Koil Energy Solutions (KLNG) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 was $5.3 million, down 9% year-over-year, mainly due to lower fixed price contract activity and underutilization of capacity, partially offset by increased service contracts.

• Gross margin declined to 31%, impacted by increased headcount, growth-related expenses, and a shift in revenue mix.

• Adjusted EBITDA margin was 6%, with adjusted EBITDA at $339,000, down from $734,000 in Q1 2024.

• Net income was a loss of $29,000, compared to $576,000 profit in Q1 2024, resulting in break-even EPS.

• Major contract awarded for Multi Quick Connector Plates in the Gulf of Mexico/America, with delivery scheduled for Q4 2025.

Financial highlights

• Gross profit was $1.7 million (31% margin), down from $2.0 million (35%) in Q1 2024.

• SG&A expenses increased to $1.73 million, mainly due to new hires and restructuring investments.

• Working capital at quarter-end was $5.1 million, with $2.2 million in cash and $4.9 million in net receivables.

• Net cash used in operating activities was $766,000; net cash used in investing activities was $463,000.

• No long-term debt reported, maintaining a strong financial foundation.

Outlook and guidance

• Order intake and bidding activity increased late in Q1, with management anticipating continued positive momentum through 2025 and into 2026, driven by offshore investment and brownfield projects.

• Focus remains on increasing share with key domestic accounts and expanding international presence, especially in Brazil and Norway.

• Goal to close first major deal in Brazil by Q4 2025.

• Strategic focus on improving financial execution, workforce utilization, and scaling growth investments.