Koil Energy Solutions (KLNG) Q3 2025 earnings summary

Executive summary

• Revenue increased 22% year-over-year and sequentially to $6.4 million for Q3 2025, driven by growth in services, products, and fixed price contracts.

• Service revenue grew 33% and product/fixed price contracts rose 15% compared to Q3 last year.

• Expansion into renewables with a major offshore wind farm contract and entry into the Brazilian market with initial contracts.

• Record high backlog and strong order intake position the company for future growth.

• Net loss for Q3 2025 was $413,000, compared to net income of $523,000 in Q3 2024, due to higher SG&A and bad debt expense.

Financial highlights

• Gross margin was 32% for Q3 2025, down from 40% in Q3 2024, due to higher pass-through costs and lower-margin product mix.

• Adjusted EBITDA margin was -3% (a loss of $249,000), impacted by a $569,000 receivable write-off.

• SG&A expenses rose 59% year-over-year in Q3 2025, mainly due to bad debt, increased hiring, and legal fees.

• Cash balance at September 30, 2025, was $1.95 million, down from $3.42 million at year-end 2024.

• Factored invoices outstanding at September 30, 2025, totaled $703,000, up from zero at year-end 2024.

Outlook and guidance

• Record backlog and increased bidding activity support a positive outlook for future quarters.

• Management remains focused on subsea tie-back projects and expects continued growth in order intake, supported by expanded team capabilities.

• Plans to strategically optimize pricing and increase project contingencies to manage cost volatility.

• Collection of the written-off receivable is expected to be an upside for future net profit.