SLB 10-K diff: FY 2024-12-31 → FY 2025-12-31
Paragraph-level diff of Risk Factors (Item 1A) and Management's Discussion & Analysis (Item 7).
Item 1A · Risk Factors
+11 paragraphs −12 paragraphs ~11 changed
FY 2024-12-31 (earlier)
Item 1A. Ris k Factors.
The following discussion of risk factors known to us contains important information for the understanding of our “forward-looking statements,” which are discussed immediately following Item 7A. of this Form 10-K and elsewhere. These risk factors should also be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and related notes included in Item 8. Financial Statements and Supplementary Data of this Form 10-K.Please carefully consider the risks described below, which discuss the material factors that make an investment in our securities speculative or risky, other material included or incorporated by reference in this Form 10-K, and other reports and materials that we file with the SEC. Additional risks and uncertainties not currently known to us or that we currently deem immaterial could also materially adversely affect our business, reputation, financial condition, results of operations, cash flows and prospects.Business and Operational Risks
Demand for our products and services is substantially dependent on the levels of expenditures by our customers, which can change based on many factors, including fluctuations in oil and gas prices. Oil and gas industry downturns have resulted in reduced demand for oilfield products and services and lower expenditures by our customers, which has in the past had, and may in the future have, a material adverse effect on our financial condition, results of operations and cash flows.
Demand for our products and services depends substantially on expenditures by our customers for the exploration, development and production of oil and gas reserves. These expenditures are generally dependent on our customers’ views of future demand for oil and gas and future oil and gas prices, as well as our customers’ ability to access capital. In addition, the transition of the global energy sector from a primarily fossil fuel-based system to a diverse system which includes renewable energy sources could affect our customers’ levels of expenditures.
Actual and anticipated declines in oil and gas prices have in the past resulted in, and may in the future result in, lower capital expenditures, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us. These effects have had, and may in the future have, a material adverse effect on our financial condition, results of operations and cash flows.Historically, oil and gas prices have experienced significant volatility and can be affected by a variety of factors, including:
• changes in the supply of and demand for hydrocarbons, which are affected by general economic and business conditions;
• the costs of exploring for, producing, and delivering oil and gas;
• the ability or willingness of the Organization of Petroleum Exporting Countries (OPEC) and the expanded alliance known as OPEC+ to set and maintain production levels for oil;
• the level of oil and gas exploration and production activity;
• the level of excess production capacity;
• the level of refining and storage capacity;
• the level of oil and gas inventories;
• access to potential resources;
• political and economic uncertainty and geopolitical unrest;
• governmental laws, policies, regulations, subsidies, and other actions, including initiatives to promote the use of renewable energy sources;
• speculation as to the future price of oil and the speculative trading of oil and gas futures contracts;
• technological advances affecting energy consumption; and
• extreme weather conditions, natural disasters, and public health or similar issues, such as pandemics and epidemics.
The oil and gas industry has historically experienced periodic downturns, which have been characterized by diminished demand for our products and services and downward pressure on the prices that we are able to charge. Sustained market uncertainty can also result in lower demand and pricing for our products and services. A significant industry downturn, sustained market uncertainty, or increased availability of economical alternative energy sources could result in a reduction in demand for our products and services, which could adversely affect our business, financial condition, results of operations, cash flows and prospects.
Disruptions in the political, regulatory, economic, and social environments of the countries in which we operate or globally could adversely affect our reputation, financial condition, results of operations and cash flows.We are a global technology company, and our non-US operations accounted for approximately 85% of our consolidated revenue in 2024, and 84% in 2023 and 2022. Geopolitical instability and unforeseen changes in any of the markets in which we operate could result in business disruptions or operational challenges that may adversely affect the demand for our products and services, or our reputation, our financial condition, and our results of operations and cash flows. These factors include, but are not limited to, the following:• uncertain or volatile political, social, and economic conditions;
• exposure to expropriation, nationalization, deprivation or confiscation of our assets or the assets of our customers, or other governmental actions;
• social unrest, acts of terrorism, war, or other armed conflict;10• confiscatory taxation or other adverse tax policies;
• theft of, or lack of sufficient legal protection for, proprietary technology and other intellectual property;
• deprivation of contract rights;
• trade and economic sanctions or other restrictions imposed by the European Union, the United States, the United Kingdom, China, or other regions or countries that could restrict or curtail our ability to operate in certain markets;
• public health crises;
• local content and other similar regional requirements;
• unexpected changes in legal and regulatory requirements, including changes in interpretation or enforcement of existing laws;
• restrictions on the repatriation of income or capital;
• supply chain disruptions;• currency exchange controls;
• currency exchange rate fluctuations and devaluations; and
• inflation.As an example of a risk resulting from our global operations, in March 2022 we decided to immediately suspend new investment and technology deployment to our Russia operations. In July 2023, we announced that we were halting shipments of products into Russia from all our facilities worldwide in response to the continued expansion of international sanctions. Russia represented approximately 4% of our worldwide revenue during 2024. The carrying value of our net assets in Russia was approximately $0.6 billion as of December 31, 2024. This consisted of $0.1 billion of cash and short-term investments, $0.3 billion of receivables, $0.2 billion of fixed assets, $0.3 billion of other assets, and $0.3 billion of current liabilities.
We continue to actively monitor the dynamic situation in Russia and Ukraine and applicable laws, sanctions and trade control restrictions resulting from the conflict. The extent to which our reputation, operations, financial results and cash flows, including the ability to repatriate cash, may be affected by the ongoing conflict in Ukraine will depend on various factors, including the extent and duration of the conflict; the effects of the conflict on regional and global economic and geopolitical conditions; the effect of further laws, sanctions and trade control restrictions on our business, the global economy and global supply chains; and the impact of fluctuations in the exchange rate of the ruble. Continuation or escalation of the conflict may also exacerbate this and other risk factors identified in this Form 10-K, including cybersecurity, regulatory, and reputational risks.
Failure to effectively and timely address the energy transition could adversely affect our reputation, business, results of operations, and cash flows.
Our long-term success depends on our ability to effectively address the energy transition, which will require adapting our technology portfolio to changing customer preferences and government requirements, developing solutions to decarbonize oil and gas operations, and scaling innovative low-carbon and carbon-neutral technologies. If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our products and services, as well as our relationships with various stakeholders, could be adversely affected. Furthermore, if we fail or are perceived to not effectively implement an energy transition strategy, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted.Our operations are subject to cyber incidents that could have a material adverse effect on our reputation, business, financial condition, results of operations, and cash flows.
Our success depends in part on our ability to provide effective cybersecurity protection in connection with our digital technologies and services as well as our internal digital infrastructure. We operate information technology networks and systems for internal purposes that incorporate third-party software and technologies. We also connect to and exchange data with external networks that may be operated by our customers, suppliers, alliance partners, or other third parties. We provide digital technologies that allow us or our customers to remotely perform wellsite and field operations. We also develop software and other digital products and services that store, retrieve, manipulate, and manage our customers’ information and data, external data, personal data, and our own data.
Our digital technologies and services, as well as third-party products, services and technologies that we rely on (including emerging technologies, such as AI programs), are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner. Cyberattacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools (including AI) that circumvent controls, evade detection and even remove forensic evidence of the infiltration. There can be no assurance that our cybersecurity risk management program, processes, or systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect material consequences arising from such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur. We have experienced and will continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from social engineering such as phishing and ransomware infections. Even if we successfully defend our own digital technologies and services, we also rely on providers of third-party products, services, and networks, with whom we may share data and services, and who may be unable to effectively defend their digital technologies and services against attack.Unauthorized access to or modification of, or actions disabling our ability to obtain authorized access to, our customers’ data, other external data, personal data, or our own data, as a result of a cyber incident, attack or exploitation of a security vulnerability, or loss of
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control of our clients’ operations could result in significant damage to our reputation or disruption of the services we provide to our customers or of our customers’ businesses. In addition, allegations, reports, or concerns regarding vulnerabilities affecting our digital products or services could damage our reputation. This could lead to fewer customers using our digital products and services, which could have a material adverse impact on our financial condition, results of operations, cash flows, and future prospects. In addition, if our systems or third-party products, services, and network systems for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to our intellectual property, proprietary or confidential information; loss of customer, supplier, or our employee data; breach of personal data; interruption of our business operations; disruption of our customers’ businesses; increased legal and regulatory exposure, including fines and remediation costs; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with our employees, our customers, our suppliers, our alliance partners and other third parties, and may result in claims against us.We operate in a highly competitive environment. If we are unable to maintain technology leadership, this could adversely affect any competitive advantage we hold.
The energy industry is highly competitive and rapidly evolving. Our business may be adversely affected if we fail to continue developing and producing innovative technologies in response to changes in the market, including customer and government requirements, or if we fail to deliver such technologies to our customers in a timely and cost-competitive manner. If we are unable to maintain technology leadership in our industry, our ability to maintain market share, defend, maintain, or increase prices for our products and services, and negotiate acceptable contract terms with our customers could be adversely affected. Furthermore, competing or new technologies may accelerate the obsolescence of our products or services and reduce the value of our intellectual property.
Limitations on our ability to obtain, maintain, protect, or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage we hold.There can be no assurance that the steps we take to obtain, maintain, protect, and enforce our intellectual property rights will be adequate. Some of our products or services, and the processes we use to produce or provide them, have been granted patent protection, have patent applications pending, or are trade secrets. Our business may be adversely affected when our patents are unenforceable, the claims allowed under our patents are not sufficient to protect our technology, our patent applications are denied, or our trade secrets are not adequately protected. Patent protection on some types of technology, such as software or machine learning processes, may not be available in certain countries in which we operate. Our competitors may also be able to develop technology independently that is similar to ours without infringing on our patents or gaining access to our trade secrets.
Third parties may claim that we have infringed upon or otherwise violated their intellectual property rights.
The tools, techniques, methodologies, programs, and components we use to provide our services and products may infringe upon or otherwise violate the intellectual property rights of others or be challenged on that basis. Regardless of the merits, any such claims generally result in significant legal and other costs, including reputational harm, and may distract management from running our business. Resolving such claims could increase our costs, including through royalty payments to acquire licenses, if available, from third parties and through the development of replacement technologies. If a license to resolve a claim were not available, we might not be able to continue providing a particular service or product.
Legal and Regulatory Risks
Our operations require us to comply with numerous laws and regulations, violations of which could have a material adverse effect on our reputation, financial condition, results of operations or cash flows.
Our operations are subject to international, regional, national, and local laws and regulations in every place where we operate, relating to matters such as environmental protection, health and safety, labor and employment, human rights, import/export controls, currency, emissions reporting, exchange, bribery and corruption, anti-money laundering, data privacy and cybersecurity, intellectual property, immigration, antitrust, and taxation. These laws and regulations are complex, frequently change, have tended to become more stringent over time, and could conflict among one another. In the event the scope of these laws and regulations expands in the future, the incremental cost of compliance could adversely affect our financial condition, results of operations, or cash flows.
