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what it is
Transocean rents out offshore drilling rigs, equipment, and crews to help oil companies drill wells in deep water.
how it gets paid
Last year Transocean made $4.0B in revenue. Ultra-deepwater drilling was the main engine at $2.6B, or 65% of sales.
why it's growing
Contract drilling revenue grew about 13% vs. prior year in 2025 (to roughly $4.0B). Recent quarters show mid–single-digit vs. prior year revenue moves, not triple-digit spikes.
what just happened
Full-year 2025 revenue was near $4.0B, but GAAP diluted EPS was about $(3.04) after impairments—scale with a GAAP loss, not a sudden $2.9B “revenue” print.
At a glance
C++ balance sheet — some cracks in the foundation
35/100 earnings predictability — expect surprises
1.0% return on capital — nothing to write home about
-$0.22 fy2024 eps est
$4B fy2024 rev est
xvary composite: 45/100 — below average
What they do
Transocean rents out offshore drilling rigs, equipment, and crews to help oil companies drill wells in deep water.
Scale is the moat. Transocean runs 32 mobile offshore drilling units, including 24 ultra-deepwater floaters and 8 harsh-environment floaters, in a market where a single Deepwater Skyros contract adds $130M of backlog (backlog → signed future work → revenue you can already see). If your well needs one of these rigs, you are choosing from a short list, and moving a rig is slow and expensive.
How they make money
$4.0B
annual revenue · contract drilling revenue grew about +13% in 2025
Ultra-deepwater drilling
$2.6B
Harsh-environment drilling
$0.9B
Equipment and crew services
$0.3B
Mobilization and other
$0.2B
The products that matter
offshore rig leasing
Contract Drilling
$3.8B · 95% of revenue
This is nearly the whole company. At $3.8B of revenue, everything comes down to fleet utilization, day rates, and whether customers keep spending offshore.
core
high-spec offshore fleet
Ultra-Deepwater Drillships
90% utilization
The fleet ran at 90% utilization, which sounds strong. It still did not stop a $2.9B annual loss. High usage only matters if the pricing is high enough too.
pricing watch
non-core revenue bucket
Other Revenues
$0.2B · 5% of revenue
At just $0.2B, this segment is too small to change the story. If RIG improves, it will come from drilling economics, not side businesses.
too small to matter
Key numbers
$4.8B
long-term debt
Debt this large matters because it equals 41% of capital, which means bad quarters hit a highly levered balance sheet faster.
-58.9%
operating margin
Operating margin → profit from the core business before interest and taxes → so what: on a GAAP basis the line is deeply negative when large impairment charges flow through.
1.0%
return on capital
Return on capital → profit generated from money invested in the business → so what: Transocean is barely earning on the assets it owns.
$130M
new backlog
Backlog → signed future work → so what: one contract can still move the revenue outlook in this business.
Financial health
C++
strength
- balance sheet grade C++ — below average — limited financial resources
- risk rank 4 — safer than 20% of stocks
- price stability 10 / 100
- long-term debt $4.8B (41% of capital)
C++ — balance sheet grade and long-term debt are flagged. this stock carries more risk than average.
Total return vs. market
Return history isn't available for RIG right now.
source: institutional data · return history unavailable
What just happened
GAAP vs. adjusted
Full-year 2025 contract drilling revenue was about $4.0B, but GAAP net loss was roughly $2.9B and diluted EPS about $(3.04)—impairments dominated the print.
Adjusted results were far better (e.g. positive adjusted EPS for the year in company materials), but GAAP still shows the impairment story. Revenue grew on the order of ~13% vs. prior year in 2025—not 184% in a single quarter.
$1.0B
contract drilling rev (FY)
$(3.04)
gaap diluted eps (FY)
~13%
vs. prior year revenue growth (FY)
the number that mattered
The key number was roughly $(3.04) GAAP diluted EPS for 2025 because impairments swamped the operating narrative—read adjusted metrics alongside it.
source: company earnings report, 2026
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What could go wrong
the #1 risk is the Valaris merger failing while offshore economics still need repair.
high
$5.8B Valaris merger does not close
This is an all-stock deal pending regulatory approval, with close still expected in late 2026. If it breaks, the scale story weakens immediately and investors are left with the existing fleet economics.
The stock has already attached strategic value to the transaction. Remove that and the thesis gets much narrower.
high
Losses stay stubbornly large
Transocean lost $2.9B on $4B of revenue last year. A -73.5% net margin is not a small operating wobble. It is the core problem.
If pricing and utilization improve more slowly than expected, equity holders are still funding a turnaround instead of owning a finished business.
med
Debt limits flexibility
Long-term debt sits at $4.8B, or 41% of capital. In a cyclical, asset-heavy business, that matters because downturns do not ask permission.
If offshore demand slips, leverage has a way of turning an operating problem into a capital structure problem.
med
Litigation over rig values
The company faces a class action tied to allegations that idle rigs were overstated before a $1.2B impairment charge in late 2024.
Even if the dollar impact is manageable, litigation keeps attention on asset quality and management credibility.
A failed merger or weak contract drilling revenue near the low end of $3.8B guidance would leave you owning the same company that just lost $2.9B on $4B of sales.
source: institutional data · regulatory filings · risk analysis
Pay attention to
margin
Does the loss rate actually improve
The last reported net margin was -73.5%. You do not need perfection. You do need that number moving sharply in the right direction.
earnings
Next earnings report
Expected around April 27, 2026. The key question is whether management can keep 2026 contract drilling revenue inside the $3.8B–$3.95B range.
merger
Valaris regulatory path
Late 2026 is still the expected close. If approvals drag or conditions tighten, the market will have to rethink how much value it assigned to the deal.
contracts
Backlog and day-rate direction
With contract drilling at 95% of revenue and fleet utilization already at 90%, the next leg of recovery likely needs better pricing, not just more activity.
Analyst rankings
earnings predictability
35 / 100
Low predictability means the earnings line can move around a lot. In human-speak: do not expect a smooth story quarter to quarter.
risk rank
4
This screens as riskier than most stocks in the dataset. That fits a leveraged offshore driller with unstable profitability.
price stability
10 / 100
The stock has very low stability. Translation: you should expect a rough ride, even when the underlying thesis has not changed.
source: institutional data
Institutional activity
institutional ownership data for RIG is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$4
current price
n/a
target midpoint · n/a from current
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