Shearwater GeoServices (SHEARWATER) Q2 2025 earnings summary

Executive summary

• Q2 2025 saw a significant decline in revenue and EBITDA, aligning with expectations due to lower activity and fewer contract awards, while fleet utilization remained robust at 78% for eight active vessels.

• Strategic focus continued on multi-client data acquisition, notably completing the second season in Brazil's Pelotas Basin and securing a 3D contract with TotalEnergies under a global capacity agreement.

• Backlog at quarter end was $319 million, with recent contract awards providing encouragement despite muted year-to-date order intake.

• Measures to strengthen balance sheet resilience and increase liquidity included cost-saving programs, deferred debt installments, and amended bank agreements.

• Net loss for Q2 2025 was $38.4 million, compared to a net profit of $24.7 million in Q2 2024.

Financial highlights

• Q2 2025 revenue was $133.8 million, down 38% year-over-year, with EBITDA at $11.9–$13.2 million (9% margin), and EBIT at -$24.3 million.

• Net income for Q2 2025 was -$38.4 million, and free cash flow ranged from -$9 million to -$25 million.

• Cash position at end of Q2 was $48 million, with free liquidity including undrawn credit at $68 million.

• Net interest-bearing debt stood at $546 million at quarter end.

• First half 2025 revenue was $323 million, slightly behind last year; EBITDA was $70 million versus $95 million last year.

Outlook and guidance

• Marine acquisition activity in Q3 2025 is expected to be similar to Q2, with significant multi-client revenue anticipated in H2 2025, though timing is uncertain.

• Backlog at end of August was around $330 million, including new contracts and minimum guaranteed vessel months.

• Market is expected to remain flattish into next year, with low visibility and cautious client investment.

• Longer-term, demand for marine seismic is expected to increase, and the company is prepared to scale with demand.

• Ongoing evaluation of long-term capacity requirements, including potential vessel divestments.