KNOT Offshore Partners LP reported third‑quarter 2025 results that surpassed consensus expectations, with total revenue of $96.9 million, operating income of $30.7 million, net income of $15.1 million, and adjusted EBITDA of $61.6 million. Revenue beat the analyst consensus of $86.3 million by $10.6 million, a 12% lift, while earnings per share of $0.45 exceeded the $0.18–$0.23 estimate by $0.22–$0.27, a 140% beat. Operating income rose from $22.2 million in Q2 2025, reflecting higher charter rates and a favorable mix of long‑term contracts.
Liquidity at quarter‑end was stronger than previously reported: cash and cash equivalents totaled $77.2 million and undrawn revolving credit capacity was $48 million, bringing total liquidity to $125.2 million—up from $101 million at the end of Q2. The contracted revenue backlog grew to $939.5 million, an increase from $854 million in Q1 2025, driven by the acquisition of the Daqing Knutsen vessel and additional charter extensions.
CEO and CFO Derek Lowe highlighted the company’s confidence in the market, noting that “the current order book still trends toward a medium‑term shortage of shuttle tankers.” He also mentioned the unsolicited buyout offer from sponsor KNOT, which is under review, and reiterated the disciplined debt‑repayment schedule of roughly $90 million per year.
Investors reacted positively to the results, citing the strong earnings beat and the favorable market environment. The tightening shuttle‑tanker market in Brazil and the North Sea—propelled by new FPSO deployments—provides a backdrop for continued demand.
Headwinds include a debt‑to‑equity ratio of 1.48 and a low Altman Z‑Score of 0.52, which signal financial leverage concerns, while the buyout offer introduces uncertainty. Tailwinds are the company’s fleet modernization strategy, the Daqing Knutsen acquisition, high fleet utilization, and robust demand in core charter segments.
The earnings beat reinforces KNOT’s strategic focus on long‑term charters and fleet upgrades, positioning the company to capitalize on upcoming demand while managing debt and potential ownership changes.
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