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Seadrill Limited (SDRL) Q2 2026 — Seadrill filed Q2 2026 results on Form 8-K before the US open on Monday August 10, call at 9.00am ET, so Monday August 10 was the reaction session. Shares closed USD43.24 on Friday, OPENED USD46.59 (+7.75 pct), and the session low of USD45.08 never came back to that close. It settled USD46.76, +8.14 pct, on 1.79x volume. Seadrill is a Bermuda-domiciled offshore drilling contractor on the NYSE, running a modern fleet of drillships and semi-submersibles. Q2 2026 total operating revenues were USD449M, +19.1 pct YoY and +25.4 pct sequentially, with Adjusted EBITDA of USD144M and GAAP diluted EPS of USD0.47 against a USD0.29 bar. THE CALL: HOLD (3/5, MEDIUM - A REAL QUARTER, ALREADY PAID FOR) — base-case value ~$44.59 vs ~$46.49 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value USD44.59 against the USD46.49 close, -4.1 pct. Bear USD29.99 / base USD44.98 / bull USD61.42, weighted 30/45/25. EV/EBITDA on 2027 Adjusted EBITDA of USD450M, USD530M and USD600M at 5.0x, 6.0x and 7.0x, less USD390M of net debt, across 62.03M shares. Cross-checked against book value of USD46.17 a share. - THE PRINT: Total operating revenues USD449M (+19.1 pct YoY, +25.4 pct QoQ) vs ~USD388M expected. Contract revenues USD355M. Adjusted EBITDA USD144M from USD97M in March, a 33.5 pct margin excluding reimbursables. Net income USD29M against a USD42M loss. GAAP diluted EPS USD0.47 vs a USD0.29 bar. Seadrill publishes no adjusted EPS, so this is GAAP against GAAP. - THE ANGLE: Operating profit went from USD6M to USD72M. The 10-Q attributes USD51M of that to management contract expenses falling, 'primarily attributable to estimated damages recognized following the unfavorable court judgment' over Sonadrill in Q2 2025, not recurring. The drilling business contributed USD16M, 24 pct. - THE RAISE IMPLIES A FADE: FY2026 Adjusted EBITDA guidance is USD420-450M, raised from USD370-420M in May and USD350-400M in February. H1 already delivered USD241M, so the implied second half is USD179-209M, or USD89.5-104.5M a quarter against the USD144M just printed - 27.4 pct below Q2 even at the top of the range. - BALANCE SHEET: Gross principal debt USD750M against USD360M of cash and restricted cash, so net debt USD390M. Contract backlog USD2.93bn at June 30, up 23.3 pct from USD2.38bn in December, with USD1.18bn falling in 2027. But H1 operating cash flow was NEGATIVE USD40M and free cash flow NEGATIVE USD78M, on a USD149M receivable build. Book value USD2.86bn, or USD46.17 a share. - BUYBACK AND TAX: 511,078 shares repurchased in Q2 at a weighted average USD38.66, USD20M. Net of 167,272 shares issued on vesting, the count fell about 0.55 pct, so weighted average shares still print at 62M and the buyback added nothing to the USD0.47. Effective tax rate for the half was 61.4 pct; a year earlier Seadrill paid USD44M of tax on a USD12M pre-tax loss. - STREET: Only two targets are sourceable by firm AND date - Capital One Overweight USD55.00 (Jul 1 2026) and BTIG Buy USD55.00 (Apr 17 2026, from USD50.00). Both predate this print. A Barclays USD39 of Feb 18 was dropped: the same firm upgraded on May 7 with no sourceable target. Rating tally 8 buy / 17 hold / 12 sell. What to watch: UP: Q3 Adjusted EBITDA near the USD144M just printed rather than the ~USD97M the full-year guide implies; new 2027 awards lifting backlog coverage above 69 pct. DOWN: the implied second-half step down confirming in November; the Oslo appeal on the West Hercules going against Seadrill for roughly USD48M; USD311M of receivables failing to convert to cash. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.