Our operations are subject to anti-corruption and anti-bribery laws and regulations, such as the Foreign Corrupt Practices Act, the UK Bribery Act, and other similar laws. We are also subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with certain persons. Our ability to transfer people, products, and data among certain countries is subject to maintaining required licenses and complying with these laws and regulations.
The internal controls, policies and procedures, and employee training and compliance programs we have implemented to deter prohibited practices may not be effective in preventing employees, contractors, or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations. Any determination that we have violated or are responsible for violations of applicable laws, including securities, environmental, trade control, trade sanctions, or anti-corruption laws, could have a material adverse effect on our financial condition. Violations of international and US laws and regulations or the loss of any required licenses may result in fines and penalties, criminal sanctions, administrative remedies, or restrictions on business conduct, and could have a material adverse effect on our business, operations, and financial condition. In addition, any major violations could have a significant effect on our reputation and consequently on our ability to win future business and maintain existing customer and supplier relationships.12Existing or future laws, regulations, court orders or other public- or private-sector initiatives to limit greenhouse gas emissions or relating to climate change may reduce demand for our products and services.
Continuing political and social attention to the issue of climate change has resulted in both existing and proposed international agreements and national, regional, and local legislation and regulatory measures to limit GHG emissions and mitigate the effects of climate change. The implementation of these agreements, including the Paris Agreement, the Europe Climate Law, and other existing or future regulatory mandates, may adversely affect the demand for our products and services, impose taxes on us or our customers, require us or our customers to reduce GHG emissions from our technologies or operations, or accelerate the obsolescence of our products or services.
In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigation or investigations brought by public and private entities against oil and gas companies in connection with their GHG emissions, as well as descriptions of their sustainable products and services. As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring mitigation of the effects of climate change, or requiring other mitigation actions.
There is also increased focus by our customers, investors and other stakeholders on climate change, sustainability, and energy transition matters. Actions to address these concerns or negative perceptions of our industry or fossil fuel products and their relationship to the environment have led to initiatives to conserve energy and promote the use of alternative energy sources, which may reduce the demand for and production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products and services. In addition, initiatives by investors and financial institutions to limit funding to companies in fossil fuel-related industries may adversely affect our liquidity or access to capital. Any of these initiatives may, in turn, adversely affect our financial condition, results of operations, and cash flows.Environmental compliance costs and liabilities arising as a result of environmental laws and regulations could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We are subject to numerous laws and regulations relating to environmental protection, including those governing GHG and other air emissions, water discharges and waste management, as well as the importation and use of hazardous materials, radioactive materials, chemicals, and explosives. The technical requirements of these laws and regulations are becoming increasingly complex, stringent, and expensive to implement. These laws sometimes provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the actions of others.
We use and generate hazardous substances and wastes in our operations. In addition, many of our current and former properties are, or have been, used for industrial purposes. Accordingly, we could become subject to material liabilities relating to the investigation and cleanup of potentially contaminated properties, and to claims alleging personal injury or property damage as a result of exposures to, or releases of, hazardous substances. In addition, stricter enforcement or changing interpretations of existing laws and regulations, the enactment of new laws and regulations, the discovery of previously unknown contamination, or the imposition of new or increased requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, operations, and financial condition.
We could be subject to substantial liability claims, including as a result of well incidents, which could adversely affect our reputation, financial condition, results of operations, and cash flows.
The technical complexities of our operations expose us to a wide range of significant health, safety, and environmental risks. Our operations involve the use of radioactive materials, chemicals, explosives and other equipment and services that are deployed in challenging exploration, development, and production environments. Accidents or acts of malfeasance involving these services (including remotely operated services) or equipment, or a failure of a product or service (including as a result of a cyberattack), could cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or suspension of operations, which could materially adversely affect us. Any well incidents, including blowouts at a well site or any loss of containment or well control, may expose us to additional liabilities, which could be material. Generally, we rely on contractual indemnities, releases, and limitations on liability with our customers and insurance to protect us from potential liability related to such events. However, our insurance may not protect us against liability for certain kinds of events, including events involving pollution, or against losses resulting from business interruption. Moreover, we may not be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate. Any damages caused by our services or products that are not covered by insurance or are in excess of policy limits or subject to substantial deductibles, could adversely affect our financial condition, results of operations, and cash flows.Risks Related to the Proposed Acquisition of ChampionX
We may be unable to complete the proposed acquisition of ChampionX.
We or ChampionX may terminate the merger agreement between the parties (the “merger agreement”) in certain circumstances as described in our Current Report on Form 8-K filed with the SEC on April 2, 2024. If the proposed acquisition is not completed for any reason, including as a result of failure to obtain required regulatory approvals, the market price of our common stock may be adversely affected; we may experience negative reactions from the financial markets, customers, suppliers and other constituencies; we will be required to pay certain costs relating to the acquisition; and we may be required to pay a termination fee under certain circumstances set forth in the merger agreement.
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We may fail to realize the anticipated benefits of the proposed acquisition of ChampionX.
If the acquisition is completed, the success of the acquisition will depend on, among other things, our ability to combine our business with that of ChampionX in a manner that facilitates growth opportunities and realizes anticipated synergies. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition may not be realized fully, or at all, or may take longer to realize than expected.General Risk Factors
Our aspirations, goals, and initiatives related to sustainability and emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.
We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our net-zero emissions target and our energy transition strategy. Statements related to these goals, targets, and objectives reflect our current plans and aspirations and do not constitute a guarantee that they will be achieved. Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and objectives expose us to numerous operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective, including with respect to emissions reduction, is subject to numerous factors and conditions, some of which are outside of our contro l. Our targets are based on empirical data and estimates that reflect our understanding of current best practices for measuring or estimating emissions or other metrics, but we anticipate that future innovations in both measurement technologies and estimation methodologies could cause us to revise our baseline as well as re-calculate progress toward our targets.
Our business faces increased scrutiny from certain investors and other stakeholders related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability practices do not meet investor or other stakeholder expectations and standards, including any third-party ratings used by stakeholders, which continue to evolve, our reputation, our ability to attract or retain employees, our ability to access capital, and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.
Failure to attract and retain qualified personnel could impede our operations.
Our future success depends on our ability to recruit, train, and retain qualified personnel. We require highly skilled personnel to operate and provide technical services and support for our business. Competition for the personnel necessary for our businesses intensifies as activity increases, technology evolves and customer demands change. In periods of high utilization, it is often more difficult to find and retain qualified individuals. This could increase our costs or have other material adverse effects on our operations.
Severe weather events, including extreme weather conditions associated with climate change, have in the past and may in the future adversely affect our operations and financial results.Our business has been, and in the future will be, affected by severe weather events in areas where we operate, which could materially affect our operations and financial results. Extreme weather conditions such as hurricanes, flooding, landslides, and heat waves have in the past resulted in, and may in the future result in, the evacuation of personnel, stoppage of services and activity disruptions at our facilities, in our supply chain, or at well-sites, or result in disruptions to our customers’ operations. Particularly severe weather events affecting platforms or structures may result in a suspension of activities. Climate change may impact the frequency and/or intensity of such events. In addition, acute or chronic physical impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall, and hurricane-strength winds may damage our facilities. Any such extreme weather events may result in increased operating costs or decreases in revenue.
FY 2025-12-31 (later)
Item 1A. Ris k Factors.
The following discussion of risk factors known to us contains important information for the understanding of our “forward-looking statements,” which are discussed immediately following Item 7A. of this Form 10-K and elsewhere. These risk factors should also be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and related notes included in Item 8. Financial Statements and Supplementary Data of this Form 10-K.Please carefully consider the risks described below, which discuss the material factors that make an investment in our securities speculative or risky, other material included or incorporated by reference in this Form 10-K, and other reports and materials that we file with the SEC. Additional risks and uncertainties not currently known to us or that we currently deem immaterial could also materially adversely affect our business, reputation, financial condition, results of operations, cash flows, and prospects.Business and Operational Risks
Demand for our products and services is substantially dependent on the levels of expenditures by our customers, which can change based on many factors, including fluctuations in oil and gas prices. Oil and gas industry downturns have resulted in reduced demand for oilfield products and services and lower expenditures by our customers, which has in the past had, and may in the future have, a material adverse effect on our financial condition, results of operations and cash flows.
Demand for our products and services depends substantially on expenditures by our customers for the exploration, development and production of oil and gas reserves. These expenditures are generally dependent on our customers’ views of future demand for oil and gas and future oil and gas prices, as well as our customers’ ability to access capital. In addition, the transition of the global energy sector from a primarily fossil fuel-based system to a diverse system which includes renewable energy sources could affect our customers’ levels of expenditures.
Actual and anticipated declines in oil and gas prices have in the past resulted in, and may in the future result in, lower capital expenditures, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us. These effects have had, and may in the future have, a material adverse effect on our financial condition, results of operations and cash flows.8Historically, oil and gas prices have experienced significant volatility and can be affected by a variety of factors, including:
• changes in the supply of and demand for hydrocarbons, which are affected by general economic and business conditions;
• the costs of exploring for, producing, and delivering oil and gas;
• the ability or willingness of the Organization of Petroleum Exporting Countries (OPEC) and the expanded alliance known as OPEC+ to set and maintain production levels for oil;
• the level of oil and gas exploration and production activity;
• the level of excess production capacity;
• the level of refining and storage capacity;
• the level of oil and gas inventories;
• access to potential resources;
• political and economic uncertainty and geopolitical unrest;
• governmental laws, policies, regulations, subsidies, and other actions, including initiatives to promote the use of renewable energy sources;
• speculation as to the future price of oil and the speculative trading of oil and gas futures contracts;
• technological advances affecting energy consumption; and
• extreme weather conditions, natural disasters, and public health or similar issues, such as pandemics and epidemics.
The oil and gas industry has historically experienced periodic downturns, which have been characterized by diminished demand for our products and services and downward pressure on the prices that we are able to charge. Sustained market uncertainty can also result in lower demand and pricing for our products and services. A significant industry downturn, sustained market uncertainty, or increased availability of economical alternative energy sources could result in a reduction in demand for our products and services, which could adversely affect our business, financial condition, results of operations, cash flows and prospects.
Disruptions in the political, regulatory, economic, and social environments of the countries in which we operate or globally could adversely affect our reputation, financial condition, results of operations and cash flows.We are a global technology company, and our non-US operations accounted for approximately 82% of our consolidated revenue in 2025, 85% in 2024, and 84% in 2023. Geopolitical instability and unforeseen changes in any of the markets in which we operate could result in business disruptions or operational challenges that may adversely affect the demand for our products and services, or our reputation, our financial condition, and our results of operations and cash flows. These factors include, but are not limited to, the following:• uncertain or volatile political, social, and economic conditions;
• exposure to expropriation, nationalization, deprivation or confiscation of our assets or the assets of our customers, or other governmental actions;
• social unrest, acts of terrorism, war, or other armed conflict;• confiscatory taxation or other adverse tax policies;
• theft of, or lack of sufficient legal protection for, proprietary technology and other intellectual property;
• deprivation of contract rights;
• trade and economic sanctions or other restrictions imposed by the European Union, the United States, the United Kingdom, China, or other regions or countries that could restrict or curtail our ability to operate in certain markets;
• public health crises;
• local content and other similar regional requirements;
• unexpected changes in legal and regulatory requirements, including changes in interpretation or enforcement of existing laws;
• restrictions on the repatriation of income or capital;
• supply chain disruptions;• changes to tariff policies;• currency exchange controls;
• currency exchange rate fluctuations and devaluations; and
• inflation.As an example of a risk resulting from our global operations, in March 2022 we decided to immediately suspend new investment and technology deployment to our Russia operations. In July 2023, we announced that we were halting shipments of products into Russia from all our facilities worldwide in response to the continued expansion of international sanctions. Russia represented approximately 4% of our worldwide revenue during 2025. The carrying value of our net assets in Russia was approximately $0.7 billion as of December 31, 2025. This consisted of $0.2 billion of cash and short-term investments, $0.4 billion of receivables, $0.3 billion of fixed assets, $0.2 billion of other assets, and $0.4 billion of current liabilities.
