Conferencia de resultados del 3T de 2026 de Oceaneering International (OII): El EBITDA alcanza los 119 millones de dólares, se emiten las previsiones para 2027

Oceaneering International (NYSE: OII) registró mayores ingresos y un EBITDA ajustado superior en el tercer trimestre de 2026, respaldada por la fijación de precios en Robótica Submarina, la actividad de inspección y una combinación favorable de proyectos en alta mar. Una pérdida relacionada con la refinanciación redujo el beneficio neto reportado, mientras que el fuerte flujo de caja operativo y el aplazamiento de las inversiones de capital impulsaron el flujo de caja libre trimestral.

Puntos clave

• Los ingresos del tercer trimestre aumentaron un 6% interanual hasta los 785 millones de dólares, el beneficio operativo creció un 7% hasta los 92 millones de dólares y el EBITDA ajustado subió un 7% hasta los 119 millones de dólares, el nivel trimestral más alto desde el T4 de 2015.
• El beneficio neto atribuible a Oceaneering disminuyó un 26% hasta los 52,6 millones de dólares, o 0,52 dólares por acción, debido principalmente a una pérdida extraordinaria vinculada a la refinanciación de deuda a largo plazo.
• Robótica Submarina generó 233 millones de dólares en ingresos y 75,4 millones de dólares en beneficio operativo. Su margen EBITDA alcanzó el 39%, el más alto desde que Oceaneering reestructuró sus segmentos de negocio en 2020.
• El flujo de caja operativo fue de 163 millones de dólares y el flujo de caja libre alcanzó los 142 millones de dólares. Oceaneering cerró el trimestre con 735 millones de dólares en efectivo, más de 1.000 millones de dólares en liquidez y sin saldo dispuesto de su línea de crédito revolvente.
• La dirección prevé para el T4 de 2026 un EBITDA consolidado de entre 85 y 95 millones de dólares, con un mayor pago en efectivo de impuestos y un aumento de las inversiones de capital que moderarán el flujo de caja libre.
• Las previsiones iniciales para 2027 apuntan a un EBITDA consolidado de entre 430 y 480 millones de dólares y un flujo de caja libre por encima del nivel previsto para 2026. La dirección señaló que este rango refleja principalmente la incertidumbre sobre los plazos de ejecución en la actividad de Robótica Submarina, AdTech y el Grupo de Proyectos Ultramar.

Datos financieros clave

Desempeño comercial y operativo

Robótica Submarina

Robótica Submarina (SSR) obtuvo mayores ingresos y beneficio operativo. Los ingresos fueron de 233 millones de dólares y el beneficio operativo alcanzó los 75,4 millones de dólares. El ingreso medio por ROV por día utilizado aumentó a 11.781 dólares frente a los 11.254 dólares anteriores, mientras que la utilización de la flota se mantuvo en el 65%.

El margen EBITDA del 39% reflejó mejores precios de los ROV en Europa, África Occidental y Noruega, una mayor actividad de inspección y la recuperación contractual extraordinaria de costes relacionada con las operaciones en el golfo de Estados Unidos. La mayor actividad en Europa, Guyana y África Occidental compensó la menor actividad en el golfo de Estados Unidos.

Oceaneering se adjudicó aproximadamente 180 millones de dólares en contratos de ROV e inspección en múltiples regiones, con plazos que se extienden hasta 2031. Al cierre del trimestre, la empresa mantenía contratos de ROV en 80 de las 136 plataformas flotantes contratadas, lo que representa una cuota de mercado del 59%. Su flota se mantuvo en 250 sistemas ROV.

Productos Manufacturados

Los ingresos de Productos Manufacturados aumentaron un 8%, mientras que el beneficio operativo se mantuvo relativamente estable en 25,1 millones de dólares. El margen operativo disminuyó ligeramente hasta el 15%, debido principalmente a la menor actividad y rentabilidad de los productos Grayloc en comparación con un trimestre del año anterior especialmente fuerte.

