Schlumberger(SLB) - 2025 Q2 - Quarterly Report

PART I Item 1. Financial Statements This section presents SLB's unaudited consolidated financial statements for Q2 and H1 2025, detailing financial performance and significant events Consolidated Statement of Income SLB reported Q2 2025 total revenue of $8.55 billion and net income of $1.01 billion, both decreasing year-over-year from Q2 2024 Q2 and Six Months 2025 vs 2024 Performance | Metric | Q2 2025 | Q2 2024 | YoY Change | Six Months 2025 | Six Months 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $8,546 M | $9,139 M | -6.5% | $17,035 M | $17,846 M | -4.5% | | Net Income (attributable to SLB) | $1,014 M | $1,112 M | -8.8% | $1,811 M | $2,180 M | -16.9% | | Diluted EPS | $0.74 | $0.77 | -3.9% | $1.32 | $1.51 | -12.6% | Consolidated Balance Sheet As of June 30, 2025, SLB's total assets slightly decreased to $48.77 billion, while total liabilities increased and stockholders' equity declined due to stock purchases Balance Sheet Summary (in millions) | Account | Jun. 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $18,453 | $18,570 | | Total Assets | $48,769 | $48,935 | | Total Current Liabilities | $14,035 | $12,811 | | Long-term Debt | $10,891 | $11,023 | | Total Liabilities | $27,218 | $26,585 | | SLB Stockholders' Equity | $20,302 | $21,130 | Consolidated Statement of Cash Flows For H1 2025, operating cash flow slightly increased to $1.80 billion, investing cash flow decreased, and financing cash flow significantly increased due to a $2.3 billion stock repurchase program Six Months Cash Flow Summary (in millions) | Cash Flow Activity | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,802 | $1,763 | | Net Cash Used in Investing Activities | $(186) | $(1,644) | | Net Cash Used in Financing Activities | $(1,989) | $(46) | | Net (Decrease) Increase in Cash | $(373) | $73 | - The stock repurchase program significantly impacted financing cash flows, with $2.3 billion used in the first six months of 2025 compared to $735 million in the same period of 2024[17] Notes to Consolidated Financial Statements These notes detail key accounting policies, significant events like the ChampionX acquisition, restructuring charges, asset sales, and segment performance by geographic area - On July 16, 2025, SLB completed the acquisition of ChampionX Corporation in an all-stock transaction valued at $4.9 billion, issuing approximately 141 million shares[26] - In Q2 2025, SLB recorded pre-tax charges of $170 million for impairments, workforce reductions, and merger costs, partially offset by a $149 million pre-tax gain from the sale of its Palliser APS project[27][28][29][30] Revenue by Geographic Area (Six Months Ended June 30, in millions) | Region | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | North America | $3,373 | $3,242 | +4.0% | | Latin America | $2,986 | $3,395 | -12.0% | | Europe & Africa | $4,604 | $4,764 | -3.4% | | Middle East & Asia | $5,983 | $6,348 | -5.8% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 5% H1 2025 revenue decline, sequential Q2 growth, and a constructive outlook for H2, highlighting strong free cash flow and capital returns - Management highlights that despite regional slowdowns, international revenue increased 2% sequentially in Q2 2025, while North America revenue decreased 4%[83] - The company remains constructive for the second half of the year, supported by its position in key markets and the acquisition of ChampionX, assuming commodity prices remain range-bound[85] - For the first six months of 2025, SLB generated $725 million in free cash flow, an increase from $554 million in the same period of 2024[109] - SLB executed a $2.3 billion accelerated share repurchase (ASR) program, completed on April 7, 2025, repurchasing 56.8 million shares at an average price of $40.51[109] Results of Operations Q2 2025 revenue increased 1% sequentially to $8.5 billion, while H1 2025 revenue decreased 5% year-over-year to $17.0 billion, with varied segment performance Segment Revenue - Q2 2025 vs Q1 2025 (in millions) | Segment | Q2 2025 Revenue | Q1 2025 Revenue | QoQ Change | | :--- | :--- | :--- | :--- | | Digital & Integration | $995 | $1,006 | -1.1% | | Reservoir Performance | $1,691 | $1,700 | -0.5% | | Well Construction | $2,963 | $2,977 | -0.5% | | Production Systems | $3,036 | $2,938 | +3.3% | Segment Revenue - Six Months 2025 vs 2024 (in millions) | Segment | Six Months 2025 Revenue | Six Months 2024 Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Digital & Integration | $2,001 | $2,003 | -0.1% | | Reservoir Performance | $3,391 | $3,544 | -4.3% | | Well Construction | $5,940 | $6,779 | -12.4% | | Production Systems | $5,974 | $5,843 | +2.2% | Liquidity and Capital Resources As of June 30, 2025, SLB's net debt increased to $9.95 billion due to share repurchases, while maintaining strong liquidity and forecasting $2.4 billion in full-year capital investments Components of Liquidity (in millions) | Component | Jun. 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Cash | $3,236 | $3,544 | | Short-term investments | $511 | $1,125 | | Total Debt | $(13,698) | $(12,074) | | Net Debt | $(9,951) | $(7,405) | - Capital investments are expected to be approximately $2.4 billion for the full year 2025, including the impact of the ChampionX acquisition[109] - SLB increased its quarterly cash dividend by 3.6% to $0.285 per share, beginning in April 2025[109] Item 3. Quantitative and Qualitative Disclosures About Market Risk SLB's market risk exposure has not materially changed since its December 31, 2024, Annual Report on Form 10-K - SLB's exposure to market risk has not materially changed since December 31, 2024[114] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that SLB's disclosure controls and procedures were effective as of the end of the period covered by the report[116] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[116] PART II Item 1. Legal Proceedings SLB refers to Note 9 for legal proceedings, where management assesses the probability of a material loss as remote - Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote[64][117] Item 1A. Risk Factors No material changes to risk factors from the 2024 Form 10-K are reported, except for the elimination of ChampionX acquisition-related risks - There have been no material changes from the risk factors disclosed in the 2024 Form 10-K, other than the elimination of risks related to the completion of the ChampionX acquisition, which is now finalized[118] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details SLB's stock repurchase activities, including approximately $5.8 billion repurchased under a $10 billion program and the finalization of a $2.3 billion ASR in Q2 2025 - As of June 30, 2025, SLB has repurchased approximately $5.8 billion of its common stock under the $10 billion share repurchase program approved in 2016[120] - The $2.3 billion Accelerated Share Repurchase (ASR) was completed on April 7, 2025. SLB received a total of 56.8 million shares, with the final 9.2 million shares delivered in April[121] Item 5. Other Information SLB discloses residual transactions with Iran in Q2 2025, primarily payments for taxes and governmental charges, with non-US subsidiaries maintaining local bank accounts - SLB's residual dealings with Iran in Q2 2025 were limited to payments of taxes and other governmental charges[125] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and other required reports - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[127]