Transocean (RIG) Q4 2025 earnings summary

Executive summary

• Achieved strong operational and financial performance in 2025, with record uptime near 98% and zero lost time incidents.

• Operating revenues for 2025 reached $3.965 billion, a 13% increase year-over-year, with revenue efficiency improving to 96.5% from 94.5%.

• Adjusted EBITDA rose nearly 20% to $1.37 billion, and free cash flow surged to $626 million, up $433 million from 2024.

• Net loss attributable to controlling interest was $2.915 billion, or $3.04 per diluted share, driven by $3.036 billion in asset impairment charges.

• Announced a definitive agreement to acquire Valaris, aiming for significant cost synergies, a combined backlog of nearly $11 billion, and enhanced fleet and financial flexibility.

Financial highlights

• Q4 contract drilling revenues were $1.043 billion, with an average daily revenue of $461,000.

• Adjusted EBITDA for Q4 was $385 million, with a margin of 36.8%.

• Operating and maintenance expense was $605 million; G&A expense was $50 million.

• Ended Q4 with total liquidity of $1.507 billion, including $620 million in unrestricted cash.

• Interest expense in Q4 was $132 million, down 6% sequentially due to debt reduction.

Outlook and guidance

• 2026 guidance assumes some idle time for several rigs but expects free cash flow to match or exceed 2025 levels.

• 2026 contract drilling revenues are projected at $3.8–$3.95 billion, with revenue efficiency expected to remain at 96.5%.

• Plans to continue debt reduction beyond scheduled $380 million in 2026 obligations.

• Expects to end 2026 with liquidity between $1.6 billion and $1.7 billion.

• Pro forma leverage expected to reach 1.5x within 24 months of Valaris deal closing.