VAL Q2 2026 - Preliminary Earnings Alert
Event: Quartr Q2 2026 event Retrieved: 2026-08-05T21:58:00Z Comparison mode: maximal Scorecard contract: v1 Source status: release=available | financials=earnings release only | transcript=not available (company states it will hold no future earnings calls)
Consensus scorecard
| Metric / basis | Quartr actual | API Ninjas consensus | Beat/Miss | Beat/Miss % |
|---|---|---|---|---|
| Revenue / total operating revenues | $539.200m | $488.523m | Beat +$50.677m | +10.4% |
| EPS / GAAP diluted | $0.72 | $0.31 | Beat +$0.41 | +132.3% |
Reported results and guidance
| Metric (GAAP unless noted) | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Revenues (exclusive of reimbursables) | $502.3m | $572.3m | −12.2% |
| Reimbursable revenues | $36.9m | $42.9m | −14.0% |
| Total operating revenues | $539.2m | $615.2m | −12.4% |
| Contract drilling expenses (excl. depreciation and reimbursables) | $380.4m | $355.2m | +7.1% |
| Reimbursable expenses | $35.1m | $40.5m | −13.3% |
| Total contract drilling expenses (excl. depreciation) | $415.5m | $395.7m | +5.0% |
| Depreciation | $44.6m | $35.5m | +25.6% |
| General and administrative | $27.2m | $18.8m | +44.7% |
| Merger and integration expenses | $11.4m | $0.0m | new |
| Total operating expenses | $498.7m | $450.0m | +10.8% |
| Equity in earnings (losses) of ARO | $10.6m | $(1.1)m | to earnings |
| Operating income | $51.1m | $164.1m | −68.9% |
| Interest income | $16.3m | $15.1m | +7.9% |
| Interest expense, net | $(24.0)m | $(24.8)m | −3.2% |
| Other, net | $37.2m | $(8.7)m | to income |
| Total other income (expense) | $29.5m | $(18.4)m | to income |
| Income before income taxes | $80.6m | $145.7m | −44.7% |
| Provision for income taxes | $33.6m | $31.5m | +6.7% |
| Net income | $47.0m | $114.2m | −58.8% |
| Net loss attributable to noncontrolling interests | $3.4m | $0.9m | +278% |
| Net income attributable to Valaris | $50.4m | $115.1m | −56.2% |
| Basic EPS | $0.73 | $1.62 | −54.9% |
| Diluted EPS | $0.72 | $1.61 | −55.3% |
| Adjusted EBITDA (non-GAAP) | $96.5m | not stated in this release | not determinable |
| Weighted-average basic shares | 69.3m | 71.1m | −2.5% |
| Weighted-average diluted shares | 70.4m | 71.3m | −1.3% |
| Sequential comparison (GAAP unless noted) | Q2 2026 | Q1 2026 | Change |
|---|---|---|---|
| Revenues (exclusive of reimbursables) | $502.3m | $430.1m | +17% |
| Total operating revenues | $539.2m | $465.4m | +16% |
| Contract drilling expenses (excl. depreciation and reimbursables) | $380.4m | $340.4m | +11.8% |
| General and administrative | $27.2m | $25.3m | +7.5% |
| Merger and integration expenses | $11.4m | $13.6m | −16.2% |
| Total other income (expense) | $29.5m | $(9.6)m | to income |
| Provision for income taxes | $33.6m | $28.4m | +18.3% |
| Net income (loss) | $47.0m | $(18.0)m | to a profit |
| Diluted EPS | $0.72 | $(0.24) | to a profit |
| Adjusted EBITDA (non-GAAP) | $96.5m | $66.7m | +45% |
| Capital expenditures | $106m | $101m | +5.0% |
| Segment (in millions) | Q2 2026 revenues excl. reimbursables | Q1 2026 | Change | Q2 2026 operating income | Q1 2026 | Q2 2026 adjusted EBITDA | Q1 2026 |
|---|---|---|---|---|---|---|---|
| Floaters | $279.0 | $192.6 | +45% | $94.4 | $29.2 | $111.6 | $42.1 |
| Jackups | $183.4 | $195.8 | −6% | $24.4 | $51.7 | $40.6 | $68.2 |
| ARO (equity method, deconsolidated) | $126.9 | $127.4 | — | $22.7 | $20.3 | $44.7 | $45.2 |
| Other | $39.9 | $41.7 | −4% | $6.6 | $13.8 | $12.7 | $20.0 |
| Reconciling items | $(126.9) | $(127.4) | — | $(97.0) | $(95.0) | $(113.1) | $(108.8) |
| Consolidated total | $502.3 | $430.1 | +17% | $51.1 | $20.0 | $96.5 | $66.7 |
| Balance sheet item (in millions) | 30 Jun 2026 | 31 Mar 2026 | 31 Dec 2025 |
|---|---|---|---|
| Cash and cash equivalents | $541.2 | $578.3 | $599.4 |
| Accounts receivable, net | $458.1 | $447.9 | $474.8 |
| Total current assets | $1,198.7 | $1,204.9 | $1,225.3 |
| Property and equipment, net | $2,233.8 | $2,165.0 | $2,088.8 |
| Long-term notes receivable from ARO | $357.2 | $351.1 | $345.0 |
| Investment in ARO | $139.2 | $128.6 | $121.8 |
| Deferred tax assets | $1,345.3 | $1,355.5 | $1,364.2 |
| Total assets | $5,448.4 | $5,363.7 | $5,304.8 |
| Total current liabilities | $774.8 | $777.7 | $691.6 |
| Long-term debt | $1,087.6 | $1,086.8 | $1,086.0 |
| Total liabilities | $2,230.6 | $2,202.0 | $2,133.1 |
| Total equity | $3,217.8 | $3,161.7 | $3,171.7 |
Guidance: none. In connection with the pending business combination with Transocean announced 9 February 2026, the company states it does not intend to hold future earnings conference calls or provide updates to forward-looking guidance.
