SLB — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue was $9.45 billion, increasing 5% sequentially and 6% year on year.
• GAAP net income attributable to SLB was $735 million, decreasing 6% sequentially and 1% year on year.
• GAAP diluted EPS was $0.49, decreasing 6% sequentially and 2% year on year.
• Adjusted EBITDA was $2.07 billion, increasing 9% sequentially and essentially flat year on year.
• Adjusted EBITDA margin was 21.9%, up 71 basis points sequentially and down 121 basis points year on year.
• Pretax segment operating income was $1.58 billion, increasing 12% sequentially and decreasing 3% year on year.
• Pretax segment operating margin was 16.7%, up 104 basis points sequentially and down 153 basis points year on year.
• Net income attributable to SLB, excluding charges and credits, was $962 million, increasing 16% sequentially and decreasing 6% year on year.
• Diluted EPS, excluding charges and credits, was $0.64, increasing 16% sequentially and decreasing 7% year on year.
• Cash flow from operations was $1.51 billion.
• Free cash flow was $828 million.
• Net debt was $9.25 billion as of September 30, 2026.

Guidance and Future Outlook:

• Full-year 2026 capital investment (capex, exploration data costs, and APS investments) is expected to be approximately $2.5 billion.
• Management sees a compelling outlook for 2027 driven by deepwater momentum in Latin America, Europe, Sub-Saharan Africa, and Asia, and international diversification by U.S. shale operators.
• The 2027 outlook includes upside potential as Middle East activity recovers.
• Energy security and supply shocks continue to drive international supply diversification and reserve replacement.

Business Segments and Product Lines:

• Digital: Revenue was $693 million, down 1% sequentially and up 5% year on year. Annualized Recurring Revenue (ARR) was $1.04 billion as of September 30, 2026, a 13% increase year on year.
• Reservoir Performance: Revenue was $1.63 billion, up 5% sequentially and down 3% year on year. Pretax operating margin was 16.3%.
• Well Construction: Revenue was $2.89 billion, up 5% sequentially and down 3% year on year. Pretax operating margin was 16.4%.
• Production Systems: Revenue was $4.00 billion, up 6% sequentially and up 15% year on year. Pretax operating margin was 16.1%.
• All Other: Revenue was $544 million, up 8% sequentially and up 37% year on year, driven by a 23% sequential increase in Data Center Solutions.
• ChampionX Contribution: The acquired ChampionX businesses contributed $956 million of revenue, $239 million of adjusted EBITDA, and $190 million of pretax segment operating income in Q3 2026.
• Data Center Solutions: Revenue increased 23% sequentially, driven by growing demand and expansion into Asia.

Market and Competitive Landscape:

• North America revenue grew 7% sequentially and 24% year on year, driven by U.S. land activity and Data Center Solutions.
• International revenue grew 5% sequentially and 1% year on year.
• Middle East revenue grew 13% sequentially despite late-quarter disruptions, reflecting a rebound in activity.
• Latin America revenue grew 2% sequentially and 18% year on year, driven by offshore activity in Guyana and Brazil.
• Europe & Africa revenue grew 2% sequentially and was flat year on year.
• Middle East & Asia revenue grew 9% sequentially but decreased 7% year on year due to conflict-related disruptions.
• SLB OneSubsea activity increased with a steady flow of new contract awards in international markets.

Risks and Challenges:

• Near-term uncertainty in the Middle East due to conflict-related disruptions.
• Late-quarter disruptions in the Middle East affected sequential growth.
• Lower revenue in SLB Capturi following the completion of project milestones.
• Ramp-up costs associated with new Data Center Solutions projects impacted profitability in the "All Other" segment.
• Lingering impact of Middle East conflict-related disruptions on year-on-year comparisons.

Management Commentary and Tone:

• CEO Olivier Le Peuch described the results as "solid" with broad sequential growth across all regions and Core divisions.
• Management noted that the upcycle is gaining momentum, supported by international deepwater momentum and U.S. land activity.
• The company highlighted the value of its production offering as customers prioritize production optimization and extended asset life.
• Management views the market fundamentals as supportive, with energy security driving a distinct upcycle.

Analyst Questions and Answers:

• Capital investment for full-year 2026 remains expected at approximately $2.5 billion.
• Cash flow from operations for Q3 2026 was $1.51 billion and free cash flow was $828 million.
• Interest & other income for Q3 2026 was $68 million, consisting of $25 million in interest income and $43 million in earnings from equity method investments.
• The effective tax rate (ETR) for Q3 2026 was 23.5% on a GAAP basis and 20.0% excluding charges and credits.
• Shares outstanding were 1.476 billion as of September 30, 2026.

Other Key Points:

• The Board approved a quarterly cash dividend of $0.295 per share, payable on January 7, 2027.
• SLB repurchased 12.9 million shares for $656 million during the quarter; total repurchases for the first nine months of 2026 were 34.0 million shares for $1.76 billion.
• On August 31, 2026, SLB signed an agreement to acquire Kelvion for approximately $3.4 billion in cash, assuming $0.7 billion of debt; the transaction is expected to close in the first half of 2027.
• On September 1, 2026, SLB completed the acquisition of S&P Global Energy's geoscience and petroleum engineering software business portfolio.
• Notable contract awards included integrated well construction contracts with Aramco, subsea production systems for ExxonMobil Moçambique, and reservoir stimulation services with Equinor.
• SLB deployed a sensor-based production chemistry optimization program in the Permian Basin that avoided $4.4 million in net costs in the first nine months.
• SLB partnered with Chevron Technical Center for the co-development of next-generation digital technologies for reservoir engineering.
• SLB was selected as the strategic reservoir partner for Harbour Energy's Havstjerne carbon storage project in the Norwegian North Sea.