We continue to actively monitor the dynamic situation in Russia and Ukraine and applicable laws, sanctions and trade control restrictions resulting from the conflict. The extent to which our reputation, operations, financial results and cash flows, including the ability to repatriate cash, may be affected by the ongoing conflict in Ukraine will depend on various factors, including the extent and duration of the conflict; the effects of the conflict on regional and global economic and geopolitical conditions; the effect of further laws, sanctions and trade control restrictions on our business, the global economy and global supply chains; and the impact of fluctuations in the exchange rate of
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the ruble. Continuation or escalation of the conflict may also exacerbate this and other risk factors identified in this Form 10-K, including cybersecurity, regulatory, and reputational risks.Our operations are subject to cyber incidents that could have a material adverse effect on our reputation, business, financial condition, results of operations, and cash flows.
Our success depends in part on our ability to provide effective cybersecurity protection in connection with our digital technologies and services as well as our internal digital infrastructure. We operate information technology networks and systems for internal purposes that incorporate third-party software and technologies. We also connect to and exchange data with external networks that may be operated by our customers, suppliers, alliance partners, or other third parties. We provide digital technologies that allow us or our customers to remotely perform wellsite and field operations. We also develop software and other digital products and services that store, retrieve, manipulate, and manage our customers’ information and data, external data, personal data, and our own data.
Our digital technologies and services, as well as third-party products, services and technologies that we rely on (including emerging technologies, such as AI programs), are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner. Cyberattacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools (including AI) that circumvent controls, evade detection and even remove forensic evidence of the infiltration. There can be no assurance that our cybersecurity risk management program, processes, or systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect material consequences arising from such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur. We have experienced and will continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from social engineering such as phishing and ransomware infections. Even if we successfully defend our own digital technologies and services, we also rely on providers of third-party products, services, and networks, with whom we may share data and services, and who may be unable to effectively defend their digital technologies and services against attack.Unauthorized access to or modification of, or actions disabling our ability to obtain authorized access to, our customers’ data, other external data, personal data, or our own data, as a result of a cyber incident, attack or exploitation of a security vulnerability, or loss of control of our clients’ operations could result in significant damage to our reputation or disruption of the services we provide to our customers or of our customers’ businesses. In addition, allegations, reports, or concerns regarding vulnerabilities affecting our digital products or services could damage our reputation. This could lead to fewer customers using our digital products and services, which could have a material adverse impact on our financial condition, results of operations, cash flows, and future prospects. In addition, if our systems or third-party products, services, and network systems for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to our intellectual property, proprietary or confidential information; loss of customer, supplier, or our employee data; breach of personal data; interruption of our business operations; disruption of our customers’ businesses; increased legal and regulatory exposure, including fines and remediation costs; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with our employees, our customers, our suppliers, our alliance partners and other third parties, and may result in claims against us.
We may fail to realize the anticipated benefits of the ChampionX acquisition.
The success of the ChampionX acquisition will depend on, among other things, our ability to combine our business with that of ChampionX in a manner that facilitates growth opportunities and realizes anticipated synergies. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition may not be realized fully, or at all, or may take longer to realize than expected.
Failure to effectively and timely address the energy transition could adversely affect our reputation, business, results of operations, and cash flows.
Our long-term success depends on our ability to effectively address the energy transition, which will require adapting our technology portfolio to changing customer preferences and government requirements, developing solutions to decarbonize oil and gas operations, and scaling innovative low-carbon and carbon-neutral technologies. If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our products and services, as well as our relationships with various stakeholders, could be adversely affected. Furthermore, if we fail or are perceived to not effectively implement an energy transition strategy, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted.We operate in a highly competitive environment. If we are unable to maintain technology leadership, this could adversely affect any competitive advantage we hold.
The energy industry is highly competitive and rapidly evolving. Our business may be adversely affected if we fail to continue developing and producing innovative technologies in response to changes in the market, including customer and government requirements, or if we fail to deliver such technologies to our customers in a timely and cost-competitive manner. If we are unable to maintain technology leadership in our industry, our ability to maintain market share, defend, maintain, or increase prices for our products and services, and negotiate acceptable contract terms with our customers could be adversely affected. Furthermore, competing or new technologies may accelerate the obsolescence of our products or services and reduce the value of our intellectual property.
Limitations on our ability to obtain, maintain, protect, or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage we hold.10There can be no assurance that the steps we take to obtain, maintain, protect, and enforce our intellectual property rights will be adequate. Some of our products or services, and the processes we use to produce or provide them, have been granted patent protection, have patent applications pending, or are trade secrets. Our business may be adversely affected when our patents are unenforceable, the claims allowed under our patents are not sufficient to protect our technology, our patent applications are denied, or our trade secrets are not adequately protected. Patent protection on some types of technology, such as software or machine learning processes, may not be available in certain countries in which we operate. Our competitors may also be able to develop technology independently that is similar to ours without infringing on our patents or gaining access to our trade secrets.
Third parties may claim that we have infringed upon or otherwise violated their intellectual property rights.
The tools, techniques, methodologies, programs, and components we use to provide our services and products may infringe upon or otherwise violate the intellectual property rights of others or be challenged on that basis. Regardless of the merits, any such claims generally result in significant legal and other costs, including reputational harm, and may distract management from running our business. Resolving such claims could increase our costs, including through royalty payments to acquire licenses, if available, from third parties and through the development of replacement technologies. If a license to resolve a claim were not available, we might not be able to continue providing a particular service or product.
Legal and Regulatory Risks
Our operations require us to comply with numerous laws and regulations, violations of which could have a material adverse effect on our reputation, financial condition, results of operations or cash flows.
Our operations are subject to international, regional, national, and local laws and regulations in every place where we operate, relating to matters such as environmental protection, health and safety, labor and employment, human rights, import/export controls, currency, emissions reporting, exchange, bribery and corruption, anti-money laundering, data privacy and cybersecurity, intellectual property, immigration, antitrust, and taxation. These laws and regulations are complex, frequently change, have tended to become more stringent over time, and could conflict among one another. In the event the scope of these laws and regulations expands in the future, the incremental cost of compliance could adversely affect our financial condition, results of operations, or cash flows.
Our operations are subject to anti-corruption and anti-bribery laws and regulations, such as the Foreign Corrupt Practices Act, the UK Bribery Act, and other similar laws. We are also subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with certain persons. Our ability to transfer people, products, and data among certain countries is subject to maintaining required licenses and complying with these laws and regulations.
The internal controls, policies and procedures, and employee training and compliance programs we have implemented to deter prohibited practices may not be effective in preventing employees, contractors, or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations. Any determination that we have violated or are responsible for violations of applicable laws, including securities, environmental, trade control, trade sanctions, or anti-corruption laws, could have a material adverse effect on our financial condition. Violations of international and US laws and regulations or the loss of any required licenses may result in fines and penalties, criminal sanctions, administrative remedies, or restrictions on business conduct, and could have a material adverse effect on our business, operations, and financial condition. In addition, any major violations could have a significant effect on our reputation and consequently on our ability to win future business and maintain existing customer and supplier relationships.Existing or future laws, regulations, court orders or other public- or private-sector initiatives to limit greenhouse gas emissions or relating to climate change may reduce demand for our products and services.
Continuing political and social attention to the issue of climate change has resulted in both existing and proposed international agreements and national, regional, and local legislation and regulatory measures to limit GHG emissions and mitigate the effects of climate change. The implementation of these agreements, including the Paris Agreement, the Europe Climate Law, and other existing or future regulatory mandates, may adversely affect the demand for our products and services, impose taxes on us or our customers, require us or our customers to reduce GHG emissions from our technologies or operations, or accelerate the obsolescence of our products or services.
In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigation or investigations brought by public and private entities against oil and gas companies in connection with their GHG emissions, as well as descriptions of their sustainable products and services. As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring mitigation of the effects of climate change, or requiring other mitigation actions.
There is also increased focus by our customers, investors and other stakeholders on climate change, sustainability, and energy transition matters. Actions to address these concerns or negative perceptions of our industry or fossil fuel products and their relationship to the environment have led to initiatives to conserve energy and promote the use of alternative energy sources, which may reduce the demand for and production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products and services. In addition, initiatives by investors and financial institutions to limit funding to companies in fossil fuel-related industries may adversely affect our liquidity or access to capital. Any of these initiatives may, in turn, adversely affect our financial condition, results of operations, and cash flows.11Environmental compliance costs and liabilities arising as a result of environmental laws and regulations could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We are subject to numerous laws and regulations relating to environmental protection, including those governing GHG and other air emissions, water discharges and waste management, as well as the importation and use of hazardous materials, radioactive materials, chemicals, and explosives. The technical requirements of these laws and regulations are becoming increasingly complex, stringent, and expensive to implement. These laws sometimes provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the actions of others.
We use and generate hazardous substances and wastes in our operations. In addition, many of our current and former properties are, or have been, used for industrial purposes. Accordingly, we could become subject to material liabilities relating to the investigation and cleanup of potentially contaminated properties, and to claims alleging personal injury or property damage as a result of exposures to, or releases of, hazardous substances. In addition, stricter enforcement or changing interpretations of existing laws and regulations, the enactment of new laws and regulations, the discovery of previously unknown contamination, or the imposition of new or increased requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, operations, and financial condition.
We could be subject to substantial liability claims, including as a result of well incidents, which could adversely affect our reputation, financial condition, results of operations, and cash flows.
The technical complexities of our operations expose us to a wide range of significant health, safety, and environmental risks. Our operations involve the use of radioactive materials, chemicals, explosives and other equipment and services that are deployed in challenging exploration, development, and production environments. Accidents or acts of malfeasance involving these services (including remotely operated services) or equipment, or a failure of a product or service (including as a result of a cyberattack), could cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or suspension of operations, which could materially adversely affect us. Any well incidents, including blowouts at a well site or any loss of containment or well control, may expose us to additional liabilities, which could be material. Generally, we rely on contractual indemnities, releases, and limitations on liability with our customers and insurance to protect us from potential liability related to such events. However, our insurance may not protect us against liability for certain kinds of events, including events involving pollution, or against losses resulting from business interruption. Moreover, we may not be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate. Any damages caused by our services or products that are not covered by insurance or are in excess of policy limits or subject to substantial deductibles, could adversely affect our financial condition, results of operations, and cash flows.General Risk Factors
Our aspirations, goals, and initiatives related to sustainability and emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.
