SLB (NYSE:SLB) executives pointed to a stronger finish to 2025, improving international activity trends, and expanding growth avenues in digital, production recovery, and data center infrastructure during the company’s fourth-quarter and full-year 2025 earnings call.
Fourth-quarter performance and key drivers
Chief Executive Officer Olivier Le Peuch said the company ended 2025 with “strong operational and financial performance” in the fourth quarter, citing sequential revenue growth, margin expansion, and “substantial cash flow generation” despite what he described as a challenging macro environment.
Le Peuch said the quarter included sequential growth across all geographies for the first time since the second quarter of 2024, which he framed as a sign that global upstream activity has stabilized with early signs of a rebound in key markets. He highlighted stronger end-product sales in Production Systems, higher exploration data sales, and strong demand for digital operations “across all areas.”
Division results: Digital strength, Production Systems momentum
SLB’s results were led by Production Systems and Digital in the fourth quarter, management said. Biguet reported adjusted EBITDA margin of 23.9%, up 83 basis points sequentially, “primarily driven by very strong digital performance.” He also said margin expansion was constrained by a loss in a carbon capture project that reduced margins by roughly 50 basis points.
- Digital: Revenue of $825 million increased 25% sequentially. Pre-tax operating margin expanded 557 basis points to 34%. For the full year, Digital revenue was $2.7 billion, up 9%, with full-year EBITDA margin of 35%. Digital annual recurring revenue surpassed $1 billion, up 15% year over year, and trailing 12-month net recurring revenue was 103% at quarter end.
- Reservoir Performance: Revenue of $1.7 billion increased 4% sequentially, driven by international activity in markets including Saudi Arabia, East Asia, Qatar, Indonesia, and Guyana. Pre-tax operating margin rose 105 basis points to 19.6%.
- Well Construction: Revenue of $2.9 billion declined 1% sequentially, with declines in the Middle East and Asia offsetting higher offshore drilling in North America and Europe/Africa, according to management. Pre-tax operating margin was 18.7%, slightly down.
- Production Systems: Revenue of $4.1 billion increased 17% sequentially, reflecting a full quarter of ChampionX activity. Excluding ChampionX, Production Systems revenue rose 11% sequentially, driven by completions and artificial lift sales and project milestones in process technologies, subsea, and valves. Pre-tax operating margin increased 20 basis points to 16%.
Le Peuch also highlighted digital milestones, including the launch of “Tela,” described as an agentic AI system intended for upstream workflows, and a partnership with ADNOC to launch an AI-powered production system optimization platform.
Cash flow, debt reduction, and shareholder returns
SLB generated $3.0 billion of cash flow from operations and $2.3 billion of free cash flow in the fourth quarter, Biguet said, attributing the result to working capital unwinding on strong collections and reduced inventory tied to year-end deliveries. For the full year, free cash flow was $4.1 billion, marking the third consecutive year at or above $4 billion.
The company reduced net debt by $1.8 billion during the quarter to end 2025 at $7.4 billion. Capital investments, including capex and investments in APS projects and exploration data, were $716 million in the fourth quarter and $2.4 billion for the full year.
For 2025, SLB returned $4.0 billion to shareholders, including about $2.4 billion in repurchases and $1.6 billion in dividends. Looking ahead, management said it expects to return more than $4 billion to shareholders in 2026 through dividends and buybacks, supported by what it called visibility into another year of strong cash flow. Biguet said the company announced a 3.5% dividend increase and is targeting buybacks of $2.4 billion in 2026, with potential to increase depending on free cash flow and business visibility.
2026 outlook: revenue range, seasonality, and mix impacts
Le Peuch said near-term oversupply could pressure commodity prices through the first half of 2026, while geopolitical uncertainty could provide a price floor, leading operators to be cautious and “back-load” budgets. He said SLB expects key international markets and offshore activity to exit 2026 at a higher level than 2025 as supply and demand rebalance into 2027.
Assuming oil prices remain “rangebound in the high 50s to low 60s,” SLB guided 2026 revenue of $36.9 billion to $37.7 billion, with adjusted EBITDA of $8.6 billion to $9.1 billion and margins “in line” with 2025 levels.
By region, management said North America should benefit from seven months of ChampionX activity, stronger offshore activity tied to customer plans, and accelerated growth in data centers, while upstream land activity is expected to decline year over year. International revenue is expected to trend upward through the year for a slight year-over-year increase, led by Latin America and the Middle East and Asia, while Europe and Africa is expected to decline slightly.
For the first quarter of 2026, SLB expects revenue to decline by high single digits sequentially due to outsized year-end product sales and project milestones in Production Systems during the fourth quarter, with adjusted EBITDA margin down 150 to 200 basis points sequentially. Management said it expects a rebound in the second quarter and further expansion into the second half driven primarily by international markets.
Strategic themes: production recovery, subsea pipeline, data centers, and Venezuela
Le Peuch repeatedly emphasized production recovery as a “critical domain for value creation,” saying operators are prioritizing efficiencies, performance assurance, and digital optimization across the asset lifecycle. He argued SLB is positioned to integrate equipment with intelligent and autonomous digital capabilities, and said the addition of ChampionX expands SLB’s production portfolio to meet demand in production-focused spending.
On the Middle East, management said 2026 should be characterized by a rebound in Saudi drilling and workover activity, with rig counts potentially returning to early-2025 levels by the end of 2026. Le Peuch also cited momentum in markets including the UAE, Kuwait, and Iraq, and described rising international investment interest in countries such as Libya, Algeria, and Egypt.
In subsea, management said more than 500 subsea trees are expected to be awarded across 2026 and 2027, about 20% higher than the 2025 run rate. Le Peuch said OneSubsea was awarded about $4 billion in subsea bookings in 2025 and that SLB sees a path for cumulative bookings exceeding $9 billion over the next two years, supported by tendering activity.
SLB also highlighted its data center solutions business, which Le Peuch said launched less than two years ago and is expanding offerings, customers, and geographies. He said SLB expects to exit 2026 at a quarterly revenue run rate equivalent to $1 billion per year, and discussed plans to expand internationally, including steps into Asia and ambitions to grow further in other regions.
Finally, Le Peuch addressed Venezuela, saying SLB is currently the only international service company actively operating in the country under a license, and that the company is receiving customer inquiries. He said SLB has maintained facilities, equipment, and personnel locally and could ramp activity quickly “with appropriate licensing, safety parameters, and compliance measures in place,” while noting the opportunity depends on such conditions.
About SLB (NYSE:SLB)
SLB (NYSE: SLB), historically known as Schlumberger, is a leading global provider of technology, integrated project management and information solutions for the energy industry. Founded by Conrad and Marcel Schlumberger in 1926, the company develops and supplies products and services used across the exploration, drilling, completion and production phases of oil and gas development. Its offerings are intended to help operators characterize reservoirs, drill and complete wells, optimize production and manage field operations throughout the asset lifecycle.
SLB’s product and service portfolio spans reservoir characterization and well testing, wireline and logging services, directional drilling and drilling tools, well construction and completion technologies, production systems, and subsea equipment.
