Seadrill (SDRL) Q1 2026 earnings summary

Executive summary

• Delivered a solid first quarter with adjusted EBITDA of $97 million and operating revenues of $358 million, driven by early contract commencements, higher dayrates, and improved economic utilization.

• Secured over $860 million in new contract awards across the U.S. Gulf, Brazil, and Angola, raising contract backlog to $3.1 billion, with significant awards for Sevan Louisiana, West Tellus, and West Jupiter.

• Net loss for Q1 2026 was $7 million, an improvement from prior periods, reflecting higher revenues and improved operating results.

• Raised full-year 2026 revenue and EBITDA guidance due to improved performance, contract wins, and robust demand.

• Priced options and extensions exercised, notably for West Saturn and West Elara, supporting long-term revenue visibility.

Financial highlights

• Q1 2026 total operating revenues were $358 million, up 7% year-over-year, with contract drilling revenues at $277 million.

• Adjusted EBITDA was $97 million, up from $88 million sequentially, with a margin excluding reimbursables at 27.9%.

• Net loss of $7 million, improved from $10 million loss in the prior quarter.

• Ended the quarter with $329 million in cash and gross principal debt of $625 million, with total liquidity at $482 million.

• Free Cash Flow for Q1 2026 was $(35) million.

Outlook and guidance

• 2026 total operating revenues guidance raised to $1.43–$1.48 billion (excluding $50 million reimbursables).

• Adjusted EBITDA guidance increased to $370–$420 million, including a $26 million non-cash net expense for mobilization amortization.

• Capital expenditure guidance maintained at $200–$240 million for the year.

• Contract backlog as of March 31, 2026 was $2.48 billion, with $1.02 billion expected to be realized in the remainder of 2026.

• Management expects higher earnings and free cash flow in H2 2026 and into 2027, citing strong demand for deepwater rigs.