Stonegate Capital Partners has updated its coverage on Civeo Corporation (NYSE: CVEO), highlighting the company's second-quarter 2026 performance. Civeo reported revenue of $180.0 million and adjusted EBITDA of $23.8 million, surpassing Stonegate's estimates of $173.1 million and $21.3 million, as well as consensus revenue of $172.2 million. The net loss improved to $2.5 million from $3.3 million in the prior year, and operating cash flow turned positive at $11.6 million versus a negative $2.3 million in the first quarter, confirming that the first-quarter outflow was seasonal. Capital expenditures of $3.7 million remained maintenance-related.
The year-over-year decline in adjusted EBITDA from $25.0 million is attributed to a $3.2 million activist cost addback in the prior period and timing items. However, unadjusted EBITDA increased year-over-year, and first-half 2026 adjusted EBITDA grew 23% to $46.3 million. According to Stonegate, the second-quarter beat was of higher quality than the headline year-over-year EBITDA decline suggests, with cash conversion normalizing and the first-half performance demonstrating solid underlying momentum.
North American growth is increasingly tied to a substantial pipeline of approximately $1.5 billion in LNG, infrastructure, and data center projects. While these opportunities are expected to contribute meaningfully to revenue and EBITDA, Stonegate notes that significant contributions are more likely to begin in 2027 as projects reach advanced stages. This pipeline positions Civeo to capitalize on long-term demand for its accommodation services in energy and infrastructure sectors.
The recent convertible issuance enhances Civeo's funding flexibility while remaining anti-dilutive below a stock price of approximately $53. This strategic move preserves capacity for both camp deployment and selective share repurchases, allowing the company to deploy capital efficiently while supporting shareholder value. Stonegate's updated coverage underscores Civeo's operational resilience and strategic positioning for future growth.