La cartera de pedidos al cierre del trimestre fue de 435 millones de dólares, respaldada por aproximadamente 160 millones de dólares en nuevas adjudicaciones. El ratio de contratación sobre facturación (book-to-bill) de los últimos 12 meses fue de 0,77. La dirección mantuvo sus expectativas de un ratio para todo el año de entre 0,9 y 1,0, basándose en las reservas recientes y la cartera de ventas pendientes.

Grupo de Proyectos Ultramar e IMDS

Los ingresos, el beneficio operativo y el margen del Grupo de Proyectos Ultramar se mantuvieron relativamente estables. Los trabajos de instalación internacional completados durante el trimestre compensaron la menor actividad en África Occidental y una combinación de proyectos menos favorable en el golfo de Estados Unidos.

Los ingresos de Gestión de Integridad y Soluciones Digitales aumentaron un 7%, mientras que el beneficio operativo y el margen se mantuvieron relativamente estables. La mayor actividad en Oriente Medio, Europa y el golfo de Estados Unidos se vio parcialmente contrarrestada por la menor actividad en África Occidental, cambios en la combinación de proyectos y el aumento de costes en Oriente Medio.

Tecnologías Aeroespaciales y de Defensa

Los ingresos de AdTech aumentaron un 7% hasta los 135 millones de dólares a medida que un programa a gran escala anunciado anteriormente alcanzó la plantilla completa para su fase actual. El beneficio operativo disminuyó un 11% hasta los 14,7 millones de dólares y el margen operativo cayó al 11%, lo que refleja en parte un aumento de la actividad de refacturación de costes sin margen (pass-through).

El segmento se aseguró contratos de continuación para dos programas de la Marina de EE. UU. El programa de refugios para diques secos tiene un valor potencial de 154 millones de dólares en cinco años, mientras que el contrato del sistema de rescates submarinos tiene un valor potencial de 67 millones de dólares durante 18 meses.

Previsiones de la dirección

Para el T4 de 2026, la dirección prevé que los ingresos consolidados aumenten en comparación interanual y que el EBITDA ajustado se sitúe entre 85 y 95 millones de dólares. Los gastos no asignados se proyectan en aproximadamente 50 millones de dólares.

Por segmentos, la dirección prevé:

• SSR: Mayores ingresos gracias a la mejora del ingreso por día utilizado de los ROV y a un aumento de la actividad de inspección, pero un menor beneficio operativo debido a la combinación geográfica, los costes de movilización por el traslado de plataformas desde el golfo de EE. UU. y un mayor volumen de trabajos de inspección con menor margen.
• Productos Manufacturados: Mayores ingresos y beneficio operativo.
• OPG: Ingresos relativamente estables y menor beneficio operativo debido a la combinación de proyectos, la finalización de un proyecto de intervención internacional del año anterior y trabajos de menor margen en el golfo de EE. UU.
• IMDS: Mayores ingresos y beneficio operativo.
• AdTech: Mayores ingresos y beneficio operativo.

Para 2027, Oceaneering presentó unas previsiones de EBITDA consolidado de entre 430 y 480 millones de dólares. Se espera que el flujo de caja libre supere el nivel previsto para 2026.

La dirección prevé mayores ingresos y beneficio operativo en SSR, con márgenes EBITDA estables, respaldados por una mayor utilización de los ROV, precios similares y mejores resultados en inspección y herramientas. Se proyecta que Productos Manufacturados se mantenga relativamente estable. Se espera que los ingresos de OPG disminuyan, mientras que el beneficio operativo se mantendría estable y el margen mejoraría. Se prevé que tanto IMDS como AdTech registren mayores ingresos, un beneficio operativo significativamente superior y mejores márgenes.

La empresa también planea continuar con la recompra de acciones en 2027, con aproximadamente 5 millones de acciones restantes bajo su autorización actual.