We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our net-zero emissions target and our energy transition strategy. Statements related to these goals, targets, and objectives reflect our current plans and aspirations and do not constitute a guarantee that they will be achieved. Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and objectives expose us to numerous operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective, including with respect to emissions reduction, is subject to numerous factors and conditions, some of which are outside of our contro l. Our targets are based on empirical data and estimates that reflect our understanding of current best practices for measuring or estimating emissions or other metrics, but we anticipate that future innovations in both measurement technologies and estimation methodologies could cause us to revise our baseline as well as re-calculate progress toward our targets.
Our business faces increased scrutiny from certain investors and other stakeholders related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability practices do not meet investor or other stakeholder expectations and standards, including any third-party ratings used by stakeholders, which continue to evolve, our reputation, our ability to attract or retain employees, our ability to access capital, and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.
Failure to attract and retain qualified personnel could impede our operations.
Our future success depends on our ability to recruit, train, and retain qualified personnel. We require highly skilled personnel to operate and provide technical services and support for our business. Competition for the personnel necessary for our businesses intensifies as activity increases, technology evolves and customer demands change. In periods of high utilization, it is often more difficult to find and retain qualified individuals. This could increase our costs or have other material adverse effects on our operations.
Severe weather events, including extreme weather conditions associated with climate change, have in the past and may in the future adversely affect our operations and financial results.12Our business has been, and in the future will be, affected by severe weather events in areas where we operate, which could materially affect our operations and financial results. Extreme weather conditions such as hurricanes, flooding, landslides, and heat waves have in the past resulted in, and may in the future result in, the evacuation of personnel, stoppage of services and activity disruptions at our facilities, in our supply chain, or at well-sites, or result in disruptions to our customers’ operations. Particularly severe weather events affecting platforms or structures may result in a suspension of activities. Climate change may impact the frequency and/or intensity of such events. In addition, acute or chronic physical impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall, and hurricane-strength winds may damage our facilities. Any such extreme weather events may result in increased operating costs or decreases in revenue.
Item 7 · Management's Discussion & Analysis
+304 paragraphs −164 paragraphs ~164 changed
FY 2024-12-31 (earlier)
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis contains forward-looking statements, including, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions, and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Item 1A. Risk Factors” of this Annual Report on Form 10-K.This section of the Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparison between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of SLB’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
2024 Executive Overview
2024 was a strong year for SLB as we successfully navigated evolving market conditions to deliver revenue growth, margin expansion, and solid free cash flow. Year on year, revenue increased by 10% and pretax segment operating income grew by 12%, while we generated $6.6 billion in cash flow from operations and $4.0 billion in free cash flow, enabling us to return $3.3 billion to shareholders and reduce net debt by $571 million. These results demonstrate SLB’s ability to deliver consistent financial performance despite moderating upstream investment growth, driven by our global scale, unmatched digital offerings and ongoing focus on cost optimization.
Our full-year results were highlighted by 12% international revenue growth. This performance was led by the Middle East & Asia and Europe & Africa, which grew 18% and 13%, respectively. The Middle East & Asia achieved record revenues, while growth in Europe & Africa was bolstered by the Aker subsea business, which was acquired in the fourth quarter of 2023. Excluding this acquired business, international revenue increased 7% year over year, outperforming the rig count over the same period.
Our Core divisions — Reservoir Performance, Well Construction and Production Systems — delivered 9% revenue growth compared to the prior year, led by 24% growth in Production Systems, largely due to the subsea acquisition. Production Systems grew 9% organically due to double-digit increases in surface systems, completions and artificial lift. Reservoir Performance also delivered 9% growth, underpinned by strong stimulation and intervention activity in the production space.
Digital & Integration revenue increased 10% year on year, driven by 20% growth in digital, which reached $2.44 billion for the year. Accelerated adoption of our digital technologies marked a milestone year, highlighted by strategic collaborations with cross-industry leaders, the launch of the Lumi data and AI platform, new Performance Live centers to enable remote operations, and the achievement of fully autonomous drilling operations.
Our fit-for-basin approach, domain expertise and integration capabilities have established us as the performance partner of choice for addressing the operating challenges our customers face throughout the life cycle of their assets. As operators across the industry increasingly prioritize production and recovery, our strengths are more critical than ever. With the anticipated completion of our announced acquisition of ChampionX, we are set to further strengthen our production and recovery capabilities, enabling us to deliver even greater value to our customers. This strategic acquisition will also enhance the resilience of the SLB portfolio, providing some stability against the cycles in the years to come.
While upstream investment growth will remain subdued in the short term due to global oversupply, we anticipate that the oil supply imbalance will gradually abate. Global economic growth and a heightened focus on energy security, coupled with rising energy demand from AI and data centers will support the investment outlook for the oil and gas industry throughout the rest of the decade.
In our Core business, we are making unmatched contributions to the discovery, development and extraction of oil and gas reserves, fueling global energy supply. We have the leading offering in digital. And we are pursuing a meaningful opportunity in New Energy and decarbonization, where we have established a differentiated market position. Together, this is laying a strong foundation for our business.
Given our confidence in the business outlook and our ability to continue generating strong cash flows, in January 2025 our Board of Directors approved a 3.6% increase to our quarterly dividend. Additionally, we entered into accelerated share repurchase transactions to repurchase $2.3 billion of SLB common stock. This positions us to increase total return to shareholders, in the form of dividends and share repurchases, from $3.3 billion in 2024 to at least $4 billion in 2025.
18
Fourth Quarter 2024 Results(Stated in millions)Fourth Quarter 2024
Third Quarter 2024Pretax
Pretax
Revenue
Income
Revenue
IncomeDigital & Integration$1,156$442$1,088$386Reservoir Performance1,810
370
1,823
367Well Construction3,267
681
3,312
714Production Systems3,197
506
3,103
519Eliminations & other(146)(81)(167)(84)Pretax segment operating income
1,918
1,902Corporate & other (1)(177)(187)
Interest income (2)36
36Interest expense (3)(128)(132)
Charges & credits (4)(262)(112)
$9,284$1,387$9,159$1,507(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.(2) Excludes interest income included in the segments’ income (fourth quarter 2024: $10 million; third quarter 2024: $16 million).
(3) Excludes interest expense included in the segments’ income (fourth quarter 2024: $3 million; third quarter 2024: $4 million).(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements .Fourth-quarter revenue of $9.3 billion increased 1% sequentially, driven by digital sales in North America and higher activity in the Middle East, Europe and North Africa. On a divisional basis, Digital & Integration led the growth, driven by increased demand for digital products and solutions, while Production Systems benefited from strong backlog conversion as customers continued to invest in maximizing recovery from existing assets.
International revenue of $7.5 billion increased 1% sequentially driven by the Middle East & Asia and Europe & Africa. The Middle East & Asia grew 2% sequentially driven by strong activity in the United Arab Emirates, higher drilling in Egypt, and increased stimulation, intervention, and evaluation activity in Qatar. These gains were offset by weaker performance in Saudi Arabia and Australia. Europe & Africa also grew 2% sequentially largely driven by increased activity in Europe and North Africa. Revenue in Latin America declined 3% sequentially primarily due to reduced drilling activity in Mexico.
North America revenue of $1.8 billion increased 4% sequentially due to higher digital sales, increased sales of production systems, and increased drilling activity in U.S. land and Canada.
Digital & Integration
Digital & Integration revenue of $1.2 billion increased 6% sequentially driven by 10% growth in digital revenue, supported by greater adoption of digital technologies and higher sales of exploration data, particularly in the U.S. Gulf of Mexico. Asset Performance Solutions (“APS”) revenue was flat sequentially.
Digital & Integration pretax operating margin of 38% expanded 274 basis points (“bps”) sequentially, reflecting improved profitability in digital from higher sales and cost efficiencies.Reservoir PerformanceReservoir Performance revenue of $1.8 billion declined 1% sequentially driven by reduced intervention and stimulation activity, partially offset by stronger evaluation activity. Revenue was impacted by lower stimulation and intervention work in Saudi Arabia, which was offset by increased activity in the rest of the Middle East & Asia and North America.
Reservoir Performance pretax operating margin of 20% expanded 35 bps sequentially, primarily reflecting improved profitability in evaluation services.Well ConstructionWell Construction revenue of $3.3 billion declined 1% sequentially due to reduced drilling activity in Mexico and Saudi Arabia, partially mitigated by higher activity across the rest of the Middle East & Asia.
Well Construction pretax operating margin of 21% declined 70 bps sequentially due to the reduced activity.
19Production SystemsProduction Systems revenue of $3.2 billion increased 3% sequentially with growth led by higher international sales of artificial lift, midstream production systems and completions, partially offset by reduced sales of subsea production systems.
Production Systems pretax operating margin of 16% decreased 93 bps sequentially primarily due to lower profitability in subsea production systems.Full-Year 2024 Results
(Stated in millions)
2024
2023
Pretax
Pretax
Revenue
Income
Revenue
IncomeDigital & Integration
$
4,247
$
1,408
$
3,871
$
1,257Reservoir Performance
7,177
1,452
6,561
1,263
Well Construction
13,357
2,826
13,478
2,932
Production Systems12,143
1,8989,831
1,245Eliminations & other(635
)
(263
)
(606
)
(174
)
Pretax segment operating income
7,321
6,523Corporate & other (1)(744
)
(729
)Interest income (2)
134
87
Interest expense (3)(498
)
(489
)Charges & credits (4)(541
)
(110
)
$
36,289
$
5,672
$
33,135
$
5,282(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.
(2) Excludes interest income included in the segments’ income (2024: $40 million; 2023: $13 million).
(3) Excludes interest expense included in the segments’ income (2024: $14 million; 2023: $14 million).
(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements .Full-year 2024 revenue of $36.3 billion increased 10% year on year. Approximately 46% of the year-on-year revenue increase came from the acquisition of the Aker Solutions subsea business ("Aker") in the fourth quarter of 2023 (see Note 6 to the Consolidated Financial Statements ).
International revenue grew by 12% year on year. Excluding the contribution of the acquired Aker subsea business, international revenue increased 7% primarily driven by higher activity in the Middle East & Asia. North America revenue decreased 1% due to lower drilling in US land.
Digital & Integration
Digital & Integration revenue of $4.2 billion increased 10% year on year due to growth in digital revenue as APS revenue was essentially flat.
Digital & Integration pretax operating margin of 33% increased 67 bps year on year primarily due to the growth in digital revenue partially offset by effects of higher APS amortization expense and lower gas prices.Reservoir Performance
Reservoir Performance revenue of $7.2 billion increased 9% year on year due to increased stimulation and intervention activity, with approximately 75% of the revenue growth coming from the Middle East & Asia.
Reservoir Performance pretax operating margin of 20% expanded 99 bps year on year due to improved profitability in the international markets driven by higher activity and improved pricing from increased technology intensity.
