Subsea 7 S.A.

Subsea 7 reported Q3 revenue of $1.8 billion, in line with the prior-year high level, and adjusted EBITDA of $407 million, up 27% year on year. Adjusted EBITDA margin was 22%, up 460 basis points, and net income was $109 million. By segment, Subsea and Conventional revenue was $1.5 billion, up 6%, with adjusted EBITDA of $368 million and a 24% margin; Renewables revenue was $302 million, down 19%, with adjusted EBITDA of $52 million and a 17% margin. For the full year 2025, management now expects revenue of $6.9 billion-$7.1 billion, adjusted EBITDA margin of 20%-21%, and capex of $300 million-$320 million. For 2026, the company expects revenue of $7.0 billion-$7.4 billion, adjusted EBITDA margin of approximately 22%, and capex of $350 million-$380 million.

John Evans emphasized that the quarter reflected strong execution and a better-quality backlog, with old pre-2022 work largely rolling off and a greater mix of more favorable projects ahead. He said tendering remains strong, clients are engaging early, and deepwater subsea demand remains resilient, with particular strength in Brazil, Norway, Türkiye, Namibia, and Mozambique. His tone was confident but selective: Subsea 7 will prioritize margins, asset deployment, and contracts that fit its risk-reward targets, even if that means being more disciplined on fleet utilization and some market segments like the U.K. offshore wind market.

Mark Foley highlighted the hard numbers behind the quarter: revenue of $1.8 billion, adjusted EBITDA of $407 million, margin of 22%, and net income of $109 million. He also cited net cash from operating activities of $283 million, capex of $47 million, cash and cash equivalents of $546 million, net debt of $505 million, and liquidity of $1.1 billion. He said 2025 capex guidance was reduced to $300 million-$320 million due to capital discipline and some spending being pushed into 2026, while 2026 capex is forecast at $350 million-$380 million. On capital allocation, he noted the second and final SEK 6.5 per share dividend was paid on November 6, and shareholder returns through dividends were about $376 million this year.

Analysts focused on why 2026 revenue guidance implies slower growth than the size of the 2026 execution backlog, and management said this is mainly a timing/capacity issue rather than a demand issue, with fleet utilization already at 87% and assets effectively booked. Questions also centered on Renewables margin guidance, AR7 timing, the CADE review for the merger, and whether Petrobras’ idea for a long-term rigid pipelay vessel lease is active; management said Renewables guidance remains 14%-16% into 2026, AR7 submissions are now in and outcomes are expected around mid-January, and the merger still targets second-half 2026 completion through the Brazil antitrust path. Management said Petrobras discussions are real and they would be interested if the contract comes to market, but timing and phasing would matter. Later questions on fleet leases confirmed some vessels are being returned, which should lower lease liability cash impact in 2026.