Has effective utilization changed for the fleet, what is idle capacity, and what are the flight hour expectations for the rest of the year, regionally?

Effective utilization for relevant offshore helicopter models remains tight with constrained supply. Flight hours are expected to be slightly higher in H2 2026, with 2027 being a significant inflection point for new offshore projects. Growth is seen in Africa and South America, while the North Sea remains stable. “So there has not been a material change in the effective utilization. It remains -- if we're talking about the relevant heavy super medium and medium offshore helicopter models, effective utilization remains very tight. And as we know, it's also a constrained supply picture with limited new capacity that could come into the market.”

Has the planned Norwegian exit impacted the business, and what is the timing for a potential exit?

There has been no material impact on the business since the announcement, with continued focus on service delivery. The process is in its early stages, involving outreach to potential buyers, so timing is currently uncertain. “No, we have not seen a material impact on the business since the announcement. We're continuing to focus on delivering safe and reliable service to our long-term customers there. ... In terms of timing, we are at the beginning of the process. So we're still in the process of reaching out to potential buyers to gauge who has an interest. And for those that are interested, we would then move forward in earnest with a more detailed part of that sale process.”

Which specific transition costs related to government SAR contracts are expected to flow into early 2027?

Additional costs related to aircraft (modifications) and personnel will extend into very early 2027. These personnel and associated costs are expected to roll off shortly thereafter. “There will be some additional costs related to aircraft and people as we prepare the last of the aircraft for the UKSAR2G to modifications, et cetera, on to that. So there will be people costs and some other lease costs, et cetera. And those people will roll off, and this is really very early in the part of '27.”

VTOL

Bristow Group (VTOL) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Aug 5, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Adjusted EBITDA	$295 million to $325 million high materiality	Full Year 2026 · FY26	High
Total Revenues	$1.6 billion to $1.7 billion high materiality	Full Year 2026 · FY26	High
OES Segment Adjusted Operating Income	$235 million to $245 million medium materiality	Full Year 2026 · FY26	High
OES Segment Revenues	Tightened range medium materiality	Full Year 2026 · FY26	High
Government Services Segment Revenues	$475 million to $495 million medium materiality	Full Year 2026 · FY26	High
Government Services Segment Adjusted Operating Income	$55 million to $65 million medium materiality	Full Year 2026 · FY26	High
Other Services Segment Revenues	$155 million and $175 million medium materiality	Full Year 2026 · FY26	High
Other Services Segment Adjusted Operating Income	$25 million to $30 million medium materiality	Full Year 2026 · FY26	High
Government Services Transition Costs	Roll into early 2027 low materiality	Early 2027 · FY27	Medium
Government Services Segment Performance	Track closer to original guidance range plus incremental EBITDA from Berry acquisition medium materiality	Full Year 2027 · FY27	Medium
Offshore Activity Inflection Point	2027 medium materiality	Full Year 2027 · FY27	Medium
Leonardo AW189 Annual Production Target	40 AW189s a year low materiality	Ongoing	Medium
Leonardo AW189 Component Recovery	Q4 of '26 or in some cases, Q1 of '27 medium materiality	Q4 FY26 / Q1 FY27 · FY26 / FY27	Medium
Defense Spending	Increase significantly high materiality	Multiyear period	High
Offshore Projects Capital Investment	Increasing share of future upstream capital investment high materiality	Future	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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

Deals & partnerships

Berry Aviation Acquisition 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.

Undisclosed Planned 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

Supply chain challenges and delayed aircraft deliveries 2026, 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 lags Q2 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 uses Year-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

Government Services Transition Costs

Early 2027

Current Some costs rolling into early 2027

Target Costs 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.

Find out whether VTOL delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.