SLB Q4 2025 Schlumberger Ltd Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Schlumberger Ltd Earnings Call
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.
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.
James 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.
Speaker #2: Good morning, and welcome to the SLB fourth quarter and full year 2025 earnings conference call. Today's call is being hosted from Houston following our board meeting held earlier this week.
Speaker #2: Joining us on the call are Olivier 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.
Speaker #2: These matters involve risks and uncertainties that could cause 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.
Speaker #2: Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter and full-year earnings press release, which is on our website.
James R. McDonald: Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter and full year earnings press release, which is on our website. With that, I will turn the call over to Olivier.
Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter and full year earnings press release, which is on our website. With that, I will turn the call over to Olivier.
Speaker #2: With that, I will turn the call over to
Speaker #2: Olivier. Thank you, James.
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: 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.
Speaker #3: Ladies and gentlemen, thank you for joining us today. I will begin by reviewing our fourth quarter performance, followed by an update on market conditions and the unique opportunities we see developing for our business.
Speaker #3: I will then share our outlook for the first quarter and expectations for the full year 2026. Stephane will then provide additional details on our financial results, and finally, we will open the line for your questions.
Speaker #3: Let's begin. We ended the year with strong operational and financial performance in the fourth quarter, achieving sequential revenue growth, margin expansion, and substantial cash flow generation.
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.
According to the market environment, near the time of supply, it may continue to exert downward pressure on commodity prices, dropping in the first half of 2026. Meanwhile, elevated geopolitical uncertainties should provide a price floor. ENT operators are therefore expected to remain cautious and maintain their backlogs.
Backload, their 2026 budget.
As supply and demand continues to rebalance into 2027, conditions will likely support a gradual recovery in upstream investments, with activity in key international markets and offshore deeper, exiting 2026 at a higher level than 2025.
Indeed, economic growth in closing population and large-scale manufacturing and infrastructure investments, partly 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 this would be the key driver for the rebalancing of supply and demand.
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.
In the meantime, our customers are focused on delivering the lowest-cost income buyers. This means capturing efficiencies at scale, and in our view that requires more technology, more integration, and more digital solutions.
Today, operators are increasingly prioritizing performance assurance across.
Asset life cycle, reducing development timelines, and accelerating optimization through digital solutions.
SLB is uniquely positioned today by value, in this by indicating equipment with intelligent and autonomous digital capabilities to reduce downtime, improve efficiency, and increase productivity, as we witness a rapid uptake in our digital operations.
Additionally, collection recovery has emerged as a critical domain for value creation—not only in brands and mature sets, but also across greenfield developments and tie-backs.
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.
Olivier Le Peuch: Globally, the international markets are stabilizing and trending upwards directionally, with Latin America, Middle East, and Asia leading the rebound in 2026. Regionally, Middle East continues to represent the largest international market with positive investment outlook. Indeed, there is a resurgence of oil production across the region driven by OPEC+ policy, while gas remains a strategic priority to meet regional demand and long-term capacity expansion. In 2025, we witnessed double-digit growth in the United Arab Emirates, Iraq, and Kuwait, which was more than offset by the decline in Saudi Arabia. In 2026, the Middle East market will be characterized by rebounds in drilling and workover activity in Saudi Arabia, with rig counts potentially returning to early 2025 levels by the end of 2026. This has already begun.
Globally, the international markets are stabilizing and trending upwards directionally, with Latin America, Middle East, and Asia leading the rebound in 2026. Regionally, Middle East continues to represent the largest international market with positive investment outlook. Indeed, there is a resurgence of oil production across the region driven by OPEC+ policy, while gas remains a strategic priority to meet regional demand and long-term capacity expansion. In 2025, we witnessed double-digit growth in the United Arab Emirates, Iraq, and Kuwait, which was more than offset by the decline in Saudi Arabia. In 2026, the Middle East market will be characterized by rebounds in drilling and workover activity in Saudi Arabia, with rig counts potentially returning to early 2025 levels by the end of 2026. This has already begun.
We first, LB, has expanded the production portfolio, including the addition of Champan X, who are uniquely positioned to meet the developing demand in the production space.
Globally.
Partial markets are stabilizing and trending upwards, directionally, with Latin America and the Middle East, Asia. Leading the rebound in 2026.
Regionally, the Middle East continues to represent the largest international market, with positive investment outlook. Indeed, there's a resurgence of oil production across the region, delivered by OPEC+ policy. While gas remains a strategic priority to meet regional demand and long-term capacity expansion.
In 2025 we witnessed.
Double-digit growth in the United Arab Emirates, Iraq, and Kuwait, which was more than offset by the decline in Saudi Arabia.
2026. The Middle East market will be characterized by rebounding, and moreover, activity in Saudi Arabia with regards to potential returning to early 2025 levels by the end of 2026, and this has already begun.
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.
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.
Offshore also continues to present compelling long-term growth opportunities for SB, partly in deepwater, where we expect activity to inflect toward the end of 2026 as what space subsides.
With 1SubS, we have the unique ability to combine subsea processing, capabilities, digital solutions, and SLB’s integrated port to process expertise across the intervention. And, to indicate, what construction could create differentiated value for customers.
2026 and 2027 are about 20% higher than the 2025 run rate, right? And this is an opportunity we aim to capitalize on.
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.
In 2025, $1,130 was about approximately $4 billion, subzi, bookings, and we see a path for cumulative bookings exceeding $9 billion in the next two years, supported by this standard activity.
Finally, I’d like to comment on the strong progress in our data center solutions business since its launch less than two years ago. This year, we plan to expand our range of offerings, our customer base, and the geography we serve, paving the way for future growth.
The opportunity is going 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 demands rebalance, supported by ongoing investments for all capacity, gas expansion projects, and a constructive long-term outlook for the border.
As on activity dynamics, further reinforced, the server of directional trajectory beginning in 2026.
Let me now share our outlook for the 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.
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.
The headwinds we faced in 2025 in certain markets may be competed with for a business.
We anticipate this will translate into higher fourth-quarter revenue exit rate in 2026 compared to the fourth quarter of 2025.
For the full year, assuming all price remains range-bound in the high $50s to low $60s range, we expect 2026 revenue to be between $36.9 billion to $37.7 billion.
In North America, we will benefit from the addition of seven months of activity from Shan X, stronger, active offshore activity tied to customer plans, and accelerated growth in data centers. While upstream land activity will continue to decline year on year.
The 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 are anticipated to decline slightly.
Olivier Le Peuch: In Digital, revenue is expected to go at the same pace as 2025, driven by digital operations. Production Systems will increase, mostly benefiting from a full year of ChampionX revenue. Reservoir Performance will be flattish, while Well Construction will decline slightly. Revenue in the All Other category will be flat year-over-year, considering the loss of revenue from the divested Palliser asset will be offset by growth in the data center solutions. This revenue outlook translates into Adjusted EBITDA between $8.6 to $9.1 billion, with margins remaining in line with full year 2025 levels. Finally, with visibility into another year of strong cash flow, we will return more than $4 billion to shareholders in 2026 through the combination of the increased dividend that we announced this morning and share repurchase.
In Digital, revenue is expected to go at the same pace as 2025, driven by digital operations. Production Systems will increase, mostly benefiting from a full year of ChampionX revenue. Reservoir Performance will be flattish, while Well Construction will decline slightly. Revenue in the All Other category will be flat year-over-year, considering the loss of revenue from the divested Palliser asset will be offset by growth in the data center solutions. This revenue outlook translates into Adjusted EBITDA between $8.6 to $9.1 billion, with margins remaining in line with full year 2025 levels. Finally, with visibility into another year of strong cash flow, we will return more than $4 billion to shareholders in 2026 through the combination of the increased dividend that we announced this morning and share repurchase.
Let me now describe how these dynamics will unfold, and the cost across the divisions.
Digital revenue is expected to grow at the same pace as 2025, driven by digital operations.
System will increase, mostly benefiting from a fully optioned revenue.
As our performance will be flattish for a while. Well, construction will decline slightly.
Revenue in the 'All Other' category will be flat year on year, considering the loss of revenue from the diversity asset. This will be offset by growth in Data Center Solutions.
This revenue outlook translates into adjusted AA between $8.6 billion to $9.1 billion, with margin 3. Many lines with full-year 2025 levels.
Finally, we have visibility into an area of strong cash flow. We will return more than $4 billion to shareholders in 2026 through the combination of the increased dividend that we announced this morning and share repurchase.
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.
Turning to the first quarter, we anticipated revenue to decline by high single digits, sequentially similar to the prior due to outsized year-end product sales and project milestones in production systems in the prior quarter.
