• Adjusted EBITDA: $338 million for Q1 2025.
• Free Cash Flow: $173 million for Q1 2025.
• Dividends and Share Buybacks: $80 million in dividends and $20 million in share repurchases during Q1 2025.
• Contract Drilling Services Revenue: $832 million for Q1 2025.
• Adjusted EBITDA Margin: 39% for Q1 2025.
• Cash Flow from Operations: $271 million for Q1 2025.
• Net Capital Expenditures: $98 million for Q1 2025.
• Total Backlog: $7.5 billion as of April 28, 2025, up 30% from the prior quarter.
• Revenue Guidance for 2025: $3.25 billion to $3.45 billion.
• Adjusted EBITDA Guidance for 2025: $1.05 billion to $1.15 billion.
• Capital Expenditures Guidance for 2025: $375 million to $425 million.

• Warning! GuruFocus has detected 3 Warning Sign with NE.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Noble Corp PLC (NYSE:NE) reported strong financial results for Q1 2025, with an adjusted EBITDA of $338 million and free cash flow of $173 million.
• The company has successfully integrated the Legacy Diamond Fleet into Noble's ERP system ahead of schedule, aiming for $100 million in synergies by year-end.
• Noble Corp PLC (NYSE:NE) secured long-term contracts with major oil companies, including Shell and Total Energies, adding nearly 14 rig years to its backlog with a revenue potential between $2.0 billion and $2.5 billion.
• The company's backlog increased by 30% from the previous quarter, reaching $7.5 billion, indicating strong future revenue potential.
• Noble Corp PLC (NYSE:NE) continues to return capital to shareholders, surpassing $1 billion in combined dividends and buybacks since Q4 2022, and declared a $0.50 per share dividend for Q2 2025.

Negative Points

• The offshore drilling market remains volatile, with Noble Corp PLC (NYSE:NE) noting a choppy spot market for deepwater and jackups through 2025 and into 2026.
• The company anticipates softer utilization across its jackup fleet in 2025 compared to 2024, due to headwinds from Saudi suspensions and day rate concessions.
• Noble Corp PLC (NYSE:NE) expects the Ocean GreatWhite rig to be idled for the remainder of the year, highlighting challenges in securing contracts for certain assets.
• Inflationary pressures are expected to impact operating costs, with low to mid-single-digit increases anticipated throughout the year.
• The company faces potential cost impacts from tariffs, estimating less than a $15 million effect in 2025, but acknowledging the situation is fluid and could change.

Q & A Highlights

Q: Can you elaborate on the performance bonus opportunities in the Shell and Total Energies contracts and how they relate to your past efficiency gains? A: Robert Eifler, President and CEO, explained that the performance bonuses are strategic and based on their internal performance data. These bonuses are not applicable in every scenario but are designed for specific programs where Noble can leverage its efficiency gains, particularly in long-term, homogeneous drilling programs.

Q: How does the CEA index pricing mechanism account for performance-based contracts? A: Robert Eifler noted that the CEA index pricing mechanism is flexible and can incorporate various market considerations, including performance-based contracts. The rate is mutually agreed upon every six months, and both parties contribute data to determine the rate.

Q: Can you discuss the competitive dynamics surrounding the Shell and Total Energies contract awards? A: Robert Eifler stated that the Suriname contracts are incremental, while the Shell contracts in the US Gulf are strategic, offering potential long-term work without substantial mobilization. These contracts are not incremental but displace existing work, emphasizing the longevity and strategic value of the contracts.

Q: How are the performance bonuses structured and paid out in the contracts? A: Robert Eifler explained that the bonuses are structured on a well-by-well basis, allowing for frequent assessments and payments based on performance metrics such as days per well and safety standards.

Q: What are the implications of maintaining the dividend amidst a volatile market? A: Robert Eifler emphasized Noble's commitment to the dividend, supported by strong EBITDA performance and a robust backlog. The company is confident in its capital return structure, with ongoing conversations and contracting behavior indicating a positive outlook.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.