Riesgos y aspectos a vigilar

• La dirección señaló que la principal incertidumbre en las perspectivas para 2027 es el calendario de ejecución. La reubicación de plataformas, los presupuestos de capital de los clientes y la programación de proyectos de OPG podrían retrasar la actividad prevista.
• Una resolución de prórroga presupuestaria y la incertidumbre en torno a las partidas presupuestarias de EE. UU. podrían ralentizar el inicio de nuevos programas de AdTech, aunque la dirección indicó que el trabajo existente cuenta por lo general con un mayor respaldo.
• Se espera que el flujo de caja libre del T4 se modere a medida que aumenten los impuestos pagados en efectivo y las inversiones de capital.
• SSR afronta costes de movilización a corto plazo y la presión de la combinación geográfica a medida que las plataformas se trasladen del golfo de EE. UU. a otras regiones.
• La dirección identificó la menor actividad en el golfo de EE. UU. como un área de seguimiento, mientras que prevé oportunidades de crecimiento en Brasil, Guyana, Mozambique y otras partes de África.

Aspectos destacados de las preguntas y respuestas con analistas

La dirección señaló que el calendario de SSR, los inicios de programas de AdTech y las oportunidades internacionales de OPG explican la mayor parte del margen de 50 millones de dólares en el rango de EBITDA para 2027. La parte baja no refleja un cambio en la visión constructiva de la dirección sobre las aguas profundas; refleja principalmente cautela sobre el momento en que comenzarán el gasto de los clientes y la actividad de las plataformas.

En cuanto a la asignación de capital, Oceaneering tiene la intención de seguir invirtiendo en sus operaciones energéticas principales, incluidas las operaciones remotas, la inspección submarina y la tecnología de gemelos digitales. En AdTech, la dirección consideraría adquisiciones que aporten capacidad de mecanizado, mano de obra cualificada, electrónica o tecnologías de sensores que complementen los programas de defensa existentes. Se descartó pagar múltiplos elevados meramente para adquirir credibilidad en el mercado.

La dirección identificó a Brasil, Guyana y África —incluidos Mozambique y África Occidental— como regiones clave con potencial de crecimiento. También citó oportunidades en el Mediterráneo oriental, la zona de alta mar de Egipto y Noruega, especialmente para conexiones submarinas y trabajos de instalación.

La inflación no se describió como una limitación importante en la actualidad. La dirección afirmó que los mecanismos de escalada contractual, los ajustes de precios, las eficiencias operativas y las operaciones remotas han ayudado a mitigar la presión de los costes de los componentes y la mano de obra.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Welcome to Oceaneering International 2026 Results Conference Call. Today's call is being webcast, and a replay will be available on our website. With me today are Rod Larson, President and Chief Executive Officer, who will provide our prepared comments; and Mike Sumruld, Senior Vice President and Chief Financial Officer. After Rob's remarks, we will open the call up to your questions. Before we begin, please note that statements made on this call about our future financial performance, business strategy, plans for future operations and industry conditions are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our remarks also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our third quarter press release, which is available on our website. With that, I'll turn the call over to Rod.

Roderick Larson

Good morning, everybody, and thanks for joining the call today. As Hilary mentioned, I'm going to be handling all of our prepared remarks today, so Mike is saving his voice for all of your math questions, so be ready. Our third quarter performance demonstrates the earnings potential of our portfolio and favorable pricing activity and project mix alone. Consolidated adjusted EBITDA was $119 million, in line with our guidance and our highest quarterly level since the fourth quarter of 2015. These results reflect solid performance in Subsea Robotics or SSR; resilience in the offshore projects group for OPG; and improvement in integrity management and digital solutions, IMDS. Highlights from the quarter include: SSR delivered increased revenue, operating income and EBITDA margin with the latter reaching its highest level since we resegmented our businesses in 2020.