We also expect just a bit of margin to decrease by 150 to 200 basis points versus the prior quarter.
This seasonal dip would be followed by a reborn activity during the second quarter, or further expansion into the second half, driven primarily by international markets.
Finally, before I end over the phone, let me briefly touch on Venezuela.
Saab is the only international service company actively operating in Venezuela today. As we are delivering a diverse set of services for an IOC under their license.
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.
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.
With nearly a century of experience in Venezuela, we did maintain active facilities, equipment, and local personnel on the ground.
Historically, we live here in the country and remain confident on that, with appropriate licensing, safety parameters, and compliance measures in place. We can rapidly ramp up activities in support of the online gas industry in Venezuela. We're excited, and we have already received a lot of inquiries from our customers.
Stéphane Biguet: 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.
I will now turn the call over to Stephane to discuss our financial results in more detail.
Thank you, Olivia, 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.
This includes an $0.11 goodwill impairment charge relating to our carbon capture business.
8 cents of merger and integration charges.
7 cents related to workforce reductions.
And a free sense 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.
Of setting. 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.
This 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,
Q4 adjusted EBITDAM margin of 23.9%.
Increased 83 basis, point sequentially.
Primarily driven by very strong digital performance.
Margin growth during the quarter was, however, constrained by your 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.
Let me now go through the four quarter results for each division.
For the quarter, digital revenue was $825 million, an increase of 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 his growth rate.
And the full year, a bit-damn margin of 35%, while exceeded the widely recognized Rule of 40.
In addition.
Digital annual recurring revenue surpassed $1 billion, reflecting year-on-year growth of 15%.
Finally, trading 12 months net recurring revenue.
Was 103% at the end of the fourth quarter.
Our performance revenue of $1.7 billion increased 4% sequentially, driven by strong international activity.
Particularly in Saudi Arabia, East Asia, Qatar, Indonesia, and Ghoul.
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.
Free 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 Envelopes.
Free tax operating margin of 16% increased 20 basis points.
Due to improved profitability in Completions and Products.
Now, turning to liquidity.
During the fourth quarter, we generated $3 billion of cash flow from operations.
And $2.3 billion of free cash flow.
Olivier Le Peuch: This strong performance was due to the unwinding of working capital on significant customer collections and reduced inventory driven by year-end product deliveries. For the full year, we generated free cash flow of $4.1 billion, marking the third year in a row with free cash flow at or above $4 billion. As a result, net debt reduced by $1.8 billion during the quarter to end the year at $7.4 billion. Capital investments, including CapEx and investments in APS projects and exploration data, were $716 million in Q4 and $2.4 billion for the full year. For the full year, we returned a total of $4 billion to our shareholders, with approximately $2.4 billion in stock repurchases and $1.6 billion in dividends. Looking ahead, let me now provide some additional color on our outlook for 2026, building on the details Olivier shared earlier.
This strong performance was due to the unwinding of working capital on significant customer collections and reduced inventory driven by year-end product deliveries. For the full year, we generated free cash flow of $4.1 billion, marking the third year in a row with free cash flow at or above $4 billion. As a result, net debt reduced by $1.8 billion during the quarter to end the year at $7.4 billion. Capital investments, including CapEx and investments in APS projects and exploration data, were $716 million in Q4 and $2.4 billion for the full year. For the full year, we returned a total of $4 billion to our shareholders, with approximately $2.4 billion in stock repurchases and $1.6 billion in dividends. Looking ahead, let me now provide some additional color on our outlook for 2026, building on the details Olivier shared earlier.
This strong performance was due to the unwinding of working capital on significant customer collections and reduced inventory driven by year-end product deliveries.
For the full year.
We generated free cash flow of $4.1 billion.
Marking the third year in a row with free cash flow at or above $4 billion.
As a result.
Capital investments, including capex and investments in APS projects and exploration data, were $716 million in the fourth quarter, and $2.4 billion for the full year.
For the full year, we returned a total of $4 billion to our shareholders, with approximately $2.4 billion in stock repurchases and $1.6 billion in dividends.
Looking ahead, let me now provide some additional color on our app outlook for 2026.
Building on the details alleviate shared earlier.
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.
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 IPS project in Canada, and of our REDA business in the Middle East.
These two businesses accounted for approximately $350 million in combined revenue in 2025.
As already 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 topline growth.
Production systems margin will increase.
Primarily driven by synergies from the ChampionX acquisition.
We still expect to achieve approximately half of the $400 million in 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.
About 75% of the synergies will benefit production systems.
With the remaining portion benefiting while construction and reservoir performance.
The positive effect of Champion X synergies on the Production System margins will be partially offset by an unfavorable technology mix within the division.
In Reservoir Performance and Well Construction, despite activity levels, stabilizing margins will be done year on year.
Due to activity, mix, and pricing headwinds in select markets.
From a below the line perspective.
Corporate cost will increase year over 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.
Why 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.
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.
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 output.
Olivier Le Peuch: Thank you, Stephane. I believe, Megan, that we are ready for the Q&A session.
I will now turn the conference call back to Review.
Thank you, Stefan. I believe, Meghan, that we are ready for the Q&A session.
Olivier Le Peuch: 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.
Q&A session. If you would like to ask a question, please press star (*) followed by 1 on your keypad.
telephone keyboard.
Your first question comes from the line of Steve Richardson from Evercore ISI. Your line is open.
Olivier Le Peuch: Hi, good morning. Good morning, Steve. Hi. I was wondering if we could talk a little bit about CapEx. I understand. I appreciate you've given some outlook here on 2026. There seems to be something with investors of an old rule of thumb about your CapEx leading revenue expectations. I thought it'd be helpful if you could maybe give us some context around the trend line of CapEx, but also, how is the capital intensity of your forward business different than perhaps it was in the past? Thanks for the question. Yes, so we increased CapEx slightly compared to last year in total with APS and exploration to $2.5 billion, as I just said. We think this is what we need to operate this year and to capture new opportunities as activity recovers gradually throughout the year, particularly in international markets.
Stephen Richardson: Hi, good morning.
Olivier Le Peuch: Good morning, Steve.
Stephen Richardson: Hi. I was wondering if we could talk a little bit about CapEx. I understand. I appreciate you've given some outlook here on 2026. There seems to be something with investors of an old rule of thumb about your CapEx leading revenue expectations. I thought it'd be helpful if you could maybe give us some context around the trend line of CapEx, but also, how is the capital intensity of your forward business different than perhaps it was in the past? Thanks for the question. Yes, so we increased CapEx slightly compared to last year in total with APS and exploration to $2.5 billion, as I just said. We think this is what we need to operate this year and to capture new opportunities as activity recovers gradually throughout the year, particularly in international markets.
Hi, good morning, Steve. Um,
Then perhaps it was in the past.
Olivier Le Peuch: So yes, compared to the past, our capital efficiency has improved quite a bit in the last few years. We can do more with less, basically, but clearly, we will not miss any opportunity if activity recovers faster. We want to be ready for the ramp-up, and we'll bring more equipment and tools as needed. By division, clearly, Reservoir Performance is probably the highest capital intensity, followed by Well Construction and Production Systems, especially with the addition of ChampionX as a quite lower capital intensity. Thank you. On the Middle East, your comments are appreciated about the other regions picking up the slack in Saudi and your view on the full year improving. I was wondering if you could talk what we're seeing is the IOCs are seeing a lot more opportunity across North Africa and the Middle East.
Stéphane Biguet: So yes, compared to the past, our capital efficiency has improved quite a bit in the last few years. We can do more with less, basically, but clearly, we will not miss any opportunity if activity recovers faster. We want to be ready for the ramp-up, and we'll bring more equipment and tools as needed. By division, clearly, Reservoir Performance is probably the highest capital intensity, followed by Well Construction and Production Systems, especially with the addition of ChampionX as a quite lower capital intensity.
Thanks for the question. Yes. So we we, we increased the capex, uh, slightly compared to last year to in total with, uh, with APS and and exploration to 2.5 as a 2.5 billion. As I just said, we think this is what we need to operate this year and uh to capture new opportunity as activity recovers gradually throughout the year uh particularly in international markets. So so yes, compared to the Past.
Our capital efficiency has improved quite a bit in the last few years.
We can do more with less, basically, but—
Stephen Richardson: Thank you. On the Middle East, your comments are appreciated about the other regions picking up the slack in Saudi and your view on the full year improving. I was wondering if you could talk what we're seeing is the IOCs are seeing a lot more opportunity across North Africa and the Middle East. I was wondering if you could talk a little bit about your mix or your expectation of your kind of customer mix as you go into 2026 and how much of that is driving some of this optimism on improvement versus some of your traditional customers and the national companies.
