• Revenue: $8.5 billion, decreased 3% year on year.
• North America Revenue: Increased 8% year on year.
• International Revenue: Decreased 5% year on year.
• Adjusted EBITDA Margin: 23.8%, up 18 basis points year on year.
• Pretax Segment Operating Margin: 18.3%, declined 60 basis points year on year.
• Digital & Integration Revenue: $1 billion, increased 6% year on year.
• Digital Revenue Growth: 17% year on year.
• Reservoir Performance Revenue: $1.7 billion, decreased 1% year on year.
• Well Construction Revenue: $3 billion, declined 12% year on year.
• Production Systems Revenue: $2.9 billion, increased 4% year on year.
• Cash Flow from Operations: $660 million.
• Free Cash Flow: $103 million.
• Capital Investments: $557 million in the first quarter.
• Net Debt: Increased to $10.1 billion.
• Earnings Per Share (EPS): $0.72, excluding charges and credits.

• Warning! GuruFocus has detected 1 Warning Sign with EBC.

Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Schlumberger Ltd (NYSE:SLB) achieved further adjusted EBITDA margin expansion year on year despite a challenging market environment.
• The company reported double-digit revenue growth in several international markets, including the United Arab Emirates, North Africa, Kuwait, Argentina, and China.
• North America showed positive results driven by the offshore market, with higher sales of digital and subsea production systems.
• Production Systems division experienced steady revenue growth and further margin expansion, supported by strong demand for surface production systems, completions, and artificial lift.
• Digital & Integration division saw a 17% year-on-year revenue growth as customers increasingly adopted digital technologies and solutions.

Negative Points

• First-quarter revenues decreased by 3% year on year, with lower revenue in international markets due to reduced drilling activity in Mexico, Saudi Arabia, and a steep decline in Russia.
• Reservoir Performance division faced revenue decline and margin impact due to challenges on new projects and lower evaluation and exploration activity.
• Well Construction division experienced a year-on-year revenue decline due to lower drilling activity across North America and international markets.
• The macroeconomic environment remains uncertain, with global upstream investment expected to decline compared to 2024.
• Tariff-related uncertainties pose potential risks to margins, particularly affecting imports of raw materials into the US and exports subject to retaliatory tariffs.

Q & A Highlights

Q: How does Schlumberger view the outlook for international and North American markets given current oil prices? A: Olivier Le Peuch, CEO, explained that global upstream spending is expected to decline more than initially anticipated. In North America, Schlumberger is less exposed to regional frac fleets and more focused on offshore, digital, and production markets, which provides resilience. Internationally, the Middle East and Asia are expected to be more resilient, with less decline compared to North America. The upcoming acquisition of ChampionX is expected to enhance resilience and improve the mix in North America.

Q: What is the outlook for Saudi Arabia's oil and gas activity for the rest of the year and into 2026? A: Olivier Le Peuch noted that Saudi Arabia's activity was slow due to adjustments in production targets. However, the focus remains on stabilizing production and expanding gas activities. The gas-led growth is expected to help rebound activity, with a potential uptick in 2026 as Saudi Arabia continues its long-term gas expansion plans.

Q: Can Schlumberger defend its EBITDA margin in a weaker market environment? A: Olivier Le Peuch stated that excluding the impact of tariffs and the ChampionX acquisition, Schlumberger aims to maintain approximately 25% EBITDA margin for the full year, assuming oil prices remain stable. The company is focused on cost management and leveraging digital growth to support margin expansion.

Q: How resilient is Schlumberger's digital growth in the current environment? A: Olivier Le Peuch emphasized that digital adoption is accelerating, driven by efficiency gains and performance improvements. Despite some discretionary spending pressures, Schlumberger expects mid- to high-teens growth in its digital business, supported by its technology and platform strategy.

Q: What steps is Schlumberger taking to diversify its portfolio beyond oil and gas? A: Olivier Le Peuch highlighted the company's strategy in new energy, including carbon capture and storage (CCS), geothermal, and data center infrastructure. Schlumberger aims to exceed $1 billion in revenue from these areas in 2025, with continued growth expected in 2026. The company is leveraging its capabilities in CCS, geothermal, and lithium extraction, as well as expanding its data center business.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.