Seadrill Limited 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Seadrill reported strong second quarter 2026 financial performance with total operating revenues of $449 million and adjusted EBITDA of $144 million, exceeding expectations.
- The company achieved economic utilization of 96% and successfully completed the West Tellus re-acceptance on schedule and on budget.
- Seadrill added approximately $200 million of backlog since May, including new contracts and extensions on three rigs in the US Gulf and Malaysia.
- The West Vela secured a 12-month contract with Talos starting June 2027, adding approximately $161 million to backlog.
- The West Capella received a priced option for approximately 75 days extending operations into the second half of 2027.
- Seadrill completed a refinancing in June, issuing $700 million of senior notes due 2034, redeeming $575 million of notes due 2030, and increasing its revolving credit facility to $300 million with maturity extended to 2031.
- Seadrill ended the quarter with $360 million in cash, a $31 million increase from the prior quarter.
- The company repurchased $20 million of shares in June and extended the remaining $208 million share repurchase authorization through the end of 2026.
- Seadrill raised its full-year 2026 revenue guidance to $1.5 billion to $1.55 billion and EBITDA guidance to $420 million to $450 million, excluding $50 million of reimbursable revenues.
- Operating expenses increased to $377 million due to full quarter operations of West Capella and West Jupiter.
- The EBITDA margin excluding reimbursables was 33.5% for the quarter.
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Transcript
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Hello, everyone. Thank you for joining us and welcome to the Seadrill second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Kevin Smith.
Please go ahead. Hello and welcome to Seadrill's second quarter 2026 earnings call.
I'm Kevin Smith, Vice President of Corporate Finance and Investor Relations, and I'm joined today by Samir Ali, President and Chief Executive Officer, Grant Creed, Executive Vice President and Chief Financial Officer, and Jacob Taylor, Vice President Commercial. Our call will include forward-looking statements that involve risks and uncertainty. Actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year, and we assume no obligation to update them except as required by securities laws. Our filings with the U.S. Securities and Exchange Commission provide a more detailed discussion of our forward-looking statements and the risk factors affecting our business. During the call, we will also reference non-GAAP measures. Our earnings release, furnished to the SEC and available on our website, includes reconciliations with the nearest corresponding GAAP measures.
Our use of the term EBITDA on today's call corresponds with the term adjusted EBITDA as defined in our earnings release. I'll now turn the call over to Samir.
Thanks, Kevin. Welcome everyone. Thank you for joining us. I'll begin with our second quarter highlights, including continued progress against our core priorities and our recent contracting successes. I'll then discuss the market backdrop and regional outlook before turning the call over to Grant to review our financial results and updated full year 2026 guidance. Second quarter financial performance was very strong, exceeding expectations. We delivered EBITDA of $144 million, underpinning our decision to raise full year revenue and EBITDA guidance. This marks our second guidance increase this year. The quarter also reflected continued execution against our core priorities: delivering safe, reliable operations, generating free cash flow, and capturing the upside ahead of us. Let's start with our first priority, safe and reliable operations. We delivered another solid quarter, achieving economic utilization of 96%. We also successfully completed the West Tellus reacceptance on schedule and on budget.
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