Clearly, we will not miss any opportunity if activity recovers faster. We want to be ready for, for the ramp up and we'll bring more equipment and tools as needed by division. Uh, clearly Reservoir performance, uh, is probably the highest Capital intensity followed by, well construction and production systems especially with the addition of champion X as I is quite lower Capital intensity.
Olivier Le Peuch: I was wondering if you could talk a little bit about your mix or your expectation of your kind of customer mix as you go into 2026 and how much of that is driving some of this optimism on improvement versus some of your traditional customers and the national companies. No, first, I would come out to reinforce the trust and the confidence we have in our national company to continue to execute the capital program. And I think, indeed, we are foreseeing and already witnessing the rebound of the Saudi Arabian drilling and workover activity, which is very favorable. And I think, as I said, coming from a dip in 2025, rebounding at the end of 2026 to, as we expect, to the level of activity of 2025, which is a V-shaped recovery.
Thank you. Um, and on the Middle East—your comments are appreciated about the other regions picking up the slack in Saudi, in your view, on the full year and proving. I was wondering if you could talk—what we're seeing is the IOCs are seeing a lot more opportunity across North Africa and the Middle East, and—
Olivier Le Peuch: No, first, I would come out to reinforce the trust and the confidence we have in our national company to continue to execute the capital program. And I think, indeed, we are foreseeing and already witnessing the rebound of the Saudi Arabian drilling and workover activity, which is very favorable. And I think, as I said, coming from a dip in 2025, rebounding at the end of 2026 to, as we expect, to the level of activity of 2025, which is a V-shaped recovery.
Um, I was wondering if you could talk a little bit about your— you know, your mix or your expectation of your kind of customer mix as you go into '26, and how much of that is driving some of this optimism on improvement, versus some of your traditional customers, um, on the national oil companies.
Olivier Le Peuch: I think that will set the year very well and also the 2027 as a much stronger year going forward. So beyond that, obviously, the region still continues momentum, high momentum in Kuwait, in UAE, and has been witnessing significant growth. But coming to international, indeed, Libya, I think, is attracting and has a conference this week and next week. Libya is attracting a lot of investment, and we have been the early beneficiaries of this. We see Libya's high trajectory of growth. We have seen it in the last couple of years. We foresee this will continue well into 2026 and 2027, driven by investment coming back in-country from an international company. Algeria has been successful in the licensing round, and I think is exploring unconventionals in the south and also getting additional investment coming back into country.
I think that will set the year very well and also the 2027 as a much stronger year going forward. So beyond that, obviously, the region still continues momentum, high momentum in Kuwait, in UAE, and has been witnessing significant growth. But coming to international, indeed, Libya, I think, is attracting and has a conference this week and next week. Libya is attracting a lot of investment, and we have been the early beneficiaries of this. We see Libya's high trajectory of growth. We have seen it in the last couple of years. We foresee this will continue well into 2026 and 2027, driven by investment coming back in-country from an international company. Algeria has been successful in the licensing round, and I think is exploring unconventionals in the south and also getting additional investment coming back into country.
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
Olivier Le Peuch: So we see a rebound in Algeria that will strengthen in 2027. Egypt, Egypt in the region, I think, is back in offshore. Additional rigs will mobilize in deepwater offshore Egypt as well as in Egypt due to the support that the government has provided and gained the return of investment into Egypt. And finally, Iraq, I think, has been an area of growth last year, will continue to be significant going forward. So Iraq is where some international companies are investing. And I think we are associated with this directly. So we have a strong exposure in all of these markets where international companies are joining. And finally, I would say that the unconventional UAE is a place where newcomers are appraising the resource and ready to scale their investments from appraisal in 2026 to 2027 developments going forward.
So we see a rebound in Algeria that will strengthen in 2027. Egypt, Egypt in the region, I think, is back in offshore. Additional rigs will mobilize in deepwater offshore Egypt as well as in Egypt due to the support that the government has provided and gained the return of investment into Egypt. And finally, Iraq, I think, has been an area of growth last year, will continue to be significant going forward. So Iraq is where some international companies are investing. And I think we are associated with this directly. So we have a strong exposure in all of these markets where international companies are joining. And finally, I would say that the unconventional UAE is a place where newcomers are appraising the resource and ready to scale their investments from appraisal in 2026 to 2027 developments going forward.
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: So a combination of oil attractiveness in the region, Libya, Iraq, particularly for international companies, and gas in the region, Qatar obviously steady, but also the upcoming UAE and unconventional and deepwater offshore East Med. So that's the template, and I would say the favorable outlook from NOC and international companies in the Middle East. Thanks so much. Thank you. Thank you. Your next question comes from the line of James West with Melius Research. Your line is open. Thanks. Good morning, Olivier. Stéphane. Good morning. Morning, James. So Olivier, curious, so with the headwinds bottoming here, Saudi, Mexico, some of the white space and deep water, Sub-Saharan Africa, and everything looking kind of up and to the right, how are you thinking about the exit rate for 2026 versus the exit rate we saw in 2025?
So a combination of oil attractiveness in the region, Libya, Iraq, particularly for international companies, and gas in the region, Qatar obviously steady, but also the upcoming UAE and unconventional and deepwater offshore East Med. So that's the template, and I would say the favorable outlook from NOC and international companies in the Middle East.
I would say that the unconventional, uh, UAE is a place where newcomers are, uh, appraising, uh, the resource and ready to scale their investments, uh, from appraisal in '26 to 227 developments, uh, going forward. So, combination of oil attractiveness in the region—Libya, Iraq, particularly for international company—and gas in the region, COPPA obviously steady. But also the
Stephen Richardson: Thanks so much.
Upcoming UAE, uh, and, uh, uncover and deepwater offshore is made. So that's, that's the template. And I've said the favorable outlook from NOC and international company in the Middle East.
Olivier Le Peuch: Thank you.
Thanks so much.
Stephen Richardson: Thank you. Your next question comes from the line of James West with Melius Research. Your line is open.
Thank you.
Thank you.
Your next question comes from the line of James West with Melius Research. Your line is open.
James West: Thanks. Good morning, Olivier. Stéphane.
Stéphane Biguet: Good morning.
Thanks. Uh, good morning. Olivier speaking.
Olivier Le Peuch: Morning, James.
James West: So Olivier, curious, so with the headwinds bottoming here, Saudi, Mexico, some of the white space and deep water, Sub-Saharan Africa, and everything looking kind of up and to the right, how are you thinking about the exit rate for 2026 versus the exit rate we saw in 2025? Certainly, it's going to be higher, but what kind of, if you can give us some observations or thoughts on kind of magnitude of how this upcycle will begin?
Good morning mornings.
Olivier Le Peuch: Certainly, it's going to be higher, but what kind of, if you can give us some observations or thoughts on kind of magnitude of how this upcycle will begin? I think first, I think we have guided into our prepared remark that we expect the Q4 2026 to be higher than the Q4 2025. This would be led by the international rebound. Secondly, as we guided the Q1 as a marked decline compared to last year before, we will see a gradual recovery, again, driven mostly by international markets throughout the year, that is setting the scene, I would say, for 2027 to be favorable, driven by, first and foremost, continuous regain momentum in the Middle East with the addition of the rebound activity in Saudi and the combination of what the factor I mentioned before. Asia, I think, has been on a momentum.
Uh, Curious. So with the, you know, headwinds, um bottoming here, you know, Saudi Mexico, some of the white space and deep water, Subs Africa, um, and everything looking kind of up and to the right. How are you thinking about the exit rate, uh, for 26 versus the exit rate we saw in, in 25, certain it's going to be higher but what kind of if you give us some some observations or thoughts on kind of magnitude of of how this upcycled, uh, will begin?
Olivier Le Peuch: I think first, I think we have guided into our prepared remark that we expect the Q4 2026 to be higher than the Q4 2025. This would be led by the international rebound. Secondly, as we guided the Q1 as a marked decline compared to last year before, we will see a gradual recovery, again, driven mostly by international markets throughout the year, that is setting the scene, I would say, for 2027 to be favorable, driven by, first and foremost, continuous regain momentum in the Middle East with the addition of the rebound activity in Saudi and the combination of what the factor I mentioned before. Asia, I think, has been on a momentum.
I think first, I think we have guided into our prepared remarks that we expect the fourth quarter of 2026 to be higher than the fourth quarter of 2025, and this will be led by the international rebounds.
