The 9.5% revenue growth confirms healthy charter rate momentum, but the 65% net income decline from accelerated depreciation and the failed $10/unit buyout (removing premium catalyst) keep the stock in a tight trading range. Key catalysts to watch: successful refinancing of the $225.8M Sep 2026 and $65.9M Oct 2026 debt maturities (any delay or unfavorable terms would pressure the units), and potential dropdown acquisitions from KNOT that could support distribution growth. Conference call on May 29, 2026 may provide refinancing updates.
Price Chart
Executive Summary
KNOT Offshore Partners reported Q1 2026 total revenues of $92.0M, operating income of $14.7M, and net income of $2.6M. YoY revenue grew 9.5% from $84.0M to $92.0M, but net income fell 65% from $7.6M to $2.6M due to higher depreciation (useful life change from 23 to 20 years). The failed $10/unit takeover offer from sponsor KNOT was terminated in March 2026, removing the takeover premium catalyst. Liquidity improved to $140.7M, but $356M in debt matures in H2 2026, including a $225.8M facility due September 2026 and a $65.9M facility due October 2026, creating refinancing risk. Charter coverage is strong at 97% for H2 2026 and 81% for 2027, and the company cited a tightening shuttle tanker market in Brazil.
Key Facts
- Q1 2026 total revenues: $92.0M, up 9.5% YoY from $84.0M in Q1 2025
- Q1 2026 net income: $2.6M, down 65% YoY from $7.6M in Q1 2025
- Q1 2026 Adjusted EBITDA: $56.5M, down from $59.3M in Q4 2025
- Q1 2026 operating income: $14.7M, down 37% YoY from $23.4M
- Fleet utilization at 97.2% for scheduled operations; 92.0% including drydockings
- Takeover offer from KNOT at $10/unit terminated on March 19, 2026; offer was rejected
- Available liquidity: $140.7M ($92.7M cash + $48.0M undrawn revolver) at March 31, 2026
- Total debt: $932.8M; $356.3M matures in H2 2026, including $225.8M in Sep 2026 and $65.9M in Oct 2026
- Remaining contracted forward revenue of $857.9M as of March 31, 2026
- Charter coverage: fully covered H1 2026, ~97% for H2 2026, ~81% for 2027
- Quarterly distribution maintained at $0.05/common unit for Q1 2026
- New time charters signed: Hilda Knutsen (Eni, Q3 2027 for 3+3 years), Recife Knutsen (Transpetro, Q3 2026 for 2 years)
Financial Impact
Revenue up ~$8M YoY (+9.5%) to $92.0M; net income down ~$5M YoY (-65%) to $2.6M; Adjusted EBITDA $56.5M. Debt maturity wall of ~$356M in H2 2026 represents a $1.34B refinancing risk relative to $372M market cap.
Risk Factors
- $356M in debt maturing in H2 2026 vs $141M liquidity — refinancing risk is material
- Failed KNOT buyout removes near-term upside catalyst; potential for lower bid or no deal
- Accelerated depreciation (useful life cut from 23 to 20 years) will continue to depress net income for at least 4 more years
- Tordis Knutsen diesel generator breakdown caused off-hire from Feb 16 to May 21, 2026 — lost revenue may not be fully covered by insurance
- Shuttle tanker market cyclicality; newbuild deliveries from KNOT and competitors could pressure rates
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001104659-26-067518 |
| Document: knop-20260528x6k.htm | 0001104659-26-067518 |
| Document: 0001104659-26-067518-index-headers.html | 0001104659-26-067518 |
| Document: 0001104659-26-067518-index.html | 0001104659-26-067518 |
| Document: 0001104659-26-067518.txt | 0001104659-26-067518 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 9, 2026 6w ago | 6-K | $11.48 $10.34 | ▼ −9.93% | ▼ −11.87% | $9.99 (−12.98%) |
Aug 26, 2026 8w ago | 6-K | $10.66 $11.18 | ▲ +4.88% | ▲ +3.67% | $9.99 (−6.29%) |
Jun 16, 2026 18w ago | Insider Buy | $10.23 $10.54 | ▲ +3.03% | ▲ +1.71% | $9.99 (−2.35%) |
Jun 10, 2026 19w ago | 6-K | $10.71 $10.64 | ▼ −0.65% | ▼ −4.28% | $9.99 (−6.72%) |
May 28, 2026 21w ago | 6-K | $11.00 $9.91 | ▼ −9.91% | ▼ −8.12% | $9.99 (−9.18%) |
Apr 17, 2026 27w ago | 20-F | $10.07 $10.88 | ▲ +8.02% | ▲ +2.65% | $9.99 (−0.81%) |
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