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SL

SCHLUMBERGER LIMITED/NV (SLB)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue $9.28B (+1% q/q, +3% y/y), adjusted EPS $0.92 (+3% q/q, +7% y/y), adjusted EBITDA $2.38B (25.7% margin; cycle high) . GAAP EPS was $0.77 (-7% q/q; flat y/y) with restructuring and impairment charges impacting GAAP results .
  • Mix shift: Digital & Integration led sequential growth (+6% q/q) and margin expansion to 38.3%, while Well Construction softened on lower drilling in Mexico and Saudi; Production Systems grew on backlog conversion but saw subsea margin pressure .
  • 2025 outlook: Company guides to flat revenue and adjusted EBITDA at or above 2024 levels; Q1 2025 expected to be similar to prior-year levels with rebound in Q2. Dividend raised to $0.285 and $2.3B ASR launched, targeting ≥$4B total shareholder returns in 2025 .
  • Estimates: Wall Street consensus from S&P Global was unavailable at time of writing, limiting beat/miss assessment (S&P Global request limit exceeded).

What Went Well and What Went Wrong

What Went Well

  • Digital acceleration and margin expansion: “Digital & Integration revenue increased 10% y/y…launch of the Lumi data and AI platform…achievement of fully autonomous drilling operations.” Division margin expanded to 38.3% (+274 bps q/q; +430 bps y/y) .
  • Production Systems growth and backlog conversion: Revenue +3% q/q and +9% y/y; strong sales in artificial lift, midstream production systems and completions, converting backlog despite subsea headwinds .
  • Strong cash generation and capital returns: Q4 CFO $2.39B; FCF $1.63B; FY FCF $3.99B; Board increased dividend to $0.285 and initiated $2.3B ASR, aiming for ≥$4B returns in 2025 .

What Went Wrong

  • Well Construction softness: Revenue -1% q/q and -5% y/y; margin down 70 bps q/q and 162 bps y/y on reduced drilling in Mexico, Saudi Arabia and U.S. land .
  • Latin America down sequentially: Revenue -3% q/q and -5% y/y, driven by Mexico drilling declines; partially offset by Brazil production system sales and activity in Argentina .
  • GAAP EPS declined: $0.77 (-7% q/q) on restructuring, impairments and integration charges; adjusted EPS grew but GAAP optics weighed by non-GAAP exclusions .

Financial Results

Core Financials (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$9.14 $9.16 $9.28
GAAP Diluted EPS ($)$0.77 $0.83 $0.77
Adjusted Diluted EPS ($)$0.85 $0.89 $0.92
Adjusted EBITDA ($USD Billions)$2.29 $2.34 $2.38
Adjusted EBITDA Margin (%)25.0% 25.6% 25.7%
Pretax Segment Operating Margin (%)20.3% 20.8% 20.7%
Net Income Attributable to SLB ($USD Billions)$1.11 $1.19 $1.10

Q4 2024 Sequential and Year-over-Year Changes

Metricvs Q3 2024vs Q4 2023
Revenue+1% +3%
GAAP EPS-7% Flat
Adjusted EPS+3% +7%
Adjusted EBITDA+2% +5%
Adjusted EBITDA Margin+8 bps +33 bps

Segment Breakdown (Revenue; Pretax Operating Margin)

DivisionQ2 2024 Revenue ($MM)Q3 2024 Revenue ($MM)Q4 2024 Revenue ($MM)Q2 MarginQ3 MarginQ4 Margin
Digital & Integration1,050 1,088 1,156 31.0% 35.5% 38.3%
Reservoir Performance1,819 1,823 1,810 20.6% 20.1% 20.5%
Well Construction3,411 3,312 3,267 21.7% 21.5% 20.8%
Production Systems3,025 3,103 3,197 15.6% 16.7% 15.8%

Geographic Revenue

GeographyQ2 2024 ($MM)Q3 2024 ($MM)Q4 2024 ($MM)
North America1,644 1,687 1,752
Latin America1,742 1,689 1,634
Europe & Africa2,442 2,434 2,472
Middle East & Asia3,268 3,302 3,376

KPIs and Liquidity

KPIQ2 2024Q3 2024Q4 2024
Cash Flow from Operations ($MM)1,436 2,449 2,390
Free Cash Flow ($MM)776 1,805 1,631
Net Debt ($MM)(9,186) (8,461) (7,405)
Dividend per share ($)$0.275 (approved 7/18) $0.275 (approved 10/17) $0.285 (approved 1/16/25)
Shares Repurchased (MM shares; $MM)9.9; $465 11.3; $501 11.8; $501
Effective Tax Rate (GAAP, %)19.4% 19.2% 19.4%
Weighted Avg Diluted Shares (Billion)1.443 1.432 1.420

