Earnings Call Insights: SLB N.V. (SLB) Q4 2025
Management View
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CEO Olivier Le Peuch stated that SLB ended the year with “strong operational and financial performance in the fourth quarter, achieving sequential revenue growth, margin expansion and substantial cash flow generation.” He noted a 9% sequential revenue increase, with “high single-digit growth internationally and mid-teens growth in North America.” Organic revenue was up 7% internationally and 6% in North America, with all geographies showing sequential growth for the first time since Q2 2024.
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Le Peuch highlighted “strong year-end product sales in Production Systems globally, higher exploration data sales and strong demand for digital operation across all areas.” He pointed to increased activity in the Middle East, especially Saudi Arabia and UAE, and a return to growth in Sub-Saharan Africa. Digital annual recurring revenue surpassed $1 billion, with 15% year-on-year growth, and the launch of “Tela, an agentic-AI assistant, purpose-built to transform the upstream energy sector.”
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Le Peuch also announced a partnership with ADNOC to launch an AI-powered production system optimization platform and expansion plans for the data center solutions business, targeting “a quarterly revenue run rate of $1 billion per year.”
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Stephane Biguet, Executive VP & CFO, reported, “Fourth quarter earnings per share, excluding charges and credits, was $0.78. This represents an increase of $0.09 sequentially and a decrease of $0.14 compared to the fourth quarter of last year.” He detailed $0.23 per share of net charges, including a goodwill impairment, merger and integration charges, workforce reductions, and other items, partially offset by a tax credit.
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Biguet added, “Our fourth quarter revenue of $9.7 billion increased $817 million or 9% sequentially.” Digital revenue was $825 million, up 25% sequentially, with a pretax operating margin of 34%. Production Systems revenue reached $4.1 billion, up 17% sequentially.
Outlook
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Le Peuch stated, “For the full year, assuming oil price remains range bound in high 50s to low 60 range, we expect 2026 revenue to be between $36.9 billion to $37.7 billion.” North America is expected to benefit from ChampionX activity and data center growth, while international revenue is expected to trend upwards, led by Latin America and the Middle East and Asia.
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The company anticipates “adjusted EBITDA between $8.6 billion to $9.1 billion with margins remaining in line with full year 2025 levels.”
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For Q1 2026, “We anticipate revenue to decline by high single digits sequentially… We also expect adjusted EBITDA margin to decrease by 150 to 200 basis points versus the prior quarter.”
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Biguet noted, “We expect revenue to benefit from a full year of ChampionX, which will result in incremental revenue of approximately $1.8 billion in 2026.”
Financial Results
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Biguet reported, “During the fourth quarter, we generated $3 billion of cash flow from operations and $2.3 billion of free cash flow.” For the full year, “we generated free cash flow of $4.1 billion.”
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Net debt reduced by $1.8 billion during the quarter, ending at $7.4 billion. Capital investments were $716 million for the quarter and $2.4 billion for the year.
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For the full year, SLB returned $4 billion to shareholders, including $2.4 billion in stock repurchases and $1.6 billion in dividends. The company announced a 3.5% dividend increase for 2026.
Q&A
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Stephen Richardson, Evercore ISI, asked about CapEx trends and capital intensity. Biguet responded, “We increased CapEx slightly compared to last year to… $2.5 billion… our capital efficiency has improved quite a bit in the last few years. We can do more with less, basically.”
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Richardson inquired about Middle East customer mix. Le Peuch explained, “We are foreseeing and already witnessing the rebound of the Saudi rig drilling and workover activity, which is very favorable… Libya… is attracting a lot of investment, and we have seen the early benefit of this… Algeria… is exploring on commercial in the South… Iraq… will continue to be significant going forward.”
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James West, Melius Research, asked about the exit rate for 2026. Le Peuch stated, “We expect the fourth quarter of 2026 to be higher than the fourth quarter of 2025. This would be led by the international rebound.”
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West also asked about digital business adoption. Le Peuch said, “We are just touching the early innings of that transformation… we are pursuing adoption of data and AI, Lumi… more than 50 customers… Tela… more than a dozen customers… the momentum comes from Digital Operations.”
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Arun Jayaram, JPMorgan, queried about Venezuela. Le Peuch responded, “Assuming that the conditions are set for investment to resume and to accelerate… we have the track record in integration… we have today a significant set of assets that are ready to be deployed across the drilling services, across production… long term, under the right conditions, we can be the leading drilling partner.”
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John Anderson, Barclays, asked about production recovery. Le Peuch replied, “Production recovery, as we call it, is a new chapter for the company… the integrated capability that we have built together will give us opportunity to create solution for the market, end-to-end solution that will help to improve the performance of existing producing assets.”
Sentiment Analysis
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Analysts largely focused on growth drivers, capital intensity, regional trends, digital adoption, and the production recovery business. The tone was neutral to slightly positive, with probing questions about market potential and execution.
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Management displayed confidence, especially regarding international rebound, digital business, and production recovery. Le Peuch frequently referenced the company’s readiness and strong positioning, stating, “We are confident that the secular trend that the industry is continuing to witness will benefit our platform approach.”
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Compared to the previous quarter, management’s tone showed increased confidence in international recovery and the digital/data center trajectory, maintaining a constructive outlook despite market uncertainties.
Quarter-over-Quarter Comparison
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Guidance for 2026 revenue ($36.9 billion to $37.7 billion) marks a forward-looking update from last quarter’s focus on achieving high single-digit revenue growth and margin expansion for Q4 2025.
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Management reiterated the strategic importance of digital and production recovery, building on last quarter’s introduction of the standalone Digital division and the integration of ChampionX.
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This quarter saw greater emphasis on data center solutions and international market recovery, whereas the prior quarter centered more on the early impact of ChampionX and digital platform expansion.
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Analysts continued to focus on digital growth, regional market trends, and capital allocation, with a slightly more optimistic tone regarding international recovery.
Risks and Concerns
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Management cited “near-term oversupply may continue to exert downward pressure on commodity price throughout the first half of 2026, while elevated geopolitical uncertainties should provide a price floor.”
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Pricing pressure persists, particularly in international markets, with Le Peuch noting, “the market has been keeping pressure considering that the market has been declining in the last 18 months or 12 months in the international market.”
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The company remains vigilant about capital allocation and stands ready to increase CapEx if activity recovers faster than expected.
Final Takeaway
SLB’s management emphasized strong sequential growth, robust digital adoption, and the successful integration of ChampionX as the drivers supporting a constructive 2026 outlook. The company projects full-year 2026 revenue between $36.9 billion and $37.7 billion, backed by international market recovery and expanding digital and data center businesses. Management remains confident in maintaining margins and returning over $4 billion to shareholders, while closely monitoring risks from commodity price volatility and geopolitical uncertainties. The strategic focus on production recovery and digital solutions is positioned to capture evolving customer demand and market opportunities in the upcoming year.