- Scorecard recap: total operating revenues of $539.2m beat consensus by 10.4% and GAAP diluted EPS of $0.72 beat the $0.31 estimate by 132.3%.
- Revenue efficiency was 98% in the quarter and year to date; drillships VALARIS DS-12 and DS-10 returned to work on new contracts, described as on schedule and on budget.
- The ongoing Middle East conflicts reduced adjusted EBITDA by approximately $30m in the quarter against approximately $8m in Q1 2026, from war-risk insurance premiums for Middle East jackups plus cost and revenue effects of shipyard delays for VALARIS 250 and 116.
- Net income included a $38m gain on the sale of assets, against a $2m loss in Q1 2026; the company sold long-term stacked jackups VALARIS 104 and 109 in June and July 2026 for total cash proceeds of $74m.
- More than $160m of backlog was added for the North Sea jackup fleet.
- Two additional drillships are set to commence new contracts before year-end.
- The Transocean combination is described as on track to close in the fourth quarter of 2026.
Key bullish aspects
- Both scorecard metrics beat: total operating revenues by 10.4% and GAAP diluted EPS by 132.3%.
- Sequentially the business inflected sharply: total operating revenues rose 16% to $539.2m, operating income rose 156% to $51.1m, adjusted EBITDA rose 45% to $96.5m, and the company swung from a $(18.0)m net loss to $47.0m of net income.
- The Floaters segment, the highest-value part of the fleet, grew revenues 45% sequentially to $279.0m and more than doubled adjusted EBITDA to $111.6m from $42.1m as DS-17, DS-12 and DS-10 began new contracts.
- Revenue efficiency of 98% for both the quarter and year to date indicates the fleet is converting contracted days to revenue with minimal downtime.
- Two more drillships are contracted to start before year-end, so the operating-day build-out that drove the sequential improvement has further to run by the company's own account.
- More than $160m of North Sea jackup backlog was added, which the company frames as extending its contract coverage across 2026 and 2027.
- Fleet high-grading generated $74m of cash from selling two long-term stacked jackups, removing carrying costs from rigs that were not working.
- The Middle East drag is described as moderating in the second half: VALARIS 250 recommenced its bareboat charter in July, 116 is expected to recommence in Q3, and war-risk insurance costs are expected to fall.
- Equity in earnings of ARO turned positive at $10.6m against a $(1.1)m loss a year ago and rose 56% sequentially from $6.8m.
- Total equity rose to $3,217.8m from $3,161.7m at 31 March, and long-term debt was essentially flat at $1,087.6m.
Key bearish aspects
- Against the prior year rather than the prior quarter the picture is much weaker: total operating revenues fell 12.4%, operating income fell 68.9%, net income fell 58.8%, and diluted EPS fell 55.3% from $1.61 to $0.72.
- The EPS beat rests on non-operating items: total other income of $29.5m includes a $38m gain on asset sales, against $(18.4)m of other expense a year ago; operating income alone fell $113.0m year over year.
- Costs rose while revenue fell: contract drilling expenses excluding depreciation and reimbursables rose 7.1% to $380.4m on 12.2% lower revenues excluding reimbursables.
- Depreciation rose 25.6% to $44.6m and G&A rose 44.7% to $18.8m→$27.2m, and $11.4m of merger and integration expense is new this year.
- The Jackups segment deteriorated sequentially on every measure: revenues excluding reimbursables fell 6% to $183.4m, operating income fell 53% to $24.4m, and adjusted EBITDA fell 40% to $40.6m.
- The Middle East drag widened almost fourfold sequentially, to approximately $30m of adjusted EBITDA from approximately $8m, and the company's expectation of moderation is not quantified.
