Skip to content
    VTOL
    Earnings call· Jun 2026(Q2 FY26)

    Bristow Group Q2 FY26 earnings call VTOL

    Aug 5, 2026 Source

    Executive summary

    Bristow Group Q2 FY26 — Strong Offshore Performance and Strategic Acquisitions Drive Outlook

    Bristow Group delivered a strong second quarter, affirming its full-year adjusted EBITDA guidance, driven by robust performance in its Offshore Energy Services segment and the strategic acquisition of Berry Aviation. While the Government Services segment faced headwinds from supply chain issues and fuel price lags, the company is actively addressing these challenges and expects improved performance. Management remains focused on capital allocation, balancing balance sheet strength, growth investments, and shareholder returns, positioning the company to benefit from global mega-trends in defense, energy security, and advanced air mobility.

    Highlights

    5

    • Affirmed FY26 adjusted EBITDA guidance of $295M-$325M, reflecting approximately 25% year-over-year growth.

    • OES segment FY26 adjusted operating income guidance increased to $235M-$245M due to better rates and activity.

    • Acquisition of Berry Aviation closed, expected to be immediately accretive to earnings and free cash flow.

    • Unrestricted cash balance of $312M and total available liquidity of $372M as of June 2026.

    • Net cash provided by operating activities increased to $41.4M in Q2 from $8.3M used in Q1.

    Concerns

    4

    • Government Services segment Q2 adjusted operating income was $2.3M lower QoQ due to higher operating expenses.

    • Supply chain challenges adversely impacted 2026 Government Services adjusted operating income by approximately $8M due to KPI penalties and extended transition costs.

    • Unprecedented increases in global jet fuel prices adversely impacted Q2 Government Services profitability by $1.5M due to contractual lag.

    • Working capital uses remained elevated year-to-date due to increased accounts receivable, new contract start-up costs, and timing of tax/OEM payments.

    Guidance & targets

    15
    CategoryTargetConfidence
    Adjusted EBITDA
    $295 million to $325 million
    high materiality
    High
    Total Revenues
    $1.6 billion to $1.7 billion
    high materiality
    High
    OES Segment Adjusted Operating Income
    $235 million to $245 million
    medium materiality
    High
    OES Segment Revenues
    Tightened range
    medium materiality
    High
    Government Services Segment Revenues
    $475 million to $495 million
    medium materiality
    High
    Government Services Segment Adjusted Operating Income
    $55 million to $65 million
    medium materiality
    High
    Other Services Segment Revenues
    $155 million and $175 million
    medium materiality
    High
    Other Services Segment Adjusted Operating Income
    $25 million to $30 million
    medium materiality
    High
    Government Services Transition Costs
    Roll into early 2027
    low materiality
    Medium
    Government Services Segment Performance
    Track closer to original guidance range plus incremental EBITDA from Berry acquisition
    medium materiality
    Medium
    Offshore Activity Inflection Point
    2027
    medium materiality
    Medium
    Leonardo AW189 Annual Production Target
    40 AW189s a year
    low materiality
    Medium
    Leonardo AW189 Component Recovery
    Q4 of '26 or in some cases, Q1 of '27
    medium materiality
    Medium
    Defense Spending
    Increase significantly
    high materiality
    High
    Offshore Projects Capital Investment
    Increasing share of future upstream capital investment
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Offshore Energy Services (OES)
    Revenue increase primarily due to higher rates and fuel revenues in Europe and Americas. Adjusted operating income increase due to higher revenues, lower operating expenses, and higher earnings from unconsolidated affiliates. Personnel costs lower due to seasonal variations in Norway. D&A higher due to accelerated depreciation of assets related to a U.S. lease facility and S-76D helicopter parts.
    Repairs and maintenance costs: $7.8 million lowerPersonnel costs: $6.3 million lowerFuel, freight and other operating costs: $9.9 million higherDepreciation and amortization expense: $4 million higher
    		$7.3 million higher—QoQ$16.4 million higher
    Government Services
    Revenue increase largely due to commencement of UKSAR2G seasonal bases, annual rate escalations, full quarter impact of Irish Coast Guard Waterford base ($1.5M higher), and higher U.S. utilization ($1M higher). Adjusted operating income lower due to higher operating expenses, offsetting revenue gains. Higher personnel costs from UKSAR2G/Irish Coast Guard transitions, overtime, and U.K. labor agreement adjustments. Fuel costs higher due to global prices, with a contractual lag in recouping expenses under UKSAR2G.
    Personnel costs: $3.3 million higherTraining, travel between bases and facilities costs: $1.8 million higherFuel costs: $1.5 million higherOperating expenses: $6.1 million higher
    		$4.4 million higher—QoQ$2.3 million lower
    Other Services
    Revenue increase primarily due to higher seasonal activity and fuel revenues. Adjusted operating income higher due to seasonal revenues, partially offset by higher operating expenses related to increased activity and fuel prices.
    Operating expenses: $7.7 million higher
    		$11.4 million higher—QoQ$4.2 million higher

