Koil Energy Solutions, Inc.

What they do

Koil Energy designs and manufactures subsea distribution systems, umbilical terminations, loose-tube steel flying leads, and provides engineering and installation support services. The company serves major integrated, large independent, and foreign national energy companies in offshore oil and gas fields worldwide, with operations in the U.S. and Brazil. It operates as a single reportable segment and is headquartered in Houston, Texas, with a wholly owned subsidiary in Brazil.

Revenue drivers

• Fixed-price contract activity — The company generates revenue from fixed-price manufacturing contracts for subsea distribution systems, carousel modifications, and related equipment, which management described as the primary growth driver in Q1 2026.
• Service projects — Revenue from load-out, transit, and installation monitoring, umbilical termination, spooling, and commissioning services, which contributed incrementally to Q1 2026 growth and correlate with subsea tree installations.
• Subsea tie-back projects — A growing share of revenue comes from subsea tie-back developments that connect new wells to existing infrastructure, which management identified as the core area of Koil Energy's expertise.
• International expansion (Brazil) — The company reports Brazilian expansion as a strategic pillar and sees capital flowing toward deepwater developments in Brazil, the U.S., and West Africa.

Recent performance

Q2 2026 revenue was $9.2 million, up 78% from $5.2 million in Q2 2025, and net income was $652,000, or $0.05 per diluted share, versus $61,000 a year earlier. For the six months ended June 30, 2026, revenue totaled $17.4 million, up 67% from $10.4 million, with net income of $893,000. Gross profit in Q2 2026 was $2.98 million (32% of revenue) versus $1.73 million (33%) in Q2 2025. The company ended the quarter with $922,000 in cash and $2.4 million drawn under credit facilities, with no long-term debt reported.

Strategy

Management is pursuing a strategy called 'KOIL 2030' focused on three pillars: systems solutions, Brazilian expansion, and rental equipment. The company is investing in new talent and additional assets, and management said bidding activity and order intake for subsea tie-back and maintenance projects increased throughout the year. Recent contract wins include a large offshore carousel modification, a subsea distribution system for a deepwater Gulf of America project, and installation monitoring services offshore West Africa. The company aims to become an integrated subsea distribution system supplier to capitalize on expected market growth.

Risks

• Cash position and liquidity — Cash fell to $922,000 at June 30, 2026 from $1.5 million at year-end 2025, while $2.4 million was drawn under credit facilities, leaving limited liquidity relative to operations.
• Dependence on offshore oil and gas capital spending — Revenue relies on capital and operating expenditure budgets of major and national oil companies, leaving the company exposed to commodity price swings and project delays.
• Subsea market cyclicality — The company's product sales correlate with subsea tree awards and installation activity, which are subject to multi-year cycles and have historically been volatile.
• Concentration on fixed-price contracts — Fixed-price contract activity drove growth, but fixed-price arrangements expose the company to cost overruns and execution risk on complex offshore projects.

Outlook

Management expects continued growth, citing Westwood Global Energy Group's forecast of a 20% increase in subsea tree awards in 2026 and an 8% increase in installation activity. The company believes its growth trajectory is sustainable, with new clients added in 2025 contributing about 25% of Q1 2026 revenue. Management said bidding activity and order intake for subsea tie-back and maintenance projects continued to increase, and it remains focused on executing its backlog and investing in capabilities.