Q4 2025 Schlumberger Ltd Earnings Call

January 23, 2026

Speaker #1: Excuse me, ladies and gentlemen. Thank you for your patience. The call will begin momentarily. Thank you for your patience. The call will begin momentarily.

Operator: Excuse me, ladies and gentlemen. Thank you for your patience. The call will begin momentarily. Thank you for your patience. The call will begin momentarily. Good morning. My name is Megan, and I'll be your conference operator today and would like to welcome everyone to the Q4 and Full Year 2025 SLB Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during the time, simply press star followed by the number one on your telephone keypad. You may remove yourself from the queue by pressing star two. As a reminder, this call is being recorded. I will now turn the call over to James R. McDonald, Senior Vice President of Investor Relations and Industry Affairs. Please go ahead.

Speaker #1: Good morning. My name is Megan, and I'll be your conference operator today. I would like to welcome everyone to the fourth quarter and full year 2025 SLB earnings call.

Speaker #1: At this time, all participants are in a listen-only mode. After the speakers’ remarks, there will be a Q&A session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad.

Speaker #1: You may remove yourself from the queue by pressing star two. As a reminder, this call is being recorded. I will now turn the call over to James R.

Speaker #1: McDonald, Senior Vice President of Investor Relations and Industry Affairs. Please go ahead.

Speaker #1: ahead. Thank you, Megan.

James R. McDonald: Thank you, Megan. Good morning and welcome to the SLB Q4 and full year 2025 earnings conference call. Today's call is being hosted from Houston following our board meeting held earlier this week. Joining us on the call are Olivier Le Peuch, Chief Executive Officer, and Stephane Biguet, Chief Financial Officer. Before we begin, I would like to remind all participants that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause the results to differ materially from those projected in these statements. For more information, please refer to our latest 10-K filing and other SEC filings, which can be found on our website. Our comments today also include non-GAAP financial measures.

Q4 2025 Schlumberger Ltd Earnings Call

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Q4 2025 Schlumberger Ltd Earnings Call

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Friday, January 23rd, 2026 at 2:30 PM

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Olivier Le Peuch: Thank you, James. Ladies and gentlemen, thank you for joining us today. I will begin by reviewing our Q4 performance, followed by an update on market conditions and the unique opportunities we see developing for our business. I will then share our outlook for the Q1 and expectations for the full year 2026. Stephane will then provide additional details on our financial results. Finally, we will open the line for your questions. Let's begin. We ended the year with strong operational and financial performance in the Q4, achieving sequential revenue growth, margin expansion, and substantial cash flow generation. This performance reflects the breadth of our portfolio and the impact of our strategy in a challenging macro environment. Sequentially, revenue increased by 9%, driven by high single-digit growth internationally and mid-teens growth in North America.

Olivier Le Peuch: Excluding ChampionX, organic revenue increased by 7% internationally and 6% in North America. We saw sequential growth across all our geographies for the first time since the second quarter of 2024. This demonstrates that global upstream activity has stabilized, with key markets showing early signs of a rebound. This helped us to deliver approximately $500 million of organic revenue growth this quarter, in addition to a roughly $300 million contribution from ChampionX, resulting from an extra month of consolidation. Let me briefly discuss a few highlights from the quarter. First, we benefited from stronger end product sales in production systems globally, higher exploration data sales, and strong demand for digital operation across all areas. Second, activity increased across the Middle East, led by Saudi Arabia, and with momentum in UAE due to a combination of sustained gas development and increased oil field intervention activity.

Excluding ChampionX, organic revenue increased by 7% internationally and 6% in North America. We saw sequential growth across all our geographies for the first time since the second quarter of 2024. This demonstrates that global upstream activity has stabilized, with key markets showing early signs of a rebound. This helped us to deliver approximately $500 million of organic revenue growth this quarter, in addition to a roughly $300 million contribution from ChampionX, resulting from an extra month of consolidation. Let me briefly discuss a few highlights from the quarter. First, we benefited from stronger end product sales in production systems globally, higher exploration data sales, and strong demand for digital operation across all areas. Second, activity increased across the Middle East, led by Saudi Arabia, and with momentum in UAE due to a combination of sustained gas development and increased oil field intervention activity.

