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SLB LIMITED/NV (SLB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue rose sequentially to $8.93B (+4% q/q) but declined 3% y/y; EPS excluding charges was $0.69 (-7% q/q, -22% y/y), and adjusted EBITDA was $2.06B (~flat q/q, -12% y/y) .
  • SLB modestly beat Street consensus on revenue ($8.93B vs $8.92B*) and EPS ex-charges ($0.69 vs $0.664*), while adjusted EBITDA was essentially in line ($2.06B vs $2.06B*) .
  • Guidance points to a stronger Q4: high single-digit sequential top-line growth and 50–150 bps adjusted EBITDA margin expansion, driven by international markets, Digital, and a full quarter of ChampionX contribution .
  • Management emphasized resilience amid a “fully supplied oil market,” highlighting Digital’s differentiated growth and the strategic shift toward production and recovery solutions; integration of ChampionX was cited as a positive catalyst .

What Went Well and What Went Wrong

What Went Well

  • Digital delivered 11% q/q revenue growth to $658M, with ARR reaching $926M; margins expanded 250 bps q/q, underscoring high-margin growth and leadership in AI and platforms . “Our Digital business delivered revenue growth both sequentially and year on year… This high-margin and growing business is a true differentiator,” said CEO Olivier Le Peuch .
  • Production Systems revenue rose 18% q/q and 14% y/y to $3.47B, aided by two months of ChampionX ($575M revenue; $106M pretax operating income), with management citing early synergy momentum and customer adoption .
  • North America revenue increased 17% q/q (to $1.93B), aided by ChampionX and stronger offshore/digital/data center; management also highlighted robust activity across several Middle East and Asia countries .

What Went Wrong

  • Year-on-year softness persisted: revenue -3% y/y; GAAP EPS -40% y/y to $0.50; adjusted EBITDA -12% y/y, reflecting lower international activity (notably Saudi Arabia) and margin compression .
  • APS headwinds: production interruption in Ecuador and the Canada APS divestiture reduced revenue and contributed to margin pressure; CFO quantified ~60 bps adjusted EBITDA margin impact from Ecuador and ~30 bps from the Canada divestiture .
  • Segment margins compressed: Well Construction margin down 273 bps y/y (activity reductions in Mexico, Saudi Arabia, and Asia) and Production Systems margin down 98 bps y/y (geographic mix and lower subsea margins), partially offset by ChampionX accretion .

Financial Results

MetricQ3 2024Q2 2025Q3 2025Q3 2025 Consensus
Revenue ($USD Billions)$9.159 $8.546 $8.928 $8.919*
Diluted EPS – GAAP ($)$0.83 $0.74 $0.50 —
EPS – Excluding Charges ($)$0.89 $0.74 $0.69 $0.664*
Adjusted EBITDA ($USD Billions)$2.343 $2.051 $2.061 $2.063*
Adjusted EBITDA Margin (%)25.6% 24.0% 23.1% —
Net Income Attributable to SLB ($USD Billions)$1.186 $1.014 $0.739 —
Cash from Operations ($USD Billions)—$1.142 $1.682 —
Free Cash Flow ($USD Billions)—$0.622 $1.101 —
Avg Diluted Shares (Billions)1.443 1.366 1.488 —

Estimates marked with * retrieved from S&P Global.

Segment Breakdown (Revenue and Pretax Operating Margin)

DivisionQ3 2024 Revenue ($MM)Q3 2024 MarginQ2 2025 Revenue ($MM)Q2 2025 MarginQ3 2025 Revenue ($MM)Q3 2025 Margin
Digital$638 29.8% $591 25.9% $658 28.4%
Reservoir Performance$1,823 20.1% $1,691 18.6% $1,682 18.5%
Well Construction$3,312 21.5% $2,963 18.6% $2,967 18.8%
Production Systems$3,037 17.1% $2,932 16.7% $3,474 16.1%

