Schlumberger(SLB) - 2025 Q2 - Quarterly Results

Second-Quarter 2025 Results Overview Summary Financial Performance SLB reported second-quarter 2025 revenue of $8.55 billion, a 1% sequential increase but a 6% year-on-year decrease, with GAAP diluted EPS at $0.74 and Adjusted EBITDA reaching $2.05 billion Summary Financial Performance (millions, except EPS) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :------------------------------------ | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Revenue | $8,546 | $8,490 | $9,139 | 1% | -6% | | Income before taxes – GAAP basis | $1,285 | $1,063 | $1,421 | 21% | -10% | | Net income attributable to SLB – GAAP basis | $1,014 | $797 | $1,112 | 27% | -9% | | Diluted EPS – GAAP basis | $0.74 | $0.58 | $0.77 | 28% | -4% | | Adjusted EBITDA* | $2,051 | $2,020 | $2,288 | 2% | -10% | | Adjusted EBITDA margin* | 24.0% | 23.8% | 25.0% | 21 bps | -103 bps | - Cash flow from operations was $1.14 billion and free cash flow was $622 million for Q2 2025[4] - The Board approved a quarterly cash dividend of $0.285 per share[4] CEO Commentary & Market Outlook CEO Olivier Le Peuch emphasized SLB's resilient Q2 performance, driven by a diversified portfolio and strategic focus on production and recovery, with a constructive outlook for the second half of the year - SLB reported solid second-quarter results, leveraging its diversified portfolio and broad market exposure to deliver steady revenue and slightly higher adjusted EBITDA and margins sequentially, demonstrating resilience amidst softer upstream spending and macroeconomic uncertainty[6] - International revenue increased 2% sequentially, driven by robust growth in parts of the Middle East, Asia, Europe, and North Africa, offsetting declines in other key markets[8] - Customers are increasing their focus on maximizing asset value and improving efficiency in the production phase, leading to higher demand for SLB's production and recovery solutions, particularly in the U.S. and mature basins[11] - SLB will increase its exposure to the less cyclical production and recovery space following the acquisition of ChampionX, which closed recently[12] - The industry has shown resilience, operating through uncertainty without a significant drop in upstream spending, driven by capital discipline and energy security needs[13] Key Events & Strategic Developments Corporate Actions SLB completed the sale of its Palliser Block interests and finalized the ChampionX acquisition to enhance production and recovery market exposure - On June 26, 2025, SLB completed the sale of its working interests in the Palliser Block in Alberta, Canada[16] - On July 16, 2025, SLB completed its acquisition of ChampionX, which is expected to increase its exposure to the growing production and recovery market and deliver best-in-class workflow integration across production chemicals and artificial lift[16] Dividend Announcement SLB's Board approved a quarterly cash dividend of $0.285 per share, payable in October 2025 - On July 17, 2025, SLB's Board of Directors approved a quarterly cash dividend of $0.285 per share of outstanding common stock, payable on October 9, 2025, to stockholders of record on September 3, 2025[17] Revenue & Operating Performance by Geography International Revenue Performance International revenue increased 2% sequentially to $6.85 billion but declined 8% year-on-year, with regional variations including growth in Europe & Africa International Revenue Performance (millions) | Region | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :---------------- | :------------ | :------------ | :------------ | :---------------- | :------------------ | | International | $6,847 | $6,727 | $7,452 | 2% | -8% | Latin America Latin America revenue remained flat sequentially at $1.49 billion, driven by mixed activity, while declining 14% year-on-year due to reduced land drilling in Mexico Latin America Revenue (millions) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :----------- | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Latin America | $1,492 | $1,495 | $1,742 | — | -14% | - Sequential growth from offshore activity in Brazil and