Olivier Le Peuch: Latin America as well, I think, a bit offshore-based in Latin America, a bit in Argentina. We are experiencing a slight rebound of Mexico, driven by deepwater activity in Mexico coming back. We will see, we expect that gradually and into 2027, the activity in sub-Saharan deepwater will resume to higher level, visibly higher level. The combination of FID in Namibia, in Mozambique, in Angola, and the early pickup of activity in Algeria are already showing signs of a very promising 2027, 2028 cycle. So directionally, international gradually recovering, and the exit rate in the end of this year to be driven by international addition so that it will result in 2024 this year being higher than last year. Okay. That's helpful. Thank you. Thanks, Olivier. And then maybe a follow-up on the digital side of the business.
Latin America as well, I think, a bit offshore-based in Latin America, a bit in Argentina. We are experiencing a slight rebound of Mexico, driven by deepwater activity in Mexico coming back. We will see, we expect that gradually and into 2027, the activity in sub-Saharan deepwater will resume to higher level, visibly higher level. The combination of FID in Namibia, in Mozambique, in Angola, and the early pickup of activity in Algeria are already showing signs of a very promising 2027, 2028 cycle. So directionally, international gradually recovering, and the exit rate in the end of this year to be driven by international addition so that it will result in 2024 this year being higher than last year.
Uh, secondly, uh, as regarded the, uh, the first quarter as a, as a marked decline compared to, to, uh, to last year, uh, before I will see a gradual recovery. Again, driven mostly by international market throughout the year. That is setting the, the scene, how we set for 2027 to be, uh, to be favorable, driven by first and foremost, continuous regained momentum in, in Middle East with the addition of the rebound activity in, in Saudi. And, and, and the combination of what the factors mentioned before. Asia, I think, has been on a, on a momentum. Latin America as well. I think a bit offshore base in Latin America or between Argentina.
Uh, we are expounding a slight rebound of Mexico, driven by deeper activities in Mexico, coming back. Uh, and uh, we will see, we expect that gradually, uh, and into 2027, the activity in SubSaharan deepwater will resume to higher level, visibly higher level. The combination of FID in Namibia, uh, in Mozambique, in Angola, and early pick up of activity in Nigeria are already showing sign of a very promising 2027-28 cycle. So, directionally,
James West: Okay. That's helpful. Thank you. Thanks, Olivier. And then maybe a follow-up on the digital side of the business. Obviously, strong results in Q4, but my sense is we're still fairly underpenetrated on Lumi and Delfi and the cloud platforms and the AI platforms that you have. My numbers may be a little bit dated, but I think a couple of 300 or so customers out of your 1,500 or so customers were on the cloud as of maybe a year ago. Could you give us a sense of kind of where that stands now or where you see that heading? I'm assuming everybody eventually goes there. Most everybody goes there. But just the magnitude of what that could mean for your digital business, I'm assuming it's pretty accretive.
International is gradually recovering, and the exit rate at the end of this year will be driven by International Edition, so that it will result in Q4 this year being higher than last year.
Olivier Le Peuch: Obviously, strong results in Q4, but my sense is we're still fairly underpenetrated on Lumi and Delfi and the cloud platforms and the AI platforms that you have. My numbers may be a little bit dated, but I think a couple of 300 or so customers out of your 1,500 or so customers were on the cloud as of maybe a year ago. Could you give us a sense of kind of where that stands now or where you see that heading? I'm assuming everybody eventually goes there. Most everybody goes there. But just the magnitude of what that could mean for your digital business, I'm assuming it's pretty accretive. No. Long term, I think we believe that the potential of digital to transform our industry from the asset team productivity to the efficiency of digital operation between doing or producing assets, I think, is very significant.
Okay, that's helpful. Thank you. Thanks Olivia. And then maybe a follow-up on the digital side of the business. Obviously strong results in the, the fourth quarter. But my senses were still, uh, fairly underpenetrated on uh, Lumi and and, and Delphine and and the the cloud platforms. Um, and the AI platform that you that you have I you know, my numbers may be a little bit dated, but I think, you know, a couple
You know, 300 or so customers out of your 1500 or so customers were were on the cloud as of maybe a year ago. Um could you give us a sense of kind of where that stands now or or where you see that heading? I'm assuming everybody, you know, eventually goes their, most everybody goes there, um, but just the magnitude of what they could mean for your digital business. I'm assuming it's it's pretty
Olivier Le Peuch: No. Long term, I think we believe that the potential of digital to transform our industry from the asset team productivity to the efficiency of digital operation between doing or producing assets, I think, is very significant.
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.
Pretty accretive know, long, long time, I think. Uh I think we we believe that the the potential of digital to transform on this uh from that set team productivity to the efficiency of digital operation between a producing assets. I think is is very significant. I think we are just touching the earlier Innings of that transformation. And uh, we're using a multi-point approach uh, towards this first and foremost strategy, uh, uh, built on a platform approach to it. And I think you mentioned the, the combination of Delphi Lumi and and Tara, and we have been indeed gradually gaining a lot of traction, for our customer to recognize that a platform is the approach to have uh, the most benefit uh, to combine the Joe sounds, the pollution, the drilling, the operation workflow Improvement at everyone is looking for. But if you look at the, the momentum,
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.
James West: Thanks, Olivier.
Well, on the Dozen customer that are engaging and and working with us to create this Foundation model, that can transform their audio, sounds workflow or that can automatically detect and, and optimize autonomously some producing assets as you have seen with at no announcement that we have done so. Well, uh, we are pleased to progress surprised with the effect on digital operation, believe this momentum continues. And they confident that the secular Trend that the industry is, uh, is continued to witness will benefit our platform approach and that Lumi Deli and ta will be at the core of this industry because transformation going forward.
Thanks.
Olivier Le Peuch: Thank you. Thank you. Your next question will go to the line of Arun Jayaram with JPMorgan. Your line is open. Yeah, good morning, Olivier. I was wondering if you could frame your thoughts on the near-term and longer-term opportunity for SLB in Venezuela. You mentioned you're the only international service company now actively operating. But talk to us about what type of product lines could benefit if we do get a revitalization of the oil industry in Venezuela. Obviously, I will have to preface this with the condition, the right condition, including licensing, including payments, and operating license will have to be put in place. But assuming that the conditions are set for investment to resume and to accelerate, not only from the customer that we are serving today, but from new customers re-entering or entering the country.
Olivier Le Peuch: Thank you.
Operator: Thank you. Your next question will go to the line of Arun Jayaram with JPMorgan. Your line is open.
Thank you.
Thank you.
Your next question will go to James McDonald.
Of.
Arun Jayaram: Yeah, good morning, Olivier. I was wondering if you could frame your thoughts on the near-term and longer-term opportunity for SLB in Venezuela. You mentioned you're the only international service company now actively operating. But talk to us about what type of product lines could benefit if we do get a revitalization of the oil industry in Venezuela.
Aaron Jarrow with J.P. Morgan, your line is open.
Olivier Le Peuch: Obviously, I will have to preface this with the condition, the right condition, including licensing, including payments, and operating license will have to be put in place. But assuming that the conditions are set for investment to resume and to accelerate, not only from the customer that we are serving today, but from new customers re-entering or entering the country.
Yeah, good morning, NBA. I was wondering if you could frame—yeah, good morning. Um, I was wondering if you could frame your thoughts on the near-term and longer-term opportunity for SLB in Venezuela. You mentioned you're the only international service company that is actively operating, but talk to us about what type of product lines could benefit if we do get a revitalization of the oil industry in Venezuela.
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.
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
Olivier Le Peuch: About 80 of them are already in country. We have more than 1,000 Venezuelan and African country employees in the company. Some of them will be welcoming to work back in Venezuela. We have almost 2,000 alumni that I think we have kept in touch with that will be also ready to be joining us as we move forward. So as I said, long term, under the right conditions, we can be the leading partner for customers there. I think I've quoted the number where we were before. I think the future will tell us when and as this can accelerate. But we are ready. We are already receiving a lot of incoming calls, as I would say, to explore options going forward. Great. That's helpful.
About 80 of them are already in country. We have more than 1,000 Venezuelan and African country employees in the company. Some of them will be welcoming to work back in Venezuela. We have almost 2,000 alumni that I think we have kept in touch with that will be also ready to be joining us as we move forward. So as I said, long term, under the right conditions, we can be the leading partner for customers there. I think I've quoted the number where we were before. I think the future will tell us when and as this can accelerate. But we are ready. We are already receiving a lot of incoming calls, as I would say, to explore options going forward.
