Schlumberger(US:SLB)2026-01-23 15:32Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $9.7 billion, an increase of $817 million or 9% sequentially, with approximately $300 million attributed to the acquisition of ChampionX [20][19] - Adjusted EBITDA margin for the fourth quarter was 23.9%, an increase of 83 basis points sequentially, driven by strong digital performance [20][19] - Earnings per share, excluding charges and credits, was $0.78, reflecting a sequential increase of $0.09 but a decrease of $0.14 compared to the same quarter last year [19] Business Line Data and Key Metrics Changes - Digital revenue reached $825 million, a 25% sequential increase, with a pre-tax operating margin of 34%, up 557 basis points [21] - Reservoir Performance revenue was $1.7 billion, a 4% sequential increase, driven by strong international activity [21] - Production Systems revenue increased by 17% sequentially to $4.1 billion, reflecting a full quarter of activity from ChampionX [22] Market Data and Key Metrics Changes - Internationally, organic revenue increased by 7%, with North America seeing a 6% increase [6] - The Middle East showed increased activity, particularly in Saudi Arabia and UAE, contributing to the overall revenue growth [6][12] - The company noted a stabilization in global upstream activity, with key markets showing early signs of a rebound [6] Company Strategy and Development Direction - The company aims to leverage technology and digital solutions to enhance operational efficiency and reduce costs for customers [10][11] - There is a focus on production recovery as a critical domain for value creation, integrating equipment with intelligent digital capabilities [11][66] - The company anticipates a gradual recovery in upstream investment, particularly in international markets, as supply and demand rebalance [10][12] Management's Comments on Operating Environment and Future Outlook - Management expects near-term oversupply to exert downward pressure on commodity prices, but geopolitical uncertainties may provide a price floor [9][10] - The outlook for 2026 includes revenue expectations between $36.9 billion and $37.7 billion, driven by a full year of ChampionX activity and growth in digital operations [15][16] - The company is optimistic about the recovery in international markets, particularly in Latin America and the Middle East, while anticipating slight declines in Europe and Africa [15] Other Important Information - The company generated $3 billion in cash flow from operations during the fourth quarter, with free cash flow of $2.3 billion [22] - A total of $4 billion was returned to shareholders in 2025, with plans for a similar amount in 2026 through dividends and stock buybacks [26] - The company is the only international service provider actively operating in Venezuela, with plans to ramp up activities as conditions allow [18][56] Q&A Session Summary Question: CapEx trends and capital intensity - Management indicated a slight increase in CapEx to $2.5 billion for 2026, emphasizing improved capital efficiency compared to the past [31][32] Question: Customer mix and market opportunities in the Middle East - Management expressed confidence in national companies executing capital programs and noted a rebound in Saudi Arabian drilling activity [35][36] Question: Exit rate expectations for 2026 - Management expects the fourth quarter of 2026 to be higher than that of 2025, driven by international market recovery [45][46] Question: Digital business penetration - Management highlighted the potential for digital platforms to transform the industry, with increasing customer adoption of digital solutions [47][48] Question: Opportunities in Venezuela - Management noted readiness to ramp up operations in Venezuela, leveraging historical partnerships and existing assets [56][58] Question: Offshore market outlook - Management anticipates improved offshore activity in 2026, supported by FID and project developments in various regions [91][92]