We also won approximately $180 million of RM and survey contracts across multiple regions with contract terms extending into 2031. OPG saw sustained demand for its higher revenue services with a favorable mix of installation projects contributing to third quarter performance. Manufactured products secured awards of approximately $160 million during the quarter, supporting our expectation for stronger order intake in the second half of the year. And Aerospace and Defense Technologies or AdTech, secured follow-on contracts for 2 strategically important U.S. Navy programs. Drydock shelters and submarine rescue systems. The drydock shelter contract and program we have supported for over 20 years has a total potential value of $154 million over 5 years. While the summary and rescue system contract has a potential value of $67 million over 18 months.

Today, I'll focus my comments on our third quarter 2020 results, our outlook for the fourth quarter of 2026 and our initial guidance for 2027. Starting with our consolidated results for the third quarter of 2026 compared to the third quarter of 2025. We delivered revenue of $785 million, a 6% increase with growth across every operating segment, operating income of $92 million, a 7% increase and adjusted EBITDA of $119 million, also a 7% improvement. Net income attributable to Oceaneering was $52.6 million or $0.52 per share a decrease of 26%. The decrease was primarily attributable to a onetime loss related to the refinancing of our long-term debt completed during the third quarter. Adjusted EBITDA increased 7% to $119 million.

Turning to our cash flow and liquidity. We generated $163 million of cash from operating activities. Capital expenditures were $21.1 million with approximately 31% allocated to growth and 69% allocated to maintenance. This investment was less than anticipated largely due to timing with most of the deferred spending now expected in the fourth quarter. Free cash flow was $142 million, reflecting strong third quarter results as well as lower cash taxes and deferred capital expenditures. We expect both cash taxes and the capital expenditures to increase in the fourth quarter, resulting in more moderate free cash flow generation to close the year. During the quarter, we also repurchased shares of approximately $5 million with a focus on mitigating dilution associated with employee equity rates. And we ended the quarter with a cash balance of $735 million, total liquidity of more than $1 billion and no borrowings under our revolving credit facility.

Now let's look at our business operations by segment for the third quarter of 2026 also compared to the third quarter of 2025. SSR delivered revenue of $233 million and operating income of $75.4 million, both higher year-over-year. These results benefited from improved ROV pricing with average revenue per day utilized decreasing to $11,781 from $11,254 as well as higher survey activity. SSR EBITDA margin improved to 39%, primarily driven by ROV pricing improvements in Europe, West Africa and Norway. Increased survey activity and a onetime contractual cost recovery related to U.S. golf operations also contributed to higher margins. ROV fleet utilization remained stable at 65% as higher activity levels in Europe, Guyana and West Africa largely offset lower activity in the U.S. Gulf.

For the quarter, the revenue split between our ROV business and our combined tooling and survey businesses as a percentage of our total SSR revenue was 75% and 25% and compared to 77% and 23% in the third quarter of 2025. ROV days utilized grew 62%, while vessel-based services were 38% compared to 63% and 37%, respectively, in the prior year quarter. As of September 30, 2026, we had ROV contracts on 80 of the 136 floating rigs under contract or 59% market share. We maintained our fleet count of 250 ROV systems. Manufactured Products generated operating income of $25.1 million, relatively flat with the prior year quarter, while operating income margin decreased slightly to 15% on an 8% increase in revenue. These results were impacted by the final resolution of a legacy mobility solutions contract including recognition of the previously unresolved contract value.

The decline in operating income margin was primarily due to lower gray lock products activity and profitability following a particularly profitable quarter in the prior year quarter. Our backlog as of September 30, 2026, was $435 million and was largely sustained by order intake during the quarter of $160 million. Our book-to-bill ratio was 0.77 for the trailing 12-month period. Based on these recent bookings, together with our sales funnel, we remain confident in our ability to achieve a full year book-to-bill ratio of 0.9 to 1.0.