Production with no less than 10 production sets across Regal probation, with rigs that we are ready to mobilize. And I think across intervention, across fooding for INF fooding, or pollution optimization. We believe to have a capacity in country, and we believe that we have the access to the vision Nationals. Uh,
About each of them are already in-country. Uh, we have more than 1,000 Venezuelan and country employees in the company, and, uh, some of them will be welcoming, uh, to work back in Venezuela. And we have almost 2,000 alumni that I think we have kept in touch with, that, uh, will be also, uh,
Arun Jayaram: Great. That's helpful. Olivier, my follow-up is I was wondering if you could talk a little bit about your data center infrastructure business. You mentioned that you expect to reach a $1 billion run rate in revenue, if I heard you correct, by year-end. Can you talk a little bit about the solutions you're providing today and maybe how you're thinking about organic and even inorganic opportunities to grow that business over time?
Ready to ready to be uh joining us as we move forward. So as I said, long term uh on the right condition, um we can be the leading, the leading partner for customers uh there and I think I've quoted the number we were before uh and I think the the future will tell us when and as this can accelerate but you are ready and we are ready, receiving a lot of incoming calls as I would say uh to to explore option, going forward.
Olivier Le Peuch: Olivier, my follow-up is I was wondering if you could talk a little bit about your data center infrastructure business. You mentioned that you expect to reach a $1 billion run rate in revenue, if I heard you correct, by year-end. Can you talk a little bit about the solutions you're providing today and maybe how you're thinking about organic and even inorganic opportunities to grow that business over time? Yeah. I think you heard me correctly. I think this is amazing what we have put together in less than 18 months. I think the rate of growth, the customer engagement that we are getting, the traction we are getting with hyperscalers, and I think is amazing. And yes, we put together a setup that is focused on the modular manufacturing capability and co-engineering of data center solutions from server role and cooling solutions.
Great, that's helpful, Olivier, and my follow-up is wondering if you could talk a little bit about your data center infrastructure business. You mentioned that you expect to reach a $1 billion run rate in revenue, if I heard you correctly, by year end. Can you talk a little bit about the solutions you're providing today and maybe how you're thinking about it?
Olivier Le Peuch: Yeah. I think you heard me correctly. I think this is amazing what we have put together in less than 18 months. I think the rate of growth, the customer engagement that we are getting, the traction we are getting with hyperscalers, and I think is amazing. And yes, we put together a setup that is focused on the modular manufacturing capability and co-engineering of data center solutions from server role and cooling solutions.
Uh, organic and even inorganic opportunities to grow that business over time.
Olivier Le Peuch: We are aiming at increasing not only our scope, but also our footprint, as we have announced last quarter, doubling our capacity to respond to the pipeline and to respond to the backlog we have. We continue to be expanding both in terms of scope, in terms of around this manufacturing design capability for modular data center solutions. We will be this year going and growing internationally. We'll be this year adding new customers to our portfolio and preparing ourselves to grow throughout the year. In 2027, $1 billion is the wrong rate, but we'll be significantly above this in 2027. We believe that we see growth through the rest of the decade internationally.
We are aiming at increasing not only our scope, but also our footprint, as we have announced last quarter, doubling our capacity to respond to the pipeline and to respond to the backlog we have. We continue to be expanding both in terms of scope, in terms of around this manufacturing design capability for modular data center solutions. We will be this year going and growing internationally. We'll be this year adding new customers to our portfolio and preparing ourselves to grow throughout the year. In 2027, $1 billion is the wrong rate, but we'll be significantly above this in 2027. We believe that we see growth through the rest of the decade internationally.
Olivier Le Peuch: And indeed, as we explore and respond to the requests from our customers who are looking for integrators in this space, we will look for complementing our current capability that we have built organically and to look at what could help complement this and accelerate our market penetration and make us as a fulfilled partner for customers going forward, technology throughout the lifecycle of the data center for construction and operation. Great. Thanks. Thank you. Thank you. Your next question comes from the line of David Anderson with Barclays. Your line is open. Great. Thank you. Good morning, Olivier. If we compare Schlumberger today or SLB, if we compare SLB today versus 10 years ago, in addition to digital, I think the biggest shift is now the emphasis on production and recovery.
And indeed, as we explore and respond to the requests from our customers who are looking for integrators in this space, we will look for complementing our current capability that we have built organically and to look at what could help complement this and accelerate our market penetration and make us as a fulfilled partner for customers going forward, technology throughout the lifecycle of the data center for construction and operation.
As we have announced last quarter, uh, doubling our capacity to respond to the pipeline and to respond to the backlog, we have, uh, and we continue to be, um, expanding both in terms of scope, in terms of, around this manufacturing design capability for modular data center solutions. We will be, this year, going—and going internationally will be—this year, adding new customers to our portfolio and preparing ourselves to, uh, go in, in, uh, throughout the year. In 2027, $1 billion is their own, right? But it will be significantly above this in 2027, and we believe that we see—we see growth through the rest of the decade internationally and, indeed, as we explore and respond to the requests from our, uh, customers who are looking for an integrator in this space. Uh, we will look for complementing your current capability.
Arun Jayaram: Great. Thanks.
That you have been organically, uh, and to look at what could help complement this and accelerate our market penetration and make us as a, as a full-filled partner for customers going forward—technology throughout the life cycle of the data center, for construction and operation.
Great, thanks.
Olivier Le Peuch: Thank you.
Operator: Thank you. Your next question comes from the line of David Anderson with Barclays. Your line is open.
Thank you.
Your next question.
Please, your line is open.
David Analyst: Great. Thank you. Good morning, Olivier. If we compare Schlumberger today or SLB, if we compare SLB today versus 10 years ago, in addition to digital, I think the biggest shift is now the emphasis on production and recovery.
Olivier Le Peuch: I was wondering if you could talk a little bit more specifically about the growth opportunity in the next few years as we think about OneSubsea, ChampionX, Artificial Lift. If I think about OneSubsea, I'm thinking about backlog conversion accelerating. Guyana, Venezuela, and potentially Venezuela could be growth engines in chemicals, and then Artificial Lift in the Middle East. Could you sort of frame this growth opportunity for us over the next few years on this side of your business? No, absolutely. Dave, I think production recovery, as we call it, is a new chapter for the company, something that we have decided strategically to invest because we believe that first is a market that has significant opportunity for value creation through technology, through integration, through digital.
I was wondering if you could talk a little bit more specifically about the growth opportunity in the next few years as we think about OneSubsea, ChampionX, Artificial Lift. If I think about OneSubsea, I'm thinking about backlog conversion accelerating. Guyana, Venezuela, and potentially Venezuela could be growth engines in chemicals, and then Artificial Lift in the Middle East. Could you sort of frame this growth opportunity for us over the next few years on this side of your business?
Olivier Le Peuch: No, absolutely. Dave, I think production recovery, as we call it, is a new chapter for the company, something that we have decided strategically to invest because we believe that first is a market that has significant opportunity for value creation through technology, through integration, through digital.
Uh, great, thank you. Uh, good morning, Olivia. Um, you know if, if we compare today or SLB if we compare SLB today versus 10 years ago, in addition to digital, I think the biggest shift is now the emphasis on production production and Recovery. I was wondering if you could talk a little bit more specifically about the growth opportunity in the next few years. As we think about 1 subsection X, artificial lift. If I think about 1 Step C, I'm thinking about backlog conversion accelerating, you know, invented, you know, Gana Venezuela and potentially Venezuela could be growth engines in chemicals and then artificial left in the Middle East. Could you sort of frame this growth opportunity for us over the next few years on this side of your business?
Olivier Le Peuch: We believe that we needed to own and have access to a broader portfolio, hence the access to the ChampionX, Apex, and artificial lift technology and the digital platform addition that put us very well placed into that market. So now the customer response is very positive. And indeed, I think if you look at the priority of our customers today into a changing commodity pricing environment, it's all about getting more from the asset that they have under production. And hence, the return on the higher barrel for lower cost is a priority. So we are getting a lot of interest into our lift solution, into our digital production, as you have heard. And indeed, trying to realize and realizing today the benefit of chemistry, chemistry for not only production assurance, chemistry for, but also chemistry for reservoir performance or recovery.
We believe that we needed to own and have access to a broader portfolio, hence the access to the ChampionX, Apex, and artificial lift technology and the digital platform addition that put us very well placed into that market. So now the customer response is very positive. And indeed, I think if you look at the priority of our customers today into a changing commodity pricing environment, it's all about getting more from the asset that they have under production. And hence, the return on the higher barrel for lower cost is a priority. So we are getting a lot of interest into our lift solution, into our digital production, as you have heard. And indeed, trying to realize and realizing today the benefit of chemistry, chemistry for not only production assurance, chemistry for, but also chemistry for reservoir performance or recovery.
