Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $282 million and free cash flow of $107 million for Q2 2025, with a total revenue of €812 million [5][33] - The adjusted EBITDA margin was 33%, and cash flow from operations was €216 million, with net capital expenditures of €110 million [33] - The company returned an additional $80 million to shareholders through a $0.50 per share quarterly dividend, totaling over $1.1 billion in capital returns since Q4 2022 [6][34] Business Line Data and Key Metrics Changes - The company secured new contracts with a total contract value of $2.8 billion, with a total backlog of $6.9 billion as of August 5 [14][34] - Significant contracts included a six-well contract with BP for carbon capture and storage in the UK North Sea and a two-well contract with OMV in the Black Sea [12][14] - The integration of the Diamond acquisition achieved a synergy target of $100 million ahead of schedule [6][34] Market Data and Key Metrics Changes - The global contracted rig count for ultra-deepwater (UDW) currently stands at 97 rigs, down from a peak of 105-106 in 2023-2024 [16][26] - UDW demand in South America remains strong, with 43 total units contracted, while West Africa shows softness with only 12 rigs currently contracted [18][21] - The U.S. Gulf has seen a decrease in contracted UDW rigs, currently at 21, down from 22-24 last year [20] Company Strategy and Development Direction - The company is focused on optimizing its fleet and managing costs effectively in a flat market while preparing for potential growth in 2026 and 2027 [26][30] - The strategy includes disposing of underperforming rigs to maintain a high-spec competitive fleet and maximize cash flow [30] - The company is actively pursuing contracts for its key rigs, including the Black Rhino, Viking, and Jerry D'Souza, which are seen as critical for future earnings [27][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the deepwater market firming up by late 2026 or 2027, despite current macro uncertainties [38][39] - The company anticipates a material rebound in EBITDA starting in 2026, supported by new long-term contracts and rising deepwater demand levels [36][37] - Management highlighted the importance of disciplined cost management and cash flow maximization in the current market environment [30][39] Other Important Information - The company updated its full-year 2025 guidance, lowering total revenue expectations to $3.2 billion to $3.3 billion while narrowing the adjusted EBITDA range to €1.075 billion to €1.15 billion [35] - Capital expenditures for 2025 are expected to increase to $400 million to $450 million, reflecting investments tied to recent long-term awards [36] Q&A Session Summary Question: Guidance update clarification - The company lowered top-line guidance by about 3% but increased EBITDA guidance by about 1%, attributing the revenue decrease to unexercised options and strong customer management [42][44] Question: Strategy for key rigs - The focus is on securing contracts for the Black Rhino, Viking, and Jerry D'Souza, with strong conversations ongoing for these rigs [46][48] Question: Brazil market outlook - The company views Brazil's rig demand as stable to slightly increasing, with positive narratives from Petrobras regarding upcoming tenders [53][54] Question: Rig sales and retirement plans - The Highlander will go to a drilling project, while the Reacher and Globetrotter II are not expected to be sold for drilling purposes [56][58] Question: Day rates expectations - Current day rates for UDW rigs are in the low to mid-400s, with expectations that rates may hold firm despite near-term softness [64][66] Question: Rig reset timing and impact - Rig resets occur on March 1 and September 1, with rates set a few months prior, and the mechanism has tracked the market effectively [74][75] Question: Impact of recent M&A in the jackup market - The recent M&A activity in the jackup market does not significantly change the company's demand outlook or strategy [80][81]