SDRLHIGH SIGNALFINANCIAL10-K

SDRL experienced a dramatic decline in operating income alongside reduced operational capacity as active drilling units dropped from 11 to 10.

The substantial deterioration in operating performance combined with reduced fleet utilization suggests significant operational or market challenges that have materially impacted profitability. The company's shift from having one unit in contract preparations to having multiple units undergoing repairs and upgrades indicates potential equipment issues or strategic repositioning that investors should monitor closely.

Comparing 2026-02-26 vs 2025-02-27View on EDGAR →
FINANCIAL ANALYSIS

SDRL's financial position weakened considerably with operating income falling dramatically from $412M to $47M, while the balance sheet showed broad-based declines including a 29% reduction in cash reserves to $339M. Current assets and liabilities both decreased meaningfully, with accounts receivable declining 16%, suggesting reduced business activity. The overall financial picture signals a company facing significant operational headwinds that have severely impacted profitability while consuming cash resources.

FINANCIAL STATEMENT CHANGES
Operating Income
P&L
-88.6%
$412.0M→$47.0M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Cash & Equivalents
Balance Sheet
-29.1%
$478.0M→$339.0M

Cash decreased 29.1% — monitor burn rate and upcoming capital needs.

Current Liabilities
Balance Sheet
-25.3%
$501.0M→$374.0M

Current liabilities reduced — improved short-term financial position and working capital health.

Current Assets
Balance Sheet
-18.3%
$928.0M→$758.0M

Current assets declined 18.3% — monitor working capital adequacy and short-term liquidity.

Accounts Receivable
Balance Sheet
-16.1%
$193.0M→$162.0M

Receivables declined — improved collection efficiency or conservative revenue recognition.

LANGUAGE CHANGES
NEW — 2026-02-26
PRIOR — 2025-02-27
ADDED
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 34 ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 36 ITEM 7A.
Changing sentiments with respect to environmental, social and governance matters and climate change may impact us.
As of December 31, 2025, we owned a total of 15 drilling units, of which 10 were operating, one was undergoing capital upgrade projects for a contract commencing in the second quarter of 2026, one was undergoing repairs and maintenance projects and three were cold stacked.
The 10 operating units include nine benign floaters (comprising six 7th generation drillships, two 6th generation drillships and one benign environment semi-submersible) and one harsh environment jackup.
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REMOVED
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE S OF EQUITY SECURITIES 33 ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIO NS 35 ITEM 7A.
Increasing attention to environmental, social and governance matters and climate change may impact us.
Because our Consolidated Financial Statements reflect fresh start accounting adjustments made upon emergence from bankruptcy in 2022, financial information in other periods of our financial statements are not comparable to Seadrill s financial information from the 2022 prior period.
As of December 31, 2024, we owned a total of 15 drilling units, of which 11 were operating (inclusive of one leased to the Sonadrill joint venture), one 6th generation drillship was undergoing contract preparations for a contract that commenced during February 2025, and three were cold stacked.
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