FIRST QUARTER 2026 KEY POINTS
Contract drilling revenues were $1.08 billion due in part to strong revenue efficiency(1) of 97.3%.
Net income was $71 million or $0.06 per diluted share.
Adjusted EBITDA was $440 million, with adjusted EBITDA margin exceeding 40%.
Net cash provided by operating activities was $164 million; net of capital expenditures of $28 million, Free Cash Flow was $136 million.
Accelerated retirement of $358 million remaining principal amount of the 8.375% Senior Secured Notes due 2028 (the Deepwater Titan Notes), reducing interest to maturity by nearly $40 million.
Ended the period with total liquidity of $1.125 billion, including the undrawn revolving credit facility.
Added $1.6 billion in contract backlog(2) at a weighted average dayrate of about $410,000.
"The Transocean team delivered exceptional performance to start the year," said Keelan Adamson, President and Chief Executive Officer. "During the quarter, we executed new or extended contracts on five rigs increasing our total backlog to $7.1 billion which, reflecting demand for our differentiated assets, contains an implied average dayrate of over $450,000. We also exceeded our revenue expectations for the quarter and achieved a strong adjusted EBITDA margin above 40%. We continued to enhance our financial flexibility by accelerating debt retirement, reducing interest expense and simplifying our balance sheet.
"Recent global events clearly underscore the importance of secure and reliable hydrocarbon supply. We continue to believe that we are in the early days of a multi-year upcycle with increasing demand for offshore exploration and development drilling services. Transocean is very well-positioned to play a key role in developing these offshore resources and creating long-term shareholder value."
1Q26 FINANCIAL SUMMARY
Three months ended
Three months ended
March 31,
December 31,
sequential
March 31,
year-over-year
2026
2025
change
2025
change
(In millions, except per share amounts and percentages)
Contract drilling revenues
$
1,081
$
1,043
$
38
$
906
$
175
Revenue efficiency
97.3
%
96.2
%
95.5
%
Operating and maintenance expense
$
606
$
605
$
(1
)
$
618
$
12
Net income (loss)
$
71
$
25
$
46
$
(79
)
$
150
Basic earnings (loss) per share
$
0.06
$
0.02
$
0.04
$
(0.09
)
$
0.15
Diluted earnings (loss) per share
$
0.06
$
0.02
$
0.04
$
(0.11
)
$
0.17
Adjusted EBITDA
$
440
$
385
$
55
$
244
$
196
Adjusted EBITDA margin
40.7
%
36.8
%
26.9
%
Adjusted net income (loss)
$
(28
)
$
21
$
(49
)
$
(65
)
$
37
Adjusted diluted earnings (loss) per share
$
(0.03
)
$
0.02
$
(0.05
)
$
(0.10
)
$
0.07
Net cash provided by operating activities
$
164
$
349
$
(185
)
$
26
$
138
Free Cash Flow
$
136
$
321
$
(185
)
$
(34
)
$
170
Total debt, principal amount, end of period
$
5,137
$
5,686
$
(549
)
$
6,734
$
(1,597
)
Favorable contract drilling revenues were primarily related to improved rig utilization, higher revenue efficiency and increased average daily revenues across the fleet.
Interest expense, excluding the $153 million effect of the bifurcated exchange feature of the 4.625% Exchangeable Bonds due 2029, was $123 million.
Net cash provided by operating activities was $164 million reflecting timing of payments from customers and increased payroll obligations in the period.
Cash taxes paid in the period were $11 million.
The Company early retired the Deepwater Titan Notes in full on March 20, 2026. The outstanding principal amount of $358 million, plus a call premium and accrued but unpaid interest, was settled with cash on hand and funds from the associated debt service reserve account.
FLEET STATUS REPORT AND CONTRACT BACKLOG
The Company today issued its Fleet Status Report. Since the February 2026 report, we added five new fixtures with an aggregate incremental backlog of approximately $1.6 billion and a weighted average dayrate of about $410,000.
As of May 4, 2026, the total backlog is approximately $7.1 billion.
