Valaris Ltd (VAL) · Nov 2, 2026 · Earnings

Valaris earnings beat revenue estimates, but EPS misses as merger nears

Miss — Diluted EPS $0.66 vs ~$1.06-$1.13 consensus

Valaris earnings show a sharp drillship-led revenue rebound and higher EBITDA, but EPS fell short as taxes and merger costs weighed.

Valaris is in the middle of a drillship reactivation cycle while preparing to combine with Transocean: four drillships have returned to work this year, and the second-quarter report had already pointed to further financial improvement as those rigs ramped. The merger is also no longer a distant proposal; Valaris says required regulatory approvals are complete and expects closing around December 1, 2026.

Q3 2026Q2 2026Consensus / prior period
Revenue (Financial Highlights)$593.6M (+10%)$539.2M~$562.7M–$569.3M consensus
Diluted EPS (Income Statement)$0.66$0.72~$1.06–$1.13 consensus
Adjusted EBITDA (Financial Highlights)$150.6M (+56%)$96.5M—
Cash and equivalents (Balance Sheet)$525.1M$541.2M—
Contract backlog (Backlog table)$4.75B$4.59B—

The operating recovery is real, but the headline earnings result still missed. Revenue rose 10% sequentially and beat the published revenue range, while adjusted EBITDA jumped 56% as DS-10 and DS-12 delivered a full quarter and DS-15 and DS-9 added new or higher-rate work. The core trend is constructive: drillship revenue climbed to $346.0 million from $279.0 million, active-fleet utilization improved to 83% from 79%, and the company says all ten active drillships are now contracted. 〔0〕

The earnings miss came below operating income, not from a collapse in demand. Diluted EPS declined to $0.66 from $0.72 and landed below the roughly $1.06–$1.13 published expectation range, despite the revenue beat. Higher tax expense, merger-related costs, and the weak ARO contribution absorbed much of the operating improvement: tax expense rose to $54.7 million, merger and integration costs reached $15.5 million, and ARO posted a $13.2 million net loss.

The backlog and market setup improved, but cash conversion remains less clean. Total backlog increased to $4.75 billion from $4.59 billion, while average drillship revenue rose to $469,000 per day from $451,000. Those figures support the company's stated view that high-specification deepwater demand and day rates are improving. 〔1〕 However, nine-month operating cash flow fell to $155.3 million from $474.0 million as capital spending increased to $328.0 million, and cash declined sequentially to $525.1 million.

The merger makes this the last phase of Valaris as a standalone reporting story. Valaris will not provide further forward guidance or hold future earnings calls because of the pending Transocean combination, so the next major business milestone is execution of the transaction rather than a new standalone outlook. 〔2〕

Bottom line: Valaris is executing the drillship ramp the market already expected, with better revenue, utilization, rates, and backlog. But the quarter was still a modest earnings miss because taxes, merger costs, and ARO weakness kept the stronger operating performance from reaching EPS.

What to watch next

Transocean merger close, anticipated around December 1

Original filing on SEC EDGAR

More Valaris Ltd news

Valaris earnings beat revenue estimates, but EPS misses as merger nears | VAL Stock News
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