Noble Q2 2025 slides reveal declining revenue, revised full-year guidance

Introduction & Market Context

Noble Corporation plc (NYSE:NE) presented its second quarter 2025 earnings results on August 6, 2025, revealing a quarter-over-quarter decline in key financial metrics while announcing revised full-year guidance. The offshore drilling contractor’s stock closed at $25.90 prior to the earnings release, with after-market trading showing a 1.66% increase to $26.33, suggesting cautious optimism from investors despite the mixed results.

The company’s presentation highlighted approximately $380 million in new contracts across its fleet while emphasizing continued progress on fleet rationalization and shareholder returns, even as quarterly performance metrics showed deterioration from the first quarter.

Quarterly Performance Highlights

Noble reported second quarter revenue of $849 million, down from $874 million in the first quarter of 2025. This represents a 2.9% sequential decline, accompanied by more significant drops in profitability metrics.

As shown in the following comprehensive financial overview:

Adjusted EBITDA fell to $282 million from $338 million in Q1, representing a 16.6% decrease quarter-over-quarter. The company’s adjusted EBITDA margin contracted significantly to 33% from 39% in the previous quarter.

Net income saw an even steeper decline, falling to $43 million from $108 million, with diluted earnings per share dropping to $0.27 from $0.67. This represents a 60% decrease in both metrics.

Cash flow from operations decreased to $216 million from $271 million in Q1, while free cash flow fell to $107 million from $173 million, representing a 38% decline.

Despite these performance declines, Noble maintained a strong balance sheet, with net debt improving slightly to $1,640 million from $1,675 million and net leverage decreasing to 1.3x from 1.4x. The company’s liquidity position also improved to $870 million from $834 million in the previous quarter.

Contract Backlog and Fleet Status

Noble’s total contract backlog stood at $6.9 billion at the end of Q2, down from $7.5 billion reported in the previous quarter. The backlog provides significant revenue visibility through 2031, with higher coverage percentages in near-term years.

The following chart illustrates the company’s contract backlog distribution and coverage rates:

For 2025, Noble has 62% of available days committed, representing $1.1 billion in backlog. Coverage decreases in subsequent years, with 49% committed for 2026 ($2.3 billion), 36% for 2027 ($1.6 billion), 20% for 2028 ($1.0 billion), and 5% for 2029-2031 ($0.9 billion).

The company highlighted several new contract awards across its fleet, including:

• Stanley Lafosse: five-well option exercised, extending until August 2027
• Valiant: confirmed as second rig for TotalEnergies (EPA:TTEF) in Suriname (Q4 2026)
• Venturer: confirmed as second rig for Shell in US Gulf (Q4 2027)
• Viking: one well plus options with TotalEnergies in Papua New Guinea (Q4 2025)
• Globetrotter 1: two wells with OMV in Black Sea (Q4 2025)
• Innovator: six wells in UK (Q3 2026)
• Intrepid: two wells in UK (Q2 2026)
• Resilient: 92 days in UK (August 2025)

The company’s drillship fleet status is detailed in the following timeline:

Noble also reported progress on its fleet rationalization strategy, having completed the retirement of the Meltem and Scirocco rigs, with plans to retire three additional units: Globetrotter II, Highlander, and Reacher. This rationalization aligns with the industry trend of focusing on higher-specification assets with better earning potential.

Revised 2025 Guidance

In a significant update, Noble revised its full-year 2025 guidance, lowering revenue expectations while slightly increasing its adjusted EBITDA forecast and capital expenditure plans.

The updated guidance is illustrated in the following chart:

The company now expects full-year revenue of $3,200-$3,300 million, down from the previous guidance of $3,250-$3,450 million. Despite the revenue reduction, Noble increased the lower end of its adjusted EBITDA guidance to $1,075-$1,150 million from the previous $1,050-$1,150 million, suggesting improved cost control and operational efficiency.

Capital additions guidance was raised to $400-$450 million from $375-$425 million, indicating continued investment in the company’s fleet despite the challenging market conditions.

Balance Sheet and Capital Returns

Noble emphasized its commitment to shareholder returns, reporting that it has returned over $1.1 billion to shareholders since Q4 2022. The company announced a Q3 dividend of $0.50 per share, maintaining its dividend level despite the quarterly performance decline.

The company’s key financial metrics are summarized in the following overview:

Noble’s financial position remains solid, with net debt of $1,640 million representing a net leverage ratio of 1.3x, an improvement from 1.4x in the previous quarter. The company maintained strong liquidity of $870 million, up from $834 million in Q1.

Outlook and Strategic Initiatives

Looking ahead, Noble appears to be balancing fleet optimization with securing long-term contracts in a challenging market environment. The company’s backlog of $6.9 billion provides revenue visibility, though at a lower level than the $7.5 billion reported after Q1.

The revised guidance suggests that while Noble expects lower revenue for the full year, it anticipates maintaining or slightly improving profitability through cost control measures and operational efficiencies. The increased capital expenditure guidance indicates continued investment in the fleet to maintain competitiveness.

The company’s fleet rationalization strategy, retiring five rigs in total, demonstrates a focus on high-grading its fleet to improve overall financial performance and adapt to market conditions. Meanwhile, the consistent dividend policy signals confidence in the company’s long-term cash flow generation capabilities despite the quarterly performance decline.

Full presentation:

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