SEADRILL Ltd (SDRL): Results of Operations and Financial Condition
SEADRILL Ltd (SDRL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Seadrill Announces Second Quarter 2026 Results Hamilton, Bermuda, August 10, 2026 - Seadrill Limited (“Seadrill” or the “Company”) (NYSE: SDRL) today announced its second quarter 2026 results. Highlights • Secured contract awards and extensions in the U.S. Gulf and M
How this was made
The 30-second read
Why it matters
Traders can update valuation and risk models using the raised 2026 revenue and Adjusted EBITDA guidance, the updated backlog level, and the balance-sheet changes from refinancing and share repurchases.
Market read
This is a primary earnings-and-guidance update with quantified commercial wins and financing actions, likely to move SDRL sentiment and expectations for 2026 EBITDA.
What to watch
Working-capital timing is highlighted (accounts receivable increase, contract preparation costs ahead of lump-sum mobilization), which can create near-term cash-flow noise despite stronger EBITDA.
Seadrill Announces Second Quarter 2026 Results
Total operating revenues, net income, Adjusted EBITDA, Adjusted EBITDA margin excluding Reimbursables, and diluted earnings per share improved from the prior quarter. The Company also increased its full-year 2026 Total operating revenues and Adjusted EBITDA guidance ranges, while extending its share repurchase program and refinancing debt.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total operating revenuesGAAP | $449 million | – | – |
| Contract revenuesGAAP | $355 million | – | – |
| Total operating expensesGAAP | $377 million | $43 million | – |
| Net income/(loss)GAAP | $29 million | – | – |
| Adjusted EBITDAnon-GAAP | $144 million | – | – |
| Adjusted EBITDA margin excluding Reimbursablesnon-GAAP | 33.5 % | – | – |
| Diluted earnings/(loss) per shareGAAP | $0.47 | – | – |
| Economic utilizationother | 96% | – | – |
| Contract Backlogother | approximately $2.9 billion | – | – |
| Capital additions and long-term maintenanceother | $57 million | – | – |
full year 2026 outlook
- Revenue$1.50 - $1.55 billion, excluding $50 million of reimbursable revenues
- NoteAdjusted EBITDA range: $420 - $450 million
- NoteCapital Expenditure and Long-Term Maintenance range: $200 - $240 million
Capital returns
- Extended the Company's share repurchase program through December 31, 2026.
- Repurchased approximately $20 million of shares in the second quarter.
What drove it
- More operating days for the West Jupiter and West Capella.
- An improved average dayrate across the fleet.
- Higher operating activity for the West Jupiter and West Capella.
- West Vela was awarded a one-year contract in the U.S. Gulf, commencing in June 2027 and adding approximately $161 million to Contract Backlog, excluding additional services.
- West Capella secured an estimated 75-day contract extension in Malaysia, adding approximately $26 million to Contract Backlog, excluding additional services.
- Sevan Louisiana added approximately 45 days in direct continuation of its prior program, committing the rig in the U.S. Gulf into August 2026.
Concerns
- Fewer operating days for the West Tellus partially offset revenue growth.
- Accounts receivable increased, primarily related to the commencement of the West Jupiter and West Capella contracts and the timing of collections across the remainder of the fleet.
- Cash outflows included contract preparation costs for the West Tellus ahead of lump-sum mobilization revenue expected in the third quarter.
- The Company reported a net debt position of $390 million at quarter-end.
What to watch
- Lump-sum mobilization revenue expected in the third quarter for the West Tellus.
- Execution of the West Vela contract commencing in June 2027.
- West Capella's additional term in Malaysia, which commits the rig into August 2027.
- Progress toward the full-year 2026 Total operating revenues range of $1.50 - $1.55 billion and Adjusted EBITDA range of $420 - $450 million.
- Activity under the share repurchase program through December 31, 2026.
Balance sheet and cash flow
- Gross principal debt of $750 million at quarter-end.
- $360 million in cash, cash equivalents and restricted cash at quarter-end.
- Net debt position of $390 million at quarter-end.
- Increased the revolving credit facility to $300 million from $225 million, extending maturity to 2031.
- Refinanced prior senior notes due in 2030, extending maturity into 2034.
- Cash inflows from the refinancing and lump-sum mobilization revenue were partially offset by an increase in accounts receivable.
- Cash outflows included a $20 million accelerated interest expense payment relating to the redemption of prior senior notes and a $16 million final payment for a legacy legal judgment relating to the Sonadrill joint venture.
Analysis
Seadrill reported a stronger second quarter relative to the prior quarter. Total operating revenues were $449 million, compared to $358 million, while contract revenues were $355 million, compared to $277 million. Management attributed the revenue increase primarily to more operating days for the West Jupiter and West Capella and an improved average dayrate across the fleet, partially offset by fewer operating days for the West Tellus. Economic utilization was 96%.