    Operational metrics

    15
    Adjusted EBITDA
    $20.5 millionhigher QoQ
    Q2 FY26

    Largely attributable to increased revenues across segments and lower repairs and maintenance costs.

    Unrestricted Cash Balance
    $312 million
    Q2 FY26

    As of June 2026.

    Total Available Liquidity
    $372 million
    Q2 FY26

    As of June 2026.

    Net Cash Provided by Operating Activities
    $41.4 millioncompared to net cash used of $8.3 million in Q1
    Q2 FY26

    Increase primarily due to higher earnings and a decrease in working capital uses.

    Dividends Paid
    $3.7 million
    Q2 FY26

    Paid during the current quarter.

    Dividend Declared
    $0.125
    Q2 FY26

    Declared on July 30, 2026.

    Growth Capital Expenditure
    $130 million
    Full Year 2026

    Expected growth CapEx for the full year.

    Maintenance Capital Expenditure
    $30 million
    Full Year 2026

    Expected maintenance CapEx for the full year.

    Total Capital Expenditure
    $160 million
    Full Year 2026

    Total expected CapEx for the full year, sum of growth and maintenance.

    Growth Capital Expenditure
    $30 million
    H2 FY26

    Growth CapEx for the second half of the year, with most CapEx weighted to the first half.

    Working Capital Uses
    Elevated
    Year-to-date

    Due to increases in accounts receivable, start-up costs for new government services contracts, and timing of tax and OEM vendor payments.

    Berry Aviation Acquisition Financial Impact
    Immediately accretive
    Ongoing

    Expected financial benefits from the acquisition.

    Pro Forma 2025 EBITDA Impact (Berry Acquisition + Norway OES Sale)
    Neutral
    FY25

    The combined effect of the Berry acquisition and the planned Norway OES exit would have been neutral to Bristow's 2025 EBITDA on a pro forma basis.

    Project SEAN Funding
    1.5 million
    Ongoing

    Funding for the Scottish Electric Aviation Network, a Bristow-led consortium.

    Leonardo AW189 Deliveries
    15vs. target of 40
    Last year

    Number of AW189 helicopters delivered by Leonardo last year, indicating supply chain constraints relative to their target.

    Industry KPIs

    2
    MetricValueDetails
    FCF CAPEX leverage$160 millionUSD
    M a integration progress—

    Deals & partnerships

    2
    Berry AviationAcquisition of a military and defense aviation services provider

    Headquartered in San Marcos, Texas, Berry operates a fleet of over 20 aircraft, providing special missions, ISR operations, MRO, training, mission support, and UAS design/development. Also offers on-demand cargo logistics and aftermarket supply chain solutions. Enhances Bristow's government services and multi-mission aviation activities, leveraging combined expertise and global footprint.

    UndisclosedPlanned sale of Norway Offshore Energy Services business

    Part of Bristow's portfolio optimization strategy to deploy assets in markets with attractive margin profiles and value-accretive returns on capital. Timing and structure subject to market conditions. Bristow expects to continue pursuing other opportunities in Norway, such as advanced air mobility.

    Risks & headwinds

    3
    Supply chain challenges and delayed aircraft deliveries2026, with recovery expected Q4 2026 or Q1 2027

    Adversely impacted 2026 Government Services adjusted operating income by approximately $8 million.