No, absolutely. Uh, Dave, I think personal recovery as we call, it is a new chapter for the company. It's something that we have decided strategically to invest because you believe that the first is the market that has significant opportunity for Value creation, through technology to integration through digital. And we believe that, uh, we needed to to own and have access to a broader portfolio and the access to the shop and next chemical Opex and fulfilled list technology and the digital, uh, uh, platform Edition that, uh, put us very well placed into that market.
Olivier Le Peuch: So we believe that the integrated capability that we have built together will give us the opportunity to create solutions for the market, end-to-end solutions that will help to improve the performance of existing producing assets, will help transform existing assets with a solution for recovery, solution for optimization, and will help across to bring digital solutions. So yes, lift solution in the major basin or into the most producing oil basin in the world, including the Middle East. Yes, subsea as a beneficiary for the long-term deepwater, but also the boosting processing capability we have in subsea that are quite unique and contribute to this recovery production gain and goal we have. So yes, it is a new story for us. It's a new chapter. We're excited.
So we believe that the integrated capability that we have built together will give us the opportunity to create solutions for the market, end-to-end solutions that will help to improve the performance of existing producing assets, will help transform existing assets with a solution for recovery, solution for optimization, and will help across to bring digital solutions. So yes, lift solution in the major basin or into the most producing oil basin in the world, including the Middle East. Yes, subsea as a beneficiary for the long-term deepwater, but also the boosting processing capability we have in subsea that are quite unique and contribute to this recovery production gain and goal we have. So yes, it is a new story for us. It's a new chapter. We're excited.
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.
We will help transform existing assets with a solution for Recovery Solution for optimization and will help across to bring a digital solution. So, yes, leave the solution in the major basin or into the most producing basins in the world, including the Middle East. Yes, Subk has a beneficiary for the long term, deepwater, but also the boosting processing capability. We have in Subzi that are quite unique and contribute.
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?
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.
David Analyst: 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? And where's your confidence that this can be scaled up to create, say, 100+ megawatt geothermal plants in the next few years?
Recovery production again and and goal we have. So, yes, it is a new story for us as a new chapter. We're excited. Customer feedback is the feedback is is very strong because they believe that they need somebody that have the subsurface have the technology and has the full integrated portfolio to respond to the transformation of friction recovery landscape as we have contributed and that the industry transformed the world construction or exploration historically.
Olivier Le Peuch: And where's your confidence that this can be scaled up to create, say, 100+ megawatt geothermal plants in the next few years? Absolutely. I think, Dave, I think let me first step back and explain the reason why we have partnered with Ormat and the potential we see in this partnership. First is to put together the two leading companies in the field. We are subsurface leader in geothermal, helping to characterize the geothermal source and then develop the wells and develop the solution to produce the heat and the hot water from those wells. And Ormat is a leader into building geothermal power plants and understanding the full lifecycle.
Both is in geothermal. Um, you've been dabbling there for a number of years, but now you as you noted in the release here, you're working with ormat on the pilot project, I believe later. This year uh in enhanced geothermal, it looks a lot of this. When we look at geothermal, a lot of this 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 and and and and where's your confidence? That this can be scaled up to create say 100 100 plus megawatt. You know, geothermal plants in the next few years.
Olivier Le Peuch: Absolutely. I think, Dave, I think let me first step back and explain the reason why we have partnered with Ormat and the potential we see in this partnership. First is to put together the two leading companies in the field. We are subsurface leader in geothermal, helping to characterize the geothermal source and then develop the wells and develop the solution to produce the heat and the hot water from those wells. And Ormat is a leader into building geothermal power plants and understanding the full lifecycle.
Olivier Le Peuch: So putting this together and providing industry for one integrated offering, I think, was very well received by the industry and will help accelerate providing conventional geothermal bridge power or base power for some of the data centers in the future. So that's clearly the first aspect. The second, obviously, we have put this together because we believe that we want to together optimize, explore, and optimize through a development of an asset or two assets in the future, in the near future, into the unconventional geothermal. And yes, we believe this is a field that has significant potential, but we want to do it right. We want to do science. We want to do technology.
So putting this together and providing industry for one integrated offering, I think, was very well received by the industry and will help accelerate providing conventional geothermal bridge power or base power for some of the data centers in the future. So that's clearly the first aspect. The second, obviously, we have put this together because we believe that we want to together optimize, explore, and optimize through a development of an asset or two assets in the future, in the near future, into the unconventional geothermal. And yes, we believe this is a field that has significant potential, but we want to do it right. We want to do science. We want to do technology.
Let let me know. Absolutely, I think, uh, uh, they, I think let me first step back and explain. The reason why we have partnered with omat and the potential we see in this partnership. First is to put together the, uh, 2 leading company in their field. Uh, we are Sub Sub sub subsurface leader in in, in, in develop the wealth and develop the solution to produce the, the Heat and the hot water from from those Wells. And all that is, uh, leaders into building U power plants and understanding the full life cycle. So putting this together and providing industry with 1 1, integrated offering, I think, is was very well received by the industry and we have accelerate providing conventional geothermal uh, Bridge power or a base power for some of the data center in the future. So that's that's clearly
Olivier Le Peuch: We want to do digital modeling of the process so that we get it right and we understand how to scale it economically, how to make it viable, how to make it safe, and then how to offer 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 we will be developing this asset, will be experimenting this asset, appraising, and then getting ready for with technology, digital, and with joint offering to offer this at scale to the market in the US and beyond. Very exciting. Thank you. Thank you. Thank you. Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open. Yeah. Thank you so much, Olivier and team. I guess the first question is more of a macro question, Olivier.
We want to do digital modeling of the process so that we get it right and we understand how to scale it economically, how to make it viable, how to make it safe, and then how to offer 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 we will be developing this asset, will be experimenting this asset, appraising, and then getting ready for with technology, digital, and with joint offering to offer this at scale to the market in the US and beyond. Very exciting.
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.
In the US and Beyond.
David Analyst: Thank you.
Olivier Le Peuch: Thank you.
Very exciting. Thank you.
Operator: Thank you. Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.
Thank you.
Neil Mehta: Yeah. Thank you so much, Olivier and team. I guess the first question is more of a macro question, Olivier. You have a unique perspective on this big debate that's in the market right now about how much OPEC spare capacity really lives there in markets like the Middle East. And of course, recognizing that there's probably limitations about what you could say, your perspective on that question, I think, would be helpful for us as we think about the back end of the oil curve. I think you have been reading what I'm reading, and I think I don't want to read it more, but I think OPEC+ has been unwinding 2.2 million barrels.
Thank you. Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.
Olivier Le Peuch: You have a unique perspective on this big debate that's in the market right now about how much OPEC spare capacity really lives there in markets like the Middle East. And of course, recognizing that there's probably limitations about what you could say, your perspective on that question, I think, would be helpful for us as we think about the back end of the oil curve. I think you have been reading what I'm reading, and I think I don't want to read it more, but I think OPEC+ has been unwinding 2.2 million barrels.
Yeah, thank you so much, Olivia and team. I guess the first question is more of a macro question. Olivia, you have a unique perspective,
On, on this big debate, that's in the market right now about, uh, how much OPEC spare capacity, really lives there in in in markets, like the Middle East? And, you know, um, of course, recognizing that there's probably a limitations about what you could say, your perspective on that question. I think would be, uh, would be helpful for us as we think about the back end of uh, of the oil curve.
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.
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: But I don't think there is significant spare beyond what has been released back to the market. Hence, the market will tighten in rebalance into 2027 and beyond. Hence, we'll set the condition for a better outlook as an investment backdrop for the industry from 2027 and beyond. Yeah. That makes sense to us. And then another market we'd love to get your perspective on is Mexico. Olivier, this is probably the most constructive I've heard you on Mexico in a little bit, that we're in a bottoming phase and maybe even a cash recovery phase. Your perspective on that market and how it should evolve from here as we think about SLB? Yeah. The market, I would say, has normalized from a market that has dropped significantly and has had a need for getting the confidence of the oil industry to reinvest.
But I don't think there is significant spare beyond what has been released back to the market. Hence, the market will tighten in rebalance into 2027 and beyond. Hence, we'll set the condition for a better outlook as an investment backdrop for the industry from 2027 and beyond.
Neil Mehta: Yeah. That makes sense to us. And then another market we'd love to get your perspective on is Mexico. Olivier, this is probably the most constructive I've heard you on Mexico in a little bit, that we're in a bottoming phase and maybe even a cash recovery phase. Your perspective on that market and how it should evolve from here as we think about SLB?
