Constellation Oil Services (COSH) Q3 2025 earnings summary

Executive summary

• Adjusted EBITDA for the first nine months reached $143 million, with Q3 2025 at $44.2 million (32% margin), driven by strong contract execution, high fleet uptime (97% in Q3), and successful rig transitions.

• Contract backlog rose to $1.9 billion, up 21–22% year-over-year, with the fleet fully contracted for 2025 and significant coverage into 2026.

• Several contract extensions, new LOIs, and exclusivity agreements added $90–$150 million to backlog, supporting strong revenue visibility into 2026 and 2027.

• Positioned for sustainable growth, with plans to initiate shareholder distributions as leverage and cash targets are met, potentially by late 2026.

• Q3 2025 saw a net loss of $13.7 million, compared to a profit in Q3 2024, mainly due to higher operating costs and the absence of prior year one-off items.

Financial highlights

• Q3 2025 operating revenues reached $138–$138.4 million, up year-over-year, driven by semi-fleet and new contracts despite maintenance impacts.

• Adjusted EBITDA for Q3 2025 was $44–$44.2 million (32% margin), with YTD adjusted EBITDA at $143 million.

• Operating cash flow through Q3 2025 was $169.8–$170 million, up from the prior year, aided by mobilization fees.

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

• Net debt decreased to $437–$437.1 million as of Q3 2025, down from December 2024, supporting improved financial flexibility.

Outlook and guidance

• Full-year adjusted EBITDA guidance raised to $195–$210 million, with CAPEX guidance at $150 million and revenue guidance for 2025 at $575–$590 million.

• Contract coverage stands at 72% for 2026 and 47% for 2027, providing strong revenue visibility.

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

• Positive cash flow is expected to cover debt service and contract transitions, with potential for dividend distributions by late 2026 if leverage and cash targets are met.