What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-30 compared with 2026-05-01 · 258 added, 114 removed, 232 unchanged (62% of the section changed)

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In general, industry capital spending programs are based on the outlook for commodity prices, production costs, economic growth, perceived political risk, global commodity supply/demand, reserve replacement requirements, estimates of resource production, annual maintenance requirements, inclusive of turnaround requirements, and the expectations of our customers' shareholders.

As a result, demand for our hospitality services is sensitive to expected commodity prices, principally related to met (metallurgical) coal, oil, iron ore and liquefied natural gas (LNG), and the resultant impact of these commodity price expectations on our customers' spending.

In addition to these historical demand drivers, there is increasing demand for our assets and services tied to data center construction and associated infrastructure.

As a result, demand for our hospitality services may be sensitive to expected commodity prices, principally related to metallurgical (met) coal, oil, iron ore and liquefied natural gas (LNG), and the resultant impact of these commodity price expectations on our customers' spending.

In addition to these historical demand drivers, there is increasing demand for our assets and services tied to data center construction, electrification projects and associated infrastructure.

This is principally occurring in the United States (U.S.) but could begin to occur in Australia and Canada as well.

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Commodity Prices

While prices for the commodities that our customers produce stabilized in late 2025 and strengthened in early 2026, there remains continued risk of future volatility, particularly in light of ongoing geopolitical tensions in the Middle East.

The factors that could drive such volatility and underlying activity include the U.S.

and Israeli conflict with Iran, expectations for global macroeconomic stability and growth, inflationary pressures, higher interest rates, economic growth (or contraction) in China and resultant economic stimulus by the Chinese government, the impact of changes to global tariff and trade policies, actions taken by Organization of the Petroleum Exporting Countries Plus (OPEC+) to adjust oil production levels, other geopolitical events such as the ongoing conflicts in Russia and Ukraine, U.S.

While prices for the commodities that our customers produce stabilized in late 2025 and remained elevated through the first half of 2026, there remains continued risk of future volatility, particularly in light of ongoing geopolitical tensions in the Middle East and continuing uncertainty surrounding global trade policy.

The factors that could drive such volatility and underlying activity include the ongoing conflict involving Iran, expectations for global macroeconomic stability and growth, inflationary pressures, higher interest rates, economic growth (or contraction) in China and resultant economic stimulus by the Chinese government, the impact of changes to global tariff and trade policies, actions taken by Organization of the Petroleum Exporting Countries Plus (OPEC+) to adjust oil production levels, other geopolitical events such as the ongoing conflicts in Russia and Ukraine, U.S.

oil production levels and regulatory implications on such prices.

In Canada, ongoing tensions between the U.S and Canadian governments regarding trade policy may spur Canadian infrastructure projects, including pipelines for LNG or oil, carbon capture installation for oil producing operations and mining for critical minerals.

In Canada, ongoing tensions between the U.S.

and Canadian governments regarding trade policy may spur Canadian infrastructure projects, including pipelines for LNG or oil, carbon capture installation for oil producing operations and mining for critical minerals.

Recent Commodity Prices.

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(per bbl) WCS

Second Quarter through April 27, 2026

Third Quarter through July 27, 2026

$ 231.18 $ 93.14 $ 78.65 $ 62.61

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In Australia, 86% of our Australian owned rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region.

Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by global steel production, which remained subdued throughout 2025 and into early 2026.

China and Japan experienced declines in steel production through the first three months of 2026, while India and the U.S.

continue to see consistent positive growth through 2025 and into early 2026.

Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by global steel production, which remained subdued throughout 2025 and into 2026.

China, Japan, Brazil and Russia experienced declines in steel production through the first half of 2026, while India and the U.S.

continue to see consistent positive growth in 2026.

Global tariff developments and recession fears are weighing on current and near-term global steel production, while the ongoing conflict in the Middle East has contributed to further economic and trade uncertainty.

While there has been no noticeable impact on met coal prices to date, input costs for producers are expected to increase, particularly due to higher diesel prices.

Global steel production decreased by 2.3% for the three months through March 2026 compared to the same period in 2025.

As of April 27, 2026, met coal spot prices were $228.50 per tonne.

Met coal prices strengthened in late 2025, rising above $200 per tonne following a 12-month period of depressed prices which fluctuated between $169 and $197 per tonne.

In early 2026, prices continued to increase, reaching $250 per tonne before moderating to a more stable level between $215 and $230 per tonne as supply and demand conditions became more balanced.

Although met coal prices have risen to over $200 in late 2025, producers continue to re-evaluate production levels with a heightened focus on cost management.

Global steel production decreased by 0.7% for the six months through June 2026 compared to the same period in 2025.

As of July 27, 2026, met coal spot prices were $219.60 per tonne.

Met coal prices in early 2026 fluctuated between $214 and $251 per tonne.

In the second quarter of 2026, prices have stabilized and consistently remained above $226 per tonne for extended periods as supply and demand conditions became more balanced, with prices rising in June closer to $245 per tonne.

Although met coal prices remain well supported above $200 per tonne in the first half of 2026, there is still a heightened focus on cost management for producers which has carried over from 2025.

The Middle East conflict has resulted in trade disruption, specifically the seaborne transport of oil and LNG through the Strait of Hormuz, increasing the price of oil, gasoline and diesel, putting further pressure on cost containment if fuel costs continue to stay elevated.

In late 2025, several large and mid-tier met coal producers in Queensland, Australia reported making production cuts and workforce reductions in response to margin pressures.

While met coal prices have settled at a more profitable level in early 2026, additional met coal supply is expected to enter the market from

both Australia and the U.S.

In late 2025, several large and mid-tier met coal producers in Queensland, Australia announced production cuts and workforce reductions.

This activity

continued to slow in the first half of 2026.