OPG revenue, operating income and operating income margin were relatively flat. Results benefited from international installation projects they concluded during the quarter, which more than offset lower activity in West Africa and a less favorable project mix in the U.S. Gulf. IMDS revenue increased 7%, while operating income and operating income margin were relatively flat, reflecting increased activity in the Middle East, Europe and the U.S. Gulf, which was partially offset by lower activity in West Africa, the changing project mix and increased costs for the Middle East. AdTech revenue increased 7% to $135 million as our previously announced large-scale program reached its full staffing levels for its current phase. Operating income decreased by 11% to $14.7 million, and operating income margin decreased to 11% due to increases in pass-through activities during the quarter and increases in [indiscernible] Unallocated expenses of $50 million were consistent with our guidance for the quarter.

Turning to our outlook for the fourth quarter of 2026 compared to the fourth quarter of 2025. We expect consolidated revenue to increase year-over-year and consolidated EBITDA to be in the range of $85 million to $95 million. By segment, for SSR, we expect revenue to increase, supported by higher ROV revenue per day utilized and increased survey activity. Operating income is expected to decrease due to changes in ROV geographic mix, additional mobilization costs as rigs relocate from the U.S. Gulf to other regions and a greater mix of lower-margin survey activity. For Manufactured Products, we anticipate higher revenue and operating income. For OPG, we expect revenue to remain relatively flat and operating income to decrease due to changes in product mix, including the completion of an international intervention project that benefited the prior year quarter and a shift to lower margin work in the U.S. Gulf. For IMDS, we anticipate higher revenue and operating income. For AdTech, we expect both revenue and operating income to be higher. We project unallocated expenses to be in the $50 million range.

Now I'll discuss our initial outlook for 2027. Looking ahead to 2027, the outlook for global deepwater markets remains constructive, with industry forecasts pointing to higher spending and activity. Floating rate activity is expected to strengthen over the course of the year as rigs complete transit to new regions and begin drilling programs. These trends provide a favorable backdrop as we established in our initial 2027 guidance. The U.S. defense environment also remains supportive, particularly across subsea programs. However, the continuing resolution and uncertain timing of appropriations process could affect the timing of program activity within AdTech. These industry conditions support our expectations for improved performance in 2027. As we announced yesterday, we are initiating consolidated EBITDA guidance in the range of $430 million to $480 million, with free cash flow expected to exceed our anticipated 2026 level.

At the segment level compared to the full year of 2026, for SSR, we expect that higher ROV utilization levels and similar pricing levels, together with improved results in survey and tooling while generating increases in revenue and operating income and stable EBITDA margins. For Manufacturing Products, revenue, operating income and operating margin are projected to be relatively flat. For OPG, we expect revenue to decrease operating income to be flat and operating margin to improve due to changes in project mix and similar utilization levels in the U.S. Gulf. For IMDS, we expect increased revenue to significantly increase operating income and improved operating margin. For AdTech, we expect significantly higher revenue and operating income and improved operating margin. We expect a slight increase in unallocated expenses.

We also plan to continue share repurchases in 2027 with approximately 5 million shares remaining under our existing repurchase authorization. As we move through the planning cycle and our customers finalize their 2027 budgets, we expect to gain greater visibility into activity levels and the timing of opportunities across our businesses. We will provide more detailed guidance for 2027 during the year-end reporting process.

In summary, we remain focused on executing through the remainder of 2026, while positioning the business for opportunities we see developing in 2027. Our priorities remain disciplined execution, cash generation, and maintaining financial flexibility to support our longer-term objectives. Thanks for your continued interest in Oceaneering we'll now be happy to take your questions.

Operator

[Operator Instructions] Your first question comes from the line of Eddie Kim with Barclays.

Preguntas y respuestas

Eddie Kim

Just wanted to touch on the preliminary 2027 EBITDA guidance of $430 million to $480 million, which spans a fairly wide range there. Just curious which 2 or 3 of the -- are the largest operational assumptions separating the low end from the high end there? And which segments account for most of that $50 million spread?