Olivier Le Peuch: Third, we delivered strong results across Asia, with increased activity in Australasia, East Asia, and Indonesia as these markets continue to benefit from offshore gas development. Notably, this quarter also marked a return of growth in Saudi Arabia and across Sub-Saharan Africa, with flat revenue in Mexico. These three bases actually accounted for the entire organic revenue decline in the full year of 2025. Directionally, we expect activity in this market to improve as we move throughout 2026. Turning to the divisions, in the fourth quarter, Production Systems and Digital & Integration led the way, where Reservoir Performance was up slightly and Well Construction revenue was steady. The strength in Production Systems was driven by increased demand for production chemicals, artificial lift, and process technology and solutions, as well as backlog execution completions and OneSubsea.

Third, we delivered strong results across Asia, with increased activity in Australasia, East Asia, and Indonesia as these markets continue to benefit from offshore gas development. Notably, this quarter also marked a return of growth in Saudi Arabia and across Sub-Saharan Africa, with flat revenue in Mexico. These three bases actually accounted for the entire organic revenue decline in the full year of 2025. Directionally, we expect activity in this market to improve as we move throughout 2026. Turning to the divisions, in the fourth quarter, Production Systems and Digital & Integration led the way, where Reservoir Performance was up slightly and Well Construction revenue was steady. The strength in Production Systems was driven by increased demand for production chemicals, artificial lift, and process technology and solutions, as well as backlog execution completions and OneSubsea.

Olivier Le Peuch: When excluding the ChampionX contribution, this division still grew by double digits sequentially and maintained its momentum with several contracts awarded in the quarter, as you can see from today's highlights. Digital also continued to grow at a healthy rate, driven by strong growth in digital exploration with year-end sales in the Gulf of America, Brazil, and Angola, as well as robust increase in digital operation and platform application. Digital annual recurring revenue surpassed $1 billion, reflecting year-on-year growth of 15%. We also announced several exciting digital milestones in the fourth quarter, including launching Tella, an agentic AI system that's built to transform the upstream energy sector and forming a partnership with ADNOC to launch an AI-powered production system optimization platform. These underscore the opportunity for AI to continue to reshape industry operations.

When excluding the ChampionX contribution, this division still grew by double digits sequentially and maintained its momentum with several contracts awarded in the quarter, as you can see from today's highlights. Digital also continued to grow at a healthy rate, driven by strong growth in digital exploration with year-end sales in the Gulf of America, Brazil, and Angola, as well as robust increase in digital operation and platform application. Digital annual recurring revenue surpassed $1 billion, reflecting year-on-year growth of 15%. We also announced several exciting digital milestones in the fourth quarter, including launching Tella, an agentic AI system that's built to transform the upstream energy sector and forming a partnership with ADNOC to launch an AI-powered production system optimization platform. These underscore the opportunity for AI to continue to reshape industry operations.

Olivier Le Peuch: Meanwhile, in Reservoir Performance, sequential growth was the result of increased stimulation activity in the Middle East and Asia, and higher intervention activity in Europe and Africa. In Well Construction, higher offshore drilling activity in North America, Europe, and Africa was offset by declines in some land markets. Additionally, our fourth quarter revenue benefited from the resumption of production in the APS projects of Ecuador. Overall, our fourth quarter results are a positive indication of the opportunity that lies ahead. I want to thank the entire SLB for delivering excellent performance for our customers throughout 2025 and finishing the year on such a strong note. Turning to the market demand, near-term oversupply may continue to exert downward pressure on commodity prices throughout the first half of 2026, while elevated geopolitical uncertainties should provide a price floor.

Meanwhile, in Reservoir Performance, sequential growth was the result of increased stimulation activity in the Middle East and Asia, and higher intervention activity in Europe and Africa. In Well Construction, higher offshore drilling activity in North America, Europe, and Africa was offset by declines in some land markets. Additionally, our fourth quarter revenue benefited from the resumption of production in the APS projects of Ecuador. Overall, our fourth quarter results are a positive indication of the opportunity that lies ahead. I want to thank the entire SLB for delivering excellent performance for our customers throughout 2025 and finishing the year on such a strong note. Turning to the market demand, near-term oversupply may continue to exert downward pressure on commodity prices throughout the first half of 2026, while elevated geopolitical uncertainties should provide a price floor.

Olivier Le Peuch: ENP operators are therefore expected to remain cautious and to backlog their 2026 budget. As supply and demand continue to rebalance into 2027, conditions will likely support a gradual recovery in upstream investment, with activity in key international markets and offshore deployment exiting 2026 at a higher level than 2025. Indeed, economic growth, including population and large-scale manufacturing and infrastructure investments, particularly in the US and China related to AI, will inherently drive more demand in both oil and gas. Coupled with the natural decline of existing oil and gas assets, we believe these will be the key drivers for the rebalancing of supply and demand. In the meantime, our customers are focused on delivering the lowest-cost incremental bias. This means capturing efficiencies at scale. And in our view, that requires more technology, more integration, and more digital solutions.

