Koil Energy Solutions, Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 14, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001683168-26-003967
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001683168-26-006430
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 49 previous paragraphs and 65 current paragraphs.
31 unchanged; 11 reworded; 20 added; 6 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
In the second quarter of 2026, bidding activity for subsea tie-back and maintenance projects remained strong, consistent with the first quarter. During the quarter, Koil announced the award of a major project for subsea umbilical handling, spooling, and storage services. This project requires two large carousels, including a large mobile offshore carousel and stationary land-based carousel to execute the work. This award was a pivotal moment for Koil and further validates its strategy to expand its rental equipment and services platform. The project is being executed by Koil’s experienced service team and contributed to second quarter results through early completion of certain activities and mobilization of the asset. The majority of the project work is expected to be performed during the second half of 2026, followed by the long-term storage of the customer’s umbilical system.
Current report
To support execution of the project, Koil secured financing and acquired a new mobile carousel, while also redeploying an underutilized carousel from its existing fleet. The newly acquired 3,500-metric-ton modular offshore carousel is designed to be assembled onboard a vessel, enabling rapid mobilization and redeployment to project locations in the United States and internationally. The newly acquired carousel is ready for mobilization.
Current report
Subsequent to June 30, 2026, Koil announced that it had secured a significant contract in Brazil marking the Company's first subsea umbilical maintenance campaign in the world's largest deepwater market. Koil has successfully executed similar work many times throughout the industry, providing well-established solutions for the maintenance of critical subsea infrastructure. The project represents an important milestone in establishing Koil as the preferred provider of subsea umbilical maintenance services in Brazil and the broader region.
Current report
The 78% increase in revenues was primarily driven by a $1,423 increase in fixed-price projects, with an additional $2,623 increase from service work. The increase in fixed-price project revenues was attributable to a large, long-term integrated project, while the increase in service revenues was primarily driven by a large project involving two of the Company’s carousels. Revenues from new customers gained in the prior 12 months contributed $2,981, or 32% of total revenue, while legacy customers accounted for the remaining $6,248, or 68% of total revenue for the three months ended June 30, 2026.
Current report
Selling, general and administrative expenses (“SG&A”) increased by $339 in the second quarter of 2026 compared to the second quarter of 2025. The increase was primarily driven by higher administrative headcount and employee bonus expense, resulting in a $173 increase in personnel costs, as well as a $57 increase in legal cost to support bidding activity, a $54 increase in IT expenses from added software licenses, and a $55 increase across other cost categories.
Current report
Other income, net
Current report
The decline in other income, net was primarily due to a $250 gain recognized upon the successful resolution of the WW Champion lawsuit in the second quarter of 2025. In addition, the Company received a $34 dividend from its insurance company during the second quarter of 2025. These items did not recur in the second quarter of 2026.
Current report
Adjusted EBITDA increased by $955 for the three months ended June 30, 2026, primarily due to higher project throughput, particularly in time and materials service contracts. A significant contributor was a major project to provide subsea umbilical handling, spooling, and storage services using the Company’s carousels. Share-based compensation increased, reflecting improved financial performance and commissions earned in connection with the booking of new projects. This stronger operating performance contributed to a $591 improvement in net income, from $61 in the quarter ended June 30, 2025, to $652 in the current year period.
Current report
The current year period did not include restructuring costs, while the three months ended June 30, 2025, included $122 of expenses related to efforts to streamline and strengthen administrative functions. In addition, the second quarter of 2025 included a $250 gain from the successful resolution of the WW Champion lawsuit.
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Current report
Revenues
Current report
Revenues increased 67% for the six months ended June 30, 2026, primarily driven by a $4,141 increase in fixed-price project revenues and a $2,830 increase in service revenues. The increase in fixed-price project revenues was attributable to a large, long-term integrated project, while the increase in service revenues was driven by a large project involving two of the Company’s carousels and increased throughput from Koil’s larger legacy customers. Revenues from customers acquired during the preceding 12 months totaled $5,422, or 31% of total revenues, while legacy customers generated the remaining $11,982, or 69% of total revenues.