Well Construction
Well Construction revenue of $13.4 billion decreased 1% year on year. North America revenue declined 13% due to lower drilling activity in US land largely offset by a 2% increase in international revenue, primarily in the Middle East & Asia.
Well Construction pretax operating margin of 21% decreased 59 bps year on year driven by the reduced activity in North America.20Production SystemsProduction Systems revenue of $12.1 billion increased 24% year on year mainly due to the acquisition of the Aker subsea business. Excluding the effects of the Aker subsea acquisition, revenue grew by 9% year on year driven by strong international sales across the portfolio.
Production Systems pretax operating margin of 16% expanded 297 bps year on year driven by a favorable activity mix, execution efficiency, and conversion of improved-price backlog.
Interest & Other Income, Net
Interest & other income, net consisted of the following:(Stated in millions)2024
2023
Earnings of equity method investments
$182
$
206Interest income174
100Gain on sale of investment24
-
Gain on sale of Liberty shares
-36
$380
$
342Interest income increased $74 million primarily due to higher average cash and short-term investment balances.Other
Research & engineering and General & administrative expenses, as a percentage of Revenue , were as follows:2024
2023
Research & engineering2.1
%
2.1
%
General & administrative1.1
%
1.1
%
Charges and CreditsSLB recorded charges and credits during 2024 and 2023. These charges and credits, which are summarized below, are more fully described in Note 3 to the Consolidated Financial Statements .
The following is a summary of the 2024 charges and credits:(Stated in millions)
Pretax Charge (Credit)
Tax Benefit (Expense)
Noncontrolling Interest
Net
First quarter:Merger & integration$25$6$5$14Second quarter:
Workforce reductions
111
17
-
94Merger & integration
315818Third quarter
-
Workforce reductions
65
10
-
55Merger & integration
47
10730Fourth quarter
-
Asset impairments
162
23
-
139Merger & integration63
6
7
50
Workforce reductions
61
10
-
51
Gain on sale of investment
(24
)
-
-
(24
)
$
541
$
87
$
27
$
427
The following is a summary of the 2023 charges and credits:21(Stated in millions)
Pretax Charge (Credit)
Tax Benefit (Expense)
Noncontrolling Interests
Net
First quarter:
Gain on sale of Liberty shares
$
(36
)
$
(8
)
$
-
$
(28
)
Fourth quarter:Merger and integration
56
8
8
40Currency devaluation loss in Argentina
90
-
-
90$
110
$
-
$
8
$
102
Liquidity and Capital Resources
Details of the components of liquidity as well as changes in liquidity follow:
(Stated in millions)
Dec. 31,
Dec. 31,Components of Liquidity:2024
2023
Cash
$3,544
$
2,900
Short-term investments1,125
1,089
Short-term borrowings and current portion of long-term debt(1,051
)
(1,123
)
Long-term debt(11,023
)
(10,842
)
Net debt (1)
$(7,405
)
$
(7,976
)Changes in Liquidity:2024
2023
Net income
$4,579
$
4,275Charges and credits
541
110Depreciation and amortization (2)2,519
2,312Stock-based compensation expense316
293Earnings of equity method investments, less dividends received(18
)
(132
)
Increase in working capital(1,379)(215)US federal tax refund
-85
Other44
(91)
Cash flow from operations6,602
6,637
Capital expenditures(1,931
)
(1,939
)
APS investments(483
)
(507
)
Exploration data capitalized(198
)
(153
)
Free cash flow (3)3,990
4,038
Dividends paid(1,533
)
(1,317
)
Stock repurchase program(1,737
)
(694
)Proceeds from employee stock purchase plan
219
191
Proceeds from exercise of stock options
29
90
Taxes paid on net-settled stock-based compensation awards
(90)(169)Business acquisitions and investments, net of cash acquired plus debt assumed(553
)
(330
)
Proceeds from sale of Liberty shares
-137
Purchases of Blue Chip Swap securities(207
)
(185
)
Proceeds from sales of Blue Chip Swap securities152
97Other53
(195
)
Change in net debt before impact of changes in foreign exchange rates323
1,663
Impact of changes in foreign exchange rates248
(307
)
Decrease in Net Debt571
1,356
Net Debt, Beginning of period(7,976
)
(9,332
)
Net Debt, End of period
$(7,405
)
$
(7,976
)
(1) “Net debt” represents gross debt less cash and short-term investments. Management believes that Net debt provides useful information to investors and management regarding the level of SLB’s indebtedness by reflecting cash and investments that could be used to repay debt. Net debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt.
(2) Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs and APS investments.22(3) “Free cash flow” represents cash flow from operations less capital expenditures, APS investments and exploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of our ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations.Key liquidity events during 2024 and 2023 included:
• In January 2024, SLB announced a 10% increase to its quarterly cash dividend from $0.25 per share of outstanding common stock to $0.275 per share, beginning with the dividend paid in April 2024. In January 2023, SLB announced a 43% increase to its quarterly cash dividend from $0.175 per share of outstanding common stock to $0.25 per share, beginning with the dividend paid in April 2023. Dividends paid during 2024 and 2023 were $1.5 billion and $1.3 billion, respectively.
In January 2025, SLB announced a 3.6% increase to its quarterly dividend from $0.275 per share of outstanding common stock to $0.285 per share, beginning with the dividend payable in April 2025.
• As of December 31, 2024, SLB cumulatively repurchased $3.5 billion of its common stock under its $10 billion share repurchase program.The following table summarizes the activity under the share repurchase program:
(Stated in millions, except per share amounts)
Total Cost
Total Number
Average Price
of Shares
of Shares
Paid per
Purchased
Purchased
Share2024
$
1,737
38.4
$
45.29
2023
$
694
13.3
$
52.05SLB has entered into accelerated share repurchase (“ASR”) transactions to repurchase $2.3 billion of its common stock. Under the terms of the ASR agreements, on January 13, 2025, SLB received an initial share delivery of approximately 80% of the shares to be repurchased, based on the closing price per share of its common stock on the preceding day. SLB expects the remainder of the shares to be delivered no later than the end of May 2025. Under certain circumstances, SLB may be required to deliver shares or pay cash, at its option, upon settlement of the ASR agreements. The total number of shares ultimately purchased under the ASR agreements will depend upon the final settlement and will be based on volume-weighted average prices of SLB’s common stock during the terms of the ASR transactions, less a discount.
• Capital investments (consisting of capital expenditures, APS investments, and exploration data capitalized) were $2.6 billion in both 2024 and 2023. Capital investments during 2025 are expected to be approximately $2.3 billion.• During the fourth quarter of 2024, SLB repaid its €0.6 billion of 0.00% Notes that were outstanding.
• During the second quarter of 2024, SLB issued $500 million of 5.00% Senior Notes due 2027, $500 million of 5.00% Senior Notes due 2029, and $500 million of 5.00% Senior Notes due 2034.• During the second quarter of 2024, SLB and Aker Carbon Capture ASA (“ACC”) announced the closing of their previously announced joint venture. The new company, SLB Capturi, combines technology portfolios, expertise, and operation platforms to support accelerated carbon capture adoption for industrial decarbonization at scale. At closing, SLB paid NOK 4.1 billion ($0.4 billion) in cash to ACC for the purchase of 80% of the shares in Aker Carbon Capture Holdings AS (“ACCH”), which held the business of ACC. ACC is also entitled to performance-based payments of up to NOK 1.4 billion if certain targets are met over the period from 2025 to 2027.After a lock-up period of three years, ACC is entitled to sell its 20% interest in ACCH to SLB during a period of six months for a price based on the fair market value of the combined business subject to a floor of NOK 1.0 billion and a ceiling of NOK 2.1 billion (the “put option”). Additionally, after the expiration of the put option, SLB has the right to purchase ACC’s 20% interest in the combined business during the following six months for a price based on the fair market value of the combined business subject to a floor of NOK 1.5 billion and a ceiling of NOK 2.6 billion.
• During the first quarter of 2023, SLB sold all of its remaining approximately 9 million shares of Liberty and received net proceeds of $137 million. As a result, SLB recognized a gain of $36 million.
• During the second quarter of 2023, SLB issued $500 million of 4.50% Senior Notes due 2028 and $500 million of 4.85% Senior Notes due 2033.
• During the fourth quarter of 2023, SLB repaid its $1.5 billion of 3.65% Senior Notes that were outstanding.23As of December 31, 2024, SLB had $4.67 billion of cash and short-term investments and committed credit facility agreements with commercial banks aggregating $5.0 billion, all of which was available. SLB believes these amounts, along with cash generated by ongoing operations, will be sufficient to meet future business requirements for the next 12 months and beyond.
On October 17, 2024, SLB entered into a definitive agreement to sell its interest in the Palliser APS project in Canada. Under the terms of the agreement, SLB will receive cash proceeds of approximately $430 million, subject to closing adjustments that are typical for such a transaction. The transaction, which is subject to regulatory approval and other customary closing conditions, is expected to close in the first quarter of 2025. SLB recorded revenue of approximately $0.5 billion relating to this project during 2024.
The following table reflects the carrying amounts of SLB’s debt at December 31, 2024 by year of maturity:(Stated in millions)
After20252026
2027
2028
2029
2030
2031
20322032Total
Fixed rate debt4.00% Senior Notes
$
523
523
1.40% Senior Notes
500
5001.375% Guaranteed Notes
$1,040
1,0401.00% Guaranteed Notes624
6240.25% Notes
$936
9365.00% Senior Notes495
4953.90% Senior Notes
$1,478
1,4784.50% Senior Notes
497
497
4.30% Senior Notes
$
848
848
5.00% Senior Notes493
4932.65% Senior Notes
$1,250
1,2500.50% Notes
$935
9352.00% Guaranteed Notes
$1,034
1,0344.85% Senior Notes
$498
4985.00% Senior Notes489
4897.00% Notes197
1975.95% Notes
111
111
5.13% Notes
98
98
Total fixed rate debt
$1,023$1,664$1,431$1,975$1,341$1,250$935$1,034$1,393$12,046Variable rate debt28-
-
-
-
-
-
-
-28Total
$1,051$1,664$1,431$1,975$1,341$1,250$935$1,034$1,393$12,074Interest payments on fixed rate debt obligations by year are as follows:
(Stated in millions)2025
$
4212026387
2027
341
2028
262
2029192Thereafter584$2,187See Note 14, Leases of the Consolidated Financial Statements for details regarding SLB’s lease obligations.
SLB has outstanding letters of credit/guarantees that relate to business performance bonds, customs/excise tax commitments, facility lease/rental obligations, etc. These were entered into in the ordinary course of business and are customary practices in the various countries where SLB operates.
Critical Accounting EstimatesThe preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires SLB to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expenses. The following accounting policies involve “critical accounting
24
estimates” because they are particularly dependent on estimates and assumptions made by SLB about matters that are inherently uncertain.SLB bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Allowance for Doubtful AccountsSLB maintains an allowance for doubtful accounts in order to record accounts receivable at their net realizable value. Judgment is involved in recording and making adjustments to this reserve. Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance may be required in future periods depending on how such potential issues are resolved, or if the financial condition of SLB’s customers were to deteriorate resulting in an impairment of their ability to make payments.