ENP operators are therefore expected to remain cautious and to backlog their 2026 budget. As supply and demand continue to rebalance into 2027, conditions will likely support a gradual recovery in upstream investment, with activity in key international markets and offshore deployment exiting 2026 at a higher level than 2025. Indeed, economic growth, including population and large-scale manufacturing and infrastructure investments, particularly in the US and China related to AI, will inherently drive more demand in both oil and gas. Coupled with the natural decline of existing oil and gas assets, we believe these will be the key drivers for the rebalancing of supply and demand. In the meantime, our customers are focused on delivering the lowest-cost incremental bias. This means capturing efficiencies at scale. And in our view, that requires more technology, more integration, and more digital solutions.

Olivier Le Peuch: Today, operators are increasingly prioritizing performance assurance across the asset lifecycle, reducing development timelines and accelerating optimization through digital solutions. SLB is uniquely positioned to deliver value in this environment by integrating equipment with intelligent and autonomous digital capabilities to reduce downtime, improve efficiency, and increase productivity, as witnessed by the rapid uptake in our digital operations. Additionally, production recovery has emerged as a critical domain for value creation, not only in brownfield and mature assets, but also across greenfield developments and tiebacks. This is not an either/or proposition between CAPEX and OPEX, but an opportunity to increase our share of CAPEX spend and capture OPEX white space with new solutions. With SLB's expanded production portfolio, including the addition of ChampionX, we are uniquely positioned to meet the developing demand in the production space.

Today, operators are increasingly prioritizing performance assurance across the asset lifecycle, reducing development timelines and accelerating optimization through digital solutions. SLB is uniquely positioned to deliver value in this environment by integrating equipment with intelligent and autonomous digital capabilities to reduce downtime, improve efficiency, and increase productivity, as witnessed by the rapid uptake in our digital operations. Additionally, production recovery has emerged as a critical domain for value creation, not only in brownfield and mature assets, but also across greenfield developments and tiebacks. This is not an either/or proposition between CAPEX and OPEX, but an opportunity to increase our share of CAPEX spend and capture OPEX white space with new solutions. With SLB's expanded production portfolio, including the addition of ChampionX, we are uniquely positioned to meet the developing demand in the production space.

Olivier Le Peuch: Offshore also continues to present compelling long-term growth opportunities for SLB, particularly in deepwater, where we expect activity to inflect toward the end of 2026 as white space subsides. With OneSubsea, we have the unique ability to combine subsea processing capabilities, digital solutions, and SLB's integrated portal process expertise across subsea intervention and integrated well construction, which could create differentiated value for customers. Specific to the subsea market, more than 500 subsea trees are expected to be awarded across 2026 and 2027, about 20% higher than 2025 run rate. This is an opportunity we aim to capitalize on. In 2025, OneSubsea was awarded approximately $4 billion in subsea bookings, and we see a path for cumulative bookings exceeding $9 billion over the next two years, supported by this tendering activity.

Olivier Le Peuch: Finally, we're excited about the strong progress in our data center solution business since its launch less than two years ago. This year, we plan to expand our range of offering, our customer base, and the geography we serve, paving the way for further growth. The opportunity is growing faster than anticipated, and we expect to exit the year at a quarterly revenue run rate of $1 billion per year. Overall, SLB is clearly positioned to fully benefit from a rebound in international activity as supply-demand rebalance, supported by ongoing investments for oil capacity, gas expansion projects, and a constructive long-term outlook for deep water. Regional activity dynamics will further reinforce this favorable directional trajectory beginning in 2026. Let me now share our outlook for the year. The headwinds we face in 2025 in certain markets may become tailwinds for our business this year.

Finally, we're excited about the strong progress in our data center solution business since its launch less than two years ago. This year, we plan to expand our range of offering, our customer base, and the geography we serve, paving the way for further growth. The opportunity is growing faster than anticipated, and we expect to exit the year at a quarterly revenue run rate of $1 billion per year. Overall, SLB is clearly positioned to fully benefit from a rebound in international activity as supply-demand rebalance, supported by ongoing investments for oil capacity, gas expansion projects, and a constructive long-term outlook for deep water. Regional activity dynamics will further reinforce this favorable directional trajectory beginning in 2026. Let me now share our outlook for the year. The headwinds we face in 2025 in certain markets may become tailwinds for our business this year.

