Abstract

Talos Energy, Inc. is scheduled to report quarterly results on February 24, 2026 Post Market, with current-quarter forecasts indicating a year-over-year revenue decline and negative adjusted EPS, as investors weigh production execution, margin resilience, and capital flexibility.

Market Forecast

Based on current-quarter projections, Talos Energy, Inc.’s revenue is estimated at USD 435.17 million, implying a year-over-year decline of 11.38%, with adjusted EPS forecast at USD -0.36, reflecting a year-over-year change of -1,406.88%; EBIT is projected at USD -45.48 million, representing a year-over-year change of -393.43%. Forecasted disclosures for gross profit margin and net profit margin are not available, while the main business is expected to continue reflecting a heavily oil-weighted revenue mix consistent with the prior quarter. The core business highlights center on oil, which remains the dominant revenue contributor, while natural gas and natural gas liquids provide smaller, complementary contributions; the company’s next round of results will be read through the lens of execution against volume plans and cost efficiency. The most promising segment by scale is oil, which generated USD 400.21 million last quarter; segment-specific year-over-year growth was not disclosed in the available data.

Last Quarter Review

In the previous quarter, Talos Energy, Inc. reported revenue of USD 450.05 million (down 11.63% year-over-year), a gross profit margin of 70.28%, GAAP net profit attributable to the parent company of USD -95.91 million, a net profit margin of -21.31%, and adjusted EPS of USD -0.19 (down 35.71% year-over-year). A notable financial highlight was outperformance versus expectations: revenue exceeded consensus by USD 21.95 million, and adjusted EPS beat by USD 0.19 per share. Main business highlights showed oil driving the revenue base at USD 400.21 million, supported by natural gas at USD 41.31 million and natural gas liquids at USD 8.54 million, with total revenue down 11.63% year-over-year; sequentially, net profit improved by 48.42%.

Current Quarter Outlook

Main Business: Oil-Weighted Upstream Operations

Talos Energy, Inc.’s main business is concentrated in oil, which accounted for USD 400.21 million last quarter, or approximately 88.93% of total revenue. That mix sets the tone for the current quarter’s outcome: revenue sensitivity will be closely tied to realized oil volumes and price realizations, the effectiveness of operating cost management, and the degree to which Talos can minimize downtime. The latest forecasts outline a revenue estimate of USD 435.17 million, down 11.38% year over year, alongside an adjusted EPS projection of USD -0.36 and an EBIT projection of USD -45.48 million, both signaling pressure on profitability measures on an annual comparison. Against this backdrop, investors will focus on how the company balances production efficiency with cost discipline—especially lease operating expenses, workover scheduling, and maintenance cycles—to support the gross profit margin and mitigate net margin compression. An execution thread to watch is the operational cadence of planned projects and routine activity, which typically affects average daily production rates and the cost per barrel of oil equivalent. Even modest improvements in cycle times—such as faster tie-ins or successful workovers—can translate into volume support and lower per-unit costs. With last quarter’s gross margin at 70.28% and a net margin of -21.31%, the levers are clear: maintain high-margin barrels, contain variable and fixed operating expenses, and protect realized pricing where possible with a disciplined marketing strategy. Sequential progress was visible last quarter with a 48.42% improvement in net profit, and the market will gauge whether that momentum can continue, particularly if the company sustains efficient runtime, disciplined vendor management, and careful capital allocation. Hedging strategy and price realization practices, while not disclosed here in detail, contribute materially to quarterly variability. When hedges protect downside but cap upside, volumes and operating cost control become even more central to near-term financial outcomes. On a year-over-year basis, the forecast declines in revenue and earnings imply Talos could be operating against a tougher comparison set, reinforcing that operational consistency—uplift from any achieved cost savings programs and disciplined execution on planned projects—will be integral to stabilizing earnings power this quarter.

Most Promising Segment: Oil

By revenue scale, oil remains the company’s most promising segment, delivering USD 400.21 million last quarter. Because oil drives the majority of the consolidated gross profit and is the primary determinant of the overall margin profile, any efficiency gains in lifting costs and improvements in production volumes can have outsized impacts on consolidated results. Investors will monitor whether planned activities—such as routine workovers, debottlenecking initiatives, and timely tie-ins—translate into stable or improved oil volumes throughout the quarter, particularly in light of the negative year-over-year forecasts for revenue and earnings. Segment-specific year-over-year growth data was not disclosed in the available materials, so the focus shifts to executional indicators: uptime rates, maintenance timing, and successful delivery of scheduled operations. Another lens investors will use is the relationship between realized oil prices and unit costs, which determines whether gross margin resilience is achievable even as headline consolidated revenue faces a year-over-year decline. The goal in this environment is to lean into high-return projects and minimize operational frictions that can elevate unit costs. With gross margin at 70.28% last quarter, maintaining favorable mix and preventing cost creep are central; stable operations can support improved EBIT trajectory despite the negative year-over-year forecast in this quarter’s projection set. Additionally, production efficiency and allocation of capital toward projects with faster paybacks help sustain near-term cash generation, which becomes increasingly valuable as EPS is estimated at USD -0.36 for the quarter. Positive deviations—where realized volumes exceed planned levels or where operating efficiencies reduce per-unit costs—could enable earnings performance to skew better than modeled, especially if realized pricing is supportive. Oil’s outsized contribution places it at the heart of any upside case, and stakeholders will be attentive to signals of reliable execution.

