Bristow Q3 Revenue, Adjusted EBITDA Rise on BSM Acquisition

Bristow Group Inc. (NYSE: VTOL) reported higher third-quarter 2026 revenue and adjusted EBITDA from the preceding quarter, as the acquisition of Berry Aviation, now Bristow Special Mission, expanded its Government Services and Other Services businesses. Those gains more than offset lower Offshore Energy Services revenue, while the company affirmed the midpoint of its 2026 adjusted EBITDA outlook.

Revenue for the three months ended September 30 rose to $437.9 million from $411.8 million in the second quarter. Bristow attributed the $26.2 million sequential increase primarily to Bristow Special Mission, acquired on July 13, and higher utilization in the Americas and Australia, partly offset by lower utilization in Europe.

Adjusted EBITDA, a non-GAAP measure, increased to $89.6 million from $79.8 million, lifting the adjusted EBITDA margin to approximately 20% from 19%. GAAP net income was $27.8 million, compared with $21.2 million in the preceding quarter.

Operating cash generation also increased. Net cash provided by operating activities was $61.2 million, while free cash flow reached $56.0 million and adjusted free cash flow was $64.3 million. In the second quarter, those measures were $41.1 million, $34.3 million and $35.8 million, respectively.

Acquisition lifts government and other services

Government Services revenue increased to $130.0 million from $112.2 million. Bristow Special Mission contributed $16.9 million of third-quarter revenue, accounting for most of the segment’s sequential growth. Revenue from the UK search-and-rescue contract increased by $1.6 million, primarily because of lower penalties and higher fuel revenue, while Irish Coast Guard contract revenue declined by $0.7 million due mainly to aircraft-availability penalties.

Government Services adjusted operating income rose to $9.7 million from $7.2 million. The benefit from higher revenue was partly offset by a $13.0 million increase in operating expenses and a $2.4 million increase in general and administrative costs, reflecting the acquired business and ongoing contract transitions.

Other Services revenue climbed to $51.9 million from $37.9 million. The acquisition contributed $9.2 million, while higher activity in Australia added $4.8 million. Adjusted operating income more than doubled to $12.6 million from $5.3 million, despite higher operating and administrative expenses related primarily to Bristow Special Mission.

Offshore Energy Services remained Bristow’s largest segment but recorded a sequential revenue decline. Revenue fell to $256.0 million from $261.6 million as a $10.9 million decrease in Europe, driven mainly by lower utilization, outweighed improvements from lower penalties and increased rates. Americas revenue rose by $6.0 million on higher utilization and rates, while Africa declined by $0.7 million primarily because of higher penalties.

Despite the lower revenue, Offshore Energy Services adjusted operating income increased to $68.5 million from $66.5 million. Bristow said an $8.3 million reduction in operating expenses and a $1.1 million decline in general and administrative costs more than offset the revenue decrease and a $2.3 million reduction in earnings from unconsolidated affiliates.

2026 outlook and capital allocation

Bristow’s updated 2026 outlook calls for adjusted EBITDA of $300 million to $320 million and total revenue of $1.64 billion to $1.70 billion. The company said it affirmed the midpoint of the adjusted EBITDA range.

Segment revenue is expected to be $1.015 billion to $1.035 billion for Offshore Energy Services, $470 million to $490 million for Government Services and $155 million to $175 million for Other Services. The company projects adjusted operating income of $240 million to $250 million for Offshore Energy Services, $35 million to $45 million for Government Services and $25 million to $30 million for Other Services.

Management also expects approximately $45 million of cash interest, about $30 million of cash taxes and $25 million to $30 million of maintenance capital expenditures in 2026. These projections are based on information available when the presentation was issued and are not guarantees of future performance.

Bristow ended September with $233.4 million of unrestricted cash, $287.3 million of total liquidity and $527 million of net debt. Total debt principal was $760 million, and the company reported no material near-term debt maturities. Unfunded capital commitments totaled $50.9 million, primarily for aircraft purchases.

During the quarter, Bristow paid $3.8 million in dividends and repurchased $25 million of shares at an average price of $45.64. It subsequently declared another quarterly dividend of $0.125 per share, payable November 27 to shareholders of record on November 13. The company had $96 million remaining under its share-repurchase authorization as of September 30.

Supply constraints remain a key risk

Persistent aviation supply-chain problems continue to pressure aircraft availability and maintenance operations. Bristow highlighted late parts deliveries, longer repair turnaround times and significant delays affecting its S92 and AW189 fleets. The company said the disruptions can lead to lost revenue opportunities, delayed contract transitions, aircraft cannibalization, additional staffing and overtime, and greater use of third-party maintenance providers.

Other uncertainties identified in the presentation include customer concentration, fluctuating offshore energy demand, foreign-exchange movements, geopolitical instability, labor issues, cyber risks, contract penalties, government spending changes and the company’s ability to execute its diversification and fleet-deployment plans.