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KLNG Swings to Earnings in Q1 as Revenues Jump 56% on Contract Wins
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Shares of Koil Energy Solutions, Inc. (KLNG - Free Report) have gained 4.8% since the company reported results for the quarter ended March 31, 2026, outperforming the S&P 500 index, which declined 2.1% over the same period. However, over the past month, Koil Energy shares have slipped 0.4%, lagging the S&P 500’s 3.7% gain.
Koil Energy reported first-quarter 2026 net income of 2 cents per share, compared with breakeven results a year earlier.
Revenues of $8.2 million improved 56% year over year from $5.3 million in the prior-year quarter. Net income totaled $0.2 million against a net loss of $0.03 million a year earlier.
Gross profit rose to $2.6 million from $1.7 million, while gross margin improved to 32% from 31%. Adjusted EBITDA increased 69% year over year to $0.6 million.
Management attributed the strong top-line performance primarily to a sharp increase in fixed-price contract activity and additional contributions from service projects. CEO Erik Wiik said the quarter reflected “another record revenue quarter,” supported by both a strong sales pipeline and operational execution.
During the quarter, Koil secured several notable contracts, including a manufacturing agreement with an international offshore installation company involving modification of a large offshore carousel. The company also won a subsea distribution system contract tied to a deepwater Gulf of America project, which management described as a key milestone in its strategy to become an integrated systems supplier. Additional work included offshore West Africa monitoring services contracts and a high volume of smaller projects that collectively contributed to quarterly growth.
Management highlighted that customers added in 2025, which represented roughly 10% of last year’s annual revenue, contributed approximately 25% of first-quarter 2026 revenue, signaling expanding customer diversification.
Expenses Rise With Expansion Efforts
Selling, general and administrative expenses increased to $2.3 million from $1.7 million in the prior-year period, mainly due to increased headcount and investments tied to growth initiatives. Full-time equivalent employees increased to 79 from 64 a year earlier, with hiring concentrated in sales and administrative functions.
Chief financial officer Kurt Keller noted that quarter-over-quarter SG&A growth was driven partly by nonrecurring items, including year-end audit expenses associated with implementing a new ERP system and marketing costs related to the subsea tieback conference. Management indicated these expenses are not expected to recur during the remainder of 2026.
The company generated operating income of $0.3 million compared with an operating loss of $0.08 million in the year-ago quarter. Cash provided by operating activities improved to $0.4 million from a use of $0.8 million a year earlier. However, cash on hand declined to $1.2 million at March 31, 2026, from $1.5 million at year-end 2025. Net receivables increased to $7.5 million from $4.8 million, which management said reflected billing and collection timing tied to fixed-price contract milestones.
Management Sees Expanding Market Opportunity
Koil management expressed confidence in sustaining growth as subsea development activity remains strong globally. The company said growth in greenfield projects and increasing subsea tie-back activity are creating favorable conditions for its core offerings. During the earnings call, management cited industry forecasts from Westwood Global Energy Group projecting subsea tree awards to rise from 254 in 2025 to 296 by 2027, representing growth of more than 15%.
The company also emphasized progress in Brazil, where it has expanded operations and qualified with multiple oil and gas companies for project bidding opportunities. Wiik said Koil is now participating in both large and small bid opportunities in the country and believes its local operating structure provides a competitive cost advantage.
Management added that bidding activity and order intake continued to rise during the quarter, while investments in talent and operational capabilities are intended to support long-term expansion.
Strategic Roadmap and Growth Priorities
Koil used its recent investor day to outline its “KOIL 2030” strategic roadmap centered on three growth pillars: distribution systems, Brazilian expansion and rental equipment. Management said the company has already achieved portions of its earlier three-year growth plan ahead of schedule, including winning its first significant subsea distribution systems award and expanding internationally.
Executives reiterated confidence in the sustainability of current growth trends and said they remain focused on balancing profitability with continued investment.
Other Developments
Management highlighted continued investments in intellectual property development, expansion of Brazilian operations and additional operational assets as part of its long-term growth strategy.
