TRANSOCEAN LTD. REPORTS third QUARTER 2026 RESULTS
Transocean Ltd. (RIG) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 TRANSOCEAN LTD. REPORTS third QUARTER 2026 RESULTS STEINHAUSEN, Switzerland, November 2, 2026—Transocean Ltd. (NYSE: RIG) today reported financial results for the third quarter of 2026. The Company will host a conference call and webcast at 9 a.m. EST, 3 p.m. CET
How this was made
The 30-second read
Why it matters
The filing provides fresh, decision-relevant inputs: quarterly financial performance, free cash flow and liquidity, backlog/dayrate additions, and explicit guidance ranges for revenue, costs, interest expense, capex, cash taxes, and end-of-year liquidity.
Market read
Traders can update near-term expectations using the provided guidance ranges and 2027 contract coverage improvement, while monitoring utilization-driven sequential softness.
What to watch
Debt reduction and synergy targets are mentioned, but traders may discount them until integration milestones and actual synergy realization are clearer.
Transocean reports third-quarter net income of $26 million, $313 million of Adjusted EBITDA and $131 million of free cash flow; adds approximately $2.0 billion of backlog.
Third-quarter profitability and free cash flow remained positive, backlog additions strengthened forward coverage and debt declined, but contract drilling revenues, net income, Adjusted EBITDA and free cash flow were lower than both the prior quarter and the prior-year quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Contract drilling revenues, three months ended September 30, 2026GAAP | $937M | $(29) million | $(91) million |
| Revenue efficiency, three months ended September 30, 2026other | 96.8% | – | – |
| Operating and maintenance expense, three months ended September 30, 2026GAAP | $589M | $19 million | $(5) million |
| Depreciation and amortization, three months ended September 30, 2026GAAP | $146M | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | $62M | – | – |
| Loss on impairment of assets, three months ended September 30, 2026GAAP | $— | – | – |
| Gain (loss) on disposal of assets, net, three months ended September 30, 2026GAAP | $3M | – | – |
| Operating income (loss), three months ended September 30, 2026GAAP | $143M | – | – |
| Interest income, three months ended September 30, 2026GAAP | $1M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | −$134M | – | – |
| Income (loss) before income taxes, three months ended September 30, 2026GAAP | −$75M | – | – |
| Income tax expense (benefit), three months ended September 30, 2026GAAP | −$101M | – | – |
| Net income (loss), three months ended September 30, 2026GAAP | $26M | $(144) million | $1,949 million |
| Basic earnings (loss) per share, three months ended September 30, 2026GAAP | $0.02 | $(0.13) | $2.02 |
| Diluted earnings (loss) per share, three months ended September 30, 2026GAAP | $0.02 | $(0.02) | $2.02 |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $313M | $1 million | $(84) million |
| Adjusted EBITDA margin, three months ended September 30, 2026non-GAAP | 33.4% | – | – |
| Adjusted net income (loss), three months ended September 30, 2026non-GAAP | $1M | $(157) million | $(61) million |
| Adjusted diluted earnings (loss) per share, three months ended September 30, 2026non-GAAP | $— | $(0.03) | $(0.06) |
| Effective Tax Rate, three months ended September 30, 2026other | 133.5% | – | – |
| Effective Tax Rate, excluding discrete items, three months ended September 30, 2026other | 97.5% | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $174M | $(62) million | $(72) million |
| Capital expenditures, three months ended September 30, 2026GAAP | −$43M | – | – |
| Free Cash Flow, three months ended September 30, 2026non-GAAP | $131M | $(81) million | $(104) million |
| Debt repayments, three months ended September 30, 2026other | −$132M | – | – |
| Levered Free Cash Flow, three months ended September 30, 2026non-GAAP | −$1M | – | – |
| Total debt, principal amount, end of periodother | $4.97B | $(132) million | $(1,322) million |
| Net Debt, September 30, 2026non-GAAP | $4.19B | – | – |
| Net Debt to EBITDA Ratio, September 30, 2026non-GAAP | 2.9 x | – | – |
| Contract drilling revenues, nine months ended September 30, 2026GAAP | $2.98B | – | – |
| Operating income (loss), nine months ended September 30, 2026GAAP | $582M | – | – |
| Net income (loss), nine months ended September 30, 2026GAAP | $267M | – | – |
| Diluted earnings (loss) per share, nine months ended September 30, 2026GAAP | $0.24 | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $1.06B | – | – |
| Adjusted EBITDA margin, nine months ended September 30, 2026non-GAAP | 35.7% | – | – |
| Free Cash Flow, nine months ended September 30, 2026non-GAAP | $479M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Ultra-deepwater floatersAverage daily revenue was $442,100, revenue efficiency was 96.4%, and utilization was 67.6%. | $590M | – | – |
| Harsh environment floatersAverage daily revenue was 504,300, revenue efficiency was 97.7%, and utilization was 95.1%. | $347M | – | – |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
4Q26E, FY26E and Preliminary FY27 outlook
- Revenue4Q26E: $915 –965; FY26E: $3,900– 3,950; Preliminary FY27: $3,850 – 4,000
- Operating expensesOperating and maintenance expense: 4Q26E: $550 – 600; FY26E: $2,350 – 2,400; Preliminary FY27: $2,375 – 2,500
- NoteRevenue efficiency, fleet wide: 4Q26E: 96.50%; FY26E: 96.50%; Preliminary FY27: 96.50%.