Roderick Larson

I think it's the normal. The normal character, Eddie. I mean, we've got as always, SSR has got some of that based on like we've got the rate moves this year and we've got some of those things that are a little bit timing based. I think that's a part of it. Some of them will be AdTech, like we said, because we talked about some of these programs, when do the programs kick off, how does appropriations work out in some of the continuing resolutions, so if it gets resolved sooner, that brings things forward in the area, and it gives us more opportunity in the area, could push us back a little bit. It brings us to the lower end of the range. And then finally, OPG. OPG has got room to pick up more international opportunities. And I think actually, probably, if I think about OPG, it drives us to the higher end of the range. If we can put more things in that bucket, which we don't resolve some of that between now and when we report next month. I think OPG could bring more goodness to the mix as well. So I think those are the typical ones. I don't expect a big change in manufactured products because that's long lead-time stuff. And I wouldn't expect a whole lot of change in IMDS just because of the relative scale.

Edward Kim

Got it. Understood. I just wanted to touch on -- I mean, the low end of that range, $430 million doesn't represent that big of an increase over 2026, which is surprising just in light of the strong growth you're expecting to see in ad tech next year, it almost implies sort of a flattish trajectory in the energy segment, which is almost counter to kind of the constructive outlook in the offshore inflection that's expected next year. So just -- I mean does the low end of that guidance imply spending slowing down? Is that based on customer conversations you're having? Or an assumption that oil prices are going to be substantially less next year than they are now. Just any more color on kind of that low end of the guidance would be great.

Roderick Larson

I think it's mostly timing, Eddie. I mean, I think everybody thinks that things are constructive, they expect some of these pickups throughout the year next year. We just have to -- we have to make sure that we're not overstating when it starts. I think that's always the trick here is a lot of times we get the story right, but we get the timing wrong. And so we're a little bit cautious on how fast some of these things will come to fruition when they start spending. It's more about that. I think we really we truly believe that the thesis is right. The expectation for the macros is right. We're just being a little bit cautious because like I said, rigs will be moving. Some of the other projects for OPG are being contemplated, but they haven't been hard scheduled, so some of that stuff. Some of that stuff is what we're -- I think it's more of the timing.

Mike, would you add anything?

Michael Sumruld

Yes, I think it's early days, too, right? I mean this is only October. I think as we start to wrap up the year or talk to our customers, they solidify their CapEx budgets, and we start to see what's happening with the rate movement, that could change. It's just -- it's a little early.

Operator

Your next question comes from the line of Keith Beckmann with Pickering Energy Partners.

Keith Beckmann

Obviously, we had -- with the refinancing that's completed kind of during the summer and maybe the significant net cash position you guys have here, right? I mean how are you guys thinking about capital deployment heading into 2027? And maybe more specifically within ad tech, I mean, what are what's maybe an example of kind of a business that could make sense from an M&A perspective versus something that doesn't if you guys went that route? And then maybe how are you weighing that against buybacks.

Roderick Larson

Sure. Keith, I appreciate that question. I mean, you led into that. I think capital deployment. We expect to continue to make investments in our core energy businesses. There may be even some opportunity to bolt on some technology some things that we can be a little disruptive with in the energy side on that side of the business. But on the AdTech side, it is a lot of focus around, are there some inorganic Opportunities, some acquisitions that make sense. I would say the things that make sense are things that are normally valued, right? Things like machining capacity or workforce capacity that we can bring to bear on the sub safe programs we work on, the new submarine build, things like that, that we could say we can use our certifications to bring them up to government specs faster.

