- 2025 Financial Performance: Adjusted EBITDA of $1.37 billion (+20% YoY), free cash flow of $626 million, and $1.3 billion in debt retired.
- Cost Efficiency: $100 million in cost reductions achieved in 2025, with $150 million more planned for 2026.
- Valaris Acquisition Synergies: $200+ million in cost synergies, $11 billion combined backlog, and a target leverage ratio of 1.5x within 24 months.
- Operational Excellence: Record 98% uptime, zero safety incidents, and five major projects completed on time and budget.
Operational Highlights
The company's operational performance was equally impressive, with a record uptime performance of nearly 98%, zero operational integrity events, and zero lost time incidents. Transocean completed five major planned out-of-service projects on time and on budget, further enhancing its fleet's technical capability. As Keelan Adamson noted, "We executed well operationally and financially," highlighting the company's ability to deliver high-level performance.
Valuation Metrics
Transocean's current valuation metrics provide insight into what's priced into the stock. The company's P/E Ratio is -2.15, P/B Ratio is 0.77, and P/S Ratio is 1.49. Additionally, the EV/EBITDA ratio stands at 7.73, indicating the company's enterprise value relative to its EBITDA. The Free Cash Flow Yield is 10.63%, suggesting a relatively attractive return for investors. The Net Debt / EBITDA ratio is 3.42, indicating that the company still has significant debt relative to its EBITDA, although this is expected to improve with the acquisition of Valaris.
Strategic Acquisition and Industry Outlook
The acquisition of Valaris positions Transocean as a leader in the industry, with a combined backlog of nearly $11,000,000,000 and identified cost synergies of over $200,000,000. The deal is expected to accelerate debt reduction, resulting in leverage of around 1.5x within 24 months of closing. The industry outlook is improving, with increasing tendering activity and visibility into 2027 and beyond. Transocean expects deepwater utilization to rise meaningfully, setting the stage for a more constructive business environment.
Regional Opportunities and Customer Feedback
Regionally, Transocean sees robust demand in the U.S. Gulf, stable activity in Brazil, and considerable growth potential in Africa. Customer feedback on the Valaris acquisition has been overwhelmingly positive, with customers understanding the need for consolidation and cost reduction. The company is well-positioned to capitalize on emerging opportunities, with a high-specification fleet and a strong track record of operational performance.