2026 SECOND QUARTER AND FULL YEAR OUTLOOK
The following table includes guidance on key items for the second quarter and full year of 2026:
2Q26E
FY26E
(In millions, except percentages)
Contract drilling revenues
$
930, 970
$
3,800, 3,900
Revenue efficiency, fleet wide (1)
96.50%
96.50%
Selected costs and expenses
Operating and maintenance expense
$
630, 660
$
2,250, 2,375
General and administrative
$
40, 45
$
170, 180
Interest expense
$
113
$
610
Interest income
$
5, 10
$
25, 30
Capital expenditures
$
30, 40
$
150
Cash taxes
$
30
$
70, 75
Total liquidity
—
$
1,250, 1,350
CONFERENCE CALL INFORMATION
Transocean will host a conference call at 9 a.m. EDT, 3 p.m. CEST, on Tuesday, May 5, 2026, to discuss the results. To participate, dial +1 785-424-1634 approximately 15 minutes prior to the scheduled start time and refer to conference code 948789.
The call will be webcast in a listen-only mode at: www.deepwater.com, by selecting Investors, News, and Webcasts. Supplemental materials that may be referenced during the call will be available at: www.deepwater.com, by selecting Investors, Financial Reports.
A replay of the call will be available after 12 p.m. EDT, 6 p.m. CEST, on Tuesday, May 5, 2026. The replay, which will be archived for approximately 30 days, can be accessed at +1 402-220-7203, passcode 948789. The replay will also be available on the Company's website.
NON-GAAP FINANCIAL MEASURES
We present our operating results in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). We believe certain financial measures, such as EBITDA, Adjusted EBITDA, Adjusted Net Income and Free Cash Flow, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under U.S. GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP.
All non-GAAP measure reconciliations to the most comparative U.S. GAAP measures are displayed in quantitative schedules on the company's website at: www.deepwater.com.
ABOUT TRANSOCEAN
Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services and operates the highest specification floating offshore drilling fleet in the world.
Transocean owns or has partial ownership interests in and operates a fleet of 27 mobile offshore drilling units, consisting of 20 ultra-deepwater drillships and seven harsh environment semisubmersibles.
For more information about Transocean, please visit: www.deepwater.com.
FORWARD-LOOKING STATEMENTS
The statements described herein or in the Fleet Status Report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements could contain words such as "believe," "primarily," "should," "outlook," "future," "schedule," "progress," "possible," "will," "expect," "estimate," "may," "approximate," "could," "plan," or other similar expressions. Forward-looking statements in the Fleet Status Report include, but are not limited to, statements involving estimated duration of customer contracts, contract dayrate amounts, future contract commencement dates and locations, planned shipyard projects and other out-of-service time, sales of drilling units, and the cost and timing of mobilizations and reactivations. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the level of activity in offshore oil and gas exploration and development, exploration success by producers, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, the fluctuation of current and future prices of oil and gas, the global and regional supply and demand for oil and gas, the intention to scrap certain drilling rigs, the effects of the spread of and mitigation efforts by governments, businesses and individuals related to contagious illnesses, and other factors, including our expectations regarding the timing, completion and anticipated benefits of the proposed business combination with Valaris Limited, an exempted company limited by shares incorporated under the laws of Bermuda, and those and other risks discussed in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2025, and in the Company's other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or the other consequences of such a development worsen, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or expressed or implied by such forward-looking statements. All subsequent written and oral forward-looking statements attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements, each of which speaks only as of the date of the particular statement. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or beliefs with regard to the statement or any change in events, conditions or circumstances on which any forward-looking statement is based, except as required by law.
This press release, or referenced documents, do not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and do not constitute an offering prospectus within the meaning of the Swiss Financial Services Act ("FinSA") or advertising within the meaning of the FinSA. Investors must rely on their own evaluation of Transocean and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean.
NOTES
Revenue efficiency is defined as actual operating revenues, excluding revenues for contract terminations and reimbursements, for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage. Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding revenues for incentive provisions, reimbursements and contract terminations. See the accompanying schedule entitled "Revenue Efficiency."