Current report
Cost of Sales
Current report
Cost of sales increased 67% from the first six months of 2025 to the first six months of 2026, generally consistent with higher revenue activity. Gross margins remained stable at 32% of sales, as increased Brazil office expenses during the first six months of 2026 were offset by a more favorable project mix.
Current report
Selling, general and administrative expenses
Current report
Other income, net
Current report
The decline in other income, net was primarily due to a $250 gain recognized upon the successful resolution of the WW Champion lawsuit in the first six months of 2025. In addition, the Company received a $34 dividend from its insurance company during the first six months of 2025. These items did not recur in the first six months of 2026.
Current report
Adjusted EBITDA
Current report
Adjusted EBITDA increased by $1,191 for the six months ended June 30, 2026, primarily due to higher project throughput, particularly in time and materials service contracts. A significant contributor was a major project to provide subsea umbilical handling, spooling, and storage services using the Company’s carousels. Share-based compensation increased, reflecting improved financial performance and commissions earned in connection with the booking of new projects. This stronger operating performance contributed to a $861 improvement in net income, from $32 in the six months ended June 30, 2025, to $893 in the current year period.
Current report
The current year period did not include restructuring costs, while the three months ended June 30, 2025, included $279 of expenses related to efforts to streamline and strengthen administrative functions. In addition, the second quarter of 2025 included a $250 gain from the successful resolution of the WW Champion lawsuit.
Removed paragraphs (6)
Previous report
The first quarter of 2026 marked a period of record bidding activity for subsea tie-back and maintenance projects. During the quarter, we secured significant contract awards from legacy customers in the Gulf of America and announced a major West Africa contract for installation and pre-commissioning services on a deepwater development, with mobilization scheduled for the second half of 2026. These awards validate our strategy of expanding our technical capabilities and position us well to execute on our growing backlog.
Previous report
We remain focused on our strategic objective of becoming the leading provider of integrated subsea distribution systems.
Previous report
The 56% increase in revenues was primarily driven by a $2,801 increase in lump-sum projects, with an additional $123 contribution from time-and-materials work. Revenues from new customers contributed $2,110 to the increase, while legacy customers accounted for the remaining $814, as compared to revenues for the three months ended March 31, 2025.
Previous report
The $233 increase in Adjusted EBITDA for the three months ended March 31, 2026, was primarily driven by higher project throughput, particularly on lump-sum, fixed-price contracts, as well as a modest improvement in gross profit margin compared to the same period in 2025. This stronger operating performance contributed to a $270 improvement in net income, from a net loss of $29 in the prior-year quarter to net income of $241 in the current quarter.
Previous report
The current-year quarter did not include any restructuring costs, while the three months ended March 31, 2025, included $158 of expenses related to efforts to streamline and strengthen administrative functions. Share-based compensation increased by $61, from $70 in the prior-year quarter to $131 in the current quarter, primarily due to equity awards granted to a new executive officer, the appointment of a new board member, and the settlement of a portion of employee bonuses in stock awards.
Previous report
During the three months ended March 31, 2025, the Company reported a $1,229 decrease in cash. The Company used $766 of net cash in operating activities, primarily driven by net changes in operating assets and liabilities of $995. This was partially offset by other adjustments of $258 to reconcile net loss to net cash used in operating activities, which includes items such as non-cash lease expense, share-based compensation, and depreciation and amortization. The Company used $463 of net cash for investing activities, primarily to fund capital expenditures.
Reworded paragraphs (11)
Previous wording
Global energy demand continues to rise. Meeting this demand requires incremental oil and natural gas production alongside growth in renewable energy sources. Years of underinvestment in offshore exploration and development are now fueling a resurgence in subsea activity. Deepwater fields naturally decline at an average rate of 7% per year, according to IHS Markit Ltd., underscoring the urgency for new development just to maintain current output. From our perspective, we are seeing global operators allocate more capital toward deepwater and ultra-deepwater developments, particularly in Brazil, the US. and West Africa.
