Talos Energy (TALO) Q2 2026 earnings summary

Executive summary

• Record adjusted free cash flow of $231.6 million and production above guidance reflected strong operating execution.

• Raised FY26 standalone production guidance despite the shelf divestiture; guidance excludes the pending Gulf of America acquisition.

• Strategic moves expanded deepwater scale and development inventory, with exploration opportunities in Mexico and Honduras.

• Cash of $577.6 million, liquidity of $1.18 billion and 0.5x net debt to LTM adjusted EBITDA supported investment and shareholder returns.

Financial highlights

• Q2 adjusted EBITDA was $402.4 million and adjusted free cash flow was $231.6 million.

• Revenue was $664.8 million, up 57% year over year; net income was $149.7 million versus a $185.9 million loss in Q2 2025.

• Production averaged 93.7 MBoe/d, including 68.6 Mbbl/d of oil, exceeding guidance.

• Cash provided by operating activities was $300.6 million; six-month operating cash flow was $474.6 million, affected by working capital and derivative settlements.

• Cash was $577.6 million and total liquidity $1.18 billion at quarter-end.

Outlook and guidance

• FY26 standalone production guidance increased to 87,000–91,000 boe/d, including 64,000–68,000 bbl/d of oil; excludes the pending Gulf of America acquisition.

• Q3 guidance is 81,000–85,000 boe/d, including 61,000–65,000 bbl/d of oil; updated guidance expected after the acquisition closes.

• FY26 capital expenditure guidance remains $500–$550 million, with $100–$130 million for plugging, abandonment and decommissioning.

• Pro forma year-end 2027 leverage is expected below 1x; first Brutus well expected to spud in Q3 and Daenerys appraisal results expected before year-end.