Noble Corporation Q1 2025 slides: EBITDA rises, backlog jumps 30% on major contracts

Noble Corporation (NYSE:NE) presented its first quarter 2025 earnings results on April 29, showing significant improvements in key financial metrics and substantial contract wins that boosted the company’s backlog. The offshore drilling contractor’s shares jumped 11.9% in aftermarket trading following the announcement, reflecting positive investor sentiment.

Quarterly Performance Highlights

Noble reported first quarter adjusted EBITDA of $338 million, up from $319 million in the fourth quarter of 2024, while achieving an improved EBITDA margin of 39% compared to 34% in the previous quarter. The company generated $173 million in free cash flow, a dramatic increase from just $2 million in Q4 2024.

Net income for the quarter reached $108 million, translating to diluted earnings per share of $0.67, compared to $97 million and $0.59 per share in the previous quarter. Cash flow from operations strengthened to $271 million from $136 million in Q4 2024.

As shown in the following financial highlights:

The company’s financial position continued to strengthen, with net debt decreasing to $1,675 million from $1,733 million at the end of 2024. This improvement reduced Noble’s net leverage ratio to 1.2x from 1.4x in the previous quarter, while liquidity increased to $834 million from $773 million.

Contract Wins and Backlog Growth

A standout achievement in the quarter was Noble’s success in securing new contracts worth between $2.2 billion and $2.7 billion, representing approximately 15 rig years of work. These new agreements increased the company’s backlog by 30% to $7.5 billion, which includes 40% assumed performance revenue from Shell and Total contracts.

The backlog provides substantial revenue visibility through 2031, with particularly strong coverage in the near term:

Major contract wins highlighted in the presentation included:

• Shell US Gulf Award for the Voyager and another V-class drillship, covering 4 years with four 1-year options each
• TotalEnergies (EPA:TTEF) Award for a V-class drillship for 16 wells (estimated 1,060 days) in Suriname, plus four one-well extension options
• Petrobras Colombia exercised a 390-day option for the Discoverer
• Shorter-term contracts for the Regina Allen and Intrepid rigs

The company’s drillship fleet shows strong utilization through 2027:

Financial Analysis

Noble’s detailed financial results showed revenue of $874 million for Q1 2025, a slight decrease from $927 million in Q4 2024. However, the company improved profitability metrics across the board, with higher EBITDA, margins, and net income.

Capital expenditures decreased to $98 million from $134 million in the previous quarter, contributing to the substantial improvement in free cash flow generation:

The integration of Diamond Offshore, which was mentioned in Noble’s Q3 2024 earnings call, appears to be progressing well, with the company noting that approximately 70% of expected synergies have been realized on a run-rate basis.

Outlook and Guidance

Noble maintained its full-year 2025 guidance, projecting:

• Total revenue of $3,250-$3,450 million
• Adjusted EBITDA of $1,050-$1,150 million
• Capital expenditures (net of reimbursements) of $375-$425 million

The company’s outlook remains positive as shown in the unchanged guidance:

The maintained guidance suggests management’s confidence in the company’s operational performance for the remainder of the year, despite the slight revenue decline in Q1.

Shareholder Returns

Noble continued its commitment to returning capital to shareholders, distributing approximately $100 million in Q1 2025 through a $0.50 per share dividend and $20 million in share repurchases. The company announced that the Q2 dividend will be maintained at $0.50 per share.

This focus on shareholder returns comes while the company simultaneously strengthens its balance sheet, with improving leverage ratios and liquidity position. The combination of growing backlog, strong free cash flow generation, and consistent capital returns appears to be resonating with investors, as evidenced by the positive aftermarket trading reaction.

Noble’s strategy of balancing operational growth, financial discipline, and shareholder returns positions the company well in the offshore drilling sector, which continues to benefit from stable energy prices and increased exploration and production activities by major oil companies.

Full presentation:

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