SLB 10-Q 2026-09-30 section summaries

SLB — Results for the quarter and nine months ended September 30, 2026

Consolidated results

Revenue grew 5.8% in Q3 and 4.5% for 9M, as increased product sales more than offset declining services revenue. Despite higher revenue, 9M income before taxes and net income declined. Q3 diluted EPS was slightly lower year over year; 9M diluted EPS fell to $1.51 from $1.80.

Segment revenue

*9M values shown where growth differed materially from the quarter’s growth rate. Q3 Digital revenue is inferred from reported segment totals and eliminations. Production Systems was the main segment growth driver; Reservoir Performance and Well Construction declined year over year for 9M. Segment capital investments, including capital expenditures, APS investments and capitalized exploration data, were $1.835B for 9M 2026 versus $1.658B; depreciation and amortization was $2.095B versus $1.911B.

Geographic revenue

*9M values shown where growth differed materially from the quarter’s growth rate. North America and Latin America growth was partly offset by weakness in Middle East & Asia.

Cash flow and capital allocation

Investing activities included $0.570B of business acquisitions and investments, net of cash acquired, versus $0.144B in 9M 2025. SLB issued $2.000B of long-term debt and repaid $0.715B. Shares outstanding decreased from 1.495B at January 1, 2026 to 1.476B at September 30, including 34M shares repurchased. Average diluted shares were 1.497B in Q3 2026 versus 1.488B, and 1.506B for 9M versus 1.414B.

Balance sheet and liquidity

Long-term debt’s estimated fair value was $10.4B at September 30, 2026, versus $9.4B at year-end 2025. SLB had $5.0B of committed credit facilities and no facility or commercial-paper borrowings at either date. Receivables increased to $9.735B from $8.689B; inventory rose to $5.517B from $5.032B.

Business developments, commitments and risks

A noncash pension settlement charge of $187M was recorded in Q3 after a lump-sum offer to former International Staff Pension Plan participants. The plan paid approximately $0.9B from plan assets, reducing its benefit obligation, with no cash impact to SLB. ChampionX-related merger and integration charges were $41M, $69M and $55M in Q1, Q2 and Q3, respectively, totaling $165M for 9M.

SLB acquired ChampionX in an all-stock transaction on July 16, 2025, issuing 0.735 SLB shares per ChampionX share. The acquisition added production chemistry, artificial lift, and engineered equipment and technologies; ChampionX’s Drilling Technologies business was disposed of concurrently. Acquired businesses contributed approximately $0.6B of revenue and $0.1B of pretax operating income from August 1 through September 30, 2025.

Backlog was $6.8B, with approximately 80% expected to convert to revenue within 12 months. Revenue recognized over time in excess of billings was $0.6B versus $0.4B at year-end 2025; billings and cash collections in excess of revenue were $2.7B versus $2.3B.

SLB has foreign-currency exposure because it incurs significant expenses outside the U.S. in currencies other than its primarily U.S.-dollar functional currency; a stronger dollar reduces reported expenses, while a weaker dollar increases them. Foreign-currency forwards totaled $5.8B U.S.-dollar equivalent, down from $6.3B at year-end. Cross-currency swaps hedge euro-denominated debt, effectively converting it to fixed-rate U.S.-dollar debt; stated annual rates ranged from 1.87% to 3.49%. Management considered material losses from pending legal proceedings remote, while acknowledging litigation outcomes remain uncertain.

SLB — Q3 and first nine months of 2026 MD&A

Revenue and business trends

Q3 revenue increased 5% sequentially, with growth in every geographic area. Middle East revenue rose 13% sequentially despite late-quarter disruption, supported by regional recovery, North American land activity and broader international deepwater activity. Nine-month revenue grew 5% as reported, but declined 4% (about $0.9B) excluding ChampionX, acquired in Q3 2025. The underlying decline principally reflected a 16% ($1.1B) reduction in Middle East revenue amid conflict-related operational disruption.

Production Systems’ nine-month increase primarily came from ChampionX production chemicals and artificial lift; excluding ChampionX, the business was essentially flat, as Middle East weakness offset growth elsewhere. Digital’s nine-month growth reflected Digital Operations and exploration-data sales.