While met coal prices have settled at a more profitable level in 2026, additional supply is expected to continue entering the market from both Australia and the U.S.

during 2026, which could place downward pressure on pricing towards $220 per tonne.

These supply and demand dynamics may be further impacted by ongoing geopolitical uncertainties, including global tariff developments and the conflict in the Middle East.

Iron ore prices have fluctuated between $97 and $111 through early 2026 and remained buoyant as steel mills replenished their iron ore stocks.

Supply has remained strong, with continued production from Australia and Brazil in early 2026, consistent with trends observed in late 2025.

Iron ore prices are expected to moderate with continued strong supply entering the market in 2026 and weaker steel demand.

WTI crude prices increased during the first quarter of 2026, primarily driven by the U.S.

and Israeli conflict with Iran, including the closure of the Strait of Hormuz, which has disrupted global oil supply.

These supply and demand dynamics may also be impacted by ongoing geopolitical uncertainties, including the conflict in the Middle East.

Iron ore prices fluctuated between $92 and $107 through early 2026 before easing below $100 in late June, driven by softer steel demand and continued strong iron ore supply.

While demand in China remained subdued amid slower construction activity and ongoing steel industry reforms, production from major exporters, including Australia and Brazil, remained strong throughout the first half of 2026.

As a result, market sentiment remained cautious heading into the third quarter of 2026, with iron ore prices continuing to be influenced by the balance between global supply and steel demand.

WTI crude prices remained elevated during the second quarter of 2026 as oil markets continued to react to geopolitical developments in the Middle East, including concerns regarding the security of global oil supply and shipping routes.

In an effort to retain and recapture global market share, OPEC+ began reversing previously implemented production cuts at the beginning of the second quarter of 2025 and continuing throughout 2025, increasing production despite softer global demand for oil.

After pausing increases in the first quarter of 2026, OPEC+ resumed unwinding production cuts beginning in the second quarter of 2026.

Current geopolitical conditions have increased volatility in the oil markets, making it more difficult to forecast spending and activity for Canadian oil producers.

After pausing increases in the first quarter of 2026, OPEC+ resumed unwinding previously implemented production cuts during the second quarter of 2026.

Current geopolitical conditions have increased volatility in the oil markets, making it more difficult to forecast spending and activity for our Canadian oil customers.

In Canada, WCS crude is the benchmark price for our oil sands customers.

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Gulf Coast over time.

WCS prices in the first quarter of 2026 averaged $57.16 per barrel compared to an average of $58.27 in the first quarter of 2025.

The WCS Differential increased from an average of $12.50 per barrel at the end of the fourth quarter of 2025 to an average of $15.58 at the end of the first quarter of 2026.

Further, the U.S.

administration implemented and amended several new tariffs during 2025.

Continued implementation or expansion of tariffs on oil from Canada could have an adverse impact on our Canadian customers' profit margins, which may in turn reduce their spending on our accommodations and services.

WCS prices in the second quarter of 2026 averaged $73.05 per barrel compared to an average of $53.15 in the second quarter of 2025.

The WCS Differential increased from an average of $12.50 per barrel at the end of the fourth quarter of 2025 to an average of $20.07 at the end of the second quarter of 2026.

Changes to global tariff and trade policies affecting oil from Canada could have an adverse impact on our Canadian customers' profit margins, which may in turn reduce their spending on our accommodations and services.

With near-term higher prices, Canadian oil sands customers are prioritizing production while focusing on capital discipline and reducing downtime, while continuing to strive for lower operating costs and lower headcount.

Recent Developments and Market Trends

Qantac Acquisition .

On May 6, 2025, we completed the Qantac Acquisition, which included four villages with 1,368 rooms in Australia’s Bowen Basin and the associated accommodation assets, land and customer contracts.

Asset Acquisition to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

See Note 5 - Asset Acquisition to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Inflationary Pressures.

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Although inflation resulting from global tariffs implemented or threatened by the U.S.

administration, and the resulting retaliations by its trading partners, did not materially impact our cost structure in 2025 or into 2026, concerns remain that inflationary pressures could return in the future.

The conflict with Iran and the resulting closure of the Strait of Hormuz has disrupted seaborne trade, specifically the transportation of oil and LNG in the Middle East.

Australia imports the majority of its oil and petroleum products, specifically gasoline and diesel.

The current disruption of trade through the Strait of Hormuz has materially increased gasoline and diesel prices in Australia, resulting in increased inflation expectations and risk of higher fuel and transportation costs.

administration, and the resulting retaliations by its trading partners, did not materially impact our cost structure in 2025 or the first half of 2026, concerns remain that inflationary pressures could return in the future.

The conflict with Iran and the associated disruptions to shipping through the Strait of Hormuz has adversely affected seaborne trade, specifically the transportation of oil and LNG in the Middle East.

Australia imports the majority of its oil and petroleum products, including gasoline and diesel.

As a result, continued disruption of trade through the Strait of Hormuz, or a further escalation of the conflict, could materially increase gasoline and diesel prices in Australia, contribute to increased inflation expectations and increase the risk of higher fuel and transportation costs.

Labor Shortages.

We continue to experience increased staff costs as a result of hospitality labor shortages in Australia.

Australia’s labor market remains historically tight, with unemployment holding just above 4% and job mobility (movement of workers between different employers or businesses) at its lowest in 30 years.

A persistent overhang of vacancies continues to constrain recruitment, while government stimulus has disproportionately driven job growth in healthcare, aged care, education and public services.

Regulated labor costs also remain high, with the Fair Work Commission decisions pushing wage increases well above Consumer Price Index changes, and statutory increases in superannuation, workers’ compensation and payroll tax

are further inflating total labor costs.

For hospitality, this combination of scarce labor supply, competition from government-funded sectors and rising employment costs creates sustained pressure on staffing productivity and availability.