Focus on pollution recovery, which is focusing on providing a technology-integrated capability to sustain production, enhance recovery. And I think that's where we will see adoption of this. But I don't think there is significant spare beyond what has been released back to the market. Uh, hence, the market will tighten and rebalance into '27 and beyond. Hence, we set the condition for a better outlook as an investment backdrop for the industry from '27 and beyond.
Yeah, that's
and then another Market.
Olivier Le Peuch: Yeah. The market, I would say, has normalized from a market that has dropped significantly and has had a need for getting the confidence of the oil industry to reinvest.
Olivia this, this is probably the most constructive I've heard you on Mexico in a little bit, but we're in a bottoming phase and, and uh, maybe even a cash recovery phase, your perspective on that market. Um, and, uh, and how it should evolve from here, as we think about SLP,
Olivier Le Peuch: I think it has normalized in the last few months. I think we anticipate it to be steady from the land activity for the first of all, short to midterm, and we expect the conditions are gradually in place, getting in place for reinvestment going forward in 2026. However, where we see the upside is in offshore activity in Mexico, where the deepwater asset that we are developing that is being developed by Woodside will give us an upside, whereas the activity in land now will make the assumption it is steady, but with the potential to start to strengthen as we move into 2027. Thank you, sir. Thank you. Thank you. Your next question comes from the line of Mark Bianchi with TD Cowen. Your line is open. Hey. Thank you. Good morning. I wanted to ask on. Morning, Mark.
I think it has normalized in the last few months. I think we anticipate it to be steady from the land activity for the first of all, short to midterm, and we expect the conditions are gradually in place, getting in place for reinvestment going forward in 2026. However, where we see the upside is in offshore activity in Mexico, where the deepwater asset that we are developing that is being developed by Woodside will give us an upside, whereas the activity in land now will make the assumption it is steady, but with the potential to start to strengthen as we move into 2027.
Neil Mehta: Thank you, sir.
Yeah, the market that we see as normalized from the market that has dropped significantly and I've had a need for getting the confidence of the the whole industry to reinvest. I think has normalized the last few months. I think it's we are anticipating To Be steady from the land activity for the foreseeable short to midterm. And we expect the condition are gradually in place, getting in place for free Investments, going forward, uh, in 2010, in 2026. However, where we see the upside is in the offshore activity in in Mexico, where the deep water asset that we are developing with, that is being developed by the, Which side will give us an upside. Whereas the, the activity in in land now will make the Assumption, it is steady. Uh but with the potential to start to uh to strengthen as moving to 2027,
Olivier Le Peuch: Thank you.
Thank you, sir.
Olivier Le Peuch: Thank you. Your next question comes from the line of Mark Bianchi with TD Cowen. Your line is open.
Thank you.
Thank you. Your next question comes from the line of Mark Biyani with TD Cowen.
Marc Bianchi: Hey. Thank you. Good morning. I wanted to ask on.
Your line is open.
Olivier Le Peuch: Morning, Mark.
Olivier Le Peuch: Good morning. So we've got these activity increases in your outlook for 2026 for certain international markets. Earlier, I think a few months ago, there was some discussion of some pricing potential weakness. Can you talk about what that looks like today and what your expectation is embedded in the outlook here? Yeah. I think first to comment that I think the industry has been under pricing pressure in the last couple of years, starting with North America, and I don't see a change there. I think although we believe in North America, we are shielded to the mix of the portfolio we have and exposure where data center and digital and our exposure in deepwater and Gulf of America is proportionally bigger.
Marc Bianchi: Good morning. So we've got these activity increases in your outlook for 2026 for certain international markets. Earlier, I think a few months ago, there was some discussion of some pricing potential weakness. Can you talk about what that looks like today and what your expectation is embedded in the outlook here?
Olivier Le Peuch: Yeah. I think first to comment that I think the industry has been under pricing pressure in the last couple of years, starting with North America, and I don't see a change there. I think although we believe in North America, we are shielded to the mix of the portfolio we have and exposure where data center and digital and our exposure in deepwater and Gulf of America is proportionally bigger.
Hey, hey, thank you. Good morning. Um, I wanted to ask on so we've got these activity and good morning. You've got these activity increases, uh, in your outlook for 26, uh, for for certain International markets. Um, earlier, I think, uh, a few months ago there was some discussion of, you know, some pricing, uh, potential weakness. Can you talk about what that looks like today? And and what your expectation is embedded in the outlook here,
Olivier Le Peuch: And also the OPEX exposure we have Schlumberger is a bit of a shield towards some of the pricing pressure in North America. Internationally, the market has been, and I keep repeating every time I get to comment on this, has remained highly competitive for a large tender in international markets. And the market has been keeping pressure considering that the market has been declining the last 18 months or 12 months in the international market. Hence, the pricing pressure has been sustained in some critical markets. And we have been responding to this pressure when we felt it was the appropriate things to do to keep us into the market.
And also the OPEX exposure we have Schlumberger is a bit of a shield towards some of the pricing pressure in North America. Internationally, the market has been, and I keep repeating every time I get to comment on this, has remained highly competitive for a large tender in international markets. And the market has been keeping pressure considering that the market has been declining the last 18 months or 12 months in the international market. Hence, the pricing pressure has been sustained in some critical markets. And we have been responding to this pressure when we felt it was the appropriate things to do to keep us into the market.
Yeah, I think first, first to come on that. I think the industry has been on the pricing pressure, uh, in the last couple of years starting with North America. And I don't see, I don't see a change there. I think, uh, although we believe in North America, we are shifted to the the mix of the portfolio. We have and exposure aware of data, center and digital. And our exposure in in deep water and go from a is proportionally bigger. And also the Opex Expo. We have shx is a bit of a
Olivier Le Peuch: At the same time, I think we are able to maintain our margin steady in 2026 compared to 2025, building on our Schlumberger Synergy, building on the digital growth margin-accretive business, and the effort we are doing to continue to use technology performance as differential to protect where we can margin against the pricing pressure. Okay. Thank you for that. And the other question I had was related to the offshore outlook. So you've talked about an expectation for improvement in offshore. And I think if we go back a year or two, there was an expectation for offshore improvement that didn't really materialize. So what are you seeing now that you think is different from that prior period and gives you the confidence to make those comments?
At the same time, I think we are able to maintain our margin steady in 2026 compared to 2025, building on our Schlumberger Synergy, building on the digital growth margin-accretive business, and the effort we are doing to continue to use technology performance as differential to protect where we can margin against the pricing pressure.
Aid towards some of the, um, some of the, uh, passing pressure in North America, internationally, the m has been and I keep repeating every time I get to come out on this as remain. Highly competitive for a large tender, uh, in in international markets, and the market has been keeping pressure concerning. The market has been declining, the last 18 months, or 28 months, in in international market. And the pressure pressing pressure has been sustained and in some critical markets and we have been responding with this to this to this pressure. When we felt, it was appropriate, appropriate things to do to to to to keep passing into the market that at the same time. I think, uh, we are able to maintain our margin, uh, steady in 2026 compared to 2025 bullying on the, on the, our shop like energy building on the uh, on the uh, this dog golf margin.
Marc Bianchi: Okay. Thank you for that. And the other question I had was related to the offshore outlook. So you've talked about an expectation for improvement in offshore. And I think if we go back a year or two, there was an expectation for offshore improvement that didn't really materialize. So what are you seeing now that you think is different from that prior period and gives you the confidence to make those comments?
In active business, and the effort we are doing to continue to use technology performance as a differential to protect where we can margin against the pricing pressure.
Okay, thank you for that. And and the other question I had was related to, um, the offshore Outlook. So you've talked about an expectation for improvement in offshore and you know, I think if we go back a year or 2, um there was an expectation for offshore Improvement that didn't really materialize. Um so what are you seeing now that that you think is different from that prior period and gives you the confidence to um to make those comments?
Olivier Le Peuch: Well, the comments I'm making is that I believe that the FID and the booking will improve in 2026, setting the right setup and context for 2027, 2028 offshore cycle rebound. Whether this is material in 2026, yes, in certain markets, in East Asia, the activity of Indonesia, the market will strengthen in deepwater. And I think this will reflect into this year. In South Sub-Saharan Africa, this is more a trend of FID, of project from Namibia to Angola and Mozambique that will set the context for a marked rebound going forward. And these FID are happening as we speak, being negotiated and being pending.
Olivier Le Peuch: Well, the comments I'm making is that I believe that the FID and the booking will improve in 2026, setting the right setup and context for 2027, 2028 offshore cycle rebound. Whether this is material in 2026, yes, in certain markets, in East Asia, the activity of Indonesia, the market will strengthen in deepwater. And I think this will reflect into this year. In South Sub-Saharan Africa, this is more a trend of FID, of project from Namibia to Angola and Mozambique that will set the context for a marked rebound going forward. And these FID are happening as we speak, being negotiated and being pending.
