On April 25, 2025, Schlumberger Ltd (SLB, Financial) released its 8-K filing detailing its financial performance for the first quarter of 2025. The company, a global leader in oilfield services, reported a revenue of $8.49 billion, which represents a 3% decline year over year and falls short of the analyst estimate of $8,594.56 million. The GAAP earnings per share (EPS) was $0.58, a 22% decrease from the previous year, and below the estimated EPS of $0.74. Excluding charges and credits, the EPS was $0.72, slightly below the estimate.
Company Overview
Schlumberger Ltd (SLB, Financial), founded in 1926, is the world's premier oilfield-services company by market share. Known for its innovation, SLB operates in differentiated oligopolies, holding competitive positions globally. The company focuses on three growth engines: its core, digital, and new energy businesses. With over three-fourths of its revenue tied to international markets, SLB generates approximately $3 billion in digital-related revenue.
Performance and Challenges
SLB's first-quarter results reflect the challenges of navigating evolving market dynamics. Despite higher activity in regions like the Middle East, North Africa, and Argentina, the company faced a sharper-than-expected slowdown in Mexico, Saudi Arabia, and offshore Africa, along with a steep decline in Russia. These factors contributed to a 3% year-over-year revenue decline.
“First-quarter adjusted EBITDA margin was slightly up year on year despite softer revenue as we continued to navigate the evolving market dynamics,” said SLB Chief Executive Officer, Olivier Le Peuch.
Financial Achievements
Despite the revenue decline, SLB's adjusted EBITDA margin showed resilience, slightly increasing year over year. The company's digital business expanded, with digital revenue growing 17% year over year, contributing to a 6% increase in Digital & Integration revenue. This growth underscores the importance of digital transformation in the energy sector.
Income Statement and Key Metrics
SLB reported a net income attributable to the company of $797 million, a 25% decrease year over year. Adjusted EBITDA was $2.02 billion, down 2% from the previous year. The adjusted EBITDA margin was 23.8%, reflecting the company's focus on cost discipline and strategic diversification.
Geographical and Divisional Performance
Revenue in Latin America declined 10% year over year, primarily due to reduced drilling activity in Mexico. Europe & Africa saw a 4% decline, while the Middle East & Asia experienced a 3% decrease. In contrast, North America revenue increased by 8% year over year, driven by higher digital sales and subsea production systems.
By division, Digital & Integration revenue increased by 6%, while Reservoir Performance and Well Construction revenues declined by 1% and 12%, respectively. Production Systems revenue grew by 4%, highlighting strong demand for surface production systems and artificial lift.
Strategic Initiatives and Future Outlook
SLB remains committed to returning a minimum of $4 billion to shareholders in 2025 through dividends and share repurchases. The company is also advancing its digital and AI capabilities, which are increasingly decoupled from upstream cycle dynamics, positioning SLB for future growth.
“SLB is committed to returning more than 50% of its free cash flow to our shareholders, and we will materially exceed this target in 2025,” Le Peuch stated.
Conclusion
Schlumberger Ltd (SLB, Financial) faces challenges in the current market environment, but its strategic focus on digital transformation and cost efficiency positions it well for future growth. The company's commitment to shareholder returns and its diversified portfolio provide a solid foundation for navigating market uncertainties.
Explore the complete 8-K earnings release (here) from Schlumberger Ltd for further details.
