Koil Energy Solutions Reports 22% Revenue Growth but Faces Net Loss in Q3 2025

Koil Energy Solutions, Inc. reported its financial results for the third quarter of 2025, revealing a revenue increase of 22% to $6.37 million compared to $5.22 million in the same period last year. For the nine months ending September 30, 2025, total revenues remained relatively stable at $16.80 million, slightly up from $16.79 million in the prior year. However, the company experienced a net loss of $413,000 for the quarter, a significant decline from a net income of $523,000 in Q3 2024. The loss for the nine-month period also reflected a downturn, with a net loss of $381,000 compared to a profit of $2.08 million in the previous year.

The company's cost of sales increased by 37% to $4.32 million in Q3 2025, contributing to a gross profit margin decline from 40% to 32%. This decrease was attributed to a shift in product mix towards lower-margin service contracts and rising overhead costs, particularly in employee benefits and office rent in Brazil. Selling, general, and administrative expenses surged by 59% to $2.51 million, driven by bad debt expenses related to a receivable write-off, increased administrative payroll, and legal fees.

Operationally, Koil Energy has made strategic investments to expand its workforce and capabilities, particularly in response to increased order intake for subsea tie-back and maintenance projects. The company is focusing on becoming a leading provider of integrated subsea distribution systems, capitalizing on the growing demand for offshore energy solutions. As of September 30, 2025, Koil Energy's total assets stood at $19.66 million, with current liabilities of $5.19 million, reflecting a slight increase in financial obligations compared to the previous fiscal year.

Looking ahead, Koil Energy's management expressed confidence in the company's ability to navigate the challenges posed by market volatility and operational costs. The company has entered into a factoring agreement with Amegy Bank to enhance liquidity, allowing it to sell accounts receivable as needed. Despite the current losses, management believes that the strategic focus on subsea projects and disciplined investment in growth will position the company favorably for future profitability. The outlook remains cautious, with ongoing assessments of market conditions and operational efficiencies to ensure sustainable growth.