Our Sitka Lodge supports the LNG Canada (LNGC) project and related pipeline projects (specifically, the Coastal GasLink Pipeline, the pipeline constructed to transport natural gas feedstock to LNGC).

Construction activity of Phase 1 of the Kitimat LNG Facility has been completed and commercial operations commenced at the end of June 2025.

The Coastal GasLink Pipeline was completed in 2024.

As such, we continue to expect lower occupancy levels at our Sitka Lodge in the near-term until additional phases of the LNGC project are approved and commence, or further construction activity increases occupancy demand.

Australia’s labor market remains historically tight, with unemployment holding above 4% and job mobility (movement of workers between different employers or businesses) at its lowest in decades.

A persistent overhang of vacancies continues to

constrain recruitment, while government stimulus has disproportionately driven job growth in healthcare, aged care, education and public services.

For hospitality, this combination of limited labor supply, competition from government-funded sectors and rising employment costs continues to create pressure on staffing productivity and availability.

Our Sitka Lodge supports the LNG Canada (LNGC) project and related pipeline projects (specifically, the Coastal GasLink Pipeline, the pipeline constructed to transport natural gas feedstock to LNGC), as well as Cedar LNG.

Phase 1 of the LNGC facility commenced commercial operations in June 2025 and the Coastal GasLink Pipeline was completed in 2024.

As such, we continue to expect lower occupancy levels at our Sitka Lodge in the near-term until additional phases of the LNGC project are approved and commence, or further regional construction activity increases occupancy demand.

From a macroeconomic standpoint, LNG demand has continued to grow, reinforcing the need for the global LNG industry to expand access to natural gas.

Evolving government energy policies around the world have amplified support for cleaner energy supply, creating more opportunities for natural gas and LNG.

The conflicts between Russia and Ukraine and in the Middle East have reinforced the importance for secure natural gas supply globally, particularly in Europe.

Ongoing geopolitical conflicts have reinforced the importance for secure natural gas supply globally, particularly in Europe.

Accordingly, we expect additional investment in LNG supply will be needed to meet the resulting expected long-term LNG demand growth.

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Three Months Ended

2026 2025 Change Percentage

June 30, Six Months Ended

2026 2025 Change Percentage 2026 2025 Change Percentage

Average Australian dollar to U.S.

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dollar $0.723 $0.723 $0.000 —% $0.726 $0.710 $0.016 2.3%

March 31, 2026 December 31, 2025 Change Percentage

June 30, 2026 December 31, 2025 Change Percentage

Australian dollar to U.S.

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Results of Operations

Unless otherwise indicated, discussion of results for the three months ended March 31, 2026, is based on a comparison to the corresponding period of 2025.

Results of Operations – Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Unless otherwise indicated, discussion of results for the three and six months ended June 30, 2026, is based on a comparison to the corresponding period of 2025.

Results of Operations – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

Three Months Ended

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Total costs and expenses 174,925 159,894 15,031

Operating income (expense) 3,123 (5,516) 8,639

Operating income 5,092 2,800 2,292

Interest expense, net (4,204) (2,624) (1,580)

Other income (expense) (61) 347 (408)

Loss before income taxes (662) (6,762) 6,100

Other income 120 119 1

Income before income taxes 1,008 295 713

Income tax expense (3,525) (3,606) 81

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Net loss attributable to Civeo Corporation $ (2,521) $ (3,314) $ 793

We reported net loss attributable to Civeo for the quarter ended March 31, 2026 of $3.8 million, or $0.34 per diluted share.

Net loss included $1.0 million in severance, $0.5 million related to real estate rationalization efforts in Canada and $0.4 million of shareholder activist related costs.

We reported net loss attributable to Civeo for the quarter ended March 31, 2025 of $9.8 million, or $0.72 per diluted share.

Net loss included $1.0 million of cost saving initiatives in Canada related to severance and two lodge closures.

Consolidated revenues increased $28.6 million, or 20%, in the first quarter of 2026 compared to the first quarter of 2025.

This increase was primarily driven by (i) contributions in Australia from the Qantac Acquisition in the second quarter of 2025, (ii) new integrated services business in Queensland, (iii) higher billed rooms at our Canadian oil sands lodges and (iv) a stronger Australian and Canadian dollar relative to the U.S.

dollar in the first quarter of 2026 compared to the first quarter of 2025.

The Qantac Acquisition generated $7.5 million of revenues in the first quarter of 2026.

We reported net loss attributable to Civeo for the quarter ended June 30, 2026 of $2.5 million or $0.23 per diluted share.

Net loss included $1.5 million related to the resolution of a sales and occupancy tax matter, $0.1 million related to real estate rationalization efforts in Canada and $0.1 million of shareholder activist related costs.

We reported net loss attributable to Civeo for the quarter ended June 30, 2025 of $3.3 million, or $0.25 per diluted share.

Net loss included $3.2 million of shareholder activist related costs and $0.5 million of cost saving initiatives in Canada related to two lodge closures.

Consolidated revenues increased $17.3 million, or 11%, in the second quarter of 2026 compared to the second quarter of 2025.

This increase was primarily driven by (i) new integrated services business in Queensland and Canada, (ii) contributions in Australia from the Qantac Acquisition in the second quarter of 2025, (iii) higher billed rooms at our Canadian lodges and (iv) a stronger Australian dollar relative to the U.S.

dollar in the second quarter of 2026 compared to the second quarter of 2025.

These increases were partially offset by reduced occupancy at our legacy Bowen Basin villages in Queensland.

See the discussion of segment results of operations below for further information.

Cost of Sales and Services.

Our consolidated cost of sales and services increased $17.9 million, or 16%, in the first quarter of 2026 compared to the first quarter of 2025.

