SLB NYSE: SLB reported third-quarter 2026 revenue of $9.45 billion, up 5% sequentially, as growth in the Middle East, North America land and international deepwater activity supported results. The company said pre-tax segment operating margins expanded across all four divisions, while adjusted EBITDA margin increased 71 basis points from the second quarter to 21.9%.
Earnings per share, excluding charges and credits, were $0.64, up $0.09 sequentially but down $0.05 from the prior-year quarter. The company recorded $0.03 per share in merger and integration charges related to its ChampionX acquisition, along with a $0.12 per-share, or $187 million, non-cash pension settlement charge.
Chief Financial Officer Stephane Biguet said the pension settlement, funded by plan assets, reduced both pension obligations and assets by nearly $900 million. He said the action was intended to reduce volatility and future pension costs, while the pension plan remains well funded.
Production Systems and Middle East Recovery Drive Growth
Chief Executive Officer Olivier Le Peuch said all geographic areas and core divisions delivered sequential revenue growth. Production Systems led the company’s divisions, supported by higher OneSubsea revenue and stronger sales of production chemicals and artificial lift in North America and the Middle East.
Production Systems revenue rose 6% sequentially to $4 billion, while its pre-tax operating margin increased 60 basis points to 16.1%. Biguet said the division saw broad-based growth in OneSubsea, artificial lift, completions and production chemicals.
The acquired ChampionX businesses delivered their highest quarterly revenue and margin since joining SLB, according to management. Le Peuch said ChampionX had expanded margins for a fourth consecutive quarter, while Biguet said its EBITDA margin had reached the mid-20% range. The company expects to achieve its approximately $200 million interim synergy target from the acquisition by the end of 2026.
Well Construction revenue increased 5% sequentially to $2.9 billion, with growth tied primarily to higher drilling activity in the Middle East. Reservoir Performance revenue also rose 5% to $1.6 billion, driven by the gradual Middle East recovery. Operating margins for Well Construction and Reservoir Performance expanded to 16.4% and 16.3%, respectively.
Middle East revenue totaled $1.9 billion in the third quarter, up 13% from the prior quarter. Le Peuch said activity improved during the quarter in the United Arab Emirates, Kuwait, Qatar and, to a lesser extent, Saudi Arabia, supported by intervention, stimulation and drilling work. He said Iraq did not experience the same increase in activity, while Oman was steady.
SLB said uncertainty remains due to heightened regional tensions. Its fourth-quarter outlook assumes Middle East revenue remains flat sequentially at approximately $1.9 billion, or about 83% of first-quarter 2025 revenue.
Despite the near-term uncertainty, SLB cited Saudi Aramco’s award of four integrated Well Construction contracts covering more than 450 wells over an initial three-year term. Le Peuch said the contracts cover both oil and gas assets, with mobilization beginning in the fourth quarter and activity expected to reach full capacity in 2027.
Digital and Data Center Businesses Continue to Expand
Digital revenue was essentially flat sequentially at $693 million, as stronger platform, application, digital operations and professional-services sales were offset by lower digital exploration revenue following a strong second quarter. Digital’s pre-tax operating margin increased 27 basis points to 28%.
Le Peuch said SLB delivered more than 750,000 automated drilling feet during the quarter, nearly 50% above the year-earlier level. The company’s Hellops predictive analytics system monitored more than 20% of active international rigs, representing year-over-year growth of more than 60%.
SLB expects a significant increase in digital exploration revenue during the fourth quarter, supported by typical year-end sales. The company said it expects the Digital division to finish 2026 with double-digit year-over-year revenue growth and adjusted EBITDA margins above 35%.
Revenue in the company’s All Other category rose 8% sequentially, led by Data Center Solutions. However, pre-tax operating income declined slightly because of ramp-up costs for new data-center projects. SLB said it opened a manufacturing center in Canada to support a Meta data center project and has begun expanding its operations into Asia.
The company remains on track to close its planned Kelvion acquisition during the first half of 2027. Management said the combination is expected to expand SLB’s thermal and heat-management offerings for data-center infrastructure.
Fourth-Quarter and 2027 Outlook
For the fourth quarter, SLB expects revenue of about $10 billion, representing sequential growth of 5% to 7%, supported by deepwater activity, year-end Digital sales and product sales. The company expects adjusted EBITDA margin to expand by 100 to 150 basis points.
- Combined core-division revenue is expected to rise by low single digits sequentially.
- Production Systems revenue is expected to grow by high single digits.
- Well Construction and Reservoir Performance revenue are expected to be essentially flat sequentially.
- Digital revenue is expected to rise in line with historical fourth-quarter trends.
Looking to 2027, SLB said it expects global oilfield-services market activity to grow at a mid-single-digit rate, assuming Middle East activity remains at second-half 2026 levels and regional conflict does not materially escalate. The company said normalization in the Middle East would provide additional upside.
Le Peuch pointed to deepwater developments, renewed exploration, production-recovery investments and activity in Venezuela as major growth drivers. He said SLB’s Venezuela revenue is on track to more than double in 2026, with potential for multifold growth in 2027. The company has previously identified $1 billion as a historical revenue level and long-term ambition for the country.
SLB also highlighted OneSubsea backlog growth, including a recent award to provide subsea production systems for the first phase of ExxonMobil’s deepwater Rovuma LNG development in Mozambique. Management said it expects to surpass its $9 billion booking target across 2025 and 2026, supporting revenue visibility through 2027 and beyond.
The company generated $1.5 billion in cash flow from operations and $828 million in free cash flow during the quarter. It ended the period with net debt of $9.2 billion, repurchased $656 million of stock, and said it remains on track to repurchase approximately $2.4 billion in shares for the full year. SLB expects total shareholder returns in 2026 to be slightly above $4 billion.
About SLB (NYSE:SLB)
SLB, formerly known as Schlumberger, is a global energy technology company that provides products, services and digital solutions to the oil and gas industry. Its offerings support the exploration, development and production of hydrocarbon resources across the life cycle of an oil or gas field.
The company provides reservoir characterization, drilling and well-construction services, well completion and production technologies, and equipment for subsea and surface operations. SLB also develops software, data and automation solutions designed to help energy companies improve operational efficiency, manage reservoirs and reduce emissions.
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