Abstract

Seadrill Limited is scheduled to release its quarterly results on February 25, 2026, Post Market; this preview summarizes the latest reported quarter, the company’s near-term revenue and earnings trajectory, and key drivers to watch ahead of the print.

Market Forecast

Based on the company’s latest projections, Seadrill Limited’s current-quarter revenue is estimated at 335.36 million, implying 12.95% year-over-year growth, with EPS estimated at $0.005, a 101.64% year-over-year improvement, and EBIT at 22.33 million, up 569.81% year-over-year. Forecasts for gross profit margin and net profit margin were not provided and are therefore not included here.

The company’s main business continues to center on contracted drilling activity, where revenue visibility is supported by backlog and high operational uptime expectations; outlook commentary highlights solid activity continuity into the quarter. The most promising revenue driver remains the ultra-deepwater contract drilling stream within the broader contract revenues, underpinned by recent backlog additions and stable utilization; last quarter this core stream generated 280.00 million.

Last Quarter Review

In the last reported quarter, Seadrill Limited delivered revenue of 363.00 million, a gross profit margin of 31.82%, a GAAP net loss attributable to shareholders of 11.00 million, a net profit margin of -3.12%, and adjusted EPS of -$0.17; revenue rose 2.54% year-over-year, while EPS declined 134.69% year-over-year. One notable financial highlight was a top-line beat versus the company’s prior estimate baseline, with revenue finishing 26.15 million above estimate (a 7.76% positive surprise).

Main business performance was anchored by contract revenues of 280.00 million, complemented by 63.00 million in managed contract revenues, 11.00 million in reimbursable revenues, and 9.00 million in lease revenues; total revenue advanced 2.54% year-over-year, reflecting steady operational execution in the core contracted portfolio.

Current Quarter Outlook

Core Contract Drilling Operations

The core revenue engine remains contracted drilling services, with the company projecting a quarterly revenue run-rate of 335.36 million for the period now being reported. On a year-over-year basis, this implies a 12.95% uplift, which reflects a combination of firm contracted activity and incremental pricing captured in renewals and options in force. Sequentially, the headline revenue estimate sits below the 363.00 million reported last quarter, suggesting a mix shift and/or a lighter calendar of operating days during the period, potentially reflecting planned maintenance windows, contract transitions, or lower reimbursables and lease income relative to the prior quarter’s mix.

Margin dynamics are a key focal point for investors after the last quarter’s gross profit margin of 31.82% and net margin of -3.12%. With EPS guided at a small positive $0.005 and EBIT at 22.33 million, the setup indicates an inflection toward breakeven profitability at the bottom line. The bridge from last quarter’s net loss of 11.00 million to a modest profit per share depends on sustaining high technical uptime, maintaining cost discipline on operating and support expenditures, and keeping unplanned downtime limited. On the revenue side, a smaller reimbursable component typically supports cleaner margin recognition, though any reduction in reimbursable revenue can also pressure top-line volume; the net effect on profitability will be determined by the mix of high-margin contract days versus lower-margin ancillary items realized in the quarter.

The pre-release indicators also echo a constructive earnings trajectory. The last reported quarter showed a 73.81% quarter-on-quarter improvement in net profit despite remaining in a net loss position, and current-quarter EPS is forecast to return to slightly positive territory. EBIT is guided at 22.33 million, which, if realized, should support additional operating leverage as the cost base normalizes and the benefit of contracted dayrates flows through at steady utilization. In short, while the quarter may present a lighter top-line versus the prior period, the internal mix and expense profile set a platform for incremental margin progress.

Ultra-Deepwater Drillships and High-Value Backlog as the Most Promising Driver

Within the broader contract revenue line, ultra-deepwater drillships remain the highest-value dayrate contributors and the most visible near-term growth lever for Seadrill Limited. A fresh example that underscores this earnings bridge is the one-year contract option exercised by Equinor Brasil Energia for the ultra-deepwater drillship West Saturn, extending the contract through October 2027 and adding 114.00 million to backlog during the period leading up to this report. Backlog additions of this quality underpin revenue continuity and increase the probability of stable dayrate capture for the fleet subset with the highest earnings power.

In the context of the current quarter, this backlog visibility lowers the variability in earnings tied to scheduling gaps and minimizes the risk of idle time in certain markets. While the $114.00 million option extension primarily benefits future periods, it reinforces a constructive revenue narrative for the quarters ahead and signals a favorable operating cadence for assets that typically carry the greatest EBITDA and free-cash-flow conversion potential. Given that contract revenues totaled 280.00 million last quarter, incremental backlog from extensions and options helps offset the natural churn of expiring work and contributes to above-trend year-over-year growth as contracted days roll through. The magnitude of the EBIT estimate jump on a year-over-year basis (up 569.81%) suggests a mix shift toward higher-contribution assets and an improving cost absorption profile within the fleet footprint.

Operational execution remains key. For these high-spec assets, reliability and uptime are critical for dayrate realization and for avoiding revenue deductions from nonproductive time. The company’s ability to keep these units operating efficiently, while managing logistics and compliance in each jurisdiction, directly influences the quarter’s EBIT capture and per-share earnings outcome. As a result, even with a somewhat softer sequential revenue estimate, the quality of the backlog and the stability of high-spec utilization argue for a steady-to-improving earnings run-rate in the near term.