As a large multinational company with a long history of operating in a cyclical industry, SLB has extensive experience in working with its customers during difficult times to manage its accounts receivable. During weak economic environments or when there is an extended period of weakness in oil and gas prices, SLB typically experiences delays in the payment of its receivables. However, except for a $469 million write-off during 2017 as a result of the political and economic conditions in Venezuela, SLB has not historically had material write-offs due to uncollectible accounts receivable. SLB has a global footprint in more than 100 countries. As of December 31, 2024, three of those countries individually accounted for greater than 5% of SLB’s net accounts receivable balance, of which only one (the United States) accounted for greater than 10% of such receivables.
As of December 31, 2024, the United States represented 11% of SLB’s net accounts receivable balance. As of December 31, 2024, Mexico represented 9.7% of SLB's net accounts receivable balance. (See Note 10 to the Consolidated Financial Statements ). SLB’s receivables from its primary customer in Mexico are not in dispute and SLB has not historically had any material write-offs due to uncollectible accounts receivable relating to this customer.Goodwill, Intangible Assets and Long-Lived Assets
SLB records the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. The goodwill relating to each of SLB’s reporting units is tested for impairment annually as well as when an event, or change in circumstances, indicates an impairment may have occurred.
Under generally accepted accounting principles, SLB has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of one or more of its reporting units is greater than its carrying amount. If, after assessing the totality of events or circumstances, SLB determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, there is no need to perform any further testing. However, if SLB concludes otherwise, then it is required to perform a quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded based on that difference.SLB has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.
SLB elected to perform the qualitative assessment described above for purposes of its annual goodwill impairment test in 2024. Based on this assessment, SLB concluded it was more likely than not that the fair value of each of its reporting units was greater than its carrying amount. Accordingly, no further testing was required.Long-lived assets, including fixed assets, intangible assets, and investments in APS projects, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing for impairment, the carrying value of such assets is compared to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. If such cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to reduce the carrying value of the long-lived asset to its estimated fair value. The determination of future cash flows as well as the estimated fair value of long-lived assets involves significant estimates on the part of management. If there is a material change in economic conditions or other circumstances influencing the estimate of future cash flows or fair value, SLB could be required to recognize impairment charges in the future.
Income TaxesSLB conducts business in more than 100 tax jurisdictions, a number of which have tax laws that are not fully defined and are evolving. SLB’s tax filings are subject to regular audits by the tax authorities. These audits may result in assessments for additional taxes that are resolved with the authorities or, potentially, through the courts. SLB recognizes the impact of a tax position in its financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits. Estimates of these tax liabilities are judgmental and are made based upon prior experience and are updated in light of changes in facts and circumstances. However, due to the uncertain and complex application of tax regulations, the ultimate resolution of audits may result in liabilities that could be materially different from these estimates. In such an event, SLB will record additional tax expense or tax benefit in the period in which such resolution occurs.25Revenue Recognition for Certain Long-term Construction-type ContractsSLB recognizes revenue for certain long-term construction-type contracts over time. These contracts involve significant design and engineering efforts in order to satisfy custom designs for customer-specific applications. Under this method, revenue is recognized as work progresses on each contract. Progress is measured by the ratio of actual costs incurred to date on the project in relation to total estimated project costs. Approximately 9% of SLB’s revenue in 2024, 6% in 2023, and 5% in 2022, was recognized under this method.The estimate of total project costs has a significant impact on both the amount of revenue recognized as well as the related profit on a project. Revenue and profits on contracts can also be significantly affected by change orders and claims. Profits are recognized based on the estimated project profit multiplied by the percentage complete. Due to the nature of these projects, adjustments to estimates of contract revenue and total contract costs are often required as work progresses. Any expected losses on a project are recorded in full in the period in which they become probable.
Pension and Postretirement Benefits
SLB’s pension and postretirement benefit obligations are described in detail in Note 17 to the Consolidated Financial Statements . The obligations and related costs are calculated using actuarial concepts, which include critical assumptions related to the discount rate and the expected rate of return on plan assets. These assumptions are important elements of expense and/or liability measurement and are updated on an annual basis, or upon the occurrence of significant events.
The discount rate that SLB uses reflects the prevailing market rate of a portfolio of high-quality debt instruments with maturities matching the expected timing of payment of the related benefit obligations. The following summarizes the discount rates utilized by SLB for its various pension and postretirement benefit plans:• The discount rate utilized to determine the liability for SLB’s United States pension plans and postretirement medical plan was 5.70% at December 31, 2024 and 5.25% at December 31, 2023.
• The weighted-average discount rate utilized to determine the liability for SLB’s international pension plans was 5.67% at December 31, 2024 and 5.14% at December 31, 2023.
• The discount rate utilized to determine expense for SLB’s United States pension plans and postretirement medical plan was 5.25% in 2024 and 5.50% in 2023.
• The weighted-average discount rate utilized to determine expense for SLB’s international pension plans was 5.14% in 2024 and 5.41% in 2023.
The expected rate of return for SLB’s retirement benefit plans represents the long-term average rate of return expected to be earned on plan assets based on expectations regarding future rates of return for the portfolio considering the asset allocation and related historical rate of return. The average expected rate of return on plan assets for the United States pension plans was 6.00% in both 2024 and 2023. The weighted average expected rate of return on plan assets for the international pension plans was 5.91% in 2024 and 6.00% in 2023. A higher expected rate of return decreases pension expense.The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant, for SLB’s United States and international pension plans:
(Stated in millions)
Effect onEffect on 2024
Dec. 31, 2024Change in Assumption
Pretax Expense
Obligation
25 basis point decrease in discount rate-$1
+$32425 basis point increase in discount rate+$3
-$30825 basis point decrease in expected return on plan assets+$31-
25 basis point increase in expected return on plan assets-$31-The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant, for SLB’s United States postretirement medical plans:(Stated in millions)
Effect onEffect on 2024
Dec. 31, 2024Change in Assumption
Pretax Expense
Obligation
25 basis point decrease in discount rate
+$2
+$22
25 basis point increase in discount rate
-$2
-$2126
FY 2025-12-31 (later)
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis contains forward-looking statements, including, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions, and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Item 1A. Risk Factors” of this Annual Report on Form 10-K.SLB previously reported its results on the basis of four Divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. Commencing the third quarter of 2025, SLB's Digital business is reported as a separate Division. Additionally, SLB's Asset Performance Solutions ("APS"), Data Center Solutions, and SLB Capturi businesses are now reported in the All Other category. The acquired ChampionX businesses are predominantly reported in SLB's Production Systems Division, with the exception of its digital business, which is reported in SLB's Digital Division. Prior periods have been recast to conform to the current presentation.
2025 Executive Overview
Although 2025 presented a challenging backdrop for the industry—with lower commodity prices, geopolitical uncertainty and an oversupplied oil market—we continued to build resilience across our portfolio by accelerating our strategy. We completed the acquisition of ChampionX during the third quarter in an all-stock transaction valued at $4.9 billion. The combined portfolio, technology capabilities and digital leadership positions SLB to create value for its customers and stakeholders by increasing its exposure to the growing production and recovery market while delivering best-in-class workflow integration across production chemicals and artificial lift. In addition to growing our emphasis on production and recovery, we also increased deployment of AI solutions and the rapid expansion of our Data Center Solutions business.
Amidst lower upstream spending, global revenue of $35.7 billion declined 2% year on year, while we generated $6.5 billion of cash flow from operations and $4.1 billion of free cash flow, enabling us to return $4.0 billion to shareholders.
Excluding the $1.5 billion of revenue from the acquisition of ChampionX, revenue declined 6% year on year as growth in our Digital and Data Center Solutions businesses were more than offset by declines in Saudi Arabia, Mexico and offshore Sub-Saharan Africa.
International revenue declined 5% year on year due to the lower activity in Saudi Arabia, Mexico and Sub-Saharan Africa while North America revenue grew 12% driven by the ChampionX acquisition. Excluding the impact of this transaction, North American revenue declined 2% despite a 5% drop in upstream spending, supported by growth in Data Center Solutions which grew 121% year on year. This business is expanding rapidly as we strengthen strategic partnerships with hyperscalers to leverage our modular data center manufacturing capabilities.
Digital revenue increased 9% on a full-year basis driven by significant uptake in Digital Operations as well as steady growth in Platforms & Applications as customers continued to invest in automated solutions to improve performance and efficiency.
SLB concluded the year with a very strong fourth quarter driven by Production Systems, Digital and Reservoir Performance. Notably, fourth quarter revenue increased sequentially across each of our four geographies for the first time since the second quarter of 2024, reflecting stabilized global upstream activity. We experienced sequential organic revenue growth both in North America and in the international markets, driven by higher offshore activity and strong year-end product and digital sales in Latin America, the Middle East and Asia, across Sub-Saharan Africa and in North America Offshore.
As we move into 2026, we believe the headwinds we experienced in key regions in 2025 are behind us. In particular, we expect rig activity in the Middle East, to increase compared to today’s level, and our footprint in the region puts us in a strong position to benefit from this recovery.
As economics remain challenged, production and recovery activity is becoming a strategic priority for our customers to unlock incremental barrels at the lowest cost. This is translating into higher demand particularly for intervention services, artificial lift, production chemicals and SLB OneSubsea.
We expect that Data Center Solutions will be our fastest growing business for years to come, and Digital will continue to grow at highly accretive margins. Both present differentiated growth opportunities for SLB in 2026 and beyond.
SLB has consistently proven that the unique strengths of our portfolio enable us to create differentiated value and generate significant cash flows in varied market conditions.
As we move through the year, we anticipate that activity will gradually improve in the key markets where we operate, giving us the confidence that we will generate strong cash flows, once again, in 2026.
Aligned with our clear priority to create value for investors, we are committed to returning more than $4 billion to shareholders in 2026 through dividends and share repurchases.
15
Fourth Quarter 2025 Results(Stated in millions)Fourth Quarter 2025
Third Quarter 2025Pretax
Pretax
Revenue
Income
Revenue
IncomeDigital$825$280$658$187Reservoir Performance1,748
342
1,682
312Well Construction2,949
550
2,967
558Production Systems4,078
664
3,474
559
All Other
445
85
397
96Eliminations & other(300)(114)(250)(86)Corporate & other (1)(208)(203)
Interest income (2)31
37Interest expense (3)(126)(142)
Charges & credits (4)(561)(318)
$9,745$943$8,928$1,000(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.(2) Excludes interest income included in the segments’ income (fourth quarter 2025: $- million; third quarter 2025: $- million).
(3) Excludes interest expense included in the segments’ income (fourth quarter 2025: $- million; third quarter 2025: $- million).(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements .Fourth-quarter revenue of $9.7 billion increased 9% sequentially with international revenue increasing 8% and North America revenue increasing 15%. These results reflect a full quarter of activity from the acquired ChampionX businesses which contributed $879 million of revenue, consisting of $583 million in North America and $266 million in the international markets. Third-quarter 2025 revenue reflected two months of activity from ChampionX, which contributed revenue of $579 million, consisting of $387 million in North America and $171 million in the international markets.
