Olivier Le Peuch
Chief Executive Officer at Schlumberger
Thank you, ND. Good morning, ladies and gentlemen. Thank you for joining us on the call. In my prepared remarks today, I will cover three topics, starting with our third quarter results and our latest view of the macro environment. Thereafter, I will conclude with our outlook for the remainder of this year.
The second half is developing to be one of the most exciting times for the company in the recent past. We started with solid results led by the international market, and we continued to execute at a very high level, delivering another quarter of double-digit revenue growth with earnings per share and EBITDA at their highest level since 2015.
In addition to the details captured in our earnings release this morning, I would like to take a moment to reflect on some of the key highlights for the quarter. To start, year-on-year revenue growth accelerated to 28%, the highest growth since 2011, more than a decade ago. Internationally, all areas grew, and the pace of growth increased to 13% sequentially and 26% year-over-year. Activity and revenue trends confirm the onset of another phase in the global growth cycle, one that will be increasingly driven by the international and the offshore markets. Through our breadth and technology integration, we are optimally positioned to benefit strongly from the acceleration of activity that is expected in the quarters and years ahead.
In our Core, all divisions continue to execute very well, and the impact of operating leverage and improved net pricing was reflected in our results. All divisions in our Core posted margin expansion led by Well Construction, our biggest division, which posted over 400 bps sequential improvement.
We also held our Digital Forum in Lucerne, Switzerland, bringing together captains of industry in energy and information technology, over 1,000 thought leaders, partners and customers. This year's forum was our biggest yet and marks an inflection point for digital. Our long-term competitiveness as an industry depends on our ability to effectively harness technology, data and deeper collaboration. During the three days of active engagement, it became increasingly clear to all participants that through digital, we enter the future better equipped to deliver higher value in terms of performance and decarbonization.
In parallel, we also continued to strengthen our Core portfolio, increasing our opportunity set in lucrative offshore markets. We announced an agreement to form a joint venture with Aker Solutions and Subsea 7. This agreement will bring together a complementary portfolio of technologies and unmatched integration capability to help customers increase production, improve efficiency and meet their decarbonization goals.
In the Core and in Digital, our technologies are increasingly being adopted and are positively impacting our customer performance. We secured several significant multiyear contract wins during the quarter and continue to build a solid pipeline of activity for the future.
And finally, in New Energy, we continue to make significant advances building partnerships, investing and developing new capability. We announced an agreement with RTI International to accelerate the industrialization and scale-up of innovative nonaqueous solvent CO2 capture technology. We also made an investment in ZEG Power to accelerate the development of technology for clean hydrogen production from natural gas. Both of these are advancing our road map for hydrogen and CCUS.
Recent policy decisions in the U.S. and Europe are supportive of our selected New Energy domains, technology-led approach and market growth opportunity. We expect to announce additional progress in the coming weeks and months, as we continue to position the company for long-term participation across the entire energy value chain.
To sum up, we entered the second half of the year with the expectation for strong growth momentum and raised our revenue guidance for the full year. This was predicated on a robust international outlook, the strengthening of offshore activity and the broadening impact of service pricing improvement.
I'm very pleased with the evolution of these dynamics and our execution thus far, both of which continue to result in differentiated operational performance and solid financial results. I would like to thank the entire Schlumberger team for delivering another exceptional quarter.
Turning now to the macro. We have strengthened our view in a multiyear upcycle as we are on the cusp of yet another year of course. Despite concerns over the slowdown of global growth rates and the potential for recession, the fundamentals of energy as a critical resource remain very constructive. First, in the near term, a seasonal uptick in demand as winter approaches is pitted against a very intricate supply landscape for both oil and gas through the end of the year. This situation is exacerbated by the ongoing energy crisis in Europe.
Looking further out into the horizon, the demand-supply picture remains delicate, with this imbalance amplified by geopolitics, increased instance of supply disruption and limited spare global capacity. Second, the growing necessity of energy security and supply-source diversification will also bring -- also drive urgent increase in energy investment. A significant step-up in investment is required to create supply redundancy, rebalance markets and rebuild global spare capacity to levels that provide for sustainable economic growth. And third, recent OPEC+ decisions and the extension of its framework for cooperation through 2023 are additional factors that will enable operation -- operators to invest with a higher degree of confidence in their commodity price assumptions. Taken together, these dynamics will result in a supply-led upcycle characterized by resilient upstream investment that is decoupled from near-term demand volatility.
We expect investment growth will be durable, reinforced by the long-term demand trajectory, multi capacity expansion plans, lower operating breakeven price and supportive commodity prices. Growth will be simultaneous in North America and in international markets. This started first in North America market, and we are already witnessing the next phase of growth with an acceleration in pace in the offshore and international markets that was very visible in the third quarter.
In the U.S. land markets, we are participating more profitably in the more accretive and lower capital-intensive market segments where our technology, performance premium and our technology access business model are driving solid revenue and margin growth. In the international and offshore markets, we have increased market access and enhanced our participation across the value chain through a combination of portfolio actions, fit-for-basin technology and higher wallet share on account of our performance and integration capabilities.
The next phase of global market inflection is expected to be driven by increasing activity in the Middle East. Looking ahead to the fourth quarter, we expect another quarter of sequential revenue growth and EBITDA margin expansion to close the year. Sequential growth will reflect historical seasonal trends. The international markets will be driven by a sequential uptick in the Middle East activity as capacity expansion projects begin to mobilize. Global offshore activity will continue to strengthen, offset by the approaching seasonality in the Northern Hemisphere, while North America land activity is expected to moderate its growth trend. This combination will result in fourth quarter year-on-year revenue growth in the mid-20s and 200 bps EBITDA margin expansion when compared to the fourth quarter of 2021.
Against this backdrop, we will visibly surpass our previously raised revenue guidance for the full year. This updated outlook will wrap up what is set to be an outstanding year for the company. Looking further ahead, we have increased our conviction on our strategy and the growth opportunities across our 3 engines: the Core, Digital and New Energy. Constructive oil and gas market fundamentals, energy security and the need to accelerate the energy transition will support increased investment in both clean energy technology development and lower carbon oil and gas production.
We have positioned the company to outperform in the long term with multiple technology-led opportunities across the entire energy value chain. These opportunities cover oil and gas, industrial decarbonization and new energy systems, all supported by digital transformation. We are ready to apply our technology, global scale and industrialization capabilities to lead in this energy landscape and deliver outstanding value for our customers and shareholders.
And finally, we will hold our Investors Conference in New York in a couple of weeks where I look forward to seeing most of you. During this event, we'll articulate our ambition for the future, including our near-term goals for 2023. As part of this year's Investors Conference, you will also have an immersive opportunity to see and touch some of our exciting new technologies and meet with members of our expanded management team. I'm truly excited about this upcoming event.
I will now turn the call over to Stephane.