- NoteGeneral and administrative: 4Q26E: $45 – 50; FY26E: $185 – 190; Preliminary FY27: $180 – 190.
- NoteInterest expense: 4Q26E: $107; FY26E: $500; Preliminary FY27: $415.
- NoteInterest income: 4Q26E: $5 – 10; FY26E: $30; Preliminary FY27: $20 – 30.
- NoteCapital expenditures: 4Q26E: $50; FY26E: $145; Preliminary FY27: $130 – 140.
- NoteCash taxes: 4Q26E: $25 – 30; FY26E: $50 – 55; Preliminary FY27: $60 – 65.
- NoteTotal liquidity (end of year): 4Q26E: —; FY26E: $1,300; Preliminary FY27: 1,500 – 1,700.
- NoteTotal liquidity guidance reflects scheduled debt amortization payments.
Capital returns
- The Company retired the remaining $200 million of debt associated with the Deepwater Aquila notes, ahead of schedule.
- Debt repayments were $(132) million in the third quarter and $(718) million in the nine months ended September 30, 2026.
What drove it
- Contract drilling revenues were lower sequentially, primarily due to an expected decrease in rig utilization.
- Nine new fixtures added approximately $2.0 billion of incremental backlog at a weighted average dayrate of about $423,000.
- New deepwater and harsh-environment awards increased contract backlog to approximately $8.0 billion and improved 2027 contract coverage to approximately 95%.
- Interest expense, excluding the $22 million effect of the bifurcated exchange feature of the 4.625% Exchangeable Bonds due 2029, was $112 million compared to the $114 million in the prior quarter.
- Cash taxes paid, net of tax refunds of $9 million, were $7 million.
Concerns
- Total fleet average rig utilization was 74.7%, versus 78.2% in the prior quarter and 76.0% in the prior-year quarter.
- Ultra-deepwater floater revenue was $590 million, compared with $623 million in the prior quarter and $696 million in the prior-year quarter.
- Adjusted EBITDA margin was 33.4%, below 38.7% in the prior-year quarter.
- Adjusted net income was $1 million and adjusted diluted earnings per share was $—.
- The third-quarter effective tax rate was 133.5%, while the effective tax rate excluding discrete items was 97.5%.
What to watch
- Execution against 4Q26E contract drilling revenue guidance of $915 –965 and fleet-wide revenue efficiency guidance of 96.50%.
- Conversion of approximately $8.0 billion of backlog into revenue and cash flow.
- The planned closing of the Valaris transaction expected on December 1 and progress toward $200 million in identified annual synergies.
- Delivery of Preliminary FY27 contract drilling revenue guidance of $3,850 – 4,000 and total liquidity guidance of 1,500 – 1,700.
- Debt reduction, including scheduled debt amortization payments reflected in total liquidity guidance.
Balance sheet and cash flow
- Cash and cash equivalents were $499 million at September 30, 2026, compared with $620 million at December 31, 2025.
- Restricted cash and cash equivalents were $285 million at September 30, 2026, compared with $377 million at December 31, 2025.
- Total liquidity was $1.3 billion, including the existing $510 million undrawn revolving credit facility.
- Debt due within one year was $460 million and long-term debt was $4,558 million at September 30, 2026.
- Net cash provided by operating activities was $574 million for the nine months ended September 30, 2026, compared with $400 million for the prior-year period.
- Capital expenditures were $(95) million for the nine months ended September 30, 2026, unchanged from the prior-year period.
- Net cash used in financing activities was $(723) million for the nine months ended September 30, 2026, compared with $(44) million for the prior-year period.