This increase was primarily driven by (i) incremental costs in Australia associated with the Qantac Acquisition in the second quarter of 2025, (ii) new integrated services business in Queensland, including the associated overhead costs and (iii) higher costs in Canada due to increased occupancy levels and higher food and service costs.

In addition, inflation and higher billed days and a stronger Australian and Canadian dollar relative to the U.S.

dollar in the first quarter of 2026 compared to the first quarter of 2025 resulted in an increase in cost of sales and services.

These items were partially offset by reduced costs at certain Canadian lodges and lower indirect costs as a result of cost reduction measures implemented in early 2025.

Our consolidated cost of sales and services increased $17.1 million, or 14%, in the second quarter of 2026 compared to the second quarter of 2025.

This increase was primarily driven by (i) new integrated services business in Queensland and Canada, including the associated overhead costs, (ii) incremental costs in Australia associated with the Qantac Acquisition in the second quarter of 2025, (iii) increased occupancy levels, higher food and service costs resulting from inflation and increased repairs and maintenance expense in Canada and (iv) a stronger Australian dollar relative to the U.S.

dollar in the second quarter of 2026 compared to the second quarter of 2025.

These increases were partially offset by lower costs and reduced indirect costs at certain Canadian lodges resulting from cost reduction measures implemented in early 2025.

See the discussion of segment results of operations below for further information.

Selling, General and Administrative Expenses.

Selling, general and administrative (SG&A) expenses increased $1.9 million, or 10%, in the first quarter of 2026 compared to the first quarter of 2025.

This increase was primarily driven by the write-off of accounts receivable in Australia due to customer insolvency of $0.8 million and higher compensation expense of $0.7 million, largely due to severance costs incurred in Canada.

In addition, a stronger Australian and Canadian dollar relative to the U.S.

dollar in the first quarter of 2026 compared to the first quarter of 2025.

These items were partially offset by lower office expenses of $0.6 million in the first quarter of 2026 compared to the first quarter of 2025.

Selling, general and administrative (SG&A) expenses decreased $0.1 million in the second quarter of 2026 compared to the second quarter of 2025.

This decrease was primarily driven by a $3.7 million reduction in professional fees, including $3.2 million of shareholder activist related costs incurred in the second quarter of 2025.

This decrease was partially offset by $1.5 million related to the resolution of a sales and occupancy tax matter, higher share-based compensation expense of $0.7 million, higher compensation expense of $0.5 million and a stronger Australian dollar relative to the U.S.

dollar in the second quarter of 2026 compared to the second quarter of 2025.

Depreciation and Amortization Expense.

Depreciation and amortization expense increased $1.1 million, or 6%, in the first quarter of 2026 compared to the first quarter of 2025.

The increase was primarily due to additional property, plant and equipment acquired through the Qantac Acquisition and a stronger Australian and Canadian dollar relative to the U.S.

dollar in the first quarter of 2026 compared to the first quarter of 2025.

Depreciation and amortization expense decreased $1.5 million, or 8%, in the second quarter of 2026 compared to the second quarter of 2025.

The decrease was primarily due to certain assets becoming fully depreciated in Canada and Australia.

This decrease was partially offset by additional depreciation on property, plant and equipment acquired in the Qantac Acquisition and a stronger Australian dollar relative to the U.S.

dollar in the second quarter of 2026 compared to the second quarter of 2025.

Operating Income (Expense).

Consolidated operating income increased $8.6 million, or 157%, in the first quarter of 2026 compared to the first quarter of 2025, primarily driven by the Qantac Acquisition in Australia, higher activity levels in Canada and gross margin expansion in Canada resulting from cost cutting measures previously implemented.

These items were partially offset by higher depreciation and amortization expense in the first quarter of 2026 compared to the first quarter of 2025.

Consolidated operating income increased $2.3 million, or 82%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the Qantac Acquisition in Australia and lower depreciation and amortization expenses in the second quarter of 2026 compared to the second quarter of 2025.

Interest Expense, net.

Net interest expense increased by $2.1 million, or 134%, in the first quarter of 2026 compared to the first quarter of 2025, primarily related to higher average debt levels, as a result of the Qantac Acquisition and increased share repurchases during 2025.

Net interest expense increased by $1.6 million, or 60%, in the second quarter of 2026 compared to the second quarter of 2025, primarily related to higher average debt levels, as a result of the Qantac Acquisition and increased share repurchases during 2025.

Income Tax Expense.

Our income tax expense for the three months ended March 31, 2026 totaled $3.1 million, or (474.5)% of pretax loss, compared to an income tax expense of $3.1 million, or (45.7)% of pretax loss, for the three months ended March 31, 2025.

Our effective tax rate for the three months ended March 31, 2026 and 2025 was impacted by Canada and the U.S.

Our income tax expense for the three months ended June 30, 2026 totaled $3.5 million, or 349.7% of pretax income, compared to an income tax expense of $3.6 million, or 1222.4% of pretax income, for the three months ended June 30, 2025.

Our effective tax rate for the three months ended June 30, 2026 and 2025 was impacted by Canada and the U.S.

being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.

Other Comprehensive Income (Loss).

Other comprehensive income increased $3.8 million in the first quarter of 2026 compared to the first quarter of 2025, primarily as a result of foreign currency translation adjustments due to changes in the Australian and Canadian dollar exchange rates compared to the U.S.

Other comprehensive income decreased $10.3 million in the second quarter of 2026 compared to the second quarter of 2025, primarily as a result of foreign currency translation adjustments due to changes in the Australian and Canadian dollar exchange rates compared to the U.S.

The Australian dollar exchange rate compared to the U.S.

dollar increased 3.1% in the first quarter of 2026 compared to a 1% increase in the first quarter of 2025.

dollar increased 0.4% in the second quarter of 2026 compared to a 5% increase in the second quarter of 2025.

