Hornbeck Offshore Services reported third-quarter results that include the first month of its combined operations with Helix Energy Solutions, whose merger closed on Sept. 1. The combination expands Hornbeck beyond offshore marine transportation into subsea services and well intervention.
The quarter brought higher revenue and adjusted cash generation, but a reported net loss driven by merger-related and other one-time expenses. Hornbeck also outlined new customer work, planned equipment purchases, cost savings and earnings guidance.
Key details
-
Results reflect a partial quarter of the combined business. Revenue was $293.3 million, up from $183.3 million in the second quarter. The third quarter included three months of legacy Hornbeck operations but only one month of legacy Helix, so comparisons do not represent a full-quarter run rate for the combined company.
-
Adjusted earnings rose sequentially, while margins were lower than a year ago. Adjusted EBITDA was $105.9 million, compared with $66.7 million in the second quarter and $84.7 million a year earlier. The adjusted EBITDA margin was 36.1%, versus 36.4% in the prior quarter and 42.5% in the year-earlier quarter.
-
One-time costs drove the reported loss. Hornbeck reported an operating loss of $59.7 million and a net loss of $85.7 million, or 40 cents per diluted share. It cited $119.8 million in merger and integration costs, accelerated stock-based compensation tied to the combination, and $0.2 million in terminated offering costs. Excluding the effects of those costs, adjusted operating income was $59.9 million, adjusted net income was $28.2 million and adjusted diluted earnings were 13 cents per share.
-
Adjusted free cash flow increased. It was $58.7 million, up from $25.6 million in the second quarter. The company reported adjusted free cash flow conversion of 56%.
-
Hornbeck set out new work and equipment plans. It announced five-year integrated-services agreements with Shell in the U.S. Gulf of America, beginning in 2027, and a two-year North Sea decommissioning contract for integrated well-intervention services, starting in the second quarter of 2027. It also committed to buy eight new work-class remotely operated vehicle systems, with deliveries beginning in that quarter.
-
The company reported $20 million in annualized cost savings implemented to date. Its stated priorities include capturing further revenue and cost synergies from the combination.
-
Guidance calls for $90 million to $100 million of adjusted EBITDA in the fourth quarter of 2026 and $500 million to $550 million for full-year 2027.
-
Potential share dilution is substantial relative to the common-share count. At Sept. 30, Hornbeck had about 222 million common shares outstanding and Jones Act warrants tied to about 103.6 million shares. The warrants are exercisable at a nominal price, subject to U.S.-citizenship determination procedures.
The merger creates a broader offshore-services business combining marine transportation, subsea services and well intervention. The Shell agreements bring those capabilities together in integrated contracts, while the reported results and 2027 guidance provide an initial view of the enlarged company’s earnings profile.