Olivier Le Peuch: We anticipate this will translate into a higher fourth quarter revenue exit rate in 2026 compared to the fourth quarter of 2025. For the full year, assuming oil price remains range-bound in the high $50s to low $60 range, we expect 2026 revenue to be between $36.9 to 37.7 billion. In North America, we will benefit from the addition of seven months of activity from ChampionX, stronger offshore activity tied to customer plans, and accelerated growth in data centers, while upstream land activity will continue to decline year-on-year. In international markets, revenue is expected to trend upwards over the year, resulting in a slight year-over-year increase. Growth will come from Latin America, the Middle East, and Asia, while Europe and Africa is anticipated to decline slightly. Let me now describe how these dynamics will unfold across the divisions.

Olivier Le Peuch: Turning to the first quarter, we anticipate revenue to decline by high single digits sequentially, similar to the prior year, due to outsized year-end product sales and project milestones in Production Systems in the prior quarter. We also expect adjusted EBITDA margin to decrease by 150 to 200 basis points versus the prior quarter. This seasonal dip will be followed by a rebound in activity during the second quarter, with further expansion into the second half driven primarily by international markets. Finally, before I hand over to Stephane, let me briefly touch on Venezuela. SLB is the only international service company actively operating in Venezuela today, as we are delivering a diverse set of services for NRC under their license. With nearly a century of experience in Venezuela, we did maintain active facilities, equipment, and local personnel on the ground.

Turning to the first quarter, we anticipate revenue to decline by high single digits sequentially, similar to the prior year, due to outsized year-end product sales and project milestones in Production Systems in the prior quarter. We also expect adjusted EBITDA margin to decrease by 150 to 200 basis points versus the prior quarter. This seasonal dip will be followed by a rebound in activity during the second quarter, with further expansion into the second half driven primarily by international markets. Finally, before I hand over to Stephane, let me briefly touch on Venezuela. SLB is the only international service company actively operating in Venezuela today, as we are delivering a diverse set of services for NRC under their license. With nearly a century of experience in Venezuela, we did maintain active facilities, equipment, and local personnel on the ground.

Olivier Le Peuch: Historically, we have been leaders in the country, and we remain confident that with appropriate licensing, safety parameters, and compliance measures in place, we can rapidly ramp up activities in support of the oil and gas industry in Venezuela. We are excited, and we are already receiving a lot of inquiries from our customers. I will now turn the call over to Stéphane to discuss our financial results in more detail. Thank you, Olivier, and good morning, ladies and gentlemen. Fourth quarter earnings per share, excluding charges and credits, was $0.78. This represents an increase of $0.09 sequentially and a decrease of $0.14 compared to the fourth quarter of last year. We recorded $0.23 of net charges during the fourth quarter. This includes an $0.11 goodwill impairment charge relating to our carbon capture business, $0.08 of merger and integration charges, $0.07 related to workforce reductions, and $0.03 of overcharges.

Olivier Le Peuch: Offsetting these charges is a $0.06 credit relating to the reversal of a valuation allowance that was recorded against certain deferred tax assets. Overall, our fourth quarter revenue of $9.7 billion increased $817 million or 9% sequentially. Approximately $300 million of this increase is due to an additional month of activity from the acquired ChampionX businesses. Excluding the impact of this transaction, SLB's fourth quarter global revenue increased 6% sequentially. The sequential revenue step-up was higher than expected and was driven by strong year-end digital sales, significant backlog deliveries, and project milestones in production systems, as well as higher reservoir performance activity in international markets. Fourth quarter Adjusted EBITDA margin of 23.9% increased 83 basis points sequentially, primarily driven by very strong digital performance. Margin growth during the quarter was, however, constrained by a loss in a carbon capture project that negatively impacted margins by approximately 50 basis points.

Offsetting these charges is a $0.06 credit relating to the reversal of a valuation allowance that was recorded against certain deferred tax assets. Overall, our fourth quarter revenue of $9.7 billion increased $817 million or 9% sequentially. Approximately $300 million of this increase is due to an additional month of activity from the acquired ChampionX businesses. Excluding the impact of this transaction, SLB's fourth quarter global revenue increased 6% sequentially. The sequential revenue step-up was higher than expected and was driven by strong year-end digital sales, significant backlog deliveries, and project milestones in production systems, as well as higher reservoir performance activity in international markets. Fourth quarter Adjusted EBITDA margin of 23.9% increased 83 basis points sequentially, primarily driven by very strong digital performance. Margin growth during the quarter was, however, constrained by a loss in a carbon capture project that negatively impacted margins by approximately 50 basis points.

