Transocean (RIG) Q1 2026 earnings summary

Executive summary

• Achieved 98% operational uptime, adjusted EBITDA of $440 million with a margin over 40%, and net income of $71 million in Q1 2026, marking the highest average daily revenue in over a decade at $476,000.

• Announced $1.6 billion in new backlog, raising total backlog to over $7.1 billion, with significant contract wins in Norway, Brazil, and the Eastern Mediterranean.

• Progressed the acquisition of Valaris, with antitrust approvals in two countries and ongoing reviews in others; integration planning underway and $200 million in expected cost synergies post-close.

• Completed the sale of two ultra-deepwater drillships for $27 million and retired $358 million of senior secured notes, reducing future interest expense by nearly $40 million.

• Operating income rose to $287 million from $64 million year-over-year, driven by higher contract drilling revenues and improved fleet utilization.

Financial highlights

• Q1 contract drilling revenues reached $1.08 billion, exceeding guidance, with revenue efficiency above 97%.

• Adjusted EBITDA was $440 million, and cash flow from operations was $164 million; free cash flow was $136 million after $28 million in capex.

• Unrestricted cash at quarter-end was $330 million, rising to $495 million by May 4; total liquidity at quarter-end was $1.125 billion, including an undrawn revolving credit facility.

• Total debt reduced to $5.14 billion from $6.73 billion year-over-year.

• Retired $358 million in Deepwater Titan notes, saving nearly $40 million in interest expense.

Outlook and guidance

• Deepwater utilization expected to approach 100% by end of 2027, with strong multi-year contract visibility.

• Full-year revenue guidance upper end reduced by $50 million to $3.9 billion due to timing; capex guidance increased by $20 million for customer-driven upgrades.

• Q2 2026 contract drilling revenues expected between $930–$970 million; full-year 2026 guidance at $3.8–$3.9 billion.

• Expect to end 2026 with $4.9 billion in debt and $1.25–$1.35 billion in liquidity.

• Revenue efficiency projected at 96.5% for both Q2 and full year.