TLDR
- SLB stock dips 1.15% as Q3 earnings miss but revenue stays strong.
- Digital revenue surges 11%, driving margin expansion and resilience.
- Cash flow holds firm with $1.1B FCF despite profit decline.
- ChampionX boosts production systems, fueling tech-led growth.
- Global operations steady as SLB eyes digital-led future strength.
SLB N.V. (NYSE: SLB) stock declined 1.15% to $32.54 after the company reported mixed third-quarter 2025 results.
The energy services firm posted weaker earnings but maintained steady revenue and robust digital growth, reflecting resilience amid a volatile energy market. Although profitability slipped, strong operational cash flow and expanding digital margins helped offset the impact of lower oilfield activity.
Earnings Pressure Amid Sequential and Yearly Declines
SLB reported third-quarter revenue of $8.93 billion, up 4% sequentially but down 3% year on year. GAAP earnings per share fell 32% from the prior quarter and 40% from last year to $0.50. Excluding charges and credits, adjusted EPS came in at $0.69, representing a 7% sequential and 22% yearly decline.
Net income attributable to SLB reached $739 million, down 27% sequentially and 38% year-over-year, reflecting lower margins. Adjusted EBITDA remained flat at $2.06 billion, while cash flow from operations stood at $1.68 billion. The company generated $1.10 billion in free cash flow, which included $153 million in acquisition-related payments.
Despite profit pressure, the board approved a quarterly dividend of $0.285 per share, reaffirming its commitment to shareholder returns. The results indicated stable underlying fundamentals even as global oil markets remained fully supplied and commodity prices subdued.
Digital Momentum and Integration of ChampionX
The Digital Division reported quarterly revenue of $658 million, up 11% sequentially and 3% year-over-year. Growth stemmed from higher revenue in Digital Operations and Platforms & Applications, alongside contributions from ChampionX, which added $20 million. The segment’s pretax operating margin expanded 250 basis points to 28%, supported by robust profitability and improved efficiency.
Annual recurring revenue for Digital increased to $926 million from $869 million the previous year, indicating sustained demand for data-driven solutions. SLB’s digital offerings continued to enhance operational performance and reinforce its strategic shift toward technology-led services. The company began reporting Digital as a standalone division in the third quarter, reflecting its increasing significance.
ChampionX integration contributed $575 million in Production Systems revenue, strengthening SLB’s presence in the production and recovery market. Excluding the acquisition, Digital revenue rose 8% sequentially, demonstrating strong organic momentum. This integration aligns with SLB’s broader strategy to capture value across the production lifecycle.
Regional Trends and Operational Outlook
In the quarter, SLB’s international business showed resilience despite geopolitical uncertainty and subdued oil prices. Middle East and Asia revenue declined 1% sequentially, offset by solid growth in Iraq, Oman, and the United Arab Emirates. Latin America revenue declined 4% sequentially, primarily due to production interruptions in Ecuador and reduced activity in Argentina.
Revenue in Europe and Africa remained flat, as gains in Sub-Saharan Africa offset declines in Europe and North Africa. North America revenue declined 4% following the divestiture of the Palliser project in Canada and weaker U.S. land activity. However, offshore digital exploration and data center demand partially cushioned the regional slowdown.
SLB expects continued strength in its international markets supported by future OPEC+ production releases. With digital acceleration and a strong cash position, the company remains well-positioned to navigate near-term challenges while expanding its global technology footprint.
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