Olivier Le Peuch: Let me now go through the fourth quarter results for each division. Fourth quarter digital revenue of $825 million increased 25% sequentially, while pre-tax operating margin expanded 557 basis points to 34%. These results were driven by strong year-end sales in digital exploration and increased revenue in both digital operations and platforms and applications. Notably, for the full year, digital revenue of $2.7 billion grew 9%. The combination of this growth rate and the full year EBITDA margin of 35% well exceeded the widely recognized Rule of 40. In addition, digital annual recurring revenue surpassed $1 billion, reflecting year-on-year growth of 15%. Finally, trailing 12-month net recurring revenue was 103% at the end of the fourth quarter. Reservoir Performance revenue of $1.7 billion increased 4% sequentially, driven by strong international activity, particularly in Saudi Arabia, East Asia, Qatar, Indonesia, and Guyana.

Let me now go through the fourth quarter results for each division. Fourth quarter digital revenue of $825 million increased 25% sequentially, while pre-tax operating margin expanded 557 basis points to 34%. These results were driven by strong year-end sales in digital exploration and increased revenue in both digital operations and platforms and applications. Notably, for the full year, digital revenue of $2.7 billion grew 9%. The combination of this growth rate and the full year EBITDA margin of 35% well exceeded the widely recognized Rule of 40. In addition, digital annual recurring revenue surpassed $1 billion, reflecting year-on-year growth of 15%. Finally, trailing 12-month net recurring revenue was 103% at the end of the fourth quarter. Reservoir Performance revenue of $1.7 billion increased 4% sequentially, driven by strong international activity, particularly in Saudi Arabia, East Asia, Qatar, Indonesia, and Guyana.

Olivier Le Peuch: Pre-tax operating margin of 19.6% increased 105 basis points, largely due to a favorable activity mix in the Middle East. Well Construction revenue of $2.9 billion decreased 1% sequentially, primarily driven by declines in Middle East and Asia, while pre-tax operating margin of 18.7% was slightly down. Production Systems revenue of $4.1 billion increased 17% sequentially, reflecting a full quarter of activity from ChampionX. Excluding the impact of this acquisition, Production Systems revenue increased 11%, driven by strong sales of completions and artificial lift, as well as project milestones in process technologies, subsea, and valves. Pre-tax operating margin of 16% increased 20 basis points due to improved profitability in completions and production chemicals. Now turning to liquidity. During the Q4, we generated $3 billion of cash flow from operations and $2.3 billion of free cash flow.

Pre-tax operating margin of 19.6% increased 105 basis points, largely due to a favorable activity mix in the Middle East. Well Construction revenue of $2.9 billion decreased 1% sequentially, primarily driven by declines in Middle East and Asia, while pre-tax operating margin of 18.7% was slightly down. Production Systems revenue of $4.1 billion increased 17% sequentially, reflecting a full quarter of activity from ChampionX. Excluding the impact of this acquisition, Production Systems revenue increased 11%, driven by strong sales of completions and artificial lift, as well as project milestones in process technologies, subsea, and valves. Pre-tax operating margin of 16% increased 20 basis points due to improved profitability in completions and production chemicals. Now turning to liquidity. During the Q4, we generated $3 billion of cash flow from operations and $2.3 billion of free cash flow.

Olivier Le Peuch: We expect revenue to benefit from a full year of ChampionX, which will result in incremental revenue of approximately $1.8 billion in 2026. This increase will be partially offset by the effects of the 2025 divestitures of our interest in the Palliser APS project in Canada and of our REIT business in the Middle East. These two businesses accounted for approximately $350 million in combined revenue in 2025. As Olivier mentioned, Adjusted EBITDA margin for 2026 will be relatively consistent with 2025 levels, with differing dynamics by division. Digital margin will increase slightly year-on-year on continued top-line growth. Production Systems margin will increase, primarily driven by synergies from the ChampionX acquisition, where we still expect to achieve approximately half of the $400 million of total synergies by the end of 2026, $30 million of which were achieved in 2025.