Excluding the impact of the acquisition, international fourth-quarter 2025 revenue increased 7% and North America fourth-quarter 2025 revenue increased 6% sequentially. Fourth quarter revenue increased sequentially across all the four geographic areas for the first time since the second quarter of 2024 as global upstream markets have stabilized. The organic sequential revenue growth both in the international markets and North America was driven by higher offshore activity and strong year-end product and digital sales, most notably in Latin America, the Middle East and Asia, across Sub-Saharan Africa and Gulf of America.
Digital
Digital revenue reached $825 million, up 25% sequentially, driven by a $104 million increase in Digital Exploration as a result of year-end sales in the Gulf of America, Brazil and Angola, as well as robust increases in Digital Operations and Platforms & Applications.
Digital pretax operating margin expanded 557 basis points sequentially to 34%, reflecting improved profitability from strong Digital Exploration activity, robust growth in Digital Operations, and higher Platforms & Applications revenue.Reservoir PerformanceReservoir Performance revenue of $1.7 billion increased 4% sequentially, primarily driven by higher stimulation activity in the Middle East & Asia and higher intervention activity in Europe & Africa.
Reservoir Performance pretax operating margin of 20% increased 105 basis points sequentially, reflecting improved profitability in evaluation and intervention services due to the higher uptake of premium technologies.Well ConstructionWell Construction revenue of $2.9 billion decreased 1% sequentially as higher offshore drilling activity in North America and Europe & Africa was more than offset by declines in certain land markets.
Well Construction pretax operating margin of 19% was essentially flat sequentially.
16Production SystemsProduction Systems revenue of $4.1 billion increased 17% sequentially, reflecting a full quarter of activity from the acquired ChampionX production chemicals and artificial lift businesses. Excluding the impact of the acquisition, Production Systems revenue increased 11% sequentially driven by strong sales of completions, artificial lift, and production chemicals.
Production Systems pretax operating margin of 16% increased 20 basis points sequentially mainly driven by stronger profitability in completions and production chemicals.
All Other
Revenue of $445 million increased $48 million sequentially largely due to higher APS revenue in Ecuador as a result of the resumption of production following the pipeline disruption during the third quarter.
Pretax operating income declined $11 million sequentially as improved profitability from the higher revenue in APS in Ecuador was more than offset by a significant loss on one particular project in SLB Capturi.
Full-Year 2025 Results
(Stated in millions)
2025
2024
Pretax
Pretax
Revenue
Income
Revenue
Income
Digital
$2,660
$745
$2,439
$612
Reservoir Performance
6,820
1,250
7,177
1,452
Well Construction
11,856
2,248
13,357
2,826
Production Systems
13,325
2,184
11,935
1,900
All Other
1,987
498
2,117
775
Eliminations & other
(940)
(351)
(736)
(244)
Corporate & other (1)
(759)
(744)
Interest income (2)
134
134
Interest expense (3)
(551)
(498)
Charges & credits (4)
(1,107)
(541)
$35,708
$4,291
$36,289
$5,672
(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.
(2) Excludes interest income included in the segments’ income (2025: $2 million; 2024: $40 million).
(3) Excludes interest expense included in the segments’ income (2025: $7 million; 2024: $14 million).
(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements .
Full-year 2025 revenue of $35.7 billion decreased 2%, or $580 million year on year. Excluding the $1.5 billion of revenue from the acquired ChampionX businesses, revenue declined 6% year on year as growth in the Digital and Data Center Solutions businesses were more than offset by activity reductions in Saudi Arabia, Mexico and offshore Sub-Saharan Africa.
International revenue declined 5% year on year due to the lower activity in Saudi Arabia, Mexico and Sub-Saharan Africa. North America revenue grew 12% year on year primarily driven by the acquisition of ChampionX. Excluding the impact of this transaction, North America revenue declined 2% despite a 5% drop in upstream spending supported by growth in Data Center Solutions, which grew 121% year on year.
Digital
Digital revenue of $2.7 billion grew 9% year on year due to strong growth from both Digital Operations and Platforms & Applications. The acquisition of ChampionX also accounted for $48 million of the increase.
Digital pretax operating margin of 28% expanded 291 bps year on year primarily driven by the higher revenue and efficiency gains.
Reservoir Performance
Reservoir Performance revenue of $6.8 billion decreased 5% year on year primarily due to a slowdown in evaluation and stimulation activity in the international markets.
17
Reservoir Performance pretax operating margin of 18% contracted 191 bps year on year due to the lower evaluation and stimulation activity.
Well Construction
Well Construction revenue of $11.9 billion decreased 11% year on year driven by a broad reduction in drilling activity both internationally, mainly in Mexico, Saudi Arabia, and offshore Africa, and in North America.
Well Construction pretax operating margin of 19% declined 220 bps year on year driven by the widespread activity reductions.
Production Systems
Production Systems revenue of $13.3 billion increased 12% year on year reflecting five months of activity from the acquired ChampionX production chemicals and artificial lift businesses, which contributed $1.45 billion of revenue. Excluding the impact of this acquisition, Production Systems revenue was essentially flat year on year.
Production Systems pretax operating margin of 16% was essentially flat year on year.
All Other
Revenue of $2.0 billion decreased 6% year on year largely due to the absence of approximately $290 million of revenue following the divestiture of SLB’s interest in the Palliser APS project in Canada at the end of the second quarter of 2025 and the loss of approximately $100 million of APS revenue due to production interruption arising from a pipeline disruption in Ecuador during the third quarter of 2025. These decreases were partially offset by a $251 million, or 121%, increase in Data Center Solutions revenue.
Pretax operating income decreased $277 million year on year primarily due to the effects of the divestiture of the Palliser asset, the pipeline disruption in Ecuador and a significant loss on one particular project in SLB Capturi.Full-Year 2024 Results
(Stated in millions)
2024
2023
Pretax
Pretax
Revenue
Income
Revenue
IncomeDigital
$2,439
$612
$2,034
$366Reservoir Performance
7,177
1,452
6,561
1,263
Well Construction
13,357
2,826
13,478
2,932
Production Systems11,935
1,9009,831
1,245All Other
2,117
775
1,844
892Eliminations & other(736)
(244)
(613)
(175)Corporate & other (1)(744)
(729)Interest income (2)
134
87
Interest expense (3)(498)
(489)Charges & credits (4)(541)
(110)
$36,289
$5,672
$33,135
$5,282(1) Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.
(2) Excludes interest income included in the segments’ income (2024: $40 million; 2023: $13 million).
(3) Excludes interest expense included in the segments’ income (2024: $14 million; 2023: $14 million).
(4) Charges and credits are described in detail in Note 3 to the Consolidated Financial Statements .2024 was a strong year for SLB as it successfully navigated evolving market conditions as full year revenue of $36.3 billion increased 10% year on year. Approximately 46% of this increase came from the acquisition of the Aker Solutions subsea business (“Aker”) in the fourth quarter of 2023.
Full-year results were highlighted by 12% international revenue growth. This performance was led by the Middle East & Asia and Europe & Africa, which grew 18% and 13%, respectively. The Middle East & Asia achieved record revenues, while growth in Europe & Africa was bolstered by the acquisition of the Aker subsea business. Excluding this acquired business, international revenue increased 7% year over
18
year, outperforming the rate of upstream investment and rig activity over the same period. North America revenue decreased 1% due to lower drilling in US land.
SLB’s Core divisions — Reservoir Performance, Well Construction and Production Systems — delivered 9% revenue growth compared to the prior year, led by 21% growth in Production Systems, largely due to the subsea acquisition. Production Systems grew 9% organically due to double-digit increases in surface systems, completions and artificial lift. Reservoir Performance also delivered 9% growth, underpinned by strong stimulation and intervention activity in the production space.
Digital revenue, which reached $2.44 billion for the year, increased 20% year on year. Accelerated adoption of digital technologies marked a milestone year, highlighted by strategic collaborations with cross-industry leaders, the launch of the Lumi data and AI platform, new Performance Live centers to enable remote operations, and the achievement of fully autonomous drilling operations.
Digital
Digital revenue of $2.4 billion increased 20% year on year driven by the accelerated adoption of digital technologies and higher sales of exploration data.
Digital & Integration pretax operating margin of 25% increased 710 bps year on year primarily as a result of the revenue growth.Reservoir Performance
Reservoir Performance revenue of $7.2 billion increased 9% year on year due to increased stimulation and intervention activity, with approximately 75% of the revenue growth coming from the Middle East & Asia.
Reservoir Performance pretax operating margin of 20% expanded 99 bps year on year due to improved profitability in the international markets driven by higher activity and improved pricing from increased technology intensity.
Well Construction
Well Construction revenue of $13.4 billion decreased 1% year on year. North America revenue declined 13% due to lower drilling activity in US land largely offset by a 2% increase in international revenue, primarily in the Middle East & Asia.
Well Construction pretax operating margin of 21% decreased 59 bps year on year driven by the reduced activity in North America.Production SystemsProduction Systems revenue of $11.9 billion increased 21% year on year mainly due to the acquisition of the Aker subsea business. Excluding the effects of the Aker subsea acquisition, revenue grew by 9% year on year driven by strong international sales across the portfolio.
Production Systems pretax operating margin of 16% expanded 325 bps year on year driven by a favorable activity mix, execution efficiency, and conversion of improved-price backlog.
All Other
Revenue of $2.1 billion increased 15% year on year with approximately 75% of the increase attributable to the Data Center Solutions business. APS revenue was essentially flat. The remaining increase was driven by the SLB Capturi joint venture which was formed in the second quarter of 2024.
Pretax operating income decreased $117 million year on year primarily due to the effects of high APS amortization expense and lower gas prices.
Interest & Other Income
Interest & other income consisted of the following:(Stated in millions)20252024
2023
Earnings of equity method investments
$196
$182
$
206Gain on sale of Palliser APS project *
149
-
-Interest income136174
100Gain on sale of investment *
-24
-
Gain on sale of Liberty shares
--36
$481
$380
$
34219
* See Note 3 to the Consolidated Financial Statements.
Interest income decreased $39 million in 2025 as compared to 2024 primarily due to lower average cash and short-term investment balances and increased $74 million in 2024 as compared to 2023 primarily due to higher average cash and short-term investment balances.Other
Research & engineering and General & administrative expenses, as a percentage of Revenue , were as follows:20252024
2023
Research & engineering2.0
%2.1
%
2.1
%
General & administrative1.0
%1.1
%
1.1
%
Charges and CreditsSLB recorded charges and credits during 2025, 2024 and 2023. These charges and credits, which are summarized below, are more fully described in Note 3 to the Consolidated Financial Statements .