Key KPIs

KPIQ3 2024Q2 2025Q3 2025
Revenue by Geography – International ($MM)$7,425 $6,847 $6,916
Revenue by Geography – North America ($MM)$1,687 $1,655 $1,930
Digital ARR ($MM)$869 —$926
ChampionX Contribution ($MM)——Revenue $579; Adjusted EBITDA $139; Pretax segment OI $108
Net Debt ($MM)$(8,461) $(9,951) $(9,181)
Share Repurchases (Quarter)——3.2M shares for $114M
Dividend per Share ($)—$0.285 $0.285
ETR (Ex-Charges) (%)—19.3% 19.2%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital Investment (capex + exploration data + APS)FY 2025~$2.4B (Q2 guide) ~$2.4B (confirmed) Maintained
Revenue (Company)2H 2025Midpoint of $18.2B–$18.8B (prior) Within midpoint confirmed Maintained
Revenue (Company)Q4 2025Not previously quantifiedHigh single-digit sequential growth Raised specificity
Adjusted EBITDA Margin (Company)Q4 2025Not previously quantified+50–150 bps q/q expansion New
Digital EBITDA MarginFY 2025Not previously quantified~35% for full year New
Dividend per ShareQ4 2025$0.285 $0.285 (approved Oct. 16, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Digital/AI strategyDigital revenue +17% y/y in Q1; platforms/applications and automation cited; collaborations with Shell, Mistral AI (Q1/Q2) Digital as standalone division; 11% q/q revenue growth; ARR $926M; expectation to outgrow core and reach ~35% FY margin Strengthening
Production & recovery focusEmphasis on production solutions; customers offset declines; Production Systems growth (Q1/Q2) Clear strategic pivot; ChampionX integration; “production and recovery” framed as resilient, less cyclical exposure Strengthening
International vs. North AmericaQ2 int’l up 2% q/q; NA down 4% q/q (mixed) Int’l +1% q/q, NA +17% q/q (ChampionX); expectation int’l to lead future rebound Mixed near-term; int’l lead medium-term
Saudi Arabia activitySoftness noted Q1/Q2 Management sees stabilization/bottom and potential rebound in 2026 Stabilizing
Deepwater pipelineSome “white space” in scheduling; constructive outlook (Q2) White space dissipating; bookings/backlog to grow; material subsea growth targeted in 2027 Improving outlook
Data Center SolutionsGrowth outside oil/gas portfolio noted (Q1/Q2) Rapid growth; expansion beyond U.S. planned; low capex intensity Accelerating
APS projectsCanada divestiture; Ecuador pipeline interruption (Q2) Continued headwind in Q3; quantified EBITDA margin drag Headwind persists

Management Commentary

  • “SLB improved revenue despite the backdrop of a fully supplied oil market, an uncertain geopolitical environment and subdued commodity prices” .
  • “ChampionX enhances our portfolio and underscores the value of expanding our presence in the less cyclical production market” .
  • “Digital… is our fastest-growing business… a true differentiator and reflects our industry leadership” with four revenue categories (Platforms & Applications, Digital Operations, Digital Exploration, Professional Services) .
  • “Looking ahead, it is more likely that the international markets will lead an activity rebound… SLB is well positioned to benefit from such a recovery” .

Q&A Highlights

  • Production & recovery thesis: “OpEx is indeed growing… we are able to unlock new solutions… combining the broadest lift portfolio, intervention, chemistry and digital capabilities” .
  • Digital growth and ARR: ARR >$900M; targeting ~$1B; seasonal Q4 step-up and durable margin profile; EBITDA margin ~35% FY as a baseline into 2026 .
  • Deepwater: White space fading; gradual rig strengthening; subsea bookings/backlog to exceed last year; material subsea growth in 2027 .
  • Saudi Arabia: Activity stabilized with likely rebound in 2026 across gas and oil .
  • Data Center Solutions: Plan to expand globally with hyperscalers; low capex intensity; pipeline in Asia .

Estimates Context

  • Q3 comparison vs Street: revenue slight beat ($8.93B vs $8.92B*), EPS ex-charges beat ($0.69 vs $0.664*), adjusted EBITDA essentially in line ($2.061B vs $2.063B*) .
  • Q4 Street embedded: consensus revenue ~$9.55B* and EPS ~$0.744*, consistent with management guide for high single-digit sequential growth and margin expansion .
  • FY trajectory: FY 2025 consensus revenue ~$35.62B* and EPS ~$2.89*, with FY 2026 modest growth; Digital’s structurally higher margins and ChampionX synergies may support estimate stability despite near-term macro .

Estimates marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential improvement with ChampionX and Digital offsets macro softness; Q3 prints were resilient but margins compressed y/y on regional activity declines and APS issues .
  • Near-term setup constructive: Q4 guide for high-single-digit revenue growth and +50–150 bps margin expansion, with a full quarter of ChampionX and seasonally stronger Digital .
  • Strategic pivot toward production and recovery (less cyclical, OpEx-heavy) broadens wallet share and stabilizes earnings through cycles; early customer wins and integrations are encouraging .
  • Digital is a multi-year growth engine with rising ARR and high margins; management expects Digital to outgrow upstream spending and deliver ~35% FY margin in 2025 .
  • International should lead the next rebound (deepwater pipeline, gas capacity projects); management sees Saudi stabilization and potential 2026 uptick, supporting medium-term thesis .
  • Capital returns remain robust: $4B planned in 2025 via dividends and buybacks; dividend maintained at $0.285 per share; net debt improved q/q .
  • Watch APS normalization and subsea margin mix; estimate revisions likely tilt positive for Q4 but hinge on international execution, Digital seasonality, and ChampionX synergy capture .