We expect revenue to benefit from a full year of ChampionX, which will result in incremental revenue of approximately $1.8 billion in 2026. This increase will be partially offset by the effects of the 2025 divestitures of our interest in the Palliser APS project in Canada and of our REIT business in the Middle East. These two businesses accounted for approximately $350 million in combined revenue in 2025. As Olivier mentioned, Adjusted EBITDA margin for 2026 will be relatively consistent with 2025 levels, with differing dynamics by division. Digital margin will increase slightly year-on-year on continued top-line growth. Production Systems margin will increase, primarily driven by synergies from the ChampionX acquisition, where we still expect to achieve approximately half of the $400 million of total synergies by the end of 2026, $30 million of which were achieved in 2025.

Olivier Le Peuch: About 75% of the synergies will benefit production systems, with the remaining portion benefiting well-construction and reservoir performance. The positive effect of ChampionX synergies on production system margins will be partially offset by unfavorable technology mix within the division. In reservoir performance and well-construction, despite activity levels stabilizing, margins will be down year-on-year due to activity mix and pricing headwinds in select markets. From a below-the-line perspective, corporate costs will increase year-on-year, driven by an incremental $70 million of intangible asset amortization expense as a result of a full year of ChampionX. Additionally, we expect our effective tax rate to be approximately 20%, representing a slight increase from 2025. While we expect overall activity to stabilize and increase from today's level in certain key international markets, we will remain disciplined in our capital allocation. In this regard, we expect our total capital investments to be approximately $2.5 billion in 2026.

About 75% of the synergies will benefit production systems, with the remaining portion benefiting well-construction and reservoir performance. The positive effect of ChampionX synergies on production system margins will be partially offset by unfavorable technology mix within the division. In reservoir performance and well-construction, despite activity levels stabilizing, margins will be down year-on-year due to activity mix and pricing headwinds in select markets. From a below-the-line perspective, corporate costs will increase year-on-year, driven by an incremental $70 million of intangible asset amortization expense as a result of a full year of ChampionX. Additionally, we expect our effective tax rate to be approximately 20%, representing a slight increase from 2025. While we expect overall activity to stabilize and increase from today's level in certain key international markets, we will remain disciplined in our capital allocation. In this regard, we expect our total capital investments to be approximately $2.5 billion in 2026.

Olivier Le Peuch: This should lead to another year of strong free cash flow generation. As a result, today, we announced a 3.5% dividend increase, and we expect to return more than $4 billion to our shareholders in 2026 through a combination of dividends and stock buybacks. We are currently targeting to buy back the same $2.4 billion that we repurchased in 2025. However, this amount could increase as the year unfolds, depending on our free cash flow generation progress and our visibility on the business outlook. I will now turn the conference call back to Olivier. Thank you, Stephane. I believe, Megan, that we are ready for the Q&A session. We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. Your first question comes from the line of Steve Richardson from Evercore ISI. Your line is open.

No. At first I would come out to reinforce the the trust and the confidence. We have our national company to continue to their execute the capital program and I think indeed we are forcing and already witnessing the rebound of the Saudi Arabian uh doing and walk over activity, which is very favorable. And I think, as I said coming from a deep in 2025 burning at the end of 2026 to, as we expect to the level of Entry of 2025, which is a v-shape recovery. I think that will set the UFA well, and, and also the the 2027 as a as a much stronger year going forward. So beyond that obviously the region is still continuous momentum High momentum in Kuwait in UAE and has been witnessing significant growth. But coming to International, indeed, Libya, I think is packing and is a, there's a conference this week. Next week, and Libya is attracting a lot of investment. And we have been in the early benefit of of this and we see Libya High trajectory of growth. We have seen it in the last, the last couple of

And we forced this, we continue in well into the 26th and 27 driven by investment coming, back in country. For my international company. At J has been successfully in licensing round and I think is exploring commercial in the South and also getting additional independent coming back into country. So we see a rebound in Algeria that will strengthen in 2027 Egypt. Egypt in in the region I think is back in offshore Edition. Rigs will mobilize in deep water offshore Egypt as well as in in Egypt, due to the support that government has provided and uh and again the return of investment into the Egypt and Iraq, I think as being an hour of growth last year, we continued to be a significant going forward. So, Iraq is where some International companies are investing, and I think we are social with this directly. So we have a strong exposure in all of this Market where, uh, international company are joining. And finally,

Olivier Le Peuch: I think we are just touching the early innings of that transformation. We're using a multi-pronged approach towards this, first and foremost, a strategy built on a platform approach to it. I think you mentioned the combination of Delfi, Lumi, and Ora. We have been, indeed, gradually gaining a lot of traction for customers to recognize that a platform is the approach to have the most benefit to combine the geoscience, the production, the drilling, the operational workflow improvement that everybody is looking for. But if we look at the momentum that we are benefiting from today, the momentum comes from digital operations that I think you have seen is getting significant benefits because it's where, I think, the rubber hits the road and where the customers are seeing and materializing the savings in drilling performance in production and NPT reduction in production optimization.

