Schlumberger(US:SLB)2026-01-23 21:01Revenue and Operations - Non-US operations accounted for approximately 82% of consolidated revenue in 2025, 85% in 2024, and 84% in 2023[50]. - Russia represented approximately 4% of worldwide revenue during 2025, with net assets in Russia valued at approximately $0.7 billion as of December 31, 2025[51]. Market Influences - Demand for products and services is significantly influenced by customer expenditures, which are affected by oil and gas price fluctuations[46]. - Anticipated declines in oil and gas prices may lead to lower capital expenditures, project modifications, and payment delays, adversely impacting financial condition and cash flows[48]. Competitive Environment - The company operates in a highly competitive environment, necessitating continuous innovation to maintain technology leadership and market share[61]. - The success of the ChampionX acquisition depends on the ability to integrate businesses and realize anticipated synergies[59]. Regulatory and Compliance Risks - Compliance with complex and frequently changing laws and regulations is essential, as violations could materially affect financial condition and reputation[65]. - Existing or future regulations to limit greenhouse gas emissions may reduce demand for products and services, impacting financial performance[68]. - Environmental compliance costs and liabilities from regulations could materially impact SLB's business and financial results, as laws governing emissions and waste management become more stringent[71]. Financial Risks - Approximately 70% of SLB's revenue in 2025 was denominated in US dollars, while a significant portion of expenses was incurred in foreign currencies, leading to increased costs when the US dollar weakens[191]. - SLB maintains forward contracts for the US dollar equivalent of $10.8 billion in various foreign currencies, with $4.5 billion related to hedges of debt balances denominated in currencies other than the functional currency[195]. - A 10% appreciation in the US dollar from December 31, 2025 market rates would decrease the unrealized value of SLB's forward contracts by $154 million, while a 10% depreciation would increase the unrealized value by $166 million[194]. - The company is exposed to substantial liability claims due to operational risks, including incidents at well sites, which could adversely affect its financial condition and cash flows[73]. Operational and Environmental Risks - The company faces risks from cyber incidents that could adversely impact reputation, business operations, and financial results[56]. - SLB's sustainability goals, including net-zero emissions targets, expose the company to operational, reputational, and financial risks if not achieved[74]. - Severe weather events, exacerbated by climate change, have historically affected SLB's operations and may continue to do so, leading to increased operating costs or decreased revenue[78]. - The company uses cross-currency interest rate swaps to hedge against cash flow risks related to fixed-rate debt denominated in currencies other than its functional currency[192]. Human Resources and Investor Relations - SLB's ability to attract and retain qualified personnel is critical for operations, with competition for skilled workers intensifying as industry activity increases[76]. - The company faces increased scrutiny from investors regarding its sustainability practices, which could negatively impact its reputation and access to capital if expectations are not met[75].