Margin Expansion in Flat Spending Environment
Q: Can you still expand margins if upstream spending is flat?
A: Yes, we expect further margin expansion in Q4 and into 2025 even with flat upstream spending. This will come from activity mix, with digital boosting margins, technology mix, performance contracts pushing margins, and continuous cost optimization efforts.

2025 EBITDA Target Amid Macroeconomic Changes
Q: How does macro outlook affect your $10B EBITDA target for 2025?
A: With the current macro outlook, excluding ChampionX, it's possible the 2021-2025 CAGR may finish in the high teens rather than hitting 20%. However, we remain laser-focused on margin expansion and have increased EBITDA margins for 15 consecutive quarters.

Pricing Pressure in Moderating Markets
Q: Are you seeing pricing pressure as growth moderates?
A: While competitive and customer pressure on pricing exists, we believe continuing to deliver value and exceed performance expectations will alleviate such pressures. The industry is tight on capacity and has strong capital discipline, which helps defend and even improve pricing, thus protecting margins.

Future Growth in Digital Business
Q: Where will future digital growth come from beyond $3B target?
A: Growth will come from three areas: ongoing cloud transition affecting over 1,000 customers; digital operations in production and drilling with edge applications and autonomous optimization; and new data and AI capabilities like the Lumi platform. Combining these, digital will continue to be a growing TAM and an engine of accretive growth for revenue and margins.

Sensitivity of Digital Growth to Upstream Spending
Q: Is digital growth sensitive to upstream spending slowdowns?
A: Digital growth is largely uncorrelated with upstream spending at this point. The early stage of digital adoption and the expanding TAM, especially with Lumi data and AI, create a long-term growth opportunity regardless of upstream spending trends.

Free Cash Flow Returned to Shareholders
Q: Will the percentage of free cash flow returned to shareholders increase?
A: We have exceeded our minimum return of 50% of free cash flow to shareholders, reaching about 80% this year. While it's hard to say if it will reach 100%, returns to shareholders remain a priority, and the percentage will be clearly above our initial guidance.

Financial Impact of Palliser Sale
Q: How does the Palliser sale impact financials?
A: Palliser generates approximately $500 million in revenue per year with pretax margins in the high 30s%. The sale removes about $150 million in annual CapEx , and eliminates future abandonment liabilities of about $280 million discounted, or close to $1 billion undiscounted. This reduces earnings volatility and capital intensity.

Integration with ChampionX Progress
Q: Has the ChampionX integration increased synergies optimism?
A: Yes, integration planning is giving us even more confidence in the transaction and synergies. Although we are not changing the synergy target at this time, we are happy with what we are seeing.

Offshore Deepwater Projects Driving Growth
Q: Can deepwater drive growth beyond 2025?
A: Yes, despite pressure on short-cycle projects, long-cycle deepwater projects remain untouched. Total offshore FIDs are expected to reach $100 billion this year and stay at that level or higher for the next 2-3 years. Cumulative offshore FIDs over 2023-2026 will exceed $500 billion, fueling growth beyond 2025.

Free Cash Flow Profile and CapEx Next Year
Q: What's the outlook for free cash flow and CapEx into next year?
A: We maintain capital discipline and expect free cash flow in 2025 to be higher than in 2024, especially with the addition of ChampionX. While it's early to specify CapEx for next year, capital discipline will remain a theme considering the macro environment. We are comfortable reaffirming our $4 billion returns to shareholders target for next year.

Capital Intensity of Digital Investments
Q: Does digital growth require significant capital investment?
A: Digital investments are expensed as product development and R&D, not CapEx. Heavy investments have already been made; ongoing investments are smooth over many years. Growth in digital doesn't trigger incremental capital intensity.

Potential Bottlenecks to Digital Growth
Q: What bottlenecks could hinder further digital growth?
A: We don't see major bottlenecks ahead. We have engaged customers to understand needs, moved to multi-cloud environments, and developed platforms like Lumi to unlock data. Digital operations led by core divisions are accelerating adoption.

Key Takeaways from Digital Forum and AI
Q: What were surprising takeaways from the digital forum regarding AI?
A: Customers realized our digital value proposition spans across domains and technology stacks, offering a comprehensive suite. The emergence of AI is unlocking more value from data-rich industries. Our Lumi platform complements Delphi, integrating applications and enabling AI across datasets, generating significant interest.

Lithium DLE Pilot and Growth Opportunity
Q: What's next for your lithium DLE technology?
A: We achieved milestones producing lithium carbonate from our Nevada pilot plant using direct lithium extraction (DLE). We plan to work with partners to scale the technology, applying it as licensed technology or in partnership to meet large demand in coming years.

International Pricing Dynamics and Margins
Q: How are current international pricing dynamics affecting margins?
A: Pricing remains positive and constructive. The industry's capital discipline and lack of spare capacity support pricing. Performance, technology, and integration capabilities offer opportunities to maintain and support pricing.

Fourth Quarter Outlook and Gulf Storm Impact
Q: What are the Q4 expectations and Gulf storm impacts?
A: Gulf storms had muted impact on operations; the Gulf of Mexico drove growth in Q3. For Q4, year-end sales in digital and production systems will boost revenue, while some seasonal budget exhaustion might offset this. We expect modest sequential growth going forward.