The headline result modestly beat expectations, but the quality of the beat is mixed. Revenue excluding reimbursables reached $502.3 million versus a published consensus of roughly $499 million, while diluted EPS was $0.72 versus an external estimate near $0.41–$0.42. However, much of the earnings improvement came from a $37.7 million gain on asset sales rather than recurring operations. (Income Statement)
| $ millions, except EPS | Q2 2026 | Q1 2026 | Q2 2025 / expectation |
|---|---|---|---|
| Revenue, excluding reimbursables | 502.3 | 430.1 | 499.4 consensus |
| Adjusted EBITDA | 96.5 | 66.7 | — |
| Net income attributable to Valaris | 50.4 | (16.4) | — |
| Diluted EPS | 0.72 | (0.24) | ~0.41–0.42 consensus |
| Operating cash flow | 13.1 | 75.0 | — |
| Capital expenditures | (105.5) | (100.9) | — |
| Contract backlog | 4,585.2 | 4,929.1 | — |
Drillships were the real operating bright spot. Floater revenue rose 45% sequentially to $279.0 million and floater Adjusted EBITDA jumped to $111.6 million from $42.1 million as DS-12 and DS-10 returned to work and DS-17 had a fuller quarter. Average drillship revenue also increased to $451,000 per day from $436,000. (Segment results — Floaters; Average daily revenue)
Jackups deteriorated despite strong utilization. Jackup revenue fell 6% to $183.4 million and Adjusted EBITDA dropped 40% to $40.6 million. Planned shipyard work, lower North Sea accommodation rates, and Middle East war-risk insurance costs outweighed 90% active-fleet utilization. (Segment results — Jackups; Utilization — Active Fleet)
The cash conversion is the main weakness. Second-quarter operating cash flow was only $13.1 million against $105.5 million of capital spending, leaving cash down to $541.2 million from $578.3 million. For the first half, operating cash flow was $88.1 million versus $206.4 million of capital expenditures. (Cash Flow statement; Balance Sheet)
Backlog and visibility slipped even as near-term operations improved. Total backlog declined 7% sequentially to $4.59 billion, including a 9% drop in drillship backlog, while total-fleet utilization improved to 61% from 58%. The company offered no updated guidance because of the pending Transocean combination, so investors get better current execution but less fresh evidence that the full-year outlook is improving. (Contract Backlog; Utilization — Total Fleet; Earnings release)
Read the original 8-K on SEC EDGAR ↗