The Canadian dollar exchange rate compared to the U.S.

dollar decreased 2% in the first quarter of 2026 compared to a 0.1% increase in the first quarter of 2025.

dollar decreased 2% in the second quarter of 2026 compared to a 5% increase in the second quarter of 2025.

Segment Results of Operations – Australian Segment

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(4) Billed rooms represent total billed days for owned assets for the periods presented.

Our Australian segment reported revenues in the first quarter of 2026 that were $19.4 million, or 19%, higher than the first quarter of 2025.

Our Australian segment reported revenues in the second quarter of 2026 that were $12.8 million, or 11%, higher than the second quarter of 2025.

The strengthening of the average exchange rate for the Australian dollar relative to the U.S.

dollar by 10.8% in the first quarter of 2026 compared to the first quarter of 2025 resulted in a $12.0 million period-over-period increase in revenues.

dollar by 10.8% in the second quarter of 2026 compared to the second quarter of 2025 resulted in a $12.2 million period-over-period increase in revenues.

On a constant currency basis, the Australian segment experienced a 0.5% period-over-period increase in revenues.

Excluding the impact of the strengthening Australian exchange rate, the increase in the Australian segment was driven by the Qantac Acquisition in the second quarter of 2025 and new integrated services business in Queensland.

Our Australian segment cost of sales and services increased $15.7 million, or 21%, in the first quarter of 2026 compared to the first quarter of 2025.

Excluding the impact of the strengthening Australian exchange rate, the increase in the Australian segment was driven by new integrated services business in Queensland and the Qantac Acquisition in the second quarter of 2025, partially offset by reduced occupancy at our legacy Bowen Basin villages in Queensland.

Our Australian segment cost of sales and services increased $11.6 million, or 14%, in the second quarter of 2026 compared to the second quarter of 2025.

The strengthening of the average exchange rate for the Australian dollar relative to the U.S.

dollar by 10.8% in the first quarter of 2026 compared to the first quarter of 2025 resulted in a $9.0 million period-over-period increase in cost of sales and services.

Excluding the impact of the strengthening Australian exchange rate, the increase in cost of sales and services in the Australian segment was largely driven by the Qantac Acquisition and new integrated services business in Queensland and the associated overhead costs.

Our Australian segment gross margin as a percentage of revenues decreased to 24.8% in the first quarter of 2026 from 26.0% in the first quarter of 2025.

This was primarily driven by reduced occupancy at our Bowen Basin villages in Queensland and increased operating costs arising from challenges in industry-wide shortage of skilled labor.

dollar by 10.8% in the second quarter of 2026 compared to the second quarter of 2025 resulted in a $9.2 million period-over-period increase in cost of sales and services.

Our Australian segment gross margin as a percentage of revenues decreased to 25.0% in the second quarter of 2026 from 26.8% in the second quarter of 2025.

This was primarily driven by reduced activity at our Bowen Basin villages in Queensland, reduced retail sales across our integrated services business and increased operating costs arising from the ongoing industry-wide shortages of skilled labor.

The reduced segment gross margin was also due to higher relative revenue contribution from our integrated services business, which has a service-only business model and generates lower overall gross margins than our accommodation business.

Segment Results of Operations – Canadian Segment

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Mobile facility rental and associated services revenue (2)

Integrated services and other services revenue (3)

10,122 6,998 3,124

Total revenues $ 54,571 $ 50,022 $ 4,549

Cost of sales and services ($ in thousands)

Accommodation and associated services cost $ 31,416 $ 30,618 $ 798

Mobile facility rental and associated services cost 348 135 213

Integrated services and other services cost 10,578 6,237 4,341

Indirect other costs 1,916 2,047 (131)

Total cost of sales and services $ 44,258 $ 39,037 $ 5,221

Gross margin as a % of revenues 18.9 % 22.0 % (3.1) %

Average daily rate for owned lodges (4)

$ 96 $ 94 $ 2

Total billed rooms for owned lodges (5)

458,020 449,970 8,050

Average Canadian dollar to U.S.

dollar $ 0.723 $ 0.723 $ —

(1) Includes revenues related to lodge rooms and hospitality services for owned rooms for the periods presented.

(2) Includes revenues related to mobile assets for the periods presented.

(3) Includes revenues related to food services, laundry and water and wastewater treatment services for the periods presented.

(4) Average daily rate is based on billed rooms and accommodation revenue in our owned lodges.

(5) Billed rooms represents total billed days for owned assets for the periods presented.

Our Canadian segment reported revenues in the second quarter of 2026 that were $4.5 million, or 9%, higher than the second quarter of 2025.

The increase in the Canadian segment was driven by higher billed rooms at our lodges, up 2% year-over-year, and a new integrated services contract in Ontario in the second quarter of 2026.

Producers in the region remain focused on reducing operating costs while also prioritizing maintaining and increasing oil production, resulting in additional personnel at site.

Our Canadian segment cost of sales and services increased $5.2 million, or 13%, in the second quarter of 2026 compared to the second quarter of 2025.

The increase in cost of sales and services in the Canadian segment was largely driven by higher costs at various lodges due to increased occupancy levels, higher food and service costs resulting from inflation, increased repairs and maintenance expense and higher costs associated with a new integrated services contract.

These increases were partially offset by lower costs at certain lodges and reduced indirect costs resulting from cost reduction measures implemented in early 2025.

Our Canadian segment gross margin as a percentage of revenues decreased from 22.0% in the second quarter of 2025 to 18.9% in the second quarter of 2026.

This was primarily driven by increased startup costs associated with a new integrated services contract, higher inflation and increased repairs and maintenance expense, partially offset by efficiencies while operating with increased occupancy levels.

