Slb N.V.

SLB reported second-quarter revenue of $9 billion, up 3% sequentially. Excluding charges and credits, EPS was $0.55, up $0.03 sequentially and down $0.19 year over year; the quarter included $0.03 of merger and integration charges. Digital revenue was $697 million, up 9% sequentially; Reservoir Performance revenue was $1.6 billion, down 2%; Construction revenue was $2.7 billion, down 2%; and Production Systems revenue was $3.8 billion, up 7%. Production Systems adjusted EBITDA margin returned above 20%, while digital adjusted EBITDA margin was 34.7%; annual recurring revenue in digital was up 15% year over year. For Q3, SLB expects global sequential revenue growth of 3% to 4% and adjusted EBITDA margin expansion of about 75 basis points. For Q4, it expects Middle East activity of $2.1 billion to $2.2 billion, revenue above $10 billion, and adjusted EBITDA margin around 24%.

Olivier Le Peuch described the quarter as solid and said SLB is seeing broad-based international growth, a rebound in North America, and improving momentum in production systems, digital, and data center solutions. He framed the macro backdrop as increasingly supportive for upstream investment, citing inventory replenishment, supply diversification, and energy security as drivers of a range-bound but constructive commodity environment. His tone was confident on the medium-term setup, repeatedly pointing to a developing upcycle, stronger offshore and deepwater activity, and a gradual Middle East recovery.

Stephane Biguet highlighted that Q2 EPS excluding charges and credits was $0.55, with $0.03 of merger and integration charges tied mainly to ChampionX. He said revenue was $9 billion, operating margins improved despite Middle East disruption, and temporary cost actions helped limit the EPS impact. Cash flow from operations was $1.4 billion and free cash flow was $716 million, up $739 million sequentially; net debt was $8.7 billion. He also said capital investments were $643 million in Q2, full-year capital investments should be about $2.5 billion, the company repurchased $648 million of stock in the quarter, expects at least $2.4 billion of buybacks for 2026, and still targets returning more than $4 billion to shareholders this year.

Analysts focused on the pace and durability of the Middle East recovery, the potential for offshore/deepwater growth into 2027, and the sustainability of the exploration cycle. Management said the Middle East recovery should be gradual, with timing varying by country, security conditions, and the need for intervention and restoration work; they also said a renewed exploration cycle appears durable given reserve replacement, energy security, and long-cycle FIDs. On data centers, management said the backlog already supports the $2 billion-plus exit-rate target and that the business is capital-light with strong free cash flow characteristics, though currently not accretive to overall SLB margins.