Key Stock Price Drivers This Quarter

Two quantitative elements stand out for the quarter relative to the last print: the pivot from a net loss of 11.00 million and EPS of -$0.17 toward an EPS estimate of $0.005, and the year-over-year acceleration in revenue to 335.36 million (+12.95%). The first is a profitability inflection call, which heavily depends on cost control and consistent operating uptime; the latter is a volume and rate capture call, which is tied to delivering the contracted program cleanly. Investors will scrutinize whether the gross profit margin can hold near or above the last quarter’s 31.82% baseline; any reduction in lower-margin reimbursables as a share of mix could be conducive to stable or slightly better gross profitability, even if top-line volume dips sequentially.

The second driver is EBIT leverage relative to prior-year comparisons. With EBIT estimated at 22.33 million and up 569.81% year-over-year, the market will look for confirmation that this is not a one-off effect from timing or nonrecurring items. A sustained path toward positive net margin from the last quarter’s -3.12% will be reinforced if EBIT-to-revenue conversion shows sequential improvement. In that case, the stock could be sensitive to commentary on maintenance schedules, reactivation cost avoidance, and any indications that nonproductive time is trending favorably.

Finally, contract developments remain a tangible swing factor for sentiment during the quarter. The Equinor West Saturn extension added 114.00 million to backlog in the period leading up to the report and supports visibility through 2027 for that asset; any additional option exercises, awards, or firm commitments announced close to or at the time of the earnings release would likely influence near-term equity reaction. Conversely, commentary indicating gaps between programs or higher-than-anticipated downtime could weigh on perceived run-rate revenue and margin durability. In this context, the company’s guidance framing around revenue cadence, cost steers, and capital priorities (e.g., maintenance capex timing) will be important for how the market extrapolates the remainder of the year.

Analyst Opinions

Across the January 1, 2026 to February 18, 2026 window, sell-side previews specifically published for this quarter were limited in the public domain, but the balance of commentary and tangible developments bias the majority view to bullish with no identified bearish previews in the period. The notable incremental data point was Equinor Brasil Energia exercising a one-year option on the West Saturn, adding 114.00 million to contracted backlog and reinforcing a constructive stance on near-term revenue visibility; this action has been referenced by market commentators as supportive for the company’s forward revenue cadence. With no bearish sell-side previews identified in the period and one meaningful positive signal from a major counterparty, the majority tone is therefore bullish.

From a numbers perspective, the market is looking for a return to positive EPS at $0.005 and an EBIT print of 22.33 million, supported by 12.95% year-over-year revenue growth to 335.36 million. On balance, bullish commentators argue that the quarter’s setup exhibits improving earnings quality, with the last reported gross margin of 31.82% serving as a base and net margin poised to trend upward from -3.12% on a sequential cost and mix bridge. They also point to the 73.81% quarter-on-quarter improvement in net profit in the last reported period and the year-over-year surge implied in the EBIT estimate as evidence of operational momentum that is not overly reliant on one-off items. The key test, in their view, is clean execution across contracted days to translate revenue stability into sustained margin progress and, by extension, a more durable EPS inflection.

Market Forecast

- Current-quarter revenue estimate: 335.36 million, up 12.95% year-over-year. - Current-quarter EBIT estimate: 22.33 million, up 569.81% year-over-year. - Current-quarter EPS estimate: $0.005, up 101.64% year-over-year. - No explicit forecasts for gross profit margin or net margin were provided.

Main business outlook: the contracted drilling portfolio anchors near-term revenue, with backlog-driven visibility and disciplined cost execution central to the earnings bridge.

Most promising driver: ultra-deepwater drillship activity within contract revenues, reinforced by a recent 114.00 million option exercise that boosts future backlog and underpins continuity.

Last Quarter Review

- Revenue: 363.00 million (+2.54% year-over-year) - Gross profit margin: 31.82% - GAAP net profit attributable to shareholders: -11.00 million (net margin: -3.12%) - Adjusted EPS: -$0.17 (down 134.69% year-over-year)

Highlight: revenue exceeded the company’s estimate baseline by 26.15 million (a 7.76% positive variance), while net profit improved 73.81% quarter-on-quarter despite remaining negative. Main business detail: contract revenues totaled 280.00 million, supplemented by 63.00 million in managed contract revenues, 11.00 million in reimbursable revenues, and 9.00 million in lease revenues; total revenue grew 2.54% year-over-year on balanced execution.

Current Quarter Outlook (with major analytical insights)

Core Contract Drilling Operations

The company’s revenue estimate of 335.36 million for the current quarter speaks to stable contracted activity, albeit with a sequential moderation from the 363.00 million achieved last quarter. Year-over-year growth of 12.95% suggests that contracted days and pricing remain supportive on balance, even if the quarterly pattern reflects standard operational ebbs and flows like transition gaps or maintenance. The key financial hinge is margin: with a 31.82% gross profit margin in the last report, investors will parse disclosures for evidence of cost normalization, reduced nonproductive time, and a smaller share of lower-margin reimbursable items.