Results of Operations – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

Six Months Ended

2026 2025 Change

($ in thousands)

Australia $ 248,464 $ 216,318 $ 32,146

Canada 104,220 90,420 13,800

Total revenues 352,684 306,738 45,946

Costs and expenses:

Cost of sales and services

Australia 186,582 159,197 27,385

Canada 84,285 76,682 7,603

Other 250 267 (17)

Total cost of sales and services 271,117 236,146 34,971

Selling, general and administrative expenses 40,474 38,655 1,819

Depreciation and amortization expense 33,635 34,080 (445)

Other operating (income) expense (757) 573 (1,330)

Total costs and expenses 344,469 309,454 35,015

Operating income (expense) 8,215 (2,716) 10,931

Interest expense, net (7,928) (4,217) (3,711)

Other income 59 466 (407)

Income (loss) before income taxes 346 (6,467) 6,813

Income tax expense (6,666) (6,694) 28

Net loss (6,320) (13,161) 6,841

Net income (loss) attributable to noncontrolling interest 9 (5) 14

Net loss attributable to Civeo Corporation $ (6,329) $ (13,156) $ 6,827

We reported net loss attributable to Civeo for the six months ended June 30, 2026 of $6.3 million, or $0.57 per diluted share.

Net loss included $1.5 million related to the resolution of a sales and occupancy tax matter, $1.0 million in severance, $0.6 million related to real estate rationalization efforts in Canada and $0.5 million of shareholder activist related costs.

We reported net loss attributable to Civeo for the six months ended June 30, 2025 of $13.2 million, or $0.98 per diluted share.

Net loss included $3.2 million of shareholder activist related costs and $1.4 million of cost saving initiatives in Canada related to severance and two lodge closures.

Consolidated revenues increased $45.9 million, or 15%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

This increase was primarily driven by (i) new integrated services business in Queensland and Canada, (ii) contributions in Australia from the Qantac Acquisition in the second quarter of 2025, (iii) higher billed rooms at our owned lodges in Canada and (iv) a stronger Australian and Canadian dollar relative to the U.S.

dollar in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

These increases were partially offset by reduced occupancy at our legacy Bowen Basin villages in Queensland.

See the discussion of segment results of operations below for further information.

Cost of Sales and Services.

Our consolidated cost of sales and services increased $35.0 million, or 15%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

dollar in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

These items were partially offset by lower costs at certain Canadian lodges and reduced indirect costs resulting from cost reduction measures implemented in early 2025.

See the discussion of segment results of operations below for further information.

Selling, General and Administrative Expenses.

Selling, general and administrative (SG&A) expenses increased $1.8 million, or 5%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

This increase was primarily driven by $1.5 million related to the resolution of a sales and occupancy tax matter, higher compensation expense of $1.2 million, largely due to severance costs incurred in Canada, the write-off of accounts receivable in Australia due to customer insolvency of $0.8 million, higher share-based compensation expense of $0.7 million and a stronger Australian and Canadian dollar relative to the U.S.

dollar in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

These increases were partially offset by a $3.7 million reduction in professional fees, including $3.2 million of shareholder activist related costs incurred in the six months ended June 30, 2025.

Depreciation and Amortization Expense.

Depreciation and amortization expense decreased $0.4 million, or 1%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

The decrease was primarily due to certain assets becoming fully depreciated in Canada and Australia.

This decrease was partially offset by additional depreciation on property, plant and equipment acquired in the Qantac Acquisition and a stronger Australian and Canadian dollar relative to the U.S.

dollar in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Operating Income (Expense).

Consolidated operating income increased $10.9 million, or 402%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by the Qantac Acquisition in Australia, higher activity levels in Canada and gross margin expansion in Canada resulting from cost cutting measures previously implemented.

Interest Expense, net.

Net interest expense increased by $3.7 million, or 88%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily related to higher average debt levels, as a result of the Qantac Acquisition and increased share repurchases during 2025.

Income Tax Expense.

Our income tax expense for the six months ended June 30, 2026 totaled $6.7 million, or 1926.6% of pretax income, compared to an income tax expense of $6.7 million or (103.5)% of pretax loss, for the six months ended June 30, 2025.

Our effective tax rate for the six months ended June 30, 2026 and 2025 was impacted by Canada and the U.S.

being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.

Other Comprehensive Income (Loss).

Other comprehensive income decreased $6.5 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of foreign currency translation adjustments due to changes in the Australian and Canadian dollar exchange rates compared to the U.S.

The Australian dollar exchange rate compared to the U.S.

dollar increased 4% in the six months ended June 30, 2026 compared to a 6% increase in the six months ended June 30, 2025.

The Canadian dollar exchange rate compared to the U.S.

dollar decreased 4% in the six months ended June 30, 2026 compared to a 5% increase in the six months ended June 30, 2025.

Segment Results of Operations – Australian Segment

Six Months Ended

2026 2025 Change

Revenues ($ in thousands)

Accommodation and associated services revenue (1)

$ 113,179 $ 99,505 $ 13,674

Integrated services and other services revenue (2)

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Accommodation and associated services cost $ 56,990 $ 48,961 $ 8,029

Integrated services and other services cost 121,545 103,814 17,731

Indirect other cost 8,047 6,422 1,625

Total cost of sales and services $ 186,582 $ 159,197 $ 27,385

Gross margin as a % of revenues 24.9 % 26.4 % (1.50) %

Average daily rate for owned villages (3)

$ 84 $ 76 $ 8

Total billed rooms for owned villages (4)

1,350,008 1,316,142 33,866

Average Australian dollar to U.S.

dollar $ 0.703 $ 0.634 $ 0.069

(1) Includes revenues related to village rooms and hospitality services for owned rooms for the periods presented.

(2) Includes revenues related to food services and other services, including facilities management for the periods presented.

