Seadrill (SDRL) Financials

Seadrill’s Q2 2026 results showed a meaningful improvement in operating performance compared with the prior year. Revenue rose to $449 million, up from $358 million in Q1 2026 and $377 million in Q2 2025. Gross profit increased to $215 million, producing a gross margin of approximately 48%, broadly in line with Q2 2025 and well above the 38% margin reported in Q4 2024.

Operating income improved to $72 million in Q2 2026 from $24 million in Q1 2026 and a $3 million operating loss in Q4 2025. Net income attributable to common shareholders was $29 million, or $0.47 per diluted share, compared with a $7 million loss in Q1 2026 and a $10 million loss in Q4 2025. This marks the first profitable quarter in the recent 2025-to-2026 sequence, although investors should remember that Q2 2024 included unusually large gains that make longer-term comparisons less straightforward.

Cash generation remains the primary concern. Seadrill reported negative operating cash flow of $18 million in Q2 2026, following negative operating cash flow of $22 million in Q1. A $124 million use of operating working capital more than offset net income and noncash depreciation adjustments. The company’s $31 million increase in cash during the quarter was driven primarily by $74 million of financing inflows, rather than by operations.

• Revenue momentum improved: Q2 2026 revenue of $449 million was the highest in the provided period and increased 25% sequentially from Q1 2026.
• Operating profitability recovered: Operating income reached $72 million, compared with $24 million in Q1 2026 and losses in Q4 2025.
• Return to net profitability: Seadrill generated $29 million of net income and $0.47 of diluted EPS after reporting losses in each quarter from Q2 2025 through Q1 2026.
• Solid liquidity position: Cash and equivalents totaled $337 million, or $360 million including restricted cash. Total current assets of $920 million exceeded current liabilities of $368 million by a wide margin.
• Debt remained manageable relative to equity: Long-term debt was $737 million versus approximately $2.86 billion of total equity, although debt increased during the first half of 2026.
• Capital spending continued: Seadrill invested $25 million in property, plant and equipment during Q2 2026, while depreciation expense was $72 million. The data lists net PP&E at zero, so investors may need additional filing detail to understand the company’s asset presentation.
• Share count was broadly stable: Weighted average diluted shares increased modestly to 62.5 million in Q2 2026 from 62.2 million in Q2 2025, suggesting limited dilution but no recent buyback benefit.
• Operating cash flow remained negative: Seadrill used $18 million in operating cash in Q2 2026 after using $22 million in Q1, despite reporting positive net income in Q2.
• Working capital absorbed significant cash: Operating assets and liabilities produced a $124 million cash use in Q2 2026, substantially worse than the $46 million use in Q1 and the $92 million use in Q4 2025.
• Cash growth depended on financing: The $31 million quarterly increase in cash was achieved despite negative operating and investing cash flow because of $74 million of financing inflows. This funding pattern may be difficult to sustain if operating cash flow does not improve.

Overall, the statements point to a stronger earnings outlook but weaker cash-flow quality. Improving revenue, margins and profitability are encouraging for SDRL, while persistent working-capital outflows and reliance on financing warrant caution. Investors should focus on whether Seadrill can convert its improved operating income into consistently positive operating cash flow in coming quarters.