- Cash fell to $541.2m from $578.3m at 31 March and $599.4m at 31 December, a $58.2m decline over six months, with capital expenditures of $106m in the quarter against $101m in Q1.
- Accounts payable rose to $416.0m from $398.5m at 31 March while accounts receivable also rose to $458.1m, and total current liabilities of $774.8m sit against a shrinking cash balance.
- The company has stopped holding earnings calls and stopped updating forward guidance, so no management commentary, no outlook, and no Q&A will be available for this or subsequent quarters while the merger is pending.
- Adjusted tax expense — excluding a $6m discrete benefit this quarter and a $2m discrete expense in Q1 — rose to $40m from $26m on a change in jurisdictional mix, so the underlying tax burden increased more than the reported line shows.
Key uncertainties
- The consensus EPS basis is not stated by the provider. Reported GAAP diluted EPS of $0.72 includes a $38m gain on asset sales; whether the $0.31 estimate was struck before or after such a gain cannot be determined here, so the size of the EPS beat may not be comparable to the estimate's intent.
- The release gives no guidance of any kind, and the company has said it will not update forward-looking guidance while the Transocean combination is pending, so no forward revenue, cost, or EBITDA path is available from this source.
- Prior-year segment detail is not presented; the segment table compares Q2 2026 only to Q1 2026, so the year-over-year trajectory of Floaters, Jackups, ARO and Other cannot be established from this document.
- Adjusted EBITDA is presented for Q2 2026 and Q1 2026 only; the prior-year comparative is absent, so the year-over-year direction of the company's headline profitability measure is not determinable here.
- Total backlog is not stated. The release discloses only that more than $160m was added for the North Sea jackup fleet; the consolidated backlog figure, its duration, and its day-rate composition are not given.
- The approximately $30m Middle East impact is a company estimate that is not decomposed between insurance premiums, VALARIS 250 delay costs, VALARIS 116 delay costs, and lost revenue.
- The completion of the Transocean combination in Q4 2026 is stated as on track but is subject to conditions the release does not enumerate here; the merger and integration expense run rate ($11.4m this quarter, $25.0m year to date) will continue until it closes or terminates.
- Day rates and utilization are not disclosed in this release, so whether the Floaters revenue increase came from rate or from operating days is only qualitatively attributed to "more operating days."
- The $1,345.3m deferred tax asset is over 40% of total book equity; the release does not discuss its recoverability, and the December 2025 quarter carried a $(680.4)m tax benefit that is not explained here.
- The sale of VALARIS 109 closed in July 2026, after the balance sheet date, so its share of the $74m of combined proceeds is a subsequent event not reflected in the 30 June cash balance.
- Cash flow from operations is not stated as a figure; it is only referenced qualitatively as partially offsetting capital expenditures in the cash bridge.
- No transcript exists or will exist for this event, so none of the above is testable against management Q&A. This preliminary is the only stage this event will support.
Market context
- API Ninjas snapshot: VAL $76.97 on NYSE, volume 668,518, quote timestamped 2026-08-05T21:45:20Z, retrieved 2026-08-05T21:53:00Z. The release was published after the U.S. close on 2026-08-05; this is a single quote of unstated session basis captured after the close, not a measured reaction to the release.
Source limitations
- Every actual above comes from the Quartr Q2 2026 earnings release document (3674316). Quartr standardized financials for this event are not yet populated, and no other document is attached to this event.
- API Ninjas supplied no actual or difference fields for this event, so each beat/miss is calculated locally as Quartr actual minus API Ninjas estimate. The API row carried no fiscal year or quarter, so the exact ticker-and-event-date match path was used.
- Year-over-year and sequential percentage changes are calculated from the release's own columns; where the release prints a percentage itself, the calculated value agrees.
- Adjusted EBITDA is a non-GAAP measure as defined by the company. The release's non-GAAP reconciliation pages beyond page 7 were not read for this preliminary.
- The consolidated statements of operations and balance sheets in this release are unaudited.
- The segment table's extracted columns interleave Q2 2026, Q1 2026 and percentage-change values across segments; each figure above was assigned by matching it to the consolidated totals and to the segment narrative on pages 2 and 3, and the segment revenues plus reconciling items foot to the consolidated total.
- Some percentage-change signs printed in the extracted segment expense rows are inconsistent with the underlying dollar movements; the dollar amounts are used above and changes are recalculated rather than quoted.
- Capital expenditures, the $38m asset-sale gain, the $74m of disposal proceeds, the $30m Middle East impact, revenue efficiency, and the North Sea backlog addition are quoted from the release narrative.
- ARO is accounted for under the equity method and its full operating results are deducted in "Reconciling Items" and replaced with equity in earnings of ARO; ARO revenues are therefore not part of the $539.2m consolidated total.