Key Stock Price Drivers This Quarter

The most visible stock price driver this quarter will be delivery against the revenue and EPS forecasts versus consensus expectations, especially given the projected year-over-year declines. Positive surprises—like the USD 21.95 million revenue beat last quarter and the USD 0.19 adjusted EPS beat—can reshape investor sentiment even when headline profitability remains negative. As a precedent, last quarter’s sequential improvement in net profit (up 48.42%) helped frame operational progress; investors will look for evidence of similar momentum through reliable production and cost management. Liquidity and capital flexibility also matter for investor perception, and here Talos Energy, Inc. has an important support: on January 21, 2026, the company amended and restated its credit agreement, maintaining a USD 700 million borrowing base and extending maturity to January 20, 2030. That extension underscores the company’s ability to fund high-return projects and manage cash flows through commodity cycles, limiting financing risk in the near term. This backstop can provide confidence that tactical capital deployment into operations—such as maintenance, optimization, and discrete growth projects—has sufficient runway to continue without undue balance-sheet pressure. In the context of a forecasted negative EBIT and EPS, a durable credit facility is a constructive signal, reducing the probability of forced capital rationing or delayed operational improvements. Another driver is the margin trajectory: last quarter’s gross margin of 70.28% demonstrates the centrality of maintaining a favorable mix and keeping operating costs aligned with production volumes. When net margin is negative (last quarter at -21.31%), investors scrutinize both controllable cost lines and the consistency of production against plan. An improved margin profile—if achieved through aggregate cost reductions, reduced downtime, and efficient scheduling—can soften the impact of a year-over-year revenue decline on the bottom line. As markets interpret the quarter, narrative elements like outperformance on volumes, visibility on cost reductions, and clarity on operational tasks will influence valuation multiples and post-report stock moves. Finally, the interplay between operational outcomes and capital allocation decisions can matter at the margin: if the company demonstrates that resources are channeled toward high-return, short-cycle opportunities, the market could attribute a higher likelihood of near-term cash flow stabilization. Given the forecast data pointing to earnings pressure, investors will likely favor signals of discipline—measured project pacing, focused maintenance cycles, and clean execution on planned activities—as catalysts for sentiment improvement.

Analyst Opinions

Within the January 1 to February 17, 2026 period reviewed, published analyst previews were limited, while institutional actions signaled support: Talos Energy, Inc. extended its credit facility with a USD 700 million borrowing base through January 20, 2030, reinforcing capital flexibility and funding visibility into the quarter. Based on collected views in this window, the ratio of bullish to bearish perspectives is 100% to 0%, with the majority supportive; no bearish opinions were identified in the reviewed period. The supportive stance reflects institutional confidence in the company’s liquidity framework, which can underpin operational execution and buffer near-term earnings pressure indicated by forecasts of USD 435.17 million in revenue and USD -0.36 in adjusted EPS. This supportive view emphasizes three points. First, the extended credit facility maturity to January 20, 2030 suggests lenders remain comfortable with the company’s asset base and cash generation potential over a multi-year horizon, which reduces refinancing risk and aligns with a steady investment cadence in high-return projects. Second, capital access complements operational levers—most notably production reliability and unit cost control—allowing management to pursue targeted efficiency initiatives without being constrained by short-term financing concerns. Third, supportive institutional posture can improve investor confidence during a quarter where headline year-over-year metrics (revenue down 11.38%, EBIT down 393.43%, adjusted EPS down 1,406.88%) point to pressure; an endorsed liquidity structure offers a buffer that can facilitate recovery in financial metrics as operational improvements compound. In assessing the likely narrative into and after the print, the majority supportive view anticipates that stable liquidity, reliable execution metrics, and targeted cost discipline can help Talos Energy, Inc. manage through the forecasted year-over-year declines. While consensus models embed negative earnings this quarter, incremental wins—revenue outperformance versus estimates, improved throughput, and efficiencies that sustain gross margin—could enable results to skew better than modeled. The institutional signal from the credit extension adds weight to the expectation that operational priorities will be funded and pursued methodically, and that any near-term volatility in reported metrics can be navigated with appropriate capital support. As the company reports on February 24, 2026 Post Market, investors aligned with the supportive view will focus less on the absolute year-over-year declines and more on whether the building blocks of sequential improvement—seen last quarter—are reinforced by strong execution and capital flexibility.