Current wording
Global energy demand continues to rise. Meeting this demand requires incremental oil and natural gas production alongside growth in renewable energy sources. Years of underinvestment in offshore exploration and development are now fueling a resurgence in subsea activity. Deepwater fields naturally decline at an average rate of 7% per year, according to IHS Markit Ltd., underscoring the urgency for new development just to maintain current output. From our perspective, we are seeing global operators allocate more capital toward deepwater and ultra-deepwater developments, particularly in the US, Brazil, Norway, the Mediterranean, and West Africa.
Previous wording
Subsea tie-back development continues to gain momentum as a preferred approach among offshore operators. These projects allow operators to access nearby reservoirs, utilize available topside capacity, and leverage existing subsea infrastructure. In mature basins, tie-back strategies have been employed for decades. In emerging regions, operators are increasingly adopting this approach to accelerate first hydrocarbon production and enhance project returns.
Current wording
Koil Energy provides products and services across all three areas, with a particular focus on subsea tie-back projects. Subsea tie-back development continues to gain momentum as a preferred approach among offshore operators. These projects allow operators to access nearby reservoirs, utilize available topside capacity, and leverage existing subsea infrastructure. In mature basins, tie-back strategies have been employed for decades. In emerging regions, operators are increasingly adopting this approach to accelerate first hydrocarbon production and enhance project returns.
Previous wording
Cost of sales increased 55% from the first quarter of 2025 to the first quarter of 2026, generally consistent with higher revenue activity. The rate of increase was slightly below revenue growth, resulting in an improvement in gross profit margins to 32% of sales, up from 31% in the prior year period. Operating leverage from higher throughput was partially offset by increased Brazil office expenses and higher consumables costs associated with fabrication projects.
Current wording
Cost of sales increased 81% from the second quarter of 2025 to the second quarter of 2026, generally consistent with higher revenue activity. The rate of increase was slightly above revenue growth, resulting in a 1% decrease in gross profit margin to 32% of sales, compared to 33% in the prior-year period. The primary driver of this change was a shift in revenue mix toward larger, long-term contracts.
Previous wording
The Company records depreciation expense related to revenue-generating property, plant and equipment as cost of sales, which totaled $146 and $117 for the three months ended March 31, 2026 and 2025, respectively.
Current wording
The Company records depreciation expense related to revenue-generating property, plant and equipment as cost of sales, which totaled $147 and $127 for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
The Company records depreciation expense related to administrative property, plant and equipment and intellectual property as SG&A, which totaled $32 and $29 for the three months ended March 31, 2026 and 2025, respectively.
Current wording
The Company records depreciation expense related to administrative property, plant and equipment and intellectual property as SG&A, which totaled $34 and $29 for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
The following is a reconciliation of net income (loss) to Adjusted EBITDA for the three months ended March 31, 2026 and 2025:
Current wording
The following is a reconciliation of net income to Adjusted EBITDA for the three months ended June 30, 2026 and 2025:
Previous wording
Selling, general and administrative expenses increased by $611 in the first quarter of 2026 compared to the first quarter of 2025. The increase was primarily driven by higher administrative headcount, resulting in a $405 increase in personnel costs, as well as a $156 increase in audit fees and $50 of public company expenses and other costs.
Current wording
Selling, general and administrative expenses increased by $955 in the first six months of 2026 compared to the first six months of 2025. The increase was primarily driven by higher administrative headcount and employee bonus expense, resulting in a $626 increase in personnel costs, as well as a $97 increase in sales and marketing expense, a $54 increase in IT expenses from added software licenses, and a $56 increase across other cost categories.
Previous wording
The Company believes it will have adequate liquidity to meet its future operating requirements. We are generally dependent on our cash flows from operations to fund our working capital requirements, and the uncertainties noted above create risks that we may not achieve our planned earnings or cash flow from operations. On May 24, 2023, the Company entered into a Purchase and Sale Agreement/Security Agreement with Zions Bancorporation, N.A., d/b/a Amegy Bank Business Credit (“Amegy”), which provides for Koil Energy from time to time to sell its accounts receivable and other rights to payment to Amegy, subject to Amegy’s right to approve or reject future accounts receivable and other rights proposed for sale, in its sole discretion. As of March 31, 2026 and December 31, 2025, the Company had $8 and $541, respectively, of factored invoices outstanding with Amegy.
Current wording
The Company believes it will have adequate liquidity to meet its future operating requirements. We are generally dependent on our cash flows from operations to fund our working capital requirements, and the uncertainties noted above create risks that we may not achieve our planned earnings or cash flow from operations. On May 19, 2026, we entered into a Loan and Security Agreement with nFusion Capital Finance, LLC (“nFusion”), pursuant to which nFusion will make revolving loans to the Company from time to time, in amounts determined by nFusion in its good faith business judgment, up to a maximum credit limit of $5,000. The facility is asset-based, and advances are subject to the weekly delivery of borrowing base certificates. The facility has an initial term of 12 months and is scheduled to mature in May 2027. The Company expects the facility to be renewed at that time, although renewal remains subject to the terms of the agreement and the parties’ mutual agreement.
Previous wording
The Company’s principal liquidity needs are to fund ongoing operations, working capital, and capital expenditures. During the three months ended March 31, 2026, cash decreased by $350. Net cash provided by operating activities totaled $414, primarily driven by net income and non-cash add-backs for depreciation and amortization. Net cash used in investing activities was $216, primarily related to capital expenditures, patent costs, and internal software development. Net cash used in financing activities was $535, substantially all of which related to repayments of short-term borrowings under the Amegy factoring line.
Current wording
The Company’s principal liquidity needs are to fund ongoing operations, working capital, and capital expenditures. During the six months ended June 30, 2026, cash decreased by $613. Net cash used in operating activities totaled $704, primarily driven an increase in accounts receivable. Net cash used in investing activities was $1,750, primarily related to capital expenditures, patent costs, and internal software development. Net cash provided by financing activities was $1,856 and included net payments of $541 to extinguish the Factoring Agreement and net borrowings of $2,400 under the nFusion facility.
Previous wording
Refer to Note 1 in Part II. Item 8. “Financial Statements and Supplemental Data,” in our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of recently issued accounting standards. There have been no significant changes to the status or expected impact of these standards during the three months ended March 31, 2026.
Current wording
Refer to Note 1 in Part II. Item 8. “Financial Statements and Supplemental Data,” in our Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of recently issued accounting standards. There have been no significant changes to the status or expected impact of these standards during the six months ended June 30, 2026.
Previous wording
On September 29, 2025, the Company filed a civil action against OMSi in the United States District Court for the Southern District of Texas seeking to recover the unpaid amounts. OMSi has not yet filed a response. For the quarter ending September 30, 2025, the Company recorded a reserve of $569 in Allowance for Credit Losses. The Company received a judgment in US District Court against OMSi in January 2026 in the amount of approximately $575 and intends to pursue full recovery. The Company will adjust the reserve as new information becomes available.
Current wording
On September 29, 2025, the Company filed a civil action against OMSi in the United States District Court for the Southern District of Texas seeking to recover the unpaid amounts. For the quarter ended September 30, 2025, the Company recorded a reserve of $569 in Allowance for Credit Losses. The Company received a judgment against OMSi in January 2026 in the amount of approximately $575 and intends to pursue full recovery. The Company will adjust the reserve as new information becomes available.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The Company records depreciation expense related to revenue-generating property, plant and equipment as cost of sales, which totaled $292 and $248 for the six months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
The Company records depreciation expense related to administrative property, plant and equipment and intellectual property as SG&A, which totaled $66 and $58 for the six months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
The following is a reconciliation of net income to Adjusted EBITDA for the six months ended June 30, 2026 and 2025:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Koil Energy provides products and services across all three areas, with a particular focus on subsea tie-back projects.