpha Star, Lone Star, Amaralina Star, Laguna Star, and Brava Star.

Financial highlights

• Q3 2025 operating revenues reached $138.4 million, up $3.1 million year-over-year, led by increased semi-fleet activity and higher day rates.

• Adjusted EBITDA for Q3 2025 was $44.2 million, down from $61.9 million in Q3 2024, reflecting higher contract drilling and SG&A expenses.

• Net loss for Q3 2025 was $13.7 million, compared to a net profit of $2.5 million in Q3 2024.

• Operating cash flow through Q3 2025 totaled $170 million, up from $151.6 million year-over-year.

• CAPEX for the nine months was $109 million, mainly for fleet upgrades, contract transitions, and maintenance.

Outlook and guidance

• Full-year adjusted EBITDA guidance raised to $195 million-$210 million, with CAPEX guidance maintained at $150 million.

• Revenue guidance for 2025 is $575-590 million, with positive cash flow expected to cover debt service and contract transitions.

• Dividend distributions anticipated to begin in late 2026, contingent on maintaining over $100 million cash and net leverage below 1.25x.

• Market fundamentals in Brazil remain strong, with robust offshore demand and new exploration frontiers opening.

• Brent oil prices declined to $68/bbl in Q3 2025, with forecasts for stabilization in the $60s for 2026.