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital investment (capex+exploration data+APS)FY 2025N/A≈$2.3B New
Revenue (ex ChampionX)FY 2025N/AFlat vs FY 2024 New
Adjusted EBITDA (ex ChampionX)FY 2025N/AAt or above FY 2024 levels New
Q1 performanceQ1 2025N/ARevenue/adj. EBITDA similar to prior-year levels; rebound in Q2 New
Dividend per shareFrom Q1 2025$0.275 $0.285 Raised
Share repurchasesFY 2025N/A$2.3B ASR initiated; ≥$4B total returns targeted New/Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/digital platform adoptionHigh-teens digital growth; exploration data license sales; cloud/AI/Edge adoption Lumi platform launched; partnerships with NVIDIA/AWS; D&I margin +456 bps q/q Digital revenue +10% y/y; D&I margin 38.3%; Lumi traction and autonomous ops highlighted Strengthening
Macro/Upstream spend outlookBroad-based international growth; Middle East & Asia elevated Cautious short-cycle spend; still expect at/above 25% adj. EBITDA margin for 2024 2025 revenue flat; Q1 soft then Q2 rebound; deepwater “white space” near-term Moderating near-term
Regional mixME&A up 6% q/q; EU&A up 5% q/q; NA down y/y ME&A +1% q/q; EU&A flat; LatAm down on Mexico ME&A +2% q/q; EU&A +2%; LatAm -3% q/q; NA +4% q/q Mixed
Production recovery focusStrong PS organic growth; surface/AL/completions record PS record revenue; margin expansion PS +3% q/q; backlog conversion; subsea margin headwind Sustained growth; margin mixed
Pricing/cost-outOngoing cost efficiency programs Cost optimization supports margins Pricing resilient; cost-out program progressing and supports margins Supportive
Russia exposureN/AN/ARussia ~4% of 2024 revenue; voluntary measures aligned with sanctions Declining exposure
Regulatory (ChampionX)JV Aker Carbon Capture closed Pact to sell Palliser interest ChampionX received clearance; closing targeted by end of Q1; ASR partly offsets issuance Advancing to close

Management Commentary

  • “2024 was a strong year…deliver revenue and EBITDA growth, margin expansion and solid free cash flow…return $3.27B to shareholders and reduce net debt by $571M.”
  • “Digital & Integration revenue increased 10% y/y…launch of the Lumi data and AI platform…fully autonomous drilling operations. AI is the X factor for our industry.”
  • “Production and recovery…Core divisions delivered 9% revenue growth, led by 24% growth in Production Systems…grew 9% organically due to double-digit increases in surface systems, completions and artificial lift.”
  • “We expect global upstream investment to be steady in 2025…flat revenue outlook…adjusted EBITDA dollars and margins at or above 2024 levels.”
  • “We increased our dividend and entered into accelerated share repurchase transactions to repurchase $2.3B…targeting to return a minimum of $4B to our shareholders in 2025.”

Q&A Highlights

  • International outlook and regional puts/takes: Middle East remains a bright spot (UAE, Iraq, Kuwait, Qatar) offsetting declines in Saudi/Egypt; deepwater activity “white space” in 2025 with FIDs expected to ramp in 2026–27 .
  • Production recovery growth trajectory: Management expects long-term earnings potential from production recovery across Reservoir Performance, Production Systems and Digital, with backlog-driven growth .
  • Seasonality and shape of 2025: Typical low Q1 with rebound in Q2; H2 weighted upside potential, including deepwater .
  • Russia exposure: Revenue down to ~4% of 2024; voluntary measures aligned with new sanctions .
  • Capital returns and ASR mechanics: $2.3B paid upfront; ~48M shares delivered initially (~80% of total); true-up by end of May; ≥$4B returns with flexibility to increase via buybacks .

Estimates Context

  • S&P Global Wall Street consensus for Q4 2024 EPS and revenue was unavailable at the time of writing due to request limits exceeded. As a result, we cannot definitively assess beats/misses versus consensus for Q4 2024.
  • Directionally, adjusted EPS and revenue increased sequentially, while GAAP EPS declined due to charges; segments showed mixed performance with strong Digital & Integration and Production Systems growth offset by Well Construction softness .

Key Takeaways for Investors

  • Mix shift toward Digital & Integration supports margin expansion; watch continued Lumi adoption and autonomous operations as catalysts for sustained accretive growth .
  • Production recovery remains a secular tailwind; expect ongoing strength in artificial lift, completions, valves and midstream systems even as subsea profitability normalizes .
  • Near-term headwinds in Well Construction tied to Mexico/Saudi drilling; positioning in other Middle East & Asia markets should offset over 2025 .
  • Capital returns are a prominent 2025 catalyst: dividend raise plus $2.3B ASR underpin ≥$4B total shareholder returns; ASR front-loads share count reduction .
  • 2025 setup: flat revenue with adjusted EBITDA at or above 2024 levels; Q1 seasonal softness followed by Q2 rebound; deepwater “white space” may persist until FIDs ramp in 2026 .
  • Watch ChampionX closing (target by end of Q1) for enhanced production recovery portfolio and potential FCF contribution; ASR offsets share issuance .
  • Regional focus: Monitor ME&A strength (UAE, Kuwait, Iraq, Qatar), EU&A modest growth, LatAm variability (Brazil strong, Mexico weaker), NA digital-led improvements .

All figures sourced from SLB’s Q4 2024 8‑K earnings release, accompanying press release, and Q4 2024 earnings call transcript as cited above.