BORR — Borr Drilling Limited

Summary of Borr Drilling Limited Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Revenue: $259.4 million, a decrease of 6.4% from Q3 2025, primarily due to lower day rates as rigs transitioned to contracts with reduced rates.
• Adjusted EBITDA: $105.4 million for Q4, bringing full-year adjusted EBITDA to $470.1 million, which is a 7% decrease from 2024 but at the top end of guidance.
• Net Loss: $1 million for Q4; full-year net income was $45 million.
• Cash Position: Cash and cash equivalents stood at $379.7 million, with total liquidity of $613.7 million including undrawn credit facilities.
• Operational Metrics: Technical utilization at 98.8% and economic utilization at 97.8%.

2. Strategic Updates and Business Highlights

• Safety Milestones: Several rigs achieved significant safety records, including Arabia III receiving an award for the best safety score in 2025.
• Fleet Expansion: Acquisition of 5 premium rigs from Noble, enhancing fleet capabilities and operational flexibility.
• Contracting Success: Secured 7 new commitments since the last report, increasing 2026 coverage to 80% in H1 and 48% in H2.
• Market Recovery: Positive trends observed in the Middle East and Mexico, with Pemex increasing upstream CapEx by 34% year-on-year.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipate modestly higher contracting days compared to 2025, with a focus on filling idle capacity in the fleet.
• Market Dynamics: Expect improvements in market conditions and day rates starting in the second half of 2026, with further recovery projected into 2027.
• Tender Pipeline: Significant tender activity in the Middle East expected to yield awards by mid-2026, potentially tightening market conditions.

4. Bad News, Challenges, or Points of Concern

• Revenue Decline: Q4 revenue decreased due to lower day rates and a drop in bareboat charter revenue.
• Increased Operating Expenses: Total operating expenses rose by 7.4% in Q4, primarily due to higher rig operating and maintenance costs.
• Market Competition: Competitive pressures in certain regions, particularly Asia, could impact future day rates.
• Idle Rigs: Two acquired rigs (Sif and Freyja) remain idle, with uncertain timelines for securing contracts.

5. Notable Q&A Insights

• Contracting Strategy: Borr Drilling is focusing on a mix of short- and long-term contracts to balance backlog and capitalize on improving market conditions.
• Middle East Tenders: Anticipated awards from major tenders in the Middle East could begin mid-2026, influencing future utilization and rates.
• Payment Normalization: Positive developments in payment collections from Pemex, with expectations of improved payment terms moving forward.
• Acquisition Potential: While open to further acquisitions, the company emphasizes a selective approach, focusing on opportunities that complement the existing fleet.

This summary encapsulates the key points from Borr Drilling's Q4 2025 earnings call, highlighting both the positive developments and challenges faced by the company.