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?
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.
As we as we speak being negotiated and being pending. And in America's, I think the continuous momentum in Brazil in uh, in uh, in Guana Suriname and in, I think are here to stay with the Metro Basin. Go from America Metro Basin of of North Sea. Remaining remaining steady somehow, although with a slight decline in, in the North Sea, so we believe that
Marc Bianchi: Thank you very much.
RFID, the economics are favorable, and the pipeline of the idea of cross Africa and Asia are set to create a rebound of activity. Going forward, as we turn into 237,
Olivier Le Peuch: Thank you.
Thank you very much.
Operator: Thank you. Your last question comes from the line of Scott Gruber with Citigroup. Your line is open.
Thank you.
Operator: 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?
Thank you. Your last question comes from the line of Scott Grubber with Citigroup. Your line is open.
Olivier Le Peuch: And ultimately, as you leverage your global relationships, could the international opportunity become even larger than your US business? Difficult to say whether it could become larger, but easy to tell you that it will grow. And this year will be the first step into establishing ourselves in Asia and to provide this modular manufacturing solution to our customer there. Also, we initiate a partnership to design a next-generation data center in one country in the Asia region. And then we expect to also look at our relationship to embed and go further, including Middle East, in the near future. So these are the places where we have ambition to leverage our hyperscaler relationship and our modular manufacturing capability, ability to source locally, ability to manufacture everywhere.
Olivier Le Peuch: And ultimately, as you leverage your global relationships, could the international opportunity become even larger than your US business? Difficult to say whether it could become larger, but easy to tell you that it will grow. And this year will be the first step into establishing ourselves in Asia and to provide this modular manufacturing solution to our customer there. Also, we initiate a partnership to design a next-generation data center in one country in the Asia region. And then we expect to also look at our relationship to embed and go further, including Middle East, in the near future. So these are the places where we have ambition to leverage our hyperscaler relationship and our modular manufacturing capability, ability to source locally, ability to manufacture everywhere.
Uh, so I want to come back to the Data Center Solutions business. Uh, Leila, 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? And ultimately, you know, as you leverage your global relationships, could the international opportunity—
Become even larger than your U.S. business.
Olivier Le Peuch: I think it's something unique that not so many companies can do and scale and replicate what we have done in the last 18 months. So that's what we look forward to, and that's where we are excited about the international market. But the US is still the hot market, and the US is where we believe we have the most exciting pipeline in 2026 and in 2027 coming our way. And we'll not miss that market. I got it. Appreciate that color. And I want to come back to the question Stephen asked at the beginning on CapEx. So your $2.5 billion of CapEx this year will support the second-half growth rate that you'll achieve, which will be led by digital and data center solutions, some contribution from the core. But overall, the capital intensity of the portfolio is improving.
I think it's something unique that not so many companies can do and scale and replicate what we have done in the last 18 months. So that's what we look forward to, and that's where we are excited about the international market. But the US is still the hot market, and the US is where we believe we have the most exciting pipeline in 2026 and in 2027 coming our way. And we'll not miss that market. I got it. Appreciate that color. And I want to come back to the question Stephen asked at the beginning on CapEx. So your $2.5 billion of CapEx this year will support the second-half growth rate that you'll achieve, which will be led by digital and data center solutions, some contribution from the core. But overall, the capital intensity of the portfolio is improving.
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.
Market. But US is still the hot market, and US is where we believe we have the most exciting pipeline in '26 and '27 coming our way, and will not miss that market.
Olivier Le Peuch: So my question is, can you sustain similar growth rate for a couple of years into the future at a CapEx level that's still broadly around $2.5 billion, given those kind of less capital-intensive drivers of growth, or do you think CapEx would need to creep a bit higher? Look, as I said before, we'll do what it takes to not miss any opportunity. But again, we have really improved our capital efficiency over the last 5 to 6 years, so we can really operate with less. But if growth really comes at high growth rates, we will have to increase beyond the $2.5 billion for sure. But as a percentage of revenue, that will still remain pretty low compared to what we were doing before and still quite in the low end of the range we had guided before of 5% to 7% of revenue.
So my question is, can you sustain similar growth rate for a couple of years into the future at a CapEx level that's still broadly around $2.5 billion, given those kind of less capital-intensive drivers of growth, or do you think CapEx would need to creep a bit higher? Look, as I said before, we'll do what it takes to not miss any opportunity. But again, we have really improved our capital efficiency over the last 5 to 6 years, so we can really operate with less. But if growth really comes at high growth rates, we will have to increase beyond the $2.5 billion for sure. But as a percentage of revenue, that will still remain pretty low compared to what we were doing before and still quite in the low end of the range we had guided before of 5% to 7% of revenue.
I got it, appreciate that color. Um and I want to come back to the uh question Stephen asked at the beginning on capex. Um, so you're you're 2 and a half billion dollars of capex, this year will, you know, support the the second half growth rate that you'll achieve you know which will be led by digital and data center Solutions some contribution from the core but but overall the capital intensity of the portfolio is is improving. So my question is, you know can you sustain similar growth rate for a couple years into the future at a capex level? That's still broadly around 2 and a half billion given, you know, those kind of less Capital intensive drivers of growth or or do you think capex would need to to keep creep creep a bit higher
Look, look as as I said before, we'll do what it takes to to not miss any opportunity. But again, we have really, uh, improved our our cap, our Capital efficiency over the last 5 to 6 years. So we can really operate with with less but I
Olivier Le Peuch: That's excluding APS and exploration data. So yes, we'll increase as necessary, but it will go with increased cash flow as well. And some of the growth that we will be seeing is production and recovery, as we elaborated on before, as well as digital. And that doesn't require as much CapEx as the well-centric businesses. So this is how we can maneuver within that range, basically. So without some acceleration in the kind of core business, you would expect the CapEx to sales ratio to continue to improve over the next couple of years? Is that fair? It will be more or less as a percentage of revenue. It will stay within that 5% to 7% we've guided before, but it's more below. As you have seen, we've been closer to 5% and 7%. So we will remain at the low end of that range in the future. Okay.
Stéphane Biguet: That's excluding APS and exploration data. So yes, we'll increase as necessary, but it will go with increased cash flow as well. And some of the growth that we will be seeing is production and recovery, as we elaborated on before, as well as digital. And that doesn't require as much CapEx as the well-centric businesses. So this is how we can maneuver within that range, basically. So without some acceleration in the kind of core business, you would expect the CapEx to sales ratio to continue to improve over the next couple of years? Is that fair? It will be more or less as a percentage of revenue. It will stay within that 5% to 7% we've guided before, but it's more below. As you have seen, we've been closer to 5% and 7%. So we will remain at the low end of that range in the future. Okay.
If growth really comes uh at high growth rates, we will have to uh to increase beyond the 2.5 billion, for sure, but as a percentage of Revenue that will still remain pretty low compared to, uh, to what we were doing before and still quite in the lower range of, in the lower end of the range, we had the guided before 5 to 7% of Revenue. That's that's excluding APS, and, and exploring.
Ation data. So yes, we'll increase as as necessary but, uh, it will go with increased cash flow as well. And and some of the growth that we will be seeing is production and Recovery as we, uh, as we, uh, elaborated on before, as well as digital. And that, that doesn't require as much capex as as the web Centric businesses. So this is how we can maneuver within that range. Basically.
So, without some acceleration in the kind of core business, you would expect the capex-to-sales ratio to continue to improve over the next couple of years.
Uh, as a percentage of revenue, it will stay within that.
That 5 to 7% with guided before but it's it's more below as you have seen. We've been closer to 5 and 7. So we we will be we will remain at the low end of that range in the future.
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.
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.
Okay, I appreciate the call. Thank you.
Thank you.
Thank you, Scott.
ladies and gentlemen, as
Yeah, thank you. Thank you, man. Ladies and gentlemen, as we conclude today's call, I would like to leave you with the following takeaways.
First, our strategic focus on production recovery—including shop, Next Digital, and data center solution. Press on 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 long term.
The outlook is becoming more positive for SLB, with the recovery in Saudi Arabia and a positive pipeline in Subsea. The growth dynamic in both digital and data centers are all catalysts.
And Venezuela hope is on the website.
Olivier Le Peuch: Thank you all for joining. This concludes today's conference call. You may now disconnect.
Olivier Le Peuch: Thank you all for joining. This concludes today's conference call. You may now disconnect.
In summary, the current cycle is recovering towards the strength of SLV with this. I will conclude today's call. Thank you all for joining.
This concludes today's conference call. You may now disconnect.