Image source: The Motley Fool.
DATE
Friday, Oct. 23, 2026
CALL PARTICIPANTS
- Senior Vice President of Investor Relations and Industry Affairs – James R. McDonald
- Chief Executive Officer – Olivier Le Peuch
- Chief Financial Officer – Stephane Biguet
TAKEAWAYS
- Revenue — $9.45 billion, representing 5% sequential growth and 6% growth year over year driven by recovery in the Middle East and strong international deepwater activity.
- Adjusted EPS — $0.64, representing a 16% sequential increase when excluding merger and pension settlement charges.
- Adjusted EBITDA — $2.07 billion, increasing 9% sequentially and representing a margin of 21.9%.
- Pretax Segment Operating Margin — 16.7%, reflecting a sequential expansion of 104 basis points driven by improvements across all four core divisions.
- ChampionX Revenue — $956 million, contributing its highest quarterly revenue and margin since the acquisition was finalized in July 2025.
- Digital Revenue — $693 million, essentially flat sequentially as high platforms and applications sales were offset by lower digital exploration activity.
- Reservoir Performance Revenue — $1.63 billion, increasing 5% sequentially due to higher evaluation and stimulation services in the Middle East.
- Well Construction Revenue — $2.89 billion, up 5% sequentially driven by higher drilling activity in the Middle East and international offshore basins.
- Production Systems Revenue — $4.00 billion, growing 6% sequentially following higher sales of production chemicals, artificial lift, and completions.
- Data Center Solutions Revenue — $230 million, representing sequential growth of 23% and year-over-year growth of 76% due to surging demand for AI infrastructure.
- Middle East Revenue — $1.9 billion, representing a 13% sequential recovery following operational disruptions in the previous quarter.
- North America Revenue — $2.40 billion, increasing 7% sequentially supported by US unconventional activity and strong demand for production chemicals.
- Digital ARR — $1.04 billion, representing a 13% increase year over year as customers continue to adopt cloud-based platforms and IoT solutions.
- Automated Drilling — 750,000 feet, representing a year-over-year increase of nearly 50% as adoption of digital operations accelerates.
- Q4 Revenue Outlook — Approximately $10 billion, representing a sequential increase of 5% to 7% supported by deepwater momentum and year-end digital sales.
- Q4 Adjusted EBITDA Margin Guidance — Expected expansion of 100 to 150 basis points relative to the third quarter.
- Venezuela Revenue Growth — On track to more than double in 2026, with potential for multifold growth in 2027 as activity from international oil companies accelerates.
- Saudi Aramco Award — Four integrated well construction contracts covering more than 450 wells over an initial three-year term, enhancing revenue visibility in the kingdom.
- Full-Year Capital Investment — Approximately $2.5 billion, encompassing capital expenditures, Asset Performance Solutions investments, and exploration data costs.
- Free Cash Flow — $828 million generated during the quarter, with a meaningful step up expected in the fourth quarter due to inventory reductions and collections.
- Net Debt — $9.2 billion, ending the quarter at the same level as the prior-year period.
- Stock Repurchases — $656 million in common stock repurchased during the quarter, on track for approximately $2.4 billion for the full year.
- OneSubsea Target Bookings — On track to exceed the $9 billion target for the 2025 to 2026 period, strengthening the long-cycle subsea backlog.
Need a quote from a Motley Fool analyst? Email [email protected]
RISKS
- Le Peuch stated, “Given the ongoing uncertainty our fourth quarter outlook assumes Middle East revenue remains flat sequentially at approximately $1.9 billion,” noting that performance depends on geopolitical developments.
- Biguet noted a “$187 million noncash pension settlement charge” during the quarter resulting from lump-sum payments to former employees.
- Le Peuch warned that “the near term pace of recovery in The Middle East remains uncertain,” citing heightened tensions and ongoing regional conflict.
SUMMARY
SLB N.V. (SLB +7.08%) reported sequential growth across all geographic regions and core divisions, indicating a broadening international investment cycle. Management reported that performance was supported by a gradual recovery in Middle Eastern markets and sustained demand for deepwater offshore projects in Latin America and Asia. The company is transitioning its portfolio toward production recovery and digital applications while expanding its industrial footprint into the data center infrastructure market. Management confirmed an outlook for mid-single-digit global activity growth in 2027, with the potential for further acceleration should regional disruptions in the Middle East resolve.
- Management is targeting $200 million in synergies from the ChampionX acquisition by the end of 2026, with Biguet noting that margins for the business have expanded for four consecutive quarters.
- The company announced a $3.4 billion agreement to acquire Kelvion, which is expected to close in the first half of 2027 and enhance the company’s thermal management capabilities for data centers.
- Le Peuch noted that third-party final investment decisions for deepwater projects are expected to increase more than 30% year over year in 2026.
- The company completed the acquisition of S&P Global Energy’s geoscience software portfolio, adding workflow-centric applications for North American onshore and unconventional operators.
- Management assumes Middle East activity will remain stable at second-half 2026 levels for its 2027 market outlook, with any conflict resolution serving as a potential growth catalyst.
- The company is establishing a new manufacturing facility in Canada to support the Meta data center project, with the center expected to open in the first half of 2027.
- Major US shale operators are expanding internationally by entering new countries and partnering with national oil companies, further broadening SLB’s addressable market.
INDUSTRY GLOSSARY
- SLB OneSubsea: A joint venture focusing on subsea production systems and subsea processing technology.
- ChampionX: A business specializing in production chemicals and artificial lift solutions acquired by SLB in 2025.
- APS: Asset Performance Solutions, a business model where SLB invests in field development to improve production and recovery.
- Digital Operations: A solutions category that integrates connected field hardware with automated drilling and production execution.
- Exploration Data: A library of seismic surveys and subsurface data licensed to operators for exploration and reservoir monitoring.
- FID: Final Investment Decision, the point at which a company officially commits to fundin
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
