Constellation Oil Services (COSH) Q2 2025 earnings summary

Executive summary

• Achieved $55 million adjusted EBITDA for Q2 2025 with a 40% margin, and $99 million for H1 2025, on track for full-year guidance.

• Q2 2025 revenues were $139 million, down $5 million year-over-year, mainly due to BRL depreciation and lower fleet efficiency.

• Contract backlog reached $2.0 billion, up 79.9% year-over-year, with the fleet fully committed for 2025 and most units for 2026.

• Fleet uptime was 92% in Q2 2025, with strong operational performance and ongoing efforts to secure additional backlog.

• Industry fundamentals remain strong, with robust demand from Petrobras and international operators.

Financial highlights

• Q2 2025 operating revenues were $139 million, down from $144 million in Q2 2024.

• Adjusted EBITDA margin for Q2 2025 was 39.5%–40%, with gross profit at $8 million and net profit at $0.2 million.

• Net financial expenses dropped 47% year-over-year to $8 million, aided by positive hedge results.

• Operating cash flow in H1 2025 was $110 million, up $19 million year-over-year.

• Cash and equivalents rose to $204 million; net debt decreased to $440 million.

Outlook and guidance

• 2025 guidance projects $550–570 million in revenue and $170–190 million adjusted EBITDA, with expectations for improved profitability and cash flow in 2026 as new contracts commence.

• Execution of contract transitions and dockings is critical for meeting 2025 targets and preparing for a turnaround in 2026.

• Dividend distributions expected to begin once net leverage falls below 1.25x, likely by late 2025 or early 2026.