Key Highlights

  • Contract drilling sales were $937 million for the quarter, versus $1.028 billion a year earlier and $966 million sequentially.
  • Net income reached $26 million, equal to $0.02 a diluted share, compared with a prior-year loss of $1.923 billion, which equaled $2.00 per share.
  • Adjusted EBITDA stood at $313 million, with the Margin at 33.4%, against $397 million and 38.7% a year before.
  • Free Cash Flow reached $131 million after $174 million of Operating Cash Flow and $43 million of capital expenditures.
  • Backlog climbed by about $2.0 billion from new fixtures, reaching roughly $8.0 billion on the Nov 2, 2026 measurement date.

Contract Drilling Sales Retreat While Income Moves Into the Black

Transocean (NYSE:RIG) released its third-quarter 2026 numbers on Nov 2, 2026, covering the quarter closing Sep 30, 2026. Contract drilling Revenue reached $937 million, roughly 8.9% under the $1.028 billion recorded a year earlier (calculated), and it was down $29 million versus the second quarter. The company attributed the sequential softness mainly to lower expected rig utilization.

The company earned $26 million, which equates to $0.02 a diluted share, a sharp Reversal from the prior-year loss of $1.923 billion, which included a $1.913 billion Impairment charge. Adjusted Net Income fell to $1 million, around zero per share, from $62 million, or $0.06 per share.

Transocean works as an offshore driller, directing its fleet at ultra-deepwater and harsh environment projects. Its roster comprises 27 mobile offshore rigs, owned outright or in part, and these are split into 20 drillships built for ultra-deepwater work plus seven semisubmersibles for harsh environments.

Ultra-Deepwater Usage of 67.6% Holds Back Margins

Ultra-deepwater floater revenue reached $590 million, down from $696 million, while harsh environment revenue climbed from $332 million to $347 million. Fleet-wide utilization registered 74.7%, below 78.2% in the preceding quarter and under 76.0% a year before. Ultra-deepwater utilization registered 67.6%, whereas the harsh environment segment ran at 95.1%.

Adjusted EBITDA reached $313 million, a 33.4% margin, up slightly from $312 million the prior quarter and down from $397 million twelve months earlier. Operating and maintenance spending totaled $589 million.

Operating Cash of $174 Million Covers a Full Retirement of $200 Million Notes

The company produced $174 million from operations and spent $43 million on capital expenditures, which left free cash flow at $131 million. Cash was applied to repay the final $200 million of notes linked to a single drillship, ahead of the scheduled timetable. Total Debt principal came to $4.975 billion, versus $5.107 billion in the preceding quarter and $6.297 billion twelve months back.

Liquidity totaled $1.3 billion, which includes a $510 million revolving Facility that remained undrawn. For the nine-month period, net income was $267 million, against a Deficit of $2.940 billion.

Backlog Approaches $8.0 Billion With 95% Coverage for 2027 and a Pending Dec 1 Closing

Nine new fixtures contributed roughly $2.0 billion to backlog, priced at a weighted average dayrate close to $423,000, which pushed the total to about $8.0 billion. Around $1.0 billion of that comes from three harsh environment semisubmersibles destined for Norway. 2027 contract coverage now stands near 95%.

The full-year 2026 outlook spans $3.90 billion through $3.95 billion, while fourth-quarter revenue sits between $915 million and $965 million, and the preliminary 2027 range runs from $3.85 billion through $4.00 billion. The pending Merger with a fellow offshore contractor is slated to close on Dec 1, 2026; all regulatory approvals are in hand and $200 million of annual synergies have been identified, so that closing is the next event to track.