SLB N.V. Q3 FY2025 earnings call

Digital business

• First quarter reporting digital as standalone division. Comprised of Platforms and Applications, Digital Operations, Digital Exploration, and Professional Services. Third quarter digital revenue up 11% sequentially, digital operations up 39%, automated drilling footage up over 50% year on year, and over 20,000 connected assets deployed.

Core divisions

• International Markets: Revenue rose 1% sequentially with growth in multiple countries across Middle East, Asia, etc. North America: Revenue grew 17% sequentially driven by digital business and offshore activity, offsetting decline in U.S. Land activity.

Production recovery strategy

• Customers place greater emphasis on production recovery solutions. Slb N.V. combines subsurface expertise, lift, intervention, chemical technology, and digital capabilities to offer differentiated value proposition. Recent acquisitions like Resman Energy Technology and Stimline Digital enhance the portfolio.

Market environment

• Industry disciplined with most long-cycle and international activity resilient. Global inventories low, need to offset natural production decline accounts for nearly 90% of upstream investment. International markets have potential for growth tied to capacity expansion plans; North America operators prioritize production maintenance due to commodity prices.

Digital business: Third quarter digital revenue increased 11% sequentially. Digital operations saw a 39% increase, with automated drilling footage up over 50% year on year and more than 20,000 connected assets deployed. North America revenue grew 17% sequentially, driven mainly by the digital business and higher offshore activity. Data Center Solution business revenue more than doubled year on year. Core divisions: International Markets revenue rose 1% sequentially with growth in several countries; North America revenue grew 17% sequentially. Revenue contribution: Digital business is a growing segment, data center solution business is a new and rapidly growing area within the overall revenue mix.

Fourth quarter outlook

• Expect sequential step-up in results with high single-digit top-line growth. Second-half revenue within midpoint of previous guidance range $18.2 billion to $18.8 billion. Adjusted EBITDA margin to expand 50 bps to 150 bps sequentially, driven by digital and Production Systems including full quarter of Champagnex results. Digital division expected to have double-digit year-on-year growth with EBITDA margin reaching 35% full-year.

Risks

• Commodity prices challenging with uncertainty on demand-supply balance. Geopolitical developments could impact results materially.

Q: David Anderson asked about production-focused business growth and digital business segments.

A: Olivier Le Peuch said customer needs to offset natural decline, production recovery is a new theme. Digital segments have different dynamics with platform applications driven by customer adoption and technology transition, digital operations linked to core divisions, digital exploration variable linked to exploration market, professional services support other buckets.

Q: James West asked about deepwater and Saudi Arabia market.

A: Olivier Le Peuch said deepwater has healthy pipeline with strengthening activity expected, Saudi Arabia market has stabilized with likely rebound in 2026 for gas and oil.

Q: Scott Gruber asked about data center solutions business strategy and capital投入.

A: Olivier Le Peuch said ambition to expand beyond U.S., add customers and geography, and it's a low CapEx intensity business.

Q: Josh Silverstein asked about ARR growth source and EBITDA margin.

A: Olivier Le Peuch said ARR growth from enhancing adoption, expanding offering, and securing new customers; EBITDA margin expected to reach 35% full-year with Q4 step-up.

Q: Arun Jayaram asked about digital business growth and international recovery leadership.

A: Olivier Le Peuch said digital growth from customer adoption and market expansion into core business; international leads recovery as North America has challenging economics and international has solid pipeline and capacity expansion trends.