(3) Average daily rate is based on billed rooms and accommodation revenue in our owned villages.

(4) Billed rooms represent total billed days for owned assets for the periods presented.

Our Australian segment reported revenues in the six months ended June 30, 2026 that were $32.1 million, or 15%, higher than the six months ended June 30, 2025.

The strengthening of the average exchange rate for the Australian dollar relative to the U.S.

dollar by 10.9% in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 resulted in a $24.2 million period-over-period increase in revenues.

On a constant currency basis, the Australian segment experienced a 3.7% period-over-period increase in revenues.

Excluding the impact of the strengthening Australian exchange rate, the increase in the Australian segment was driven by the new integrated services business in Queensland and the Qantac Acquisition in the second quarter of 2025, partially offset by reduced occupancy at our legacy Bowen Basin villages in Queensland.

Our Australian segment cost of sales and services increased $27.4 million, or 17%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

The strengthening of the average exchange rate for the Australian dollar relative to the U.S.

dollar by 10.9% in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 resulted in a $18.2 million period-over-period increase in cost of sales and services.

Our Australian segment gross margin as a percentage of revenues decreased to 24.9% in the six months ended June 30, 2026 from 26.4% in the six months ended June 30, 2025.

Segment Results of Operations – Canadian Segment

Six Months Ended

2026 2025 Change

Revenues ($ in thousands)

Accommodation and associated services revenue (1)

$ 87,216 $ 76,026 $ 11,190

Mobile facility rental and associated services revenue (2)

1,405 653 752

Integrated services and other services revenue (3)

15,599 13,741 1,858

Total revenues $ 104,220 $ 90,420 $ 13,800

Cost of sales and services ($ in thousands)

Accommodation and associated services cost $ 63,540 $ 59,483 $ 4,057

Mobile facility rental and associated services cost 1,027 135 892

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(5) Billed rooms represents total billed days for owned assets for the periods presented.

Our Canadian segment reported revenues in the first quarter of 2026 that were $9.3 million, or 23%, higher than the first quarter of 2025.

Our Canadian segment reported revenues in the six months ended June 30, 2026 that were $13.8 million, or 15%, higher than the six months ended June 30, 2025.

The strengthening of the average exchange rate for the Canadian dollar relative to the U.S.

dollar by 4.6% in the first quarter of 2026 compared to the first quarter of 2025 resulted in a $2.2 million period-over-period increase in revenues.

On a constant currency basis, the increase in the Canadian segment was driven by higher billed rooms at our oil sands lodges, up 17% year-over-year.

dollar by 2.3% in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 resulted in a $2.3 million period-over-period increase in revenues.

On a constant currency basis, the increase in the Canadian segment was driven by higher billed rooms at our owned lodges, up 10% year-over-year, and a new integrated services contract in Ontario, which began in the second quarter of 2026.

Producers in the region remain focused on reducing operating costs while also prioritizing maintaining and increasing oil production, resulting in additional personnel at site.

Our Canadian segment cost of sales and services increased $2.4 million, or 6%, in the first quarter of 2026 compared to the first quarter of 2025.

Our Canadian segment cost of sales and services increased $7.6 million, or 10%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

The strengthening of the average exchange rate for the Canadian dollar relative to the U.S.

dollar by 4.6% in the first quarter of 2026 compared to the first quarter of 2025 resulted in a $1.8 million period-over-period increase in cost of sales and services.

On a constant currency basis, the increase in cost of sales and services in the Canadian segment was largely driven by higher costs at various lodges due to increased occupancy levels and higher food and service costs as a result of inflation and higher billed days, partially offset by reduced costs at certain lodges and reduced indirect costs as a result of various cost reduction measures implemented in early 2025.

Our Canadian segment gross margin as a percentage of revenues increased from 6.8% in the first quarter of 2025 to 19.4% in the first quarter of 2026.

This was primarily driven by operating efficiencies with higher occupancy as well as higher margins as a result of various cost reduction measures implemented in early 2025.

dollar by 2.3% in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 resulted in a $1.8 million period-over-period increase in cost of sales and services.

Excluding the impact of the strengthening Canadian exchange rate, the increase in cost of sales and services was largely driven by higher costs at various lodges due to increased occupancy levels, higher food and service costs resulting from inflation, increased repairs and maintenance expense and higher costs associated with a new integrated services contract.

These increases were partially offset by lower costs at certain lodges and reduced indirect costs resulting from cost reduction measures implemented in early 2025.

Our Canadian segment gross margin as a percentage of revenues increased from 15.2% in the six months ended June 30, 2025 to 19.1% in the six months ended June 30, 2026.

This was primarily driven by operating efficiencies while operating with increased occupancy levels, as well as higher margins as a result of various cost reduction measures implemented in early 2025, partially offset by startup costs associated with a new integrated services contract.

Liquidity and Capital Resources

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In addition, capital has been used to repay debt and fund strategic business acquisitions.

Historically, our primary sources of funds have been available cash, cash flow from operations, borrowings under our Amended Credit Agreement and proceeds from equity issuances.

Historically, our primary sources of funds have been available cash, cash flow from operations, borrowings under our Amended Credit Agreement and proceeds from debt and equity issuances.

In the future, we may seek to access the debt and equity capital markets from time to time to raise additional capital, increase liquidity, fund acquisitions or refinance debt.

The following table summarizes our consolidated liquidity position as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

The following table summarizes our consolidated liquidity position as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 December 31, 2025

Lender commitments $ 285,000 $ 265,000

Reduction in availability (1)

(13,952) (5,344)

Borrowings against revolving credit capacity (208,595) (182,842)

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Total available liquidity $ 82,223 $ 90,387

(1) As of March 31, 2026 and December 31, 2025, zero and $5.3 million, respectively, of our borrowing capacity under the Amended Credit Agreement could not be utilized in order to maintain compliance with the maximum leverage ratio financial covenant in the Amended Credit Agreement.