I think we are just touching the early innings of that transformation. We're using a multi-pronged approach towards this, first and foremost, a strategy built on a platform approach to it. I think you mentioned the combination of Delfi, Lumi, and Ora. We have been, indeed, gradually gaining a lot of traction for customers to recognize that a platform is the approach to have the most benefit to combine the geoscience, the production, the drilling, the operational workflow improvement that everybody is looking for. But if we look at the momentum that we are benefiting from today, the momentum comes from digital operations that I think you have seen is getting significant benefits because it's where, I think, the rubber hits the road and where the customers are seeing and materializing the savings in drilling performance in production and NPT reduction in production optimization.

Olivier Le Peuch: We are benefiting from that. But obviously, we are pursuing adoption of data and AI. Lumi, which we launched 4 or 5 quarters ago, is already having more than 50 customers of an adoption. Tella, that we launched less than 3 months ago, has already more than a dozen customers that are engaging and working with us to create this foundation model that can transform their own geoscience workflow or that can automatically detect and optimize autonomously some producing assets, as you have seen with ADNOC announcement that we have done. So we are pleased with the progress. Surprised with the effect on digital operation. I believe this momentum continues. And very confident that the secular trend that the industry is continuing to witness will benefit our platform approach and that Lumi, Delfi, and Tella will be at the core of this industry transformation going forward. Thanks, Olivier.

We are benefiting from that. But obviously, we are pursuing adoption of data and AI. Lumi, which we launched 4 or 5 quarters ago, is already having more than 50 customers of an adoption. Tella, that we launched less than 3 months ago, has already more than a dozen customers that are engaging and working with us to create this foundation model that can transform their own geoscience workflow or that can automatically detect and optimize autonomously some producing assets, as you have seen with ADNOC announcement that we have done. So we are pleased with the progress. Surprised with the effect on digital operation. I believe this momentum continues. And very confident that the secular trend that the industry is continuing to witness will benefit our platform approach and that Lumi, Delfi, and Tella will be at the core of this industry transformation going forward.

Olivier Le Peuch: We have historically been the largest supplier, the largest partner of the national company, and the largest supplier in service technology in country. Historically, we had had, about 10 years ago, more than 3,000 people, and we were recording visibly more than $1 billion revenue at that time. So we have the track record in integration. We have a unique subsurface digital leading role that we had at that time that we can resume. And we have today a significant set of assets that are ready to be deployed across the drilling services, across production, with no less than 10 production sets across rig operation with rigs that we are ready to mobilize. And I think across intervention, across drilling for infill drilling or production optimization, we believe to have a capacity in country. And we believe that we have the access to the Venezuelan nationals.

Have you seen that? We have to preface this with the the condition, the right condition, including licensing, including payments. And operating license will have to be put in place, but assuming that the condition are set for investment to resume and to accelerate, uh, not only from the customer that we are saving today. But from new customer re-entering or entering the country, uh, we have kept, we have historically been the largest supplier, the largest partner of the national company and the largest supplier in in service technology in country. Historically, we had had about 10 years ago, more than 3,000 people and we were recording visibly more than 1 billion dollar Revenue at that time. Uh, so we have the, we have the track record in integration. We have a unique subsurface digital leading role that we had at that time that we can resume and we have today, a city account set of assets that are ready to to be deployed across the ding Services across

So now the customer response is very positive. And indeed, I think if you see, look at the priority of our customers today into the into a charging committee on pricing environment, uh, it's all about getting more from their set that they have on the, on the production and hence, the the return of the the higher barrier for lower cost is a priority. So I getting a lot of intake into our lift solution into our digital production as you have heard, uh and indeed uh, trying to realize and realizing today the benefit of of chemistry chemistry for not only your production Assurance chemistry for uh but also chemistry for performance or recovery. So we believe that the the credit capability that we have built together, uh will give us opportunity to create solution for the market and to end solution that will help to improve the performance of existing producing assets.

Olivier Le Peuch: Customer feedback is very strong because they believe that they need somebody that has the subsurface, has the technology, and has the full integrated portfolio to respond to the transformation of production recovery landscape as we have contributed and helped the industry transform the well construction or exploration historically. That makes a lot of sense. Shifting gears a little bit to another area of potential growth in geothermal. You've been dabbling there for a number of years, but now, as you noted in the release here, you're working with Ormat on a pilot project, I believe, later this year in enhanced geothermal. A lot of this, when we look at geothermal, sounds a lot like shale in the early 2000s. We know the resources there, but it's a matter of process and technique to solve for the economics. Do you agree with that conceptually?