    Mitigation: Active discussions with OEM (Leonardo), with expected recovery of key components by Q4 2026 or Q1 2027. Management is working to mitigate KPI penalties and transition costs.

    Fuel price volatility and contractual lagsQ2 FY26, not expected to recur in Q3 and beyond

    Adversely impacted Q2 Government Services profitability by $1.5 million.

    Mitigation: Contractual amendment tightened the adjustment mechanism, so this impact should not recur in Q3 and beyond.

    Elevated working capital usesYear-to-date, expected to normalize in coming quarters

    Working capital uses remain elevated year-to-date.

    Mitigation: New contract transitions are set to conclude in coming quarters, and activity/timing-related items are expected to normalize, leading to continued improvements in working capital.

    What to watch in Q3 FY26

    5

    Government Services Transition Costs

    Early 2027
    CurrentSome costs rolling into early 2027
    TargetCosts roll off in early 2027

    Why it matters

    Successful conclusion of transition costs is critical for the Government Services segment to track closer to its original guidance and realize the full benefit of the Berry acquisition.

    While some of these transition costs will roll into early 2027, the 2027 Government Services results should track closer to the original guidance range plus the additional benefit of the incremental EBITDA from the Berry acquisition.

    Q&A highlights

    8

    What were the primary drivers for the increased adjusted operating income guidance and tightened revenue range for the OES segment?

    The increase was driven by better performance in the first half of the year, including higher rates and activity, with contracts extending longer than anticipated. The revenue guidance was tightened due to increased certainty.

    “We had -- we did have better performance in the first half of the year. This is both in rate and in activity, more aircraft being put on contracts and contracts that went longer than we had originally expected. And we expect that to continue through the rest of the year, which really informed our increase in the guidance, and we just have more certainty around the revenue.”

    asked by Jason Bandel · answered by Jennifer Whalen

    2 min read5 chapters

    Detailed Narrative

    01

    Safety Performance and Operational Excellence

    Bristow Group maintained its strong safety record, achieving zero air accidents year-to-date 2026 and progressing towards a third consecutive year of fewer lost workdays. This performance underscores the company's commitment to safety as its primary core value and highest operational priority. The focus on reliability and rapid response in complex environments is a shared cultural emphasis across Bristow's operations.

    02

    Strategic Portfolio Optimization and Expansion

    The company executed on its portfolio optimization strategy by closing the acquisition of Berry Aviation, which significantly enhances its government services and multi-mission aviation capabilities. Concurrently, Bristow is pursuing the sale of its Norway Offshore Energy Services business, aligning with its strategy to deploy assets in markets offering attractive margin profiles and value-accretive returns on capital. These strategic moves are expected to create a more durable and balanced business profile.

    03

    Leveraging Global Mega-trends for Growth

    Bristow is strategically positioned to capitalize on three global mega-trends: increased defense spending, the importance of energy security, and the electrification of transportation. The Berry Aviation acquisition directly addresses defense spending, while the company's offshore energy services benefit from renewed emphasis on secure hydrocarbon supplies. Bristow is also an early leader in advanced air mobility, participating in initiatives like Project SEAN in Scotland and test programs in Norway and the U.S. Gulf.

    04

    Government Services Segment Headwinds and Mitigation

    The Government Services segment experienced lower margins in Q2 due to elevated KPI penalties stemming from continued supply chain challenges🌐, particularly with Leonardo's AW189 helicopters, which delayed aircraft deliveries and modifications. Additionally, higher personnel and operating costs persisted longer than anticipated due to extended transition periods for new contracts. Management has addressed fuel price lag through contractual amendments and expects supply chain recovery by Q4 2026 or Q1 2027, with transition costs rolling into early 2027.

    05

    Robust Offshore Energy Services Performance

    The Offshore Energy Services (OES) segment delivered strong performance, leading to an increased adjusted operating income guidance for FY26. This was driven by higher rates and increased activity in key markets such as Africa and South America. Effective utilization of the heavy, super medium, and medium offshore helicopter models remains tight, with 2027 anticipated as a significant inflection point for new incremental offshore projects.

    AI-generated summary of the company’s earnings call. Not investment advice.