Valaris (VAL) Q4 2025 earnings summary

Executive summary

• Achieved total operating revenues of $537 million in Q4 2025, with revenue efficiency at 98% for the quarter and 96% for the full year, marking five consecutive years above 96%.

• Net income surged to $717 million, driven by a $680 million tax benefit related to changes in deferred tax asset valuation allowances.

• Secured nearly $900 million in new contract backlog since Q3 2025, raising total backlog to approximately $4.7 billion.

• Announced an all-stock transaction with Transocean, expected to deliver synergies and future upside for shareholders.

• Repurchased $25 million in shares during Q4 and $100 million for the full year.

Financial highlights

• Q4 2025 net income of $717 million, up from $187 million in Q3, primarily due to a $680 million tax benefit.

• Adjusted EBITDA was $97 million, down from $163 million in Q3.

• Revenues (excluding reimbursables) decreased to $502 million from $556 million in Q3, mainly due to fewer operating days and asset sales.

• Contract drilling expenses (excluding reimbursables) increased to $380 million from $368 million in Q3, driven by higher maintenance and mobilization costs.

• Capital expenditures rose to $106 million from $70 million in Q3, reflecting shipyard projects and fleet upgrades.

• Cash and cash equivalents declined to $599 million at year-end from $663 million at Q3-end.

Outlook and guidance

• FY 2026 revenue guidance: $2,125–2,205 million; Adjusted EBITDA: $485–565 million (excluding Transocean transaction costs).

• Capital expenditures projected at $425–475 million, with $110 million in upfront customer payments for contract-specific upgrades.

• 97% of 2026 revenue at guidance midpoint secured by firm contracts.

• Financial results expected to improve as idle drillships return to work throughout 2026.