Analysis
Transocean reported $937 million of third-quarter contract drilling revenues, down from $966 million in the prior quarter and $1,028 million in the prior-year quarter. The company attributed the sequential decline primarily to an expected decrease in rig utilization. Total fleet average rig utilization was 74.7%, compared with 78.2% in the prior quarter, while revenue efficiency remained high at 96.8%. The mix was uneven: ultra-deepwater floater revenue was $590 million, below both comparison periods, while harsh-environment floater revenue was $347 million, above $343 million in the prior quarter and $332 million in the prior-year quarter.
GAAP net income was $26 million, or $0.02 per diluted share, compared with $170 million, or $0.04 per diluted share, in the prior quarter. Adjusted EBITDA was $313 million, essentially unchanged sequentially from $312 million but below $397 million a year earlier. The adjusted EBITDA margin improved sequentially to 33.4% from 32.2%, though it remained below the prior-year-quarter margin of 38.7%. Adjusted net income was $1 million and adjusted diluted earnings per share was $—, reflecting the impact of acquisition and restructuring costs, a benefit plan termination settlement cost, and discrete tax items in the reconciliation.
Cash generation remained positive but stepped down. Net cash provided by operating activities was $174 million and free cash flow was $131 million, versus $236 million and $212 million, respectively, in the prior quarter. Capital expenditures were $(43) million. Debt repayments of $(132) million reduced total debt principal to $4,975 million, while net debt was $4,191 million. The company also stated that it retired the remaining $200 million of debt associated with the Deepwater Aquila notes ahead of schedule. Total liquidity ended at $1.3 billion, including a $510 million undrawn revolving credit facility.
The principal forward-demand development was the addition of nine new fixtures carrying approximately $2.0 billion of incremental backlog at a weighted average dayrate of about $423,000. Contract backlog stood at approximately $8.0 billion as of November 2, 2026, and management said 2027 contract coverage improved to approximately 95%. The company expects the Valaris closing on December 1 and identified $200 million in annual synergies, making transaction closing and integration planning central items for the next reporting period.
For the fourth quarter, Transocean guided contract drilling revenues to $915 –965, fleet-wide revenue efficiency to 96.50%, operating and maintenance expense to $550 – 600, and capital expenditures to $50. Full-year 2026 revenue guidance is $3,900– 3,950, with Preliminary FY27 revenue guidance of $3,850 – 4,000. The guide points to continued high revenue efficiency and a stable revenue range, while operating costs, cash taxes, interest expense, liquidity, backlog conversion and debt amortization remain key variables.
Management, verbatim
Since our last report, we delivered solid operating results and significantly strengthened forward contract visibility.
Keelan Adamson, Transocean’s CEO
Strong cash flow enabled us to retire the remaining $200 million of debt associated with the Deepwater Aquila notes, ahead of schedule.
Keelan Adamson, Transocean’s CEO
Our priorities remain safe and reliable customer service, maximizing conversion of backlog into cash flow, and reducing debt.
Keelan Adamson, Transocean’s CEO
Not in the filing
stated, not guessed- Gross margin was not reported.
- Gross-margin guidance was not provided.
- No prior outlook section was provided, so comparison of actual results against prior guidance is unavailable.
- Share repurchases and dividends were not reported.
- A third-quarter GAAP gross profit or gross margin was not reported.
AlphAI 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
Transocean’s 8-K furnishes 3Q26 operating results, fleet status and backlog updates, and an outlook table for 4Q26, FY26, and preliminary FY27.
Ticker impact
Transocean reports 3Q26 results and provides 4Q26 and preliminary FY27 guidance, plus $2.0B backlog additions and liquidity details.
Likely modest upside bias as traders price in improved forward contract coverage and 2027 visibility, offset by sequential utilization-driven revenue softness.
The filing includes specific quarterly results, free cash flow, liquidity, and a detailed 2027 contract coverage target, which are direct inputs to valuation and near-term expectations.
Market effects
Reinforces offshore drilling demand visibility narrative via backlog and dayrate assumptions, potentially influencing sentiment across deepwater and harsh-environment peers.
Limited direct regional spillover; primarily affects US-listed offshore drilling sentiment.
Global relevance is mainly through offshore rig utilization and contract coverage expectations rather than a macro supply shock.
Counterpoint
Sequential contract drilling revenue declined due to expected lower rig utilization, so the market may focus on whether utilization can rebound to sustain the guidance range.
Key entities
- companyTransocean Ltd.
Reports third quarter 2026 results, updates fleet status and contract backlog, and provides 4Q26 and preliminary FY27 guidance.
- counterpartyValaris
Valaris closing is expected on December 1, 2026, with integration planning and identified annual synergies referenced.