Earnings leverage is visible in the forecasts: EBIT is guided to 22.33 million, and EPS is projected at $0.005, implying progress from the last quarter’s net margin of -3.12% and EPS of -$0.17. This bridge requires that operating expenses remain contained and that project execution stays clean to avoid deductions or penalties. Operational uptime is a primary determinant of realized economics; every point of technical utilization has an outsized effect on EBIT for the contracted fleet, given the relatively fixed cost structure and the high incremental margin of contracted dayrates. Even with slightly lighter revenue sequentially, the mix of higher-contribution contract days can keep gross margins resilient.

The last quarter’s 73.81% quarter-on-quarter improvement in net profit, though still a loss, indicates that the company has been moving in the right direction on cost and operational throughput. Maintaining that momentum into a small positive EPS for this quarter is achievable if there are no surprises on downtime or cost accruals. Investors will also look for clarity on any forthcoming contract rollovers within the reporting horizon, especially where dayrates and utilization trends can influence the next few quarters’ revenue cadence and the slope of margin expansion.

Ultra-Deepwater Drillships and High-Value Backlog as the Most Promising Driver

High-specification, ultra-deepwater drillships contribute disproportionately to revenue quality and earnings power within the contract revenue line, making them the focal point for near-term upside. The recent one-year option exercised by Equinor Brasil Energia for the West Saturn, extending that program through October 2027 and adding 114.00 million to backlog, underscores the durability of this driver. While the financial benefit of that option is principally realized across future quarters, it reinforces the company’s visibility and provides a tangible anchor for forecasting contracted days at attractive economics.

The current-quarter EBIT estimate would be difficult to achieve without a solid contribution from these higher-value assets. Their impact on consolidated margins is typically positive due to the combination of higher dayrates and efficient operating profiles when well-managed. The challenge lies in delivering consistent uptime and managing logistics across jurisdictions to avoid cost creep or schedule slippage that could dilute margin. Given that last quarter’s contract revenue was 280.00 million, the incremental backlog and option exercises help stabilize the revenue base and reduce the risk of sudden dips in contribution, thereby supporting the projected 12.95% top-line growth year-over-year.

On the outlook, the market’s attention turns to any commentary on new awards, option exercises, or extensions for similar high-spec assets in the fleet. Signals of continuity or incremental work at firm dayrates would help validate not only the current-quarter EBIT estimate but also the trajectory of per-share earnings for the remainder of the year. Conversely, absent such signals, the stock may trade more closely to reported margins and near-term cost performance rather than medium-term visibility.

Key Stock Price Drivers This Quarter

Three elements are likely to steer the share reaction around the print. First is the profitability inflection: transitioning from last quarter’s net loss of 11.00 million and EPS of -$0.17 to a positive EPS of $0.005. That requires execution discipline—high technical uptime, tight control of operating costs, and minimal nonproductive time. Second is the degree of EBIT leverage: an estimate of 22.33 million implies a substantial year-over-year step-up; validating that with clean operating metrics would support a narrative that cost structure and fleet mix are working in favor of sustained margin recovery. Third is visibility from contracts: announcements or commentary around extensions, options, or new awards—like the recent 114.00 million option extension—can recalibrate expectations for the next several quarters.

Investors will also parse revenue mix and margin quality. If lower-margin reimbursables and lease revenues represent a smaller share of the mix this quarter compared with the last, it could bolster gross margin even as total revenue ticks down sequentially from 363.00 million to an estimated 335.36 million. Conversely, any unplanned downtime or additional maintenance expenditures could pressure both gross and net margins, postponing the EPS inflection indicated by forecasts. In short, the stock’s response is likely to mirror management’s commentary on operational execution, cost containment, and the cadence of contracted days across the fleet.

Analyst Opinions

Within the January 1, 2026 to February 18, 2026 window, available market commentary and concrete contract updates skew bullish, with no identified bearish previews of this quarter’s results; the balance of views is therefore predominantly positive. The extension option exercised by Equinor Brasil Energia on the West Saturn, adding 114.00 million of backlog through October 2027, has been cited by market watchers as supportive for forward revenue visibility and operating momentum. This tangible development aligns with the company’s current-quarter framework—revenue estimated at 335.36 million (+12.95% year-over-year), EBIT at 22.33 million (+569.81% year-over-year), and a return to a small positive EPS at $0.005—forming the basis for a constructive near-term earnings trajectory.

Bullish commentators emphasize that last quarter’s 31.82% gross margin and the 73.81% quarter-on-quarter improvement in net profit provide a platform for further margin normalization. They also argue that the projected EPS inflection reflects cleaner execution and a healthier revenue mix rather than transitory items. In their view, the key to sustaining this trend is straightforward: deliver contracted days with high uptime, maintain cost control, and continue to convert backlog into revenue without gaps. If the company meets or beats the indicated revenue and EBIT estimates while signaling continued contract continuity, the bullish stance is likely to remain the majority view in the immediate aftermath of the release.