SLB

SLB Limited 2025 Annual Report (10-K) Summary

Business Context and Reporting Period

This Form 10-K covers the fiscal year ended December 31, 2025, for SLB Limited (formerly Schlumberger), a global technology company providing energy innovation solutions. The company operates across four primary divisions: Digital, Reservoir Performance, Well Construction, and Production Systems, with additional businesses in "All Other" (Asset Performance Solutions, Data Center Solutions, and SLB Capturi). In 2025, SLB completed the acquisition of ChampionX Corporation in an all-stock transaction valued at approximately $4.9 billion, strengthening its position in production chemicals and artificial lift.

Key Financial Metrics

Note: Net Debt represents gross debt less cash and short-term investments.

Material Changes vs. Prior Period

• Revenue Decline: Global revenue decreased 2% year-over-year to $35.7 billion. Excluding the $1.5 billion contribution from the ChampionX acquisition, organic revenue declined 6% due to lower activity in Saudi Arabia, Mexico, and offshore Sub-Saharan Africa.
• Segment Performance:
  • Digital: Revenue grew 9% to $2.7 billion, driven by Digital Operations and Platforms & Applications.
  • Production Systems: Revenue increased 12% to $13.3 billion, largely due to the ChampionX acquisition. Organic revenue was essentially flat.
  • Well Construction: Revenue fell 11% to $11.9 billion due to broad reductions in drilling activity globally.
  • Reservoir Performance: Revenue decreased 5% to $6.8 billion, primarily due to slower evaluation and stimulation activity internationally.
• Profitability: Net income declined significantly, impacted by a $210 million goodwill impairment charge related to the SLB Capturi reporting unit and $407 million in workforce reduction charges.
• Geographic Shifts: North America revenue grew 12% (driven by ChampionX), while International revenue declined 5%.

Guidance, Outlook, and Risks

Outlook: Management expects activity to gradually improve in key markets in 2026. The company anticipates rig activity in the Middle East to increase. Data Center Solutions is projected to be the fastest-growing business for years to come, and Digital is expected to continue growing at highly accretive margins.

Capital Allocation: SLB is committed to returning more than $4 billion to shareholders in 2026 through dividends and share repurchases. In January 2026, the quarterly dividend was increased by 3.5% to $0.295 per share.

Risks and Contingencies:

• Geopolitical Exposure: Approximately 82% of revenue is generated outside the U.S. Operations in Russia (approx. 4% of revenue) face sanctions and asset repatriation risks.
• Commodity Prices: Demand is highly sensitive to oil and gas prices and customer capital expenditures.
• Cybersecurity: The company faces increasing risks from cyberattacks targeting its digital infrastructure and customer data.
• Energy Transition: Failure to adapt to the global shift toward lower-carbon energy could adversely affect long-term demand.

Investor Verification Checklist

• ChampionX Integration: Verify the realization of anticipated synergies and the integration progress of ChampionX's production chemicals and artificial lift businesses.
• Goodwill Impairment: Review the assumptions used in the $210 million goodwill impairment for SLB Capturi and monitor future valuation risks for this joint venture.
• Regional Activity: Monitor upstream spending trends in key declining regions (Saudi Arabia, Mexico, Sub-Saharan Africa) versus growth in North America and the Middle East.
• Data Center Growth: Assess the sustainability of the 121% year-over-year growth in Data Center Solutions revenue and its contribution to future margins.
• Debt Maturity: Review the debt maturity schedule, noting significant fixed-rate debt obligations maturing between 2027 and 2034.