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KLNG Swings to Earnings in Q1 as Revenues Jump 56% on Contract Wins
Shares of Koil Energy Solutions, Inc. (KLNG - Free Report) have gained 4.8% since the company reported results for the quarter ended March 31, 2026, outperforming the S&P 500 index, which declined 2.1% over the same period. However, over the past month, Koil Energy shares have slipped 0.4%, lagging the S&P 500’s 3.7% gain.
Koil Energy reported first-quarter 2026 net income of 2 cents per share, compared with breakeven results a year earlier.
Revenues of $8.2 million improved 56% year over year from $5.3 million in the prior-year quarter. Net income totaled $0.2 million against a net loss of $0.03 million a year earlier.
Gross profit rose to $2.6 million from $1.7 million, while gross margin improved to 32% from 31%. Adjusted EBITDA increased 69% year over year to $0.6 million.
Koil Energy Solutions, Inc. Price
Koil Energy Solutions, Inc. price | Koil Energy Solutions, Inc. Quote
Strong Contract Activity Drives Growth
Management attributed the strong top-line performance primarily to a sharp increase in fixed-price contract activity and additional contributions from service projects. CEO Erik Wiik said the quarter reflected “another record revenue quarter,” supported by both a strong sales pipeline and operational execution.
During the quarter, Koil secured several notable contracts, including a manufacturing agreement with an international offshore installation company involving modification of a large offshore carousel. The company also won a subsea distribution system contract tied to a deepwater Gulf of America project, which management described as a key milestone in its strategy to become an integrated systems supplier. Additional work included offshore West Africa monitoring services contracts and a high volume of smaller projects that collectively contributed to quarterly growth.
Management highlighted that customers added in 2025, which represented roughly 10% of last year’s annual revenue, contributed approximately 25% of first-quarter 2026 revenue, signaling expanding customer diversification.
Expenses Rise With Expansion Efforts
Selling, general and administrative expenses increased to $2.3 million from $1.7 million in the prior-year period, mainly due to increased headcount and investments tied to growth initiatives. Full-time equivalent employees increased to 79 from 64 a year earlier, with hiring concentrated in sales and administrative functions.
Chief financial officer Kurt Keller noted that quarter-over-quarter SG&A growth was driven partly by nonrecurring items, including year-end audit expenses associated with implementing a new ERP system and marketing costs related to the subsea tieback conference. Management indicated these expenses are not expected to recur during the remainder of 2026.
The company generated operating income of $0.3 million compared with an operating loss of $0.08 million in the year-ago quarter. Cash provided by operating activities improved to $0.4 million from a use of $0.8 million a year earlier. However, cash on hand declined to $1.2 million at March 31, 2026, from $1.5 million at year-end 2025. Net receivables increased to $7.5 million from $4.8 million, which management said reflected billing and collection timing tied to fixed-price contract milestones.
Management Sees Expanding Market Opportunity
Koil management expressed confidence in sustaining growth as subsea development activity remains strong globally. The company said growth in greenfield projects and increasing subsea tie-back activity are creating favorable conditions for its core offerings. During the earnings call, management cited industry forecasts from Westwood Global Energy Group projecting subsea tree awards to rise from 254 in 2025 to 296 by 2027, representing growth of more than 15%.
The company also emphasized progress in Brazil, where it has expanded operations and qualified with multiple oil and gas companies for project bidding opportunities. Wiik said Koil is now participating in both large and small bid opportunities in the country and believes its local operating structure provides a competitive cost advantage.
Management added that bidding activity and order intake continued to rise during the quarter, while investments in talent and operational capabilities are intended to support long-term expansion.
Strategic Roadmap and Growth Priorities
Koil used its recent investor day to outline its “KOIL 2030” strategic roadmap centered on three growth pillars: distribution systems, Brazilian expansion and rental equipment. Management said the company has already achieved portions of its earlier three-year growth plan ahead of schedule, including winning its first significant subsea distribution systems award and expanding internationally.
Executives reiterated confidence in the sustainability of current growth trends and said they remain focused on balancing profitability with continued investment.
Other Developments
Management highlighted continued investments in intellectual property development, expansion of Brazilian operations and additional operational assets as part of its long-term growth strategy.