Constellation Oil Services (COSH) Q4 2025 earnings summary

Executive summary

• Adjusted EBITDA reached $233 million in 2025, 37% above initial guidance, driven by strong operational execution, high fleet utilization, and disciplined cost control.

• Operating revenues for 2025 totaled $597 million, up $34 million year-over-year, exceeding guidance and reflecting managed fleet operations and high fleet uptime.

• Net loss of $138 million, impacted by a $127 million non-cash impairment, but positive free cash flow to equity of $55 million was achieved.

• Contract backlog stands at $1.7 billion, with a fully contracted fleet for 2025 and strong coverage into 2026.

• Operational efficiency improved, with average rig transition times reduced by ~40% over the past 24 months.

Financial highlights

• Adjusted EBITDA for 2025 was $233 million, up $53 million year-over-year, with a 39% margin.

• Operating revenues: $597 million, up 6% year-over-year.

• Operating cash flow reached $277 million in 2025, up $53 million year-over-year.

• Net leverage improved to 1.8x in 2025, down from 2.0x in 2024.

• CapEx: $175 million in 2025, with $153 million outflow, reflecting contract transitions and maintenance.

Outlook and guidance

• 2026 revenue guidance: $740–$775 million; adjusted EBITDA: $350–$385 million.

• CapEx for 2026 expected at $95–$110 million, with continued investment in fleet and maintenance.

• Quarterly shareholder distributions of $25 million planned, totaling up to $100 million for 2026, subject to AGM approval.

• Targeting net leverage below 1.25x by end of 2026 and around 1x in 2027.

• Repriced contracts starting in 2025–2026 are expected to drive higher dayrates and stronger cash flows.