Seadrill Raises 2026 Revenue Outlook to $1.58 Billion Despite Quarterly Loss
Key Facts
On November 3, Seadrill raised its fiscal 2026 revenue guidance to $1.56–$1.58 billion, excluding $90 million in reimbursable revenue, after reporting third-quarter results. The company said its previous guidance, issued in August, was $1.50–$1.55 billion, excluding $50 million of that revenue. The higher annual outlook came despite a quarterly net loss of $30 million, or $0.49 per diluted share. Operating revenue fell to $428 million from $449 million in the second quarter, but exceeded $363 million in the third quarter of 2025. The results thus combined an improved annual outlook with weaker performance than in the previous quarter, as the company attributed the revenue decline to operational factors linked to rig operating days and periods between contracts.
Adjusted EBITDA fell to $121 million in the third quarter from $144 million in the second quarter. The metric’s margin, excluding reimbursable revenue, also declined to 29.7% from 33.5%. The company attributed the quarterly revenue decline mainly to fewer operating days for the West Carina, whose contract ended in the second quarter. It also cited transition periods between contracts for the West Vela, West Elara and Sevan Louisiana. More operating days for the West Tellus partly offset the impact of those factors, the company said.
Seadrill said the net loss included the impact of a legal provision recorded during the quarter, but the statement did not specify the provision’s value in the information provided. Despite the accounting loss, the company reported $195 million in cash generated from operating activities and $179 million in free cash flow. It also repurchased about $22 million of shares during the period. The company attributed the cash benefit to receiving a lump-sum mobilization payment related to the West Tellus and to working capital releases. These cash flows offer another view of the quarter’s results, alongside the declines in profitability and revenue compared with the second quarter.
The company raised its 2026 adjusted EBITDA guidance to $440–$460 million from $420–$450 million in its August update. At the same time, it narrowed its range for capital and long-term maintenance spending to $210–$230 million. Seadrill had raised its revenue guidance in August to $1.50–$1.55 billion from a previous range of $1.43–$1.48 billion, and increased its adjusted EBITDA guidance to $420–$450 million from $370–$420 million. The new update puts revenue guidance at $1.56–$1.58 billion, excluding $90 million in reimbursable revenue, compared with $50 million excluded in the August update. The revisions reflect the company’s continued increases to its annual estimates during 2026, while third-quarter results remained weaker than those in the second quarter.
The company had a backlog of about $3.3 billion as of November 3. Contracts, awards and extensions secured after the August fleet status report added total contract value of about $800 million and covered Indonesia, Malaysia, Angola and the U.S. Gulf of Mexico. Chief Executive Samir Ali said more than 85% of available drillship operating days in 2027 were contracted. Ali linked that coverage to improved visibility into next year’s earnings and cash flows. These commercial indicators come as the company seeks to support its outlook with contracts covering a substantial share of available operating days.
Seadrill ended the third quarter with total gross debt of $750 million and cash, cash equivalents and restricted cash of $506 million, resulting in net debt of $244 million. At the end of the second quarter, total gross debt was $750 million, cash, cash equivalents and restricted cash were $360 million, and net debt was $390 million. The comparison shows cash rising and net debt falling between quarter-ends, alongside the cash flows the company recorded in the third quarter. In the second quarter, the company posted net income of $29 million and adjusted EBITDA of $144 million. In the first quarter, it reported a net loss of $7 million and adjusted EBITDA of $97 million, according to the company’s previously reported results.
Second-quarter revenue had risen to $449 million from $358 million in the first quarter, driven by more operating days for the West Jupiter and West Capella and an improvement in average dayrates across the fleet. In August, management said the second-quarter results reflected strong operational, commercial and financial execution, and reported economic utilization of 96%. In share trading, SDRL closed at $47.73 on November 2, compared with a close of $52.57 on October 30. Seadrill scheduled a conference call to discuss third-quarter results for November 4 at 08:00 CT and 15:00 CET. The results release date was announced on October 6, with results due after the New York Stock Exchange closed on November 3.