Won the first, the first aspect, the second obviously we have put this together because you believe that we want to together optimize explore and optimize uh through a development of an asset or 2 assets uh in the future in in recent in a near future uh into the unconventional geothermal. And yes we believe this is a field that has significant potential but to want to do it right we want to do science. We want to do technology, we want to do with digital modeling of the process so that we get it, right? And we understand the, how to scale it economically, how to make it viable, how to make it safe, and then how, to afford it together to the market in the near future. So that's the ambition. So, we have done this for a reason and I think, uh, we will be developing, this assets will be experimenting in this asset appraising, and then, uh, getting ready for with technology, with digital and with joint offering, uh, to offer this at scale, uh, to the market.

Olivier Le Peuch: And I think when you fast forward a year from now, when the imbalance that still exists today will start to subside and then the market will balance itself, I don't think there will be much spare capacity available, a sign of which you see by the reinvestment into oil capacity sustenance, investments that are happening to the cost across the Middle East, and oil intervention and intervention activity in which we have a strong exposure is benefiting from this. So yes, I don't think you have some of the OPEC members beyond the Middle East that are not necessarily having an easy path towards sustaining their existing production. So all in, I think it bodes very well to our focus on production recovery, which is focusing on providing a technology and integrated capability to sustain production and hence recovery. And I think that's where we will see adoption of this.

I think uh I think you, you have been reading what I'm reading and I think I don't want to really know but I think OPEC plus has been unwinding 2.2 million by and I think when you fast forward in a year from from now, when the the unbalanced that still exist in in, in today, will start to subside. And, and then the market will balance itself. I don't think they will be much spare capacity available. Uh, sign of which you see by the reinvestment, into all capacity, systems investment that are happening to the Cross, uh, across the, the Middle East and all intervention and and intervention activity. In which we have a strong exposure is benefiting from this. Uh so yes I don't think and you have some some other OPEC member beyond the Middle East that are not necessarily having a an easy path towards sustaining their existing production so or in I think it both very well to

Olivier Le Peuch: And in the Americas, I think the continuous momentum in Brazil, in Guyana, or Suriname, and in Iraq, I think, are here to stay with the Permian Basin, Gulf of America, mature basins of the North Sea remaining steady somehow, although with a slight decline in the North Sea. So we believe that the FID, the economics are favorable, and the pipeline of FID across Africa and Asia are set to create a rebound of activity going forward as we turn into 2027. Thank you very much. Thank you. Thank you. Your last question comes from the line of Scott Gruber with Citigroup. Your line is open. Yeah. Morning, Mark. So I want to come back to the data center solutions business. Olivier, you mentioned expanding the business abroad. But does the billion-dollar target capture any of that international growth opportunity, or would that be future upside? And how quickly could this materialize?

Difficult to say, what I could become larger. But easy to tell you that it will grow. And this year will be the first, the first step into your establishing yourself in in Asia and to provide this modular manufacturing solution to our customer there. Uh, also we initiate a partnership to design and Next Generation data center in 1, country in the Asia region and then we expect you also look at our relationship to embed and, and go further including Middle East in the near future. So, these are the, these are the place where we have ambition to, to leverage our hyperscaler relationship. And our modular manufacturing capability, ability to Source locally, ability to manufacture everywhere. I think is something unique that. Not so many company can do and scale and replicate what we have done the last 18 months. So that's what we look forward. And that's where we are excited about the international.

Olivier Le Peuch: I appreciate the call. Thank you. Thank you. Thank you, Scott. Thank you. Thank you, Megan. Ladies and gentlemen, as we conclude today's call, I would like to leave you with the following takeaways. First, our strategy focuses on production recovery, including SLB Digital and data center solutions present new pathways for growth, supporting a full-year revenue and margin guidance. Second, I'm confident that we continue to generate strong cash flows, enabling us to return more than $4 billion of shareholder returns in 2026. Third, in the longer term, the outlook is becoming more positive for SLB. The recovery of Saudi Arabia, the positive pipeline in subsea, the growth dynamic in both digital and data centers are all catalysts, and Venezuela represents an upside. In summary, the current cycle is recovering towards the strength of SLB. With this, I will conclude today's call.

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