Valaris — Financial Results
Valaris Is Being Acquired by Transocean in an All-Stock Deal
On February 9, 2026, Valaris agreed to be acquired by Transocean in an all-stock transaction. Each Valaris share will be exchanged for 15.235 Transocean shares, with existing Valaris shareholders owning approximately 47% of the combined company. The deal requires approval from both companies' shareholders and various regulators, and must close by February 9, 2027, or either party can walk away. If the deal falls through under certain conditions, Valaris would owe Transocean a $173 million termination fee.
Operating Profit Rose 35% Despite Flat Revenue, Thanks to Lower Costs
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | $2,207.9M | $2,211.9M | Flat |
| Contract drilling expenses | $1,477.1M | $1,618.5M | -9% |
| Operating income | $477.0M | $352.3M | +35% |
Revenue barely moved year over year, but Valaris cut its drilling costs by $141 million — largely by retiring or stacking underperforming rigs, reducing mobilization costs, and winning a patent lawsuit. That cost discipline drove a meaningful jump in operating profit, showing the business became more efficient even without top-line growth.
Jackups Surged While Floaters Declined
| Segment | 2025 Revenue | 2024 Revenue | Change |
|---|---|---|---|
| Floaters | $1,224.1M | $1,382.8M | -11% |
| Jackups | $823.4M | $686.5M | +20% |
The floater segment (deep-water drillships) lost revenue as several rigs completed contracts and sat idle. Meanwhile, the jackup segment — shallower-water rigs — had a strong year, with both more working days and higher day rates averaging $138,000 in 2025 versus $121,000 in 2024. These two trends largely offset each other at the total revenue level.
Total Backlog (Future Contracted Revenue) Grew 29% to $4.7 Billion
| Segment | Feb 2026 | Feb 2025 |
|---|---|---|
| Floaters | $3,030.8M | $2,024.0M |
| Jackups | $1,125.8M | $1,313.0M |
| Total | $4,672.3M | $3,608.5M |
Backlog represents signed contracts not yet fulfilled — it is the clearest forward indicator of revenue visibility. The floater backlog jumped by over $1 billion, driven by new drillship contract awards. Jackup backlog fell slightly as one contract (VALARIS 120) was cancelled, erasing roughly $120 million in expected future revenue.
A Large Tax Benefit Inflated Net Income — But the Underlying Business Is Genuinely Stronger
Net income came in at $982.8 million in 2025, up 163% from $373.4 million in 2024. However, a $426.8 million income tax benefit — mainly from releasing a valuation allowance (an accounting reserve against tax assets the company now believes it will actually use) — accounts for most of that swing. Stripping that out, the underlying business improvement is still real but more modest, driven by the cost savings and higher day rates described above.
Cash Position Strengthened and the Balance Sheet Is Clean Near-Term
Valaris ended 2025 with $599.4 million in cash, up from $368.2 million a year earlier. Operating cash flow was $546.2 million, up from $355.4 million in 2024. Crucially, the company has no debt principal payments due until 2030, when its $1.1 billion in notes mature — giving it significant financial breathing room during the pending merger process.