Transocean Ltd. (RIG): Results of Operations and Financial Condition
Transocean Ltd. (RIG) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 TRANSOCEAN LTD. REPORTS second QUARTER 2026 RESULTS STEINHAUSEN, Switzerland, August 5, 2026—Transocean Ltd. (NYSE: RIG) today reported financial results for the second quarter of 2026. The Company will host a conference call and webcast at 9 a.m. EDT, 3 p.m. CES
How this was made
The 30-second read
Why it matters
Traders can update models using the provided revenue efficiency, adjusted EBITDA, free cash flow, liquidity, and the explicit guidance ranges for the next quarter and full year.
Market read
A primary earnings and guidance disclosure with quantified cash flow, liquidity, and backlog additions, plus forward ranges for revenues, costs, and liquidity.
What to watch
The guidance ranges and the note that $1.0B Equinor backlog is excluded until approvals may create uncertainty around timing of revenue recognition.
TRANSOCEAN LTD. REPORTS second QUARTER 2026 RESULTS
The company reported GAAP net income of $170 million, positive free cash flow of $212 million, 97.0% revenue efficiency, and lower debt year over year. Contract drilling revenues and adjusted EBITDA declined from both the prior quarter and prior year, while the third-quarter outlook calls for lower contract drilling revenues than the second-quarter result.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Contract drilling revenuesGAAP | $966 million | $ (115) million | $ (22) million |
| Revenue efficiencyother | 97.0% | – | – |
| Operating and maintenance expenseGAAP | $608 million | $ (2) million | $ (9) million |
| Net income (loss)GAAP | $170 million | $99 million | $1,108 million |
| Basic earnings (loss) per shareGAAP | $0.15 | $0.09 | $1.21 |
| Diluted earnings (loss) per shareGAAP | $0.04 | $ (0.02) | $1.10 |
| Adjusted EBITDAnon-GAAP | $312 million | $ (128) million | $ (32) million |
| Adjusted EBITDA marginnon-GAAP | 32.2% | – | – |
| Adjusted net income (loss)non-GAAP | $158 million | $186 million | $139 million |
| Adjusted diluted earnings (loss) per sharenon-GAAP | $0.03 | $0.06 | $0.03 |
| Net cash provided by operating activitiesGAAP | $236 million | $72 million | $108 million |
| Free cash flownon-GAAP | $212 million | $76 million | $108 million |
| Capital expendituresother | $24 million | – | – |
| Total debt, principal amount, end of periodGAAP | $5,107 million | $ (30) million | $ (1,547) million |
| Interest expense, excluding the $134 million effect of the bifurcated exchange feature of the 4.625% Exchangeable Bonds due 2029GAAP | $114 million | – | – |
| Cash taxes paid, net of tax refunds of $22 millionGAAP | $10 million | – | – |
| Total liquidityother | more than $1.3 billion | – | – |
| Added contract backlogother | $292 million | – | – |
| Weighted average dayrate for added contract backlogother | about $461,000 | – | – |
| Total backlog as of August 5, 2026other | approximately $6.7 billion | – | – |
| Equinor backlog excluded from total backlogother | $1.0 billion | – | – |
3Q26E and FY26E outlook
- Revenue3Q26E Contract drilling revenues: $920 – 960; FY26E Contract drilling revenues: $3,900 – 3,975
- Operating expenses3Q26E Operating and maintenance expense: $595 – 625; FY26E Operating and maintenance expense: $2,325 – 2,400
- Note3Q26E Revenue efficiency, fleet wide: 96.5%
- NoteFY26E Revenue efficiency, fleet wide: 96.5%
- Note3Q26E General and administrative: $45
- NoteFY26E General and administrative: $170 – 180
- Note3Q26E Interest expense: $113
- NoteFY26E Interest expense: $475
- Note3Q26E Interest income: $5 – 10
- NoteFY26E Interest income: $30 – 35
- Note3Q26E Capital expenditures: $40 – 50
- NoteFY26E Capital expenditures: $150
- Note3Q26E Cash taxes: $25 – 30
- NoteFY26E Cash taxes: $55 – 60
- NoteFY26E Total liquidity: $1,250 – 1,350
What drove it
- Contract drilling revenues were lower sequentially, primarily due to the expected decrease in rig utilization for this quarter.
- Revenue efficiency was 97.0%.
- The Company added five new fixtures with an aggregate incremental backlog of approximately $292 million and a weighted average dayrate of about $461,000.
- Recent contract awards were cited across Norway, Australia, the U.S. Gulf, and the Ivory Coast.
- The $1.0 billion Equinor agreement covers three harsh environment semisubmersibles, subject to receipt of approvals from license partners.
Concerns
- Contract drilling revenues declined to $966 million from $1,081 million in the prior quarter and from $988 million in the prior-year quarter.
- Adjusted EBITDA declined to $312 million from $440 million in the prior quarter and from $344 million in the prior-year quarter.
- Adjusted EBITDA margin was 32.2%, compared with 40.7% in the prior quarter and 34.9% in the prior-year quarter.
- Third-quarter contract drilling revenue guidance of $920 – 960 is below the reported second-quarter result of $966 million.
- The reported total backlog of approximately $6.7 billion excludes $1.0 billion of backlog for work with Equinor pending approvals from license partners.
What to watch
- Third-quarter contract drilling revenues guidance of $920 – 960 and fleet-wide revenue efficiency guidance of 96.5%.
