Koil Energy Solutions (KLNG) Q2 2025 earnings summary

Executive summary

• Revenue for Q2 2025 was $5.2 million, a 10% decrease year-over-year, primarily due to lower fixed price contract sales and project delays, partially offset by increased service contract work.

• Gross margin was 33%, impacted by underutilization of direct labor and higher SG&A expenses from increased headcount.

• Net income for Q2 2025 was $61,000, or 1.2% of revenue, down from $984,000 in Q2 2024, reflecting lower labor utilization and higher SG&A expenses.

• Adjusted EBITDA for Q2 2025 was $163,000 (3% of revenue), down from $1.17 million in Q2 2024, affected by higher SG&A and growth investments.

• Major new contracts were secured in subsea tieback, cable management, and greenfield projects, including the largest subsea flying leads project in nearly a decade, supporting future growth.

Financial highlights

• Q2 2025 revenue: $5.2 million, down 10% year-over-year; six-month revenue: $10.4 million, down 10%.

• Gross profit was $1.7 million (33% margin), down from $2.2 million (39% margin) last year.

• SG&A expenses increased to $2.0 million (38% of revenue), mainly due to new hires and restructuring.

• Working capital at quarter-end was $5.1 million, with $2.2 million in cash and $5.6 million in receivables.

• Operating loss of $235,000 compared to $981,000 operating income in Q2 2024.

Outlook and guidance

• Financial performance is expected to improve in the second half of 2025, supported by a strong backlog, robust pipeline, and increased service activity.

• Anticipates additional service work and continued revenue growth over the next four quarters.

• Brazil market entry progressing, with potential contracts expected by early next year or possibly late this year.