And so that these are things that you would pay sort of normal amounts for and then be able to add value through our competencies. So I think those things make sense. I think when we're working on some of the more highly technical vehicle tank programs, we could be looking at some of our partners, some of the people that work as subcontractors for us or bring a unique piece of technology to the mix, whether that's more electronics or a different type of sensor technology or something like that. I think those are things that are kind of nichey maybe or a little bit bigger than nichey that make sense. What doesn't make sense is us -- I mean we've got an established brand. I don't think we need to go buy one of the big super -- what I consider overvalued flashy names just to try to buy credibility with the customer.

I don't think we need to go into that ridiculous multiple range to try to get a foot in the door. We're already there. We've got one of the strongest operational reputations in the business. They know we've been here. I mean some people forget that we've been in that government business. We're a 60-year-old company. We've been on the government side more than 40 years, so it's not like we're new to the game. We don't need to buy presence.

Keith Beckmann

Okay. Perfect. And then my second question is maybe any more color we can get around kind of the ongoing continuing resolution going on, right, with the government spending. So I'm just trying to get a sense on the potential range of outcomes for 2027, like what could be more of the low end versus the high end? And I guess, more specifically, like those awards would still be there, it's more of a function of timing rather than actually things going away. Is that the right way to think about it, right? Just kind of when things start -- sorry, I'll turn it over.

Roderick Larson

Yes, that's exactly -- and it's really the sensitivity is more on new project starts, right, continuing resolution means if you you're doing, you get to continue doing it. So I think a lot of those things, we've got a pretty good support from nearly all the awards we're doing. Some of the newer things we've won could get slowed down. On the other hand, I will say, while there's always this risk. I mean right now, I feel better about what we're hearing coming off the hill and what we're hearing about a potential resolution for a defense spending bill, for example, it seems like even for an election year, people aren't really keen to get a defense bill in place, probably not surprising given the geopolitical climate, but I'm not as worried about the defense portion of that. I think there really is a lot of cooperation going on, so I remain quite optimistic that while it's an unknown out there, and we do think it's appropriate to call caution to it or call attention to it, I do feel like we've probably got better information coming back to us than we have in past years.

Operator

Your next question comes from the line of Colby Sasso with Daniel Energy Partners.

Colby Sasso

Just on thinking about '27. Could you talk about where you see the most growth from a geographical standpoint next year?

Roderick Larson

Sure. I think it's -- a lot of it is Brazil. Of course, we still see growing we see Guyana growing to Africa. I mean, we see opportunities in the rest of Africa. I think those are good. One of the things we call out is the Gulf of Mexico. It's just -- the Gulf of Mexico already is going down. We got to see how much resilience the Gulf of Mexico has -- and that's why that we'd be keeping around. Mike, what else would you call on? .

Michael Sumruld

I think what rest of Africa is a good one, Mozambique seeing a lot of activity, working back in, again, all across West Africa. It's a challenging base to learn, but we've done work there for years and years and got some more mind of there as well.

Roderick Larson

Yes. I mean, I don't know that everybody realizes, but could have as much drilling activity as Guyana within a year or 2, so.

Colby Sasso

And just another follow-up. How are you thinking about inflation across your supply chain? And this is dragging on margins at all today? And if so, how long will this take to ultimately push through your customer base? And could it potentially be a tailwind for margins in '27?

Roderick Larson

I don't -- I can't call that out as a huge factor. Colby. I mean, most of it -- where we see the biggest part of it, it's been manufactured products, obviously, and especially with some of the bigger components that go into an umbilical. Those things are almost always price adjusted or cost adjusted into the price. Those we are covered on the same product, I mean, same -- in the same bid. So that's not such a big one. It would be the biggest impact of it, if it weren't. And then the rest of it is within -- it's got within our reach. I mean we're able to mitigate a lot of it. For example, what shows up in R&M in the ROV business. We can mitigate that just by being more efficient, being more careful about where we're buying things, how we're sending them around the world. I think that's -- the mitigations have been pretty effective.

