Constellation Oil Services (COSH) Q3 2025 earnings summary

Executive summary

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

• Q3 2025 saw 97% fleet uptime and successful transitions, with the fleet fully contracted for 2025 and a $1.9 billion backlog, providing significant coverage into 2026.

• Net loss for Q3 2025 was $13.7 million, compared to a net profit of $2.5 million in Q3 2024, mainly due to higher contract drilling and SG&A expenses.

• Secured multiple contract extensions, new LOIs, and exclusivity agreements, adding $90-$150 million to backlog and supporting robust future revenue streams.

• Major contract awards and extensions for key rigs, including Alpha Star, Lone Star, Amaralina Star, Laguna Star, Brava Star, and new managed fleet additions like Admarine 511.

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 (32% margin), down from $61.9 million (45.7% margin) in Q3 2024, reflecting higher costs and the absence of prior year one-off items.

• Operating cash flow through Q3 2025 totaled $170 million, up from $151.6 million in 9M24, aided by mobilization fees.

• CAPEX for the nine months was $109 million, mainly for contract transitions and rig preparations.

• Cash and equivalents at $223 million at quarter end, up from $183 million at year-end 2024.

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.

• Several new and extended contracts for key rigs support a robust backlog into 2028.

• Market fundamentals in Brazil remain strong, with medium- to long-term growth supported by ongoing exploration and development.