Valaris(VAL) - 2025 Q3 - Quarterly Results

Financial Performance - Net income for Q3 2025 was $187 million, a 64% increase from $114 million in Q2 2025, driven by a $90 million gain on asset sales[5] - Adjusted EBITDA for Q3 2025 was $163 million, down 19% from $201 million in Q2 2025[5] - Operating income for the three months ended September 30, 2025, was $130.5 million, compared to $94.9 million for the same period in 2024, representing a 37.5% increase[25] - Net income for the nine months ended September 30, 2025, was $262.3 million, an increase from $239.2 million in the same period of 2024, representing an increase of approximately 9.2%[29] - Net income for the third quarter was $2.4 million, a recovery from a net loss of $8.6 million in the previous quarter, reflecting improved financial health[50] - Valaris reported a net income of $187.3 million for the three months ended September 30, 2025, compared to $114.2 million for the previous quarter, representing a 64% increase[61] Revenue and Operating Metrics - Total operating revenues decreased to $596 million from $615 million in Q2 2025, primarily due to fewer operating days for the floater fleet[8] - Revenues from the floater segment decreased to $293 million, an 8% decline from $320 million in Q2 2025[12] - Revenues from the jackup segment increased to $217 million, a 2% increase from $212 million in Q2 2025[14] - ARO Drilling revenues rose to $157 million, a 12% increase from $140 million in Q2 2025, due to more operating days and higher day rates[15] - Total operating revenues for the three months ended September 30, 2025, were $595.7 million, compared to $584.4 million for the same period in 2024, representing a 1.1% increase[25] - Total operating revenues for the three months ended September 30, 2025, were $595.7 million, a decrease from $643.1 million in the same period of 2024, reflecting a decline of approximately 7.4%[33] Cash Flow and Capital Management - Cash from operating activities was $198 million, with Adjusted Free Cash Flow of $237 million[8] - Cash and cash equivalents increased to $676 million as of September 30, 2025, up from $516 million as of June 30, 2025, due to operational cash flow and asset sales[11] - Cash and cash equivalents increased to $662.7 million as of September 30, 2025, from $379.3 million as of September 30, 2024, marking a 74.8% increase[27] - Adjusted Free Cash Flow for the three months ended September 30, 2025, was $237.0 million, significantly higher than $62.6 million in the previous quarter[65] - The company generated $198.1 million in net cash from operating activities for the three months ended September 30, 2025, up from $120.0 million in the previous quarter[65] Assets and Liabilities - Total assets as of September 30, 2025, were $4,638.0 million, up from $4,333.4 million as of September 30, 2024, indicating a 7.0% growth[27] - Total liabilities decreased slightly to $2,187.4 million as of September 30, 2025, from $2,209.6 million as of September 30, 2024[27] - Long-term debt remained stable at $1,085.2 million as of September 30, 2025, compared to $1,081.8 million as of September 30, 2024[27] - The company reported total current assets of $1,343.6 million as of September 30, 2025, an increase from $1,111.5 million as of September 30, 2024, reflecting a 20.8% rise[27] Market Outlook and Contracts - The company anticipates continued growth in offshore drilling activity and expects to benefit from increased customer demand and favorable market conditions[22] - The company secured a contract for VALARIS DS-12 with an estimated duration of 350 days, with all four active drillships now contracted for work starting next year[3] - Total contract backlog as of October 23, 2025, is $4,450.3 million, a decrease from $4,714.4 million in July 2025, representing a decline of 5.6%[37] - The total contract backlog for jackups was $1,262.9 million as of October 23, 2025, down from $1,353.8 million in July 2025, a decline of 6.7%[37] Fleet and Utilization - Total fleet utilization for Valaris was 67% in September 2025, slightly down from 68% in June 2025[41] - Active fleet utilization reached 88% in September 2025, compared to 89% in June 2025, indicating a minor decrease[43] - Total rig utilization for the third quarter was 90%, up from 85% in the previous quarter, indicating better operational efficiency[54] - The total active fleet as of September 30, 2025, consisted of 29 rigs, a slight decrease from 30 rigs in the previous quarter[49] Segment Performance - FLOATERS segment net income was $90.0 million for the three months ended September 30, 2025, down from $128.8 million in the previous quarter, a decline of 30%[62] - JACKUPS segment net income increased to $166.9 million for the three months ended September 30, 2025, compared to $75.1 million in the previous quarter, reflecting a growth of 122%[62] - Adjusted EBITDA for Valaris was $163.2 million for the three months ended September 30, 2025, down from $200.7 million in the previous quarter, indicating a decrease of 18.7%[61] - Adjusted EBITDA for ARO increased to $59.7 million for the three months ended September 30, 2025, compared to $36.9 million in the previous quarter, marking a significant improvement[61]