Koil Energy Solutions (KLNG) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 was $5.3 million, down 9% year-over-year, mainly due to lower fixed price contract activity, partially offset by increased service contracts.

• Net loss for Q1 2025 was $29,000, or break-even EPS, compared to net income of $576,000 in Q1 2024, reflecting lower gross profit and higher SG&A expenses.

• Gross margin was 31%, impacted by growth-related expenses, increased headcount, and lower labor utilization.

• Adjusted EBITDA margin was 6% (EBITDA of $339,000), down from 13% in the prior year.

• Major contract wins in the Gulf of Mexico and Caribbean, and establishment of a subsidiary in Brazil support international expansion.

Financial highlights

• Revenue: $5.3 million, down from $5.8 million in Q1 2024.

• Gross profit: $1.7 million (31% margin), down from $2.0 million (35% margin) last year.

• SG&A expenses rose to $1.73 million (33% of revenue), up $267,000 year-over-year due to new hires and restructuring.

• Working capital at quarter-end was $5.1 million, with $2.2 million in cash and $4.9 million in receivables.

• Net cash used in operating activities was $766,000; investing activities used $463,000.

Outlook and guidance

• Significant increase in order intake and bidding activity during March and April, with strong pipeline and positive momentum expected through 2025.

• Focus on international expansion, targeting first major deal in Brazil by Q4 and leveraging alliances in Norway.

• Strategic focus on high-value subsea, brownfield, and decommissioning projects, with global demand rising.