Cash totaling $9.7 million was used in operations during the three months ended March 31, 2026, compared to $8.4 million used in operations during the three months ended March 31, 2025.

Net cash used in working capital was $24.9 million during the three months ended March 31, 2026 compared to net cash used in working capital of $14.7 million during the three months ended March 31, 2025.

The year-over-year increase in cash used in working capital in 2026 compared to 2025 is largely due to increased accounts receivable balances in Australia and Canada.

Cash was used in investing activities during the three months ended March 31, 2026 in the amount of $3.9 million, compared to cash used in investing activities during the three months ended March 31, 2025 in the amount of $5.1 million.

The decrease in cash used in investing activities was primarily due to lower capital expenditures.

We received net proceeds from the sale of property, plant and equipment of $0.2 million during the three months ended March 31, 2026 and 2025.

Capital expenditures totaled $4.1 million and $5.3 million during the three months ended March 31, 2026 and 2025, respectively.

(1) As of June 30, 2026 and December 31, 2025, $14.0 million and $5.3 million, respectively, of our borrowing capacity under the Amended Credit Agreement could not be utilized in order to maintain compliance with the maximum leverage ratio financial covenant in the Amended Credit Agreement.

Cash totaling $1.9 million was provided by operations during the six months ended June 30, 2026, compared to $10.8 million used in operations during the six months ended June 30, 2025.

Net cash used in working capital was $26.4 million during the six months ended June 30, 2026 compared to net cash used in working capital of $31.3 million during the six months ended June 30, 2025.

The year-over-year decrease in cash used in working capital in 2026 compared to 2025 is largely due to lower cash taxes paid in Australia, partially offset by increased accounts receivable balances in Australia and Canada.

Cash was used in investing activities during the six months ended June 30, 2026 in the amount of $6.6 million, compared to cash used in investing activities during the six months ended June 30, 2025 in the amount of $74.4 million.

The decrease was primarily due to the Qantac acquisition completed during 2025.

We received net proceeds from the sale of property, plant and equipment of $1.2 million during the six months ended June 30, 2026 compared to $0.3 million during the six months ended June 30, 2025.

Capital expenditures totaled $7.8 million and $9.8 million during the six months ended June 30, 2026 and 2025, respectively.

Capital expenditures in both periods were primarily related to maintenance.

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We continue to monitor the global economy, commodity prices, demand for met coal, crude oil, LNG and iron ore, inflation and the resultant impact on the capital spending plans of our customers in order to plan our business activities, and we may adjust our capital expenditure plans in the future.

Net cash of $15.9 million was provided by financing activities during the three months ended March 31, 2026 primarily due to net borrowings under our revolving credit facilities of $30.6 million, partially offset by repurchases of our common shares of $14.4 million and payments to settle tax obligations on vested shares under our share-based compensation plans of $0.3 million.

Net cash of $36.6 million was provided by financing activities during the three months ended March 31, 2025 primarily due to net borrowings under our revolving credit facilities of $44.2 million, partially offset by dividend payments of $3.4 million, repurchases of our common shares of $3.3 million, payments to settle tax obligations on vested shares under our share-based compensation plans of $0.7 million and debt issuance costs of $0.1 million.

The following table summarizes the changes in debt outstanding during the three months ended March 31, 2026 (in thousands):

Net cash of $11.5 million was provided by financing activities during the six months ended June 30, 2026 primarily due to net borrowings under our revolving credit facilities of $29.6 million, partially offset by repurchases of our common shares of $14.4 million, debt issuance costs of $3.4 million and payments to settle tax obligations on vested shares under our share-based compensation plans of $0.3 million.

Net cash of $92.2 million was provided by financing activities during the six months ended June 30, 2025 primarily due to net borrowings under our revolving credit facilities of $119.2 million primarily to fund the Qantac Acquisition and share repurchases, partially offset by repurchases of our common shares of $22.5 million, dividend

payments of $3.4 million, payments to settle tax obligations on vested shares under our share-based compensation plans of $0.6 million and debt issuance costs of $0.4 million.

The following table summarizes the changes in debt outstanding during the six months ended June 30, 2026 (in thousands):

Balance at December 31, 2025 $ 182,842

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Translation (3,827)

Balance at March 31, 2026 $ 212,276

Balance at June 30, 2026 $ 208,595

We believe that cash on hand and cash flow from operations will be sufficient to meet our anticipated liquidity needs for the next 12 months.

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• provide for other technical changes and amendments to the Credit Agreement.

As of March 31, 2026, we had outstanding letters of credit of zero under the U.S.

As of June 30, 2026, we had outstanding letters of credit of zero under the U.S.

facility, zero under the Australian facility and $0.8 million under the Canadian facility.

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See Note 7 – Debt to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

4.50% Convertible Senior Notes

Subsequent to June 30, 2026, we strengthened our liquidity through the issuance of $115.0 million aggregate principal amount of 4.50% Convertible Senior Notes due 2031 (the Convertible Notes) in a private placement, including the full exercise of the initial purchasers’ option to purchase an additional $15.0 million aggregate principal amount of Convertible Notes.

We received approximately $110.8 million in net proceeds, of which approximately $22.3 million was used to repurchase 660,297 of our common shares.

We used the remainder of the net proceeds from the offering to repay outstanding borrowings under our Amended Credit Agreement.

The Convertible Notes bear interest at a rate of 4.50% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2027.

The Convertible Notes will mature on August 1, 2031, unless earlier repurchased or redeemed by us or converted pursuant to their terms.

See Note 14 – Subsequent Event to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

In April 2025, our Board suspended quarterly dividends on our common shares to prioritize returning capital to our shareholders through ongoing share repurchases.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis