Cash conversion efficiency is currently strained, evidenced by a 2026Q1 OCF/NI ratio of -0.56 and a significant $141 million working capital drain reported in 2025Q4.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Cash from Operations | -23M | -28M | 88M | 287M | 9M | -154M | -420M | -256M | -239M | 399M | 1.18B | 1.79B | 1.57B | 1.7B | 1.59B |
| Operating CF Margin % | - | -1.95% | 6.35% | 19.52% | 0.96% | -16.98% | -43.7% | -18.44% | -20.22% | 19.96% | 39.88% | 43.55% | 33.65% | 34.32% | 36.89% |
| Operating CF Growth % | -535.28% | -131.82% | -69.34% | 3088.89% | 105.84% | 63.33% | -64.06% | -7.11% | -159.9% | -66.3% | -33.78% | 13.6% | -7.14% | 6.6% | - |
| Net Income | -24M | -77M | 446M | 300M | 3.67B | -577M | -4.45B | -753M | -4.48B | -2.97B | -181M | -634M | 3.98B | 2.65B | 1.11B |
| Depreciation & Amortization | 254M | 238M | 168M | 155M | 152M | 127M | 319M | 426M | 664M | 755M | 745M | 663M | 562M | 646M | 627M |
| Stock-Based Compensation | 16M | 20M | 17M | 0 | 0 | 0 | 0 | 0 | 3M | 7M | 8M | 7M | 10M | 7M | 8M |
| Deferred Taxes | 36M | 22M | -13M | -13M | -7M | -3M | -7M | -61M | -22M | -174M | -264M | -274M | 285M | 199M | 190M |
| Other Non-Cash Items | 51M | 57M | -477M | -41M | -3.71B | 297M | 3.76B | 118M | 3.48B | 2.58B | 395M | 1.63B | -2.33B | -1.43B | -145M |
| Working Capital Changes | -310M | -288M | -53M | -114M | -90M | 2M | -41M | 14M | 95M | 33M | 217M | 119M | -650M | -186M | -198M |
| Change in Receivables | -78M | 23M | 38M | -6.23M | -2M | -47M | -54M | 27M | 93M | 167M | 256M | 267M | -295M | -206M | -198M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -158M | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | -1M | -47M | 65M | -35.28M | 23M | 15M | -37M | 4M | -9M | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -77M | -113M | 226M | 42M | 343M | 37M | -32M | -26M | 210M | 358M | 354M | -190M | 66M | -2.96B | -1.36B |
| Capital Expenditures | -32M | 0 | -157M | -101M | -149M | -29M | -27M | -48M | -76M | -92M | -136M | -935M | -2.87B | -4.27B | -1.56B |
| CapEx % of Revenue | 2.21% | 7.65% | 11.34% | 6.87% | 15.92% | 3.2% | 2.81% | 3.46% | 6.43% | 4.6% | 4.58% | 22.77% | 61.43% | 86.52% | 36.13% |
| Acquisitions | 1M | 0 | 0 | 45M | 3M | 0 | -22M | -25M | 0 | 0 | 0 | 0 | 0 | -554M | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -46M | -113M | 383M | 98M | 489M | 66M | 28M | 47M | 286M | 450M | 490M | 745M | 2.94B | 1.86B | 197M |
| Cash from Financing | -4M | -3M | -532M | -200M | -363M | 0 | -163M | -367M | 679M | -846M | -1.41B | -1.37B | -1.52B | 1.7B | -395M |
| Debt Issued (Net) | 0 | 0 | 0 | 98M | -399M | 0 | -36M | -34M | 518M | -793M | -1.36B | -1.34B | -92M | 2.36B | 0 |
| Equity Issued (Net) | 0 | 0 | -532M | -263M | 0 | 0 | 0 | 0 | 0 | 0 | -11M | 0 | -18M | -39M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.42B | -1.29B | -1.48B |
| Share Repurchases | 0 | 0 | -532M | -263M | 0 | 0 | 0 | 0 | 200M | 0 | -11M | 0 | -18M | -39M | 0 |
| Other Financing | -4M | -3M | 0 | -35M | 36M | 0 | -127M | -333M | 161M | -53M | -38M | -30M | 4M | 662M | 1.08B |
| Net Change in Cash | -101M | -140M | -223M | 130M | 71M | -119M | -634M | -646M | 2.82B | -84M | 399M | 213M | 87M | 426M | 318M |
| Free Cash Flow | -55M | -138M | -69M | 186M | -140M | -183M | -447M | -304M | -315M | 307M | 1.05B | 853M | -1.3B | -2.58B | 33M |
| FCF Margin % | -3.8% | -9.6% | -4.98% | 12.65% | -14.96% | -20.18% | -46.51% | -21.9% | -26.65% | 15.36% | 35.3% | 20.77% | -27.77% | -52.2% | 0.77% |
| FCF Growth % | 62.59% | -100% | -137.1% | 232.86% | 23.5% | 59.06% | -47.04% | 3.49% | -202.61% | -70.71% | 22.86% | 165.67% | 49.61% | -7912.12% | - |
| FCF per Share | -0.89 | -2.22 | -0.97 | 2.51 | -2.80 | -1.83 | -4.47 | -3.04 | -1.04 | 0.61 | 2.09 | 1.73 | -2.63 | -5.24 | 0.07 |
| FCF Conversion (FCF/Net Income) | 2.29x | 0.36x | 0.20x | 0.96x | 0.00x | 0.26x | 0.09x | 0.21x | 0.05x | -0.13x | -6.54x | -2.82x | 0.40x | 0.64x | 1.44x |
| Interest Paid | 0 | 0 | 54M | 36M | 0 | 0 | 174M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 17M | 24M | 0 | 3M | 10M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Inconsistent cash conversion cycles
As reported in recent financial filings, Seadrill's operating cash flow frequently decouples from net income, evidenced by a 2026Q1 OCF/NI ratio of -0.56, which suggests that reported accounting profits are not translating into the liquid resources necessary to sustain the company's capital-intensive offshore drilling operations.
The persistent divergence between net income and operating cash flow indicates that non-cash charges and accruals are heavily influencing the bottom line. Investors should monitor whether this trend reflects structural inefficiencies in revenue recognition or simply the timing of project-based cash receipts.
Based on the provided quarterly data, Seadrill's free cash flow trajectory remains highly erratic, swinging from a positive $92 million in 2023Q4 to a negative $35 million in 2026Q1, highlighting the difficulty of maintaining consistent cash generation within a cyclical and capital-heavy offshore service environment.
The inability to maintain positive free cash flow margins suggests that the company's current operational scale may be insufficient to cover both maintenance capital expenditures and fixed operating costs. This volatility warrants further investigation into whether future contract renewals can provide the necessary cash flow stability.
According to recent SEC filings, Seadrill has faced significant working capital outflows, including a $141 million drain in 2025Q4, which appears to be a primary factor in the company's inability to convert operational activity into positive cash flow during recent reporting periods.
These recurring working capital outflows may indicate challenges in managing receivables or an accumulation of inventory related to rig reactivations. The magnitude of these swings suggests that operational cash flow is highly sensitive to the timing of client payments and project-specific procurement cycles.
As reported in financial statements, Seadrill utilized substantial cash for share repurchases, including $217 million in 2023Q4, even as the company's core operating cash flow exhibited significant instability, raising questions about the sustainability of such capital returns in a volatile offshore drilling market.
The decision to prioritize share buybacks over cash preservation during periods of negative free cash flow may indicate management's confidence in future recovery, yet it leaves the company with less liquidity to navigate potential industry downturns. Investors should monitor whether this capital allocation strategy remains viable if dayrate momentum fails to materialize.
Quick answers to the most common questions about buying SDRL stock.
Seadrill Limited (SDRL) generated $-28.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Seadrill Limited (SDRL) reported negative free cash flow of $138.0M in 2025, indicating capital requirements exceeded cash from operations.
Seadrill Limited (SDRL) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.