- Third-quarter operating and maintenance expense guidance of $595 – 625.
- Execution of the five new fixtures that added approximately $292 million in backlog.
- Receipt of approvals from license partners for the $1.0 billion Equinor backlog.
- FY26E total liquidity guidance of $1,250 – 1,350 and FY26E capital expenditures guidance of $150.
Balance sheet and cash flow
- Net cash provided by operating activities was $236 million.
- Free cash flow was $212 million.
- Total debt, principal amount, end of period was $5,107 million.
- Ended the period with total liquidity of more than $1.3 billion, including the undrawn revolving credit facility.
- Cash taxes paid, net of tax refunds of $22 million, were $10 million.
Analysis
Transocean reported a profitable second quarter, with GAAP net income of $170 million and diluted earnings per share of $0.04, compared with a net loss of $938 million and diluted loss per share of $ (1.06) in the prior-year quarter. The quarter generated $236 million of net cash provided by operating activities and $212 million of free cash flow, with capital expenditures of $24 million. Revenue efficiency was 97.0%, supporting the company's characterization of operating execution as strong.
Top-line and adjusted earnings measures declined sequentially. Contract drilling revenues were $966 million, down from $1,081 million in the first quarter, primarily because of the expected decrease in rig utilization. Adjusted EBITDA was $312 million, down from $440 million, while adjusted EBITDA margin was 32.2%, compared with 40.7% in the prior quarter. Contract drilling revenues were also below $988 million in the prior-year quarter, and adjusted EBITDA was below $344 million.
Cash generation and debt reduction were the central financial positives. Free cash flow increased from $136 million in the prior quarter and $104 million in the prior-year quarter. Total debt, principal amount, ended the period at $5,107 million, compared with $5,137 million at March 31, 2026 and $6,654 million at June 30, 2025. The company also reported total liquidity of more than $1.3 billion, including the undrawn revolving credit facility.
Backlog additions point to continuing contracting activity for the fleet. Since the May 2026 Fleet Status Report, Transocean added five fixtures with approximately $292 million of incremental backlog at a weighted average dayrate of about $461,000. Total backlog was approximately $6.7 billion as of August 5, 2026, excluding $1.0 billion of Equinor backlog pending license-partner approvals.
The near-term outlook calls for further moderation in activity relative to the reported second quarter. Third-quarter contract drilling revenue guidance is $920 – 960, with fleet-wide revenue efficiency of 96.5% and operating and maintenance expense of $595 – 625. Full-year guidance calls for contract drilling revenues of $3,900 – 3,975, operating and maintenance expense of $2,325 – 2,400, capital expenditures of $150, and total liquidity of $1,250 – 1,350. Key attention points are third-quarter revenue execution, maintenance-cost control, and the timing of approval for the Equinor backlog.
Management, verbatim
Transocean delivered a strong second quarter, supported by 97% revenue efficiency and solid adjusted EBITDA margins, resulting in excellent cash flow and improved liquidity.
Keelan Adamson, Transocean’s CEO
We expect to see demand for our highest specification rigs increase in the coming years with industry utilization for deepwater and harsh environment assets projected to move well into the 90% range during 2027.
Keelan Adamson, Transocean’s CEO
With our differentiated fleet, strong execution capabilities, and improving financial flexibility, we believe Transocean is well positioned to deliver long-term value for our shareholders.
Keelan Adamson, Transocean’s CEO
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- GAAP gross profit and gross margin were not reported.
- GAAP operating income or loss and operating margin were not reported.
- Cash and cash equivalents balance was not reported.
- Net debt was not reported.
- Segment revenue and segment profit were not reported.
- Capital returns, including share repurchases and dividends, were not reported.
- GAAP and non-GAAP effective tax rates were not reported.
- Adjusted diluted earnings (loss) per share prior-year value was displayed as $ — rather than a numerical amount.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Transocean’s SEC Form 8-K (Item 2.02) with 2Q26 results, fleet status/backlog updates, and 3Q26 and FY26 outlook.
Ticker impact
Transocean reported 2Q26 results and issued 3Q26 and FY26 guidance, including contract drilling revenues $920-$960M and FY26 $3.9-$3.975B.
Moderately positive bias, with upside skew if investors focus on free cash flow and backlog growth versus the sequential revenue and EBITDA decline.
The article is a primary 8-K earnings release with explicit quarterly and full-year ranges, plus quantified cash flow, liquidity, and backlog additions.
Market effects
Reinforces signals on deepwater and harsh-environment utilization expectations and dayrate strength, which can affect sentiment across offshore drillers.
Backlog additions cited across Norway, Australia, U.S. Gulf, and Ivory Coast may support regional demand confidence.
Improved liquidity and contract backlog can influence global offshore drilling risk appetite and credit perceptions.
Counterpoint
Sequential declines in contract drilling revenues and adjusted EBITDA margin (vs prior quarter) could temper enthusiasm despite strong cash flow.
Key entities
- companyTransocean Ltd.
Offshore contract drilling company reporting 2Q26 results and issuing 3Q26 and FY26 guidance.
- counterpartyEquinor
Customer referenced for a $1.0B agreement for three harsh environment semisubmersibles, with backlog subject to approvals.
- executiveKeelan Adamson
CEO quoted on performance, demand expectations, and positioning.