Contract backlog is defined as the maximum contractual operating dayrate multiplied by the number of days remaining in the firm contract period, including certain performance-based provisions for which achievement is probable, excluding provisions for mobilization, demobilization, contract preparation, other incentive provisions or reimbursement revenues, which are not expected to be material to our contract drilling revenues. The contract backlog represents the maximum contract drilling revenues that can be earned considering the reported operating dayrate in effect during the firm contract period.
Effective Tax Rate is defined as income tax expense or benefit divided by income or loss before income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."
ANALYST CONTACT:
Sarah Davidson+1 713-232-7217
MEDIA CONTACT:
Kristina Mays+1 713-232-7734
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(Unaudited)
Three months ended
March 31,
2026
2025
Contract drilling revenues
$
1,081
$
906
Costs and expenses
Operating and maintenance
606
618
Depreciation and amortization
143
176
General and administrative
49
50
798
844
Gain on disposal of assets, net
4
2
Operating income
287
64
Other income (expense), net
Interest income
10
8
Interest expense
(276
)
(116
)
Loss on retirement of debt
(11
)
—
Other, net
7
4
(270
)
(104
)
Income (loss) before income taxes
17
(40
)
Income tax expense (benefit)
(54
)
39
Net income (loss)
$
71
$
(79
)
Earnings (loss) per share
Basic
$
0.06
$
(0.09
)
Diluted
$
0.06
$
(0.11
)
Weighted-average shares outstanding
Basic
1,109
883
Diluted
1,124
958
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
(Unaudited)
March 31,
December 31,
2026
2025
Assets
Cash and cash equivalents
$
330
$
620
Accounts receivable, net of allowance of $2 at March 31, 2026 and December 31, 2025
638
540
Materials and supplies, net of allowance of $144 and $140 at March 31, 2026 and December 31, 2025, respectively
383
378
Assets held for sale
1
24
Restricted cash and cash equivalents
285
377
Other current assets
129
142
Total current assets
1,766
2,081
Property and equipment
17,465
17,451
Less accumulated depreciation
(5,006
)
(4,874
)
Property and equipment, net
12,459
12,577
Deferred tax assets, net
47
61
Other assets
879
923
Total assets
$
15,151
$
15,642
Liabilities and equity
Accounts payable
$
229
$
242
Accrued income taxes
28
22
Debt due within one year
329
445
Other current liabilities
562
627
Total current liabilities
1,148
1,336
Long-term debt
4,945
5,212
Deferred tax liabilities, net
317
404
Other long-term liabilities
549
582
Total long-term liabilities
5,811
6,198
Commitments and contingencies
Shares, $0.10 par value, 1,204 authorized, 141 conditionally authorized, 1,204 issued at March 31, 2026
and December 31, 2025, and 1,107 and 1,102 outstanding at March 31, 2026 and December 31, 2025, respectively
111
110
Additional paid-in capital
15,611
15,604
Accumulated deficit
(7,389
)
(7,460
)
Accumulated other comprehensive loss
(141
)
(146
)
Total equity
8,192
8,108
Total liabilities and equity
$
15,151
$
15,642
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three months ended
March 31,
2026
2025
Cash flows from operating activities
Net income (loss)
$
71
$
(79
)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization
143
176
Share-based compensation expense
8
8
Gain on disposal of assets, net
(4
)
(2
)
Amortization of debt-related balances, net
10
13
(Gain) loss on adjustment to bifurcated compound exchange feature
153
(36
)
Loss on retirement of debt
11
—
Deferred income tax expense (benefit)
(73
)
15
Other, net
(1
)
4
Changes in contract liabilities, net
(42
)
(38
)
Changes in deferred costs, net
31
(12
)
Changes in other operating assets and liabilities, net
(143
)
(23
)
Net cash provided by operating activities
164
26
Cash flows from investing activities
Capital expenditures
(28
)
(60
)
Proceeds from disposal of assets, net of costs to sell
25
2
Proceeds from disposal of investment in note receivable from unconsolidated affiliate
13
—
Net cash provided by (used in) investing activities
10
(58
)
Cash flows from financing activities