Segment profitability

Middle East recovery drove much of the sequential margin improvement. All Other profitability declined sequentially as ramp-up costs for new Data Center Solutions projects weighed on results. For the first nine months, Digital’s pretax operating margin was 26%, up 41 bps year over year; Reservoir Performance was 16%, down 212 bps; Well Construction was 16%, down 346 bps; and Production Systems was 15%, down 111 bps. Middle East disruption affected Reservoir Performance and Well Construction, with Well Construction also facing pricing headwinds in select markets. All Other nine-month pretax operating income was $391M, down $23M year over year.

Costs, earnings and cash flow

SLB defines free cash flow as operating cash flow less capital expenditures, APS investments and capitalized exploration-data costs. Capital investments on that broader basis were $1.8B for the first nine months, versus $1.7B a year earlier; full-year 2026 capital investments are expected to be about $2.5B.

Nine-month interest expense was $377M, down $55M, primarily due to lower average commercial-paper borrowings. The Q3 effective tax rate was 23%, versus 20% in Q2, mainly because Q3 included a $187M nondeductible pension settlement charge. The nine-month effective tax rate was 21% in both years. Research and engineering expense was 1.8% of nine-month revenue, versus 2.0%; general and administrative expense was 1.0% in both periods.

Investment, capital allocation and liquidity

SLB repurchased $1.755B of stock during the first nine months (34.0M shares at an average $51.57), compared with $2.414B (60.0M shares at $40.23) in the prior-year period. Cumulative repurchases under the $10B program were approximately $7.6B at September 30, 2026. Nine-month dividends paid were $1.305B, versus $1.176B. The quarterly dividend increased 3.5%, from $0.285 to $0.295 per share, beginning with the April 2026 payment.

At September 30, 2026, cash and short-term investments were $3.6B and net debt was $9.249B, compared with $9.181B at September 30, 2025 and $7.424B at December 31, 2025. SLB had $5.0B of committed bank facilities, all available, and expected liquidity and operating cash generation to meet requirements for the next 12 months and beyond. In Q2 2026, SLB issued $2.0B of senior notes: $500M at 4.55% due 2031, $500M at 4.80% due 2033, and $1.0B at 5.15% due 2036.

Outlook, strategic developments and risks

Management cited a strengthening international outlook, including deepwater momentum in Latin America, Europe, Sub-Saharan Africa and Asia and SLB OneSubsea awards. Energy-security concerns and supply shocks are supporting international supply diversification, reserve replacement and sustained production, although near-term Middle East uncertainty remains. Data Center Solutions revenue increased 23%, or $44M, sequentially and $226M year over year.

On August 31, 2026, SLB agreed to acquire Kelvion for approximately $3.4B cash and assumption of approximately $0.7B debt, adding thermal-management and heat-exchange capabilities to Data Center Solutions. Closing is expected in H1 2027, subject to approvals and customary conditions.

Key risks include conflict-related Middle East disruption, which has materially reduced activity and revenue; pricing pressure and weaker margins in parts of Well Construction and Production Systems; and uncertainty around customer E&P spending, geopolitical and economic conditions, inflation, foreign exchange, tariffs, supply-chain and raw-material availability, regulation, and acquisition execution and integration. Kelvion’s closing and successful integration are also subject to risk.

SLB reported no material change in its exposure to market risk since December 31, 2025. Its quantitative and qualitative market-risk disclosures are incorporated by reference to Item 7A of its 2025 Form 10-K.

Disclosure controls and internal control over financial reporting

Management, including the CEO and CFO, concluded that SLB’s disclosure controls and procedures were effective as of period-end, providing reasonable assurance that required information is recorded and reported on time. No quarterly change in internal control over financial reporting materially affected, or was reasonably likely to materially affect, those controls.

Risk Factors

As of the filing date, SLB reported no material changes to the risk factors disclosed in its FY2025 Form 10-K. The section identifies no new or materially changed risks.

Residual dealings involving Iran

SLB completed the wind-down of its service operations in Iran in 2013. In Q3 2026, its remaining dealings with the Iranian government were limited to taxes and other typical governmental charges.

Certain non-U.S. subsidiaries continued to maintain accounts at the Dubai branch of Bank Saderat Iran and at Bank Tejarat in Tehran and Kish. The accounts were used to receive and hold amounts owed by the National Iranian Oil Company and its affiliates for services performed in Iran before the wind-down. One subsidiary also maintained a Tejarat account for local expenses, including taxes. SLB expects to end dealings with Saderat and Tejarat after it receives all amounts owed for those prior services. The legacy receivables and continued use of the Iranian bank accounts leave residual sanctions and compliance exposure until those dealings end.