Seadrill (SDRL) Q3 2024 earnings summary

Executive summary

• Q3 2024 results exceeded expectations with $93 million in Adjusted EBITDA and a 13% increase in full-year guidance midpoint to $385 million.

• Achieved operating profit of $47 million in Q3 and year-to-date Adjusted EBITDA of $350 million.

• Key operational achievements include integration of Aquadrill drillships, stacking of West Phoenix, and mobilization of rigs to Brazil.

• Strategic focus remains on a floater-focused fleet, operational optimization, and maintaining a strong balance sheet.

• Fleet status report as of November 12, 2024, details contract coverage and rig activity across US Gulf of Mexico, Brazil, Angola, SE Asia, and Norway.

Financial highlights

• Q3 2024 operating revenues were $354 million, down from $375 million in Q2; contract drilling revenues were flat at $263 million.

• Adjusted EBITDA for Q3 was $93 million, with a margin of 27.5% (excluding reimbursables); net income was $32 million and diluted EPS $0.49.

• Operating expenses rose 6% sequentially to $307 million, driven by higher maintenance and personnel costs.

• Free Cash Flow was negative $80 million, impacted by Brazil contract preparation.

• $131 million in CapEx spent in Q3; $183 million in share repurchases completed under a $500 million authorization.

Outlook and guidance

• 2024 Adjusted EBITDA guidance raised to $375–$395 million on revenues of $1,390–$1,410 million; CapEx guidance narrowed to $420–$440 million.

• Guidance includes $63 million of reimbursable revenue and expenses.

• Lower Q4 EBITDA expected due to reduced operating activity and increased maintenance costs.

• Too early to provide 2025 guidance as contract negotiations for uncommitted capacity are ongoing.