increased land activity in Argentina was offset by reduced sales of production systems in Guyana[19] - Year-on-year decline was primarily due to a significant reduction in land drilling activity in Mexico, partially offset by robust unconventional stimulation activity in Argentina[19] Europe & Africa Europe & Africa revenue grew 6% sequentially to $2.37 billion from strong artificial lift and digital sales, but decreased 3% year-on-year due to reduced deepwater activity Europe & Africa Revenue (millions) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :------------- | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Europe & Africa | $2,369 | $2,235 | $2,442 | 6% | -3% | - Sequential growth was driven by significant sales of artificial lift in North Africa, subsea production systems in Nigeria, and higher digital revenue and increased sales of production systems in Europe[20] - Year-on-year decline was a result of reduced deepwater activity, partially offset by strong sales of artificial lift in North Africa and increased sales of production systems in Europe[21] Middle East & Asia Middle East & Asia revenue was flat sequentially at $2.99 billion, with gains in Iraq and UAE offset by declines in Saudi Arabia and Qatar, resulting in a 9% year-on-year decrease Middle East & Asia Revenue (millions) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :---------------- | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Middle East & Asia | $2,986 | $2,997 | $3,268 | — | -9% | - Sequential performance was flat as solid drilling performance and higher production system sales in Iraq and UAE, along with increased activity across Asia, were offset by activity decline in Saudi Arabia and Qatar[22] - Year-on-year decline was due to reduced activity and lower production system sales in Saudi Arabia, with declines also noted in Asia, Egypt, and Qatar, partially offset by higher revenues in UAE, Kuwait, and Iraq[23] North America Revenue Performance North America revenue decreased 4% sequentially to $1.65 billion due to various factors, but saw a 1% year-on-year increase driven by data center infrastructure solutions North America Revenue (millions) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :------------ | :------------ | :------------ | :------------ | :---------------- | :------------------ | | North America | $1,655 | $1,719 | $1,644 | -4% | 1% | - The sequential decline stemmed from lower Asset Performance Solutions (APS) revenue in the divested Palliser block, reduced drilling activity due to the Canadian seasonal spring breakup, and lower offshore exploration data sales[24] - Year-on-year revenue was slightly higher, driven by strong growth in data center infrastructure solutions, largely offset by reduced APS revenue in Canada and a sharp decline in U.S. land drilling activity[25] Revenue & Operating Performance by Division Digital & Integration Digital & Integration revenue decreased 1% sequentially to $995 million and 5% year-on-year, yet pretax operating margin significantly expanded to 32.8% due to digital adoption and cost efficiencies Digital & Integration Performance (millions, except margin) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :------------------------ | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Revenue | $995 | $1,006 | $1,050 | -1% | -5% | | Pretax operating income | $327 | $306 | $325 | 7% | — | | Pretax operating margin | 32.8% | 30.4% | 31.0% | 240 bps | 186 bps | - Digital revenue remained steady, with double-digit sequential growth from platforms, applications, and digital operations, offset by reduced sales of exploration data[27] - Margin improvement was primarily driven by greater digital adoption and cost-efficiency gains[29] Reservoir Performance Reservoir Performance revenue declined 1% sequentially to $1.69 billion and 7% year-on-year, but pretax operating margin improved 203 bps sequentially to 18.6% from higher intervention activity Reservoir Performance (millions, except margin) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :------------------------ | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Revenue | $1,691 | $1,700 | $1,819 | -1% | -7% | | Pretax operating income | $314 | $282 | $376 | 12% | -16% | | Pretax operating margin | 18.6% | 16.6% | 20.6% | 203 bps | -205 bps | - Sequential decline was due to a slowdown in evaluation and stimulation activity across international markets, partially offset by strong intervention activity[31] - Year-on-year revenue dropped primarily due to reduced activity in Saudi Arabia, Namibia, and Mexico[32] - Sequential margin improvement stemmed from higher intervention activity and the absence of startup costs that impacted the first quarter[32] Well Construction Well Construction revenue was flat sequentially at $2.96 billion but decreased 13% year-on-year, with pretax operating margin declining to 18.6% due to widespread activity reductions Well Construction Performance (millions, except margin) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :------------------------ | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Revenue | $2,963 | $2,977 | $3,411 | — | -13% | | Pretax operating income | $551 | $589 | $742 | -6% | -26% | | Pretax operating margin | 18.6% | 19.8% | 21.7% | -119 bps | -315 bps | - Sequential revenue was essentially flat, with gains in Iraq, UAE, offshore Mexico, North Africa, and Nigeria offset by declines in Namibia, North America land markets, Argentina, and Saudi Arabia[34] - Year-on-year revenue fell due to a broad reduction in drilling activity across Mexico, Namibia, Saudi Arabia, North America, Guyana, and India[35] - Margin compression stemmed from widespread activity reductions across North America and several international markets, partially offset by cost efficiency measures[36] Production Systems Production Systems revenue increased 3% sequentially to $3.04 billion and was flat year-on-year, with pretax operating margin improving to 16.4% due to favorable activity mix and execution Production Systems Performance (millions, except margin) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential Change | Year-on-year Change | | :------------------------ | :------------ | :------------ | :------------ | :---------------- | :------------------ | | Revenue | $3,036 | $2,938 | $3,025 | 3% | — | | Pretax operating income | $499 | $475 | $473 | 5% | 5% | | Pretax operating margin | 16.4% | 16.2% | 15.6% | 28 bps | 79 bps | - Sequential growth was fueled by higher sales of artificial lift systems, midstream production solutions, valves and completions, as well as higher data center infrastructure solutions in North America[38] - Year-on-year revenue grew slightly as strong demand for data center infrastructure solutions, artificial lift, and completions was largely offset by reduced sales of subsea production systems and valves[39] - Margin expansion was driven by stronger profitability across several business lines, supported by a favorable activity mix, efficient execution, and conversion of higher-margin backlog[39] Quarterly Highlights Core Business Contract Awards SLB secured significant Core business contracts, including subsea EPCI for bp's Ginger project, CO2 injection for Equinor, and integrated completion services for PDO - SLB's OneSubsea joint venture and Subsea Integration Alliance Partner, Subsea7, were awarded a substantial engineering, procurement, construction, and installation contract by bp for the Ginger project offshore Trinidad and Tobago[40] - SLB's OneSubsea was awarded an engineering, procurement, and construction contract by Equinor for a CO2 subsea injection system for the Northern Lights phase two offshore project in Norway, marking a decisive milestone for carbon capture and storage (CCS) at scale[40] - Perenco awarded SLB a multiyear contract to deliver well construction measurement services in Gabon and the Republic of Congo, deploying advanced technologies like the PowerDrive Archer™ hybrid rotary steerable system[40] - Petroleum Development Oman awarded SLB two five-year contracts for integrated completion services as well as wireline and tubing-conveyed perforation across its Block 6 concession, based on technology leadership and in-country value offering[40] - North Oil Company in Qatar awarded SLB a contract to provide Electris™ completions technologies aimed at boosting production and recovery in its Al-Shaheen field, marking the inaugural award for Electris completions in Qatar and the first globally paired with an SLB ESP[40] Technology and Innovation SLB launched Electris and Retina™ imaging systems, deploying advanced technologies for enhanced drilling, production, and autonomous operations globally - SLB launched Electris, a portfolio of digitally enabled electric well completions technologies that boost production and recovery while reducing total cost of ownership, with over 100 installations across five countries[41] - SLB launched Retina™ at-bit imaging system, a technology that converts drill bit measurements into high-quality borehole images for optimizing drilling efficiency, formation evaluation, and safety[41] - In Ecuador, SLB and ENAP deployed GeoSphere HD™ and PowerDrive Archer™ to achieve precise placement and 100% pay zone contact in horizontal wells, setting a benchmark for the region[41] - In the United Arab Emirates, Turnwell Industries LLC OPC drilled 95% of a 9,210-foot well section in autonomous directional control mode using SLB DrillOps™ advisory solution and Neuro™ autonomous solutions, setting a new pad record for rate of penetration[41] - In East Kuwait, SLB and Kuwait Oil Company enhanced production from the Mauddud Formation using tailored stimulation workflows and innovative technologies, achieving a record-setting total production rate of 4,500 barrels per day from the first two wells[41][42] Digital Solutions SLB expands digital solutions through partnerships with Mistral AI, Shell, and Cactus Drilling, deploying AI platforms, subsurface modeling, and autonomous drilling technologies - SLB will deploy its AI platform on Mistral Compute, integrating Mistral AI's large language models as primary generative AI models for the Lumi™ data and AI platform[43] - SLB partnered with Shell to deploy Petrel™ subsurface modeling across its assets worldwide, powered by advanced AI for seismic interpretation workflows, aiming to standardize infrastructure and accelerate scalable digital solutions[43] - SLB announced a strategic collaboration agreement with Cactus Drilling to expand the adoption of automated and autonomous drilling solutions, integrating Precise™ automated drilling system with DrillSync™ platform and DrillOps™/Neuro™ solutions[43] - Renaissance Africa Energy Company awarded SLB a software agreement to deploy advanced digital solutions like Petrel subsurface modeling, Techlog™ wellbore interpretation, and Eclipse™ reservoir simulator in Nigeria[43] New Energy Initiatives SLB advances new energy initiatives, including carbon storage solutions, emissions management, and geothermal energy partnerships, enabling the world's first full-scale cement carbon capture facility - Velesto Energy Berhad and SLB signed a three-year collaboration agreement to deploy DrillOps intelligent well delivery and insights solutions, as well as drilling emissions management solutions on designated Velesto rigs in Malaysia[44] - SLB launched Sequestri™ carbon storage solutions, a comprehensive portfolio of technologies and services for accelerating safer and more economic carbon storage projects, complementing its Capturi™ carbon capture solutions[44] - The Heidelberg Materials carbon capture plant in Brevik, Norway, enabled by SLB Capturi's Big Catch™ technology, officially opened as the world's first full-scale carbon capture facility for cement production, capturing its first CO2 in May[44] - SLB partnered with Google Cloud® and Project InnerSpace to drive global adoption of geothermal energy, leveraging advanced mapping technology, deep geothermal knowledge, and powerful computing[44] Financial Tables Condensed Consolidated Statement of Income The consolidated statement of income reflects a year-on-year decrease in revenue, net income, and income before taxes for Q2 and the first six months of 2025 Condensed Consolidated Statement of Income (millions, except EPS) | Periods Ended June 30, | Second Quarter 2025 (millions) | Second Quarter 2024 (millions) | Six Months 2025 (millions) | Six Months 2024 (millions) | | :------------------------------------ | :------------------ | :------------------ | :-------------- | :-------------- | | Revenue | $8,546 | $9,139 | $17,035 | $17,846 | | Interest & other income (1) | 252 | 85 | 330 | 169 | | Cost of revenue (1) | 6,934 | 7,262 | 13,815 | 14,270 | | Research & engineering | 180 | 188 | 352 | 369 | | General & administrative | 87 | 94 | 184 | 215 | | Merger & integration (1) | 35 | 16 | 84 | 27 | | Restructuring & other (1) | 135 | 111 | 293 | 111 | | Interest | 142 | 132 | 289 | 245 | | Income before taxes (1) | $1,285 | $1,421 | $2,348 | $2,778 | | Tax expense (1) | 237 | 276 | 471 | 535 | | Net income (1) | $1,048 | $1,145 | $1,877 | $2,243 | | Net income attributable to SLB (1) | $1,014 | $1,112 | $1,811 | $2,180 | | Diluted earnings per share of SLB (1) | $0.74 | $0.77 | $1.32 | $1.51 | | Average shares outstanding assuming dilution | 1,366 | 1,443 | 1,373 | 1,445 | Condensed Consolidated Balance Sheet SLB's total assets slightly decreased to $48.77 billion as of June 30, 2025, with current liabilities increasing due to higher short-term borrowings Condensed Consolidated Balance Sheet (millions) | Asset/Liability | Jun. 30, 2025 (millions) | Dec. 31, 2024 (millions) | | :------------------------------------ | :------------ | :------------ | | Assets | | | | Cash and short-term investments | $3,747 | $4,669 | | Receivables | 8,586 | 8,011 | | Inventories | 4,740 | 4,375 | | Other current assets | 1,380 | 1,515 | | Total Current Assets | 18,453 | 18,570 | | Investment in affiliated companies | 1,676 | 1,635 | | Fixed assets | 7,399 | 7,359 | | Goodwill | 14,658 | 14,593 | | Intangible assets | 2,893 | 3,012 | | Other assets | 3,690 | 3,766 | | Total Assets | $48,769 | $48,935 | | Liabilities and Equity | | | | Accounts payable and accrued liabilities | $9,993 | $10,375 | | Estimated liability for taxes on income | 833 | 982 | | Short-term borrowings and current portion of long-term debt | 2,807 | 1,051 | | Dividends payable | 402 | 403 | | Total Current Liabilities | 14,035 | 12,811 | | Long-term debt | 10,891 | 11,023 | | Other liabilities | 2,292 | 2,751 | | Total Liabilities | 27,218 | 26,585 | | Equity | 21,551 | 22,350 | | Total Liabilities and Equity | $48,769 | $48,935 | Components of Liquidity Q2 2025 cash flow from operations was $1.14 billion and free cash flow was $622 million, while Net Debt increased to $9.95 billion due to repurchases and acquisitions Net Debt (millions) | Metric | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Dec. 31, 2024 (millions) | | :------------------------------------ | :------------ | :------------ | :------------ | :------------ | | Cash and short-term investments | $3,747 | $3,897 | $4,003 | $4,669 | | Short-term borrowings and current portion of long-term debt | (2,807) | (3,475) | (1,033) | (1,051) | | Long-term debt | (10,891) | (10,527) | (12,156) | (11,023) | | Net Debt (1) | $(9,951) | $(10,105) | $(9,186) | $(7,405) | Cash Flow Metrics (millions) | Cash Flow Metric | Six Months 2025 (millions) | Second Quarter 2025 (millions) | Six Months 2024 (millions) | | :----------------------- | :-------------- | :------------------ | :-------------- | | Net income | $1,877 | $1,048 | $2,243 | | Cash flow from operations | $1,802 | $1,142 | $1,763 | | Capital expenditures | (769) | (371) | (862) | | APS investments | (225) | (117) | (256) | | Exploration data capitalized | (83) | (32) | (91) | | Free cash flow (4) | $725 | $622 | $554 | | Dividends paid | (773) | (387) | (751) | | Stock repurchase program | (2,300) | — | (735) | Non-GAAP Financial Measures & Reconciliations Charges & Credits Non-GAAP financial measures, excluding specific charges and credits, provide insight into SLB's underlying business, with Q2 2025 diluted EPS at $0.74 on this adjusted basis - Non-GAAP financial measures, excluding charges & credits, provide useful perspective on SLB's underlying business results and operating trends, and are used by management as performance measures[49] Second Quarter 2025 Reconciliation (millions, except EPS) | Metric | Pretax (millions) | Tax (millions) | Noncont. Interests (millions) | Net (millions) | Diluted EPS | | :------------------------------------ | :----- | :-- | :----------------- | :-- | :---------- | | SLB net income (GAAP basis) | $1,285 | $237 | $34 | $1,014 | $0.74 | | Impairment of equity method investment | 69 | 12 | — | 57 | 0.04 | | Workforce reductions | 66 | 3 | — | 63 | 0.05 | | Merger & integration | 35 | 4 | 4 | 27 | 0.02 | | Gain on sale of Palliser APS project | (149) | (4) | — | (145) | (0.11) | | SLB net income, excluding charges & credits | $1,306 | $252 | $38 | $1,016 | $0.74 | First Quarter 2025 Reconciliation (millions, except EPS) | Metric | Pretax (millions) | Tax (millions) | Noncont. Interests (millions) | Net (millions) | Diluted EPS | | :------------------------------------ | :----- | :-- | :----------------- | :-- | :---------- | | SLB net income (GAAP basis) | $1,063 | $234 | $32 | $797 | $0.58 | | Workforce reductions | 158 | 10 | — | 148 | 0.11 | | Merger & integration | 48 | 1 | 4 | 43 | 0.03 | | SLB net income, excluding charges & credits | $1,269 | $245 | $36 | $988 | $0.72 | Second Quarter 2024 Reconciliation (millions, except EPS) | Metric | Pretax (millions) | Tax (millions) | Noncont. Interests (millions) | Net (millions) | Diluted EPS | | :------------------------------------ | :----- | :-- | :----------------- | :-- | :---------- | | SLB net income (GAAP basis) | $1,421 | $276 | $33 | $1,112 | $0.77 | | Workforce reductions | 111 | 17 | — | 94 | 0.07 | | Merger & integration | 31 | 5 | 8 | 18 | 0.01 | | SLB net income, excluding charges & credits | $1,563 | $298 | $41 | $1,224 | $0.85 | Divisional Performance Reconciliation Reconciliation of divisional pretax operating income to consolidated income before taxes highlights corporate items and unallocated interest as key differences Three Months Ended Jun. 30, 2025 (millions) | Division | Revenue (millions) | Income Before Taxes (millions) | | :-------------------- | :------ | :------------------ | | Digital & Integration | $995 | $327 | | Reservoir Performance | 1,691 | 314 | | Well Construction | 2,963 | 551 | | Production Systems | 3,036 | 499 | | Eliminations & other | (139) | (107) | | Pretax segment operating income | | $1,584 | | Corporate & other | | (169) | | Interest income(1) | | 30 | | Interest expense(1) | | (139) | | Charges & credits(2) | | (21) | | Consolidated Income Before Taxes | $8,546 | $1,285 | Six Months Ended Jun. 30, 2025 (millions) | Division | Revenue (millions) | Income Before Taxes (millions) | | :-------------------- | :------ | :------------------ | | Digital & Integration | $2,001 | $633 | | Reservoir Performance | 3,391 | 596 | | Well Construction | 5,940 | 1,140 | | Production Systems | 5,974 | 973 | | Eliminations & other | (271) | (202) | | Pretax segment operating income | | $3,140 | | Corporate & other | | (347) | | Interest income(1) | | 66 | | Interest expense(1) | | (283) | | Charges & credits(2) | | (228) | | Consolidated Income Before Taxes | $17,035 | $2,348 | - The difference between SLB's consolidated income before taxes and pretax segment operating income consists of corporate items, charges and credits, and interest income and interest expense not allocated to the segments, as well as stock-based compensation expense, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items[60] Supplementary Information (FAQs) Capital Investment Guidance SLB's full-year 2025 capital investment guidance is approximately $2.4 billion, reflecting the ChampionX acquisition impact and a decrease from 2024 - Capital investment (capex, exploration data costs, and APS investments) for full-year 2025 is expected to be approximately $2.4 billion, reflecting the ChampionX acquisition impact, down from $2.6 billion in 2024[56] Cash Flow from Operations & Free Cash Flow Q2 2025 cash flow from operations was $1.14 billion, with free cash flow at $622 million - Cash flow from operations for Q2 2025 was $1.14 billion, and free cash flow was $622 million[57] Interest & Other Income Details Q2 2025 interest & other income totaled $252 million, primarily from the Palliser APS project sale, interest income, and equity method investments Interest & Other Income Components (millions) | Component | Amount (millions) | | :-------------------------- | :---------------- | | Gain on sale of Palliser APS project | $149 | | Interest income | 30 | | Earnings of equity method investments | 73 | | Total Interest & other income | $252 | Interest Income & Expense Changes Q2 2025 interest income decreased $4 million sequentially to $30 million, while interest expense decreased $5 million sequentially to $142 million - Interest income of $30 million for Q2 2025 decreased $4 million sequentially[59] - Interest expense of $142 million for Q2 2025 decreased $5 million sequentially[59] Income Before Taxes vs. Pretax Segment Operating Income The difference between consolidated income before taxes and pretax segment operating income is due to corporate items, charges, unallocated interest, and nonoperating items - The difference between consolidated income before taxes and pretax segment operating income includes corporate items, charges and credits, unallocated interest income/expense, stock-based compensation expense, amortization of certain intangible assets, centrally managed initiatives, and other nonoperating items[60] Effective Tax Rate (ETR) The GAAP effective tax rate for Q2 2025 was 18.4%, while the adjusted ETR, excluding charges and credits, was 19.3% - The GAAP ETR for Q2 2025 was 18.4%, compared to 22.0% for Q1 2025[61] - Excluding charges and credits, the ETR for Q2 2025 was 19.3%, compared to 19.4% for Q1 2025[61] Shares Outstanding As of June 30, 2025, 1.351 billion common shares were outstanding, a decrease from Q1 due to the stock repurchase program - There were 1.351 billion shares of common stock outstanding as of June 30, 2025, down from 1.360 billion shares outstanding as of March 31, 2025[62] Shares Outstanding (millions) | Shares Outstanding | Amount (millions) | | :-------------------------- | :---------------- | | Shares outstanding at March 31, 2025 | 1,360 | | Stock repurchase program | (9) | | Shares outstanding at June 30, 2025 | 1,351 | - The weighted average number of shares outstanding was 1.352 billion during Q2 2025 and 1.366 billion during Q1 2025[64] Adjusted EBITDA & Margin Q2 2025 Adjusted EBITDA was $2.05 billion with a 24.0% margin, showing sequential growth but a year-on-year decrease - SLB's adjusted EBITDA was $2.051 billion in Q2 2025, $2.020 billion in Q1 2025, and $2.288 billion in Q2 2024[65] - SLB's adjusted EBITDA margin was 24.0% in Q2 2025, 23.8% in Q1 2025, and 25.0% in Q2 2024[66] Adjusted EBITDA Reconciliation (Q2 2025) (millions) | Metric | Amount (millions) | | :------------------------------------ | :---------------- | | Net income attributable to SLB | $1,014 | | Net income attributable to noncontrolling interests | 34 | | Tax expense | 237 | | Income before taxes | $1,285 | | Charges & credits | 22 | | Depreciation and amortization | 633 | | Interest expense | 142 | | Interest income | (30) | | Adjusted EBITDA | $2,051 | | Revenue | $8,546 | | Adjusted EBITDA margin | 24.0% | Adjusted EBITDA Reconciliation (Six Months 2025 vs. 2024) (millions) | Metric | Six Months 2025 (millions) | Six Months 2024 (millions) | Change | | :------------------------------------ | :-------------- | :-------------- | :----- | | Net income attributable to SLB | $1,811 | $2,180 | | | Net income attributable to noncontrolling interests | 66 | 63 | | | Tax expense | 471 | 535 | | | Income before taxes | $2,348 | $2,778 | | | Charges & credits | 228 | 167 | | | Depreciation and amortization | 1,273 | 1,231 | | | Interest expense | 289 | 245 | | | Interest income | (66) | (77) | | | Adjusted EBITDA | $4,072 | $4,344 | -6% | | Revenue | $17,035 | $17,846 | -5% | | Adjusted EBITDA margin | 23.9% | 24.3% | -44 bps | Depreciation & Amortization Components Total depreciation and amortization expense for Q2 2025 was $633 million, primarily from fixed assets and APS investments, totaling $1.27 billion for the first six months Q2 2025 Depreciation and Amortization (millions) | Component | Amount (millions) | | :------------------------------------ | :---------------- | | Depreciation of fixed assets | $408 | | Amortization of intangible assets | 82 | | Amortization of APS investments | 115 | | Amortization of exploration data costs capitalized | 28 | | Total | $633 | Six Months 2025 Depreciation and Amortization (millions) | Component | Amount (millions) | | :------------------------------------ | :---------------- | | Depreciation of fixed assets | $805 | | Amortization of intangible assets | 164 | | Amortization of APS investments | 225 | | Amortization of exploration data costs capitalized | 79 | | Total | $1,273 | Core Business Divisional Performance SLB's Core business generated $7.69 billion in Q2 2025 revenue, a 1% sequential increase but 7% year-on-year decrease, with a pretax operating margin of 17.7% - SLB's Core business comprises the Reservoir Performance, Well Construction, and Production Systems Divisions[70] Core Business Revenue (Q2 2025) (millions) | Division | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential | Year-on-year | | :-------------------- | :------------ | :------------ | :------------ | :--------- | :----------- | | Reservoir Performance | $1,691 | $1,700 | $1,819 | | | | Well Construction | 2,963 | 2,977 | 3,411 | | | | Production Systems | 3,036 | 2,938 | 3,025 | | | | Total Core Revenue | $7,690 | $7,615 | $8,255 | 1% | -7% | Core Business Pretax Operating Income (Q2 2025) (millions) | Division | Jun. 30, 2025 (millions) | Mar. 31, 2025 (millions) | Jun. 30, 2024 (millions) | Sequential | Year-on-year | | :-------------------- | :------------ | :------------ | :------------ | :--------- | :----------- | | Reservoir Performance | $314 | $282 | $376 | | | | Well Construction | 551 | 589 | 742 | | | | Production Systems | 499 | 475 | 473 | | | | Total Core Pretax Operating Income | $1,364 | $1,346 | $1,591 | 1% | -14% | Core Business Pretax Operating Margin (Q2 2025) | Division | Jun. 30, 2025 | Mar. 31, 2025 | Jun. 30, 2024 | Sequential | Year-on-year | | :-------------------- | :------------ | :------------ | :------------ | :--------- | :----------- | | Reservoir Performance | 18.6% | 16.6% | 20.6% | | | | Well Construction | 18.6% | 19.8% | 21.7% | | | | Production Systems | 16.4% | 16.2% | 15.6% | | | | Total Core Margin | 17.7% | 17.7% | 19.3% | 8 bps | -152 bps | Company Information & Disclosures About SLB SLB is a global technology company driving energy innovation across oil and gas, digital solutions, decarbonization, and new energy systems in over 100 countries - SLB is a global technology company driving energy innovation for a balanced planet, with a presence in over 100 countries[71] - The company focuses on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems to accelerate the energy transition[71] Conference Call Details SLB held a conference call on July 18, 2025, to discuss Q2 earnings and business outlook, with access details provided for replays - SLB held a conference call on Friday, July 18, 2025, at 9:30 a.m. U.S. Eastern time to discuss earnings and business outlook[72] - Access details for the live call and audio/webcast replays (available until July 25, 2025) were provided[72] Investor Relations & Media Contacts Contact information for SLB's Investor Relations and Media teams, including key personnel and contact details, is available for inquiries - Contact information for Investor Relations (James R. McDonald, Joy V. Domingo) and Media (Josh Byerly, Moira Duff) was provided, including phone numbers and email addresses[73] Forward-Looking Statements The press release includes forward-looking statements on financial targets, business outlook, and strategic initiatives, which are subject to various risks and uncertainties - The press release contains forward-looking statements concerning financial and performance targets, business outlook, growth, the benefits of the ChampionX acquisition, oil and natural gas demand/prices, energy transition, capital expenditures, business strategies, and future liquidity/results of operations[73] - These statements are subject to risks and uncertainties, including changing global economic and geopolitical conditions, changes in customer spending, inability to achieve targets, foreign currency risk, inflation, and regulatory changes[73] - SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise[74]