Labor rates are always probably the thing that we're most sensitive to, and so I would say that the customers are pretty good about recovering labor rates because they value their crews. If they like the people who work for them, they are very well -- I think there they're very well aware of what's going on in the labor market because they have to deal with it to some degree as well. And so getting adjustments for labor rates has been pretty effective so far. So I can't hang a lot of things off on that, although the more efficient we get, the smarter we get operating the business, all of those things can help us get the cost reductions to make us more competitive.

Michael Sumruld

Yes, the escalation cost is under contracts really help on the labor side plus the more we do from a remote operating perspective, I think, also reduces our footprint and our cost. I think we just haven't had a major issue that I can tell from inflation right now so I don't not overly concerned about it.

Operator

[Operator Instructions] Your next question comes from the line of James West with Melius Research.

Unknown Analyst

Rod, you talked about Ghana growing other Africa growing was highlighted as well. What are you seeing outside of Brazil, Africa, maybe a little bit of Gulf of Mexico. What about Mediterranean offshore North Africa, what are you guys seeing in those regions of the world? Just this gas, heavy areas where gas is just becoming a much more important product these days. Just curious your thoughts there.

Roderick Larson

I think the Eastern man definitely is still a lot of opportunity kind of tempered a little bit by activity or by that geopolitical situation over there. But there's still a lot of a lot of interest. I mean you've got E&I working over there on the Chevron projects others. So I think that's one that's got a lot of upside potential to your point. One of our really good products was offshore Egypt. So we had a great installation project there this year, and I think we see opportunity for more of that kind of work. So yes, the Med's an interesting one. We don't call it out because it's a little more -- I would call it a little more sporadic, but it could be meaningful, for sure.

Yes. And then Norway is always an interesting one. Norway is persistent. And so as Equinor starts to find things, we see -- the other thing we see from Norway is the potential for a lot of subsea tiebacks. They've talked about improving seismic resolution through AI, and that can light up some spots and existing fields that make really good opportunities for subsea tiebacks. We love those because we can do a full installation project there and provide the umbilical and a lot of engineering. So I think the more we see tiebacks in the near future, which again, if we have a continued strong commodity price, tieback are one of those things that's easiest to get on the budget. So that could affect Norway for sure. But if that becomes sort of a greater interest, it definitely could affect the independence of the Gulf of American.

Unknown Analyst

Okay. Okay. Got it. Very helpful. And then maybe follow-up question, not necessarily related to that. But how are you thinking about capital allocation on your oil and gas business versus your military business, which has been growing because there's kind of capital cycles -- upside capital cycle was happening in both areas right now. And so you've got a, I would think kind of balance where you see the best returns, but I'm kind of curious how you're thinking about that.

Roderick Larson

I think there's still opportunities. When we talk about -- Mike mentioned earlier in one of the questions about more remote work, being able to do more remote work being able to do work differently, actually things that we could do that improve the efficiency of both the work we do and the customers' work. I mean there's a chance to be a little disruptive with technology. And so I think investments in the energy side are going to make sense. We're going to find things that make a lot of economic sense, both from their value stand-alone but also from the value they bring to protecting our core, right, things that we enhance RV operations with that make us even stronger within those pieces of the business are really makes sense.

Subsea inspection -- let me use that one as an example. Doing more and more digital twin modeling and building a digital twin from ROV video and then using that to devise a risk-based inspection program for subsea assets as we try to keep subsea assets going longer, tying back more things to existing infrastructure, stuff like that, keeping TMPs running longer. I mean all of these things require more inspection while in service. And the more of that we can do with technology. And of course, there's a lot of really cool technology out there that can be levered here. I think that's the kind of stuff that really does warrant continued investment inside the energy business.

Operator

There are no further questions at this time. I will now turn the call back to Rod Larson for closing remarks.

Roderick Larson

Well, since there are no more questions, I'll just wrap up by thanking everybody for joining the call. This concludes our third quarter 2026 conference call.

Operator

Thank you for attending. You may now disconnect.