Profitability improved alongside the higher activity. Net income was $29 million versus a net loss of $7 million in the prior quarter, and diluted earnings were $0.47 per share versus a loss of $0.11 per share. Adjusted EBITDA increased to $144 million from $97 million, while Adjusted EBITDA margin excluding Reimbursables was 33.5 % compared with 27.9 %. Total operating expenses increased by $43 million to $377 million, primarily reflecting higher operating activity for the West Jupiter and West Capella.
Commercial activity added contract coverage. West Vela received a one-year U.S. Gulf contract commencing in June 2027 that adds approximately $161 million to Contract Backlog, excluding additional services. West Capella's Malaysia extension adds approximately $26 million to Contract Backlog, excluding additional services, and commits the rig into August 2027. As of August 10, 2026, Contract Backlog was approximately $2.9 billion.
Capital allocation included approximately $20 million of share repurchases, and the Company extended the repurchase program through December 31, 2026. The balance sheet actions refinanced senior notes due in 2030 into 2034 and expanded the revolving credit facility to $300 million from $225 million, with maturity extended to 2031. At quarter-end, Seadrill had gross principal debt of $750 million, cash, cash equivalents and restricted cash of $360 million, and a net debt position of $390 million. Capital additions and long-term maintenance totaled $57 million.
The outlook was raised for full-year 2026. Seadrill increased its Total operating revenues range to $1.50 - $1.55 billion, excluding $50 million of reimbursable revenues, from $1.43 - $1.48 billion, and increased its Adjusted EBITDA range to $420 - $450 million from $370 - $420 million. The Capital Expenditure and Long-Term Maintenance range was maintained at $200 - $240 million. Near-term execution points include collections reflected in the increase in accounts receivable and West Tellus contract preparation costs ahead of lump-sum mobilization revenue expected in the third quarter.
Management, verbatim
Seadrill’s second quarter performance reflects strong operational, commercial and financial execution, with momentum building across the business. We achieved 96% Economic utilization, meaningfully enhanced our contract coverage in the U.S. Gulf and increased our full-year revenue and EBITDA guidance.
Samir Ali, President and Chief Executive Officer
Demand for our high specification fleet continues to strengthen and contract coverage is improving as we enter a period where our strategic decisions are enabling us to capture the upside in the market.
Samir Ali, President and Chief Executive Officer
Not in the filing
stated, not guessed- Prior-year comparisons for total operating revenues, contract revenues, total operating expenses, net income/(loss), Adjusted EBITDA, Adjusted EBITDA margin excluding Reimbursables, diluted earnings/(loss) per share, economic utilization, Contract Backlog, and capital additions and long-term maintenance
- Reported year-over-year percentage changes
- Reported quarter-over-quarter percentage changes
- GAAP gross margin
- Non-GAAP gross margin
- GAAP operating income
- Non-GAAP operating income
- GAAP operating margin
- Non-GAAP operating margin
- Non-GAAP net income
- Non-GAAP earnings per share
- Operating cash flow
- Free cash flow
- Dividend amount
- Segment revenue and segment revenue comparisons
- Forward gross margin guidance
- Forward operating expenses guidance
- Forward tax-rate guidance
- Previous-quarter outlook section needed for guidance-versus-actual comparison
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
The 8-K Item 2.02 reports Seadrill’s Q2 2026 results and financial condition, including contract backlog updates, refinancing actions, and updated full-year guidance ranges.
Ticker impact
Seadrill raised 2026 revenue and Adjusted EBITDA guidance ranges, reported Q2 net income of $29M and Adjusted EBITDA of $144M, and updated contract backlog to ~$2.9B.
Likely positive bias for SDRL as traders price higher 2026 EBITDA and stronger contract coverage, partially offset by ongoing capex and working-capital timing.
The filing is a primary 8-K with quantified Q2 results, explicit full-year guidance range increases, and concrete commercial actions (U.S. Gulf award, Malaysia extension) that directly support backlog and utilization.
Market effects
Reinforces demand and utilization strength for high-spec offshore drilling fleets, supporting sentiment for deepwater drillers.
U.S. Gulf contract awards and extensions add incremental visibility for Gulf-focused offshore drilling activity.
Malaysia extension and overall ~$2.9B backlog suggest continued international contract coverage, relevant to global offshore drilling risk appetite.
Counterpoint
Higher guidance may still be vulnerable to dayrate volatility and operating-day variability, as the quarter’s revenue changes were driven by operating days and fleet mix.
Key entities
- companySeadrill Limited
Deepwater offshore drilling contractor reporting Q2 2026 results, contract awards/extensions, and raised 2026 guidance in an SEC 8-K.
- contractWest Vela
One-year U.S. Gulf contract awarded, adding about $161M to contract backlog (excluding additional services).
- contractWest Capella
Malaysia contract extension adding about $26M to contract backlog (excluding additional services).
- fleet operationsWest Jupiter and West Capella
More operating days and improved average dayrate drove Q2 revenue growth.
