Viridien - comment - Q3 26

Despite weaker headline numbers, the Q3 results will be positive for bondholders. Viridien has announced a further partial early redemption of its euro bonds in November, while continuing to reduce net debt. Net debt (excluding IFRS 16) fell to $656m from $804m a year earlier, with 9M net cash flow of $67m. Management reiterated its $100m FY26 cash flow target.

Q3 segment revenue declined 24% YoY to $237m and adjusted EBITDA fell 40% to $100m. The decline reflects a difficult comparison in Earth Data, following exceptional transfer fees in Q3 2025, alongside continued disruption from the Middle East conflict, which weighed on Sensing & Monitoring revenue. Geoscience provided some encouragement, with revenue up 17% sequentially and backlog reaching $283m at the end of October.

Looking ahead, management expects improved profitability in Q4, supported by higher revenues in both Earth Data and Sensing & Monitoring, alongside continued momentum in Geoscience. The $100m FY26 net cash flow target was reiterated, implying a further $33m in Q4. Overall, the continued debt reduction and cash generation are positive for creditors, with the prospect of an improving operating performance providing further support into 2027.