The following is a summary of the 2025 charges and credits:(Stated in millions)
Pretax Charge (Credit)
Tax Benefit (Expense)
Noncontrolling Interest
Net
First quarter:Workforce reductions$158$10$-$148
Other merger and integration
49
1
4
44
Second quarter:
Impairment of equity method investment
69
12
-
57
Workforce reductions
66
3
-
63
Other merger and integration
35
4
4
27
Gain on sale of Palliser APS project
(149
)
(4
)
-
(145
)
Third quarter:
Amortization of inventory purchase accounting adjustment
66
15
-
51
Acquisition-related professional fees
61
-
-
61
Workforce reductions
57
4
-
53
Acquisition-related employee benefits
54
2
-
52
Impairment of equity-method investment
52
4
-
48
Other merger and integration
28
2
4
22
Fourth quarter:
Goodwill impairment
210
-
41
169
Workforce reductions
126143
109
Amortization of inventory purchase accounting adjustment
100
23
-
77
Other merger and integration
125
21
12
92
Reversal of valuation allowance relating to deferred tax assets
-
92
-
(92
)
$
1,107
$
203
$
68
$
836
The following is a summary of the 2024 charges and credits:
20
(Stated in millions)
Pretax Charge (Credit)
Tax Benefit (Expense)
Noncontrolling Interest
Net
First quarter:
Amortization of inventory purchase accounting adjustment
$
14
$
4
$
3
$
7
Merger and integration
11
2
2
7Second quarter:
Workforce reductions
111
17
-
94Merger and integration
16
1510
Amortization of inventory purchase accounting adjustment
15
4
38Third quarter
-
Workforce reductions
65
10
-
55Merger and integration
33
6
4
23
Amortization of inventory purchase accounting adjustment
14
4
37Fourth quarter
-
Asset impairments
162
23
-
139Merger and integration63
6
7
50
Workforce reductions
61
10
-
51
Gain on sale of investment
(24
)
-
-
(24
)
$
541
$
87
$
27
$
427
The following is a summary of the 2023 charges and credits:(Stated in millions)
Pretax Charge (Credit)
Tax Benefit (Expense)
Noncontrolling Interests
Net
First quarter:
Gain on sale of Liberty shares
$
(36
)
$
(8
)
$
-
$
(28
)
Fourth quarter:Currency devaluation loss in Argentina
90
-
-
90Merger and integration
45
5
6
34
Amortization of inventory purchase accounting adjustment
11
3
2
6$
110
$
-
$
8
$
102
Liquidity and Capital Resources
Details of the components of liquidity as well as changes in liquidity follow:
(Stated in millions)
Dec. 31,
Dec. 31,Dec. 31,Components of Liquidity:20252024
2023
Cash
$3,036
$3,544
$
2,900
Short-term investments1,1761,125
1,089
Short-term borrowings and current portion of long-term debt(1,894
)(1,051
)
(1,123
)
Long-term debt(9,742
)(11,023
)
(10,842
)
Net debt (1)
$(7,424
)
$(7,405
)
$
(7,976
)21Changes in Liquidity:20252024
2023
Net income
$3,451
$4,579
$
4,275Depreciation and amortization (2)2,6432,519
2,312Impairments
331
162
-
Amortization of inventory purchase accounting adjustment
166
43
11
Gains on sales of investments
-
(24
)
(36
)
Gain on sale of Palliser APS project
(149
)
-
-Stock-based compensation expense332316
293Deferred taxes
(279
)
(41
)
28Earnings of equity method investments, less dividends received(59
)(18
)
(132
)
Increase in working capital(60)(1,020)(159
)US federal tax refund
--85
Other113
86
(40)
Cash flow from operations6,4896,602
6,637
Capital expenditures(1,694
)(1,931
)
(1,939
)
APS investments(428
)(483
)
(507
)
Exploration data capitalized(252
)(198
)
(153
)
Free cash flow (3)4,1153,990
4,038
Dividends paid(1,602
)(1,533
)
(1,317
)
Stock repurchase program(2,414
)(1,737
)
(694
)Proceeds from employee stock purchase plan and exercise of stock options
229
248
281
Net debt assumed in connection with ChampionX acquisition
(133)-
-
Proceeds from sale of Palliser APS project
338
-
-
Proceeds from sale of ChampionX Drilling Technologies business
286
-
-
Other business acquisitions and investments, net of cash acquired plus debt assumed
(187)(553
)
(330
)
Proceeds from sale of Liberty shares
--137
Purchases of Blue Chip Swap securities(224
)(207
)
(185
)
Proceeds from sales of Blue Chip Swap securities194152
97Taxes paid on net-settled stock-based compensation awards
(61
)
(90
)
(169
)Other(51
)53
(195
)
Change in net debt before impact of changes in foreign exchange rates490323
1,663
Impact of changes in foreign exchange rates(509
)248
(307
)
Decrease in Net Debt(19
)571
1,356
Net Debt, Beginning of period(7,405
)(7,976
)
(9,332
)
Net Debt, End of period
$(7,424
)
$(7,405
)
$
(7,976
)
(1) “Net debt” represents gross debt less cash and short-term investments. Management believes that Net debt provides useful information to investors and management regarding the level of SLB’s indebtedness by reflecting cash and investments that could be used to repay debt. Net debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt.
(2) Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs and APS investments.(3) “Free cash flow” represents cash flow from operations less capital expenditures, APS investments and exploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of our ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations.Key liquidity events during 2025, 2024 and 2023 included:
• In January 2026, SLB announced a 3.5% increase to its quarterly cash dividend from $0.285 per share of outstanding common stock to $0.295 per share, beginning with the dividend payable in April 2026. In January 2025, SLB announced a 3.6% increase to its quarterly cash dividend from $0.275 per share of outstanding common stock to $0.285 per share, beginning with the dividend payable in April 2025. In January 2024, SLB announced a 10% increase to its quarterly cash dividend from $0.25 per share of outstanding common stock to $0.275 per share, beginning with the dividend paid in April 2024. Dividends paid during 2025, 2024 and 2023 were $1.6 billion, $1.5 billion and $1.3 billion, respectively.
• Capital investments (consisting of capital expenditures, APS investments, and exploration data capitalized) were $2.4 billion in 2025, and $2.6 billion in both 2024 and 2023. Capital investments during 2026 are expected to be approximately $2.5 billion.
• During the fourth quarter of 2025, SLB repaid its $0.5 billion 4.00% Senior Notes due 2025.
• During the third quarter of 2025, SLB repaid its $0.5 billion 1.40% Senior Notes due 2025.
22
• During the third quarter of 2025, SLB fully repaid all the $0.6 billion of debt assumed in connection with the acquisition of ChampionX.
• During the third quarter of 2025 and concurrent with the close of the ChampionX acquisition, the ChampionX Drilling Technologies business was disposed of and SLB received $286 million of proceeds.
• As of December 31, 2025, SLB cumulatively repurchased $5.9 billion of its common stock under its $10 billion share repurchase program.The following table summarizes the activity under the share repurchase program:
(Stated in millions, except per share amounts)
Total Cost
Total Number
Average Price
of Shares
of Shares
Paid per
Purchased
Purchased
Share2025
$
2,414
60.0
$
40.232024
$
1,737
38.4
$
45.29
2023
$
694
13.3
$
52.05• During the second quarter of 2025, SLB completed the sale of its interest in the Palliser APS project in Canada in exchange for net cash proceeds of $338 million. SLB recorded revenue of approximately $0.2 billion relating to this project during the six months ended June 30, 2025 and approximately $0.5 billion during 2024.• During the fourth quarter of 2024, SLB repaid its €0.6 billion of 0.00% Notes that were outstanding.
• During the second quarter of 2024, SLB issued $500 million of 5.00% Senior Notes due 2027, $500 million of 5.00% Senior Notes due 2029, and $500 million of 5.00% Senior Notes due 2034.• During the second quarter of 2024, SLB and Aker Carbon Capture ASA (“ACC”) announced the closing of their previously announced joint venture. The new company, SLB Capturi, combines technology portfolios, expertise, and operation platforms to support accelerated carbon capture adoption for industrial decarbonization at scale. At closing, SLB paid NOK 4.1 billion ($0.4 billion) in cash to ACC for the purchase of 80% of the shares in Aker Carbon Capture Holdings AS (“ACCH”), which held the business of ACC.After a lock-up period of three years, ACC is entitled to sell its 20% interest in ACCH to SLB during a period of six months for a price based on the fair market value of the combined business subject to a floor of NOK 1.0 billion and a ceiling of NOK 2.1 billion (the “put option”). Additionally, after the expiration of the put option, SLB has the right to purchase ACC’s 20% interest in the combined business during the following six months for a price based on the fair market value of the combined business subject to a floor of NOK 1.5 billion and a ceiling of NOK 2.6 billion.
• During the first quarter of 2023, SLB sold all of its remaining approximately 9 million shares of Liberty and received net proceeds of $137 million. As a result, SLB recognized a gain of $36 million.
• During the second quarter of 2023, SLB issued $500 million of 4.50% Senior Notes due 2028 and $500 million of 4.85% Senior Notes due 2033.
• During the fourth quarter of 2023, SLB repaid its $1.5 billion of 3.65% Senior Notes that were outstanding.As of December 31, 2025, SLB had $4.2 billion of cash and short-term investments and committed credit facility agreements with commercial banks aggregating $5.0 billion, all of which was available. SLB believes these amounts, along with cash generated by ongoing operations, will be sufficient to meet future business requirements for the next 12 months and beyond.23The following table reflects the carrying amounts of SLB’s debt at December 31, 2025 by year of maturity:(Stated in millions)
After2026
2027
2028
2029
2030
2031
20322033
2033Total
Fixed rate debt1.375% Guaranteed Notes
$1,177
1,1771.00% Guaranteed Notes707
7070.25% Notes
$1,059
1,0595.00% Senior Notes497
4973.90% Senior Notes
$1,484
1,4844.50% Senior Notes
497
497
4.30% Senior Notes
$
848
848
5.00% Senior Notes494
4942.65% Senior Notes
$1,247
1,2470.50% Notes
$1,058
1,0582.00% Guaranteed Notes
$1,172
1,1724.85% Senior Notes
$495
4955.00% Senior Notes$
487
4877.00% Notes195
1955.95% Notes
111
111
5.13% Notes
98
98
Total fixed rate debt
$1,884$1,556$1,981$1,342$1,247$1,058$1,172$495$891$11,626Variable rate debt10-
-
-
-
-
-
-
-10Total
$1,894$1,556$1,981$1,342$1,247$1,058$1,172$495$891$11,636Interest payments on fixed rate debt obligations by year are as follows:
(Stated in millions)2026$387
2027
341
2028
262
2029204
2030
153Thereafter430$1,777See Note 14, Leases of the Consolidated Financial Statements for details regarding SLB’s lease obligations.
SLB has outstanding letters of credit/guarantees that relate to business performance bonds, customs/excise tax commitments, facility lease/rental obligations, etc. These were entered into in the ordinary course of business and are customary practices in the various countries where SLB operates.
Critical Accounting EstimatesThe preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires SLB to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expenses. The following accounting policies involve “critical accounting estimates” because they are particularly dependent on estimates and assumptions made by SLB about matters that are inherently uncertain.SLB bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Allowance for Doubtful AccountsSLB maintains an allowance for doubtful accounts in order to record accounts receivable at their net realizable value. Judgment is involved in recording and making adjustments to this reserve. Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance
24
may be required in future periods depending on how such potential issues are resolved, or if the financial condition of SLB’s customers were to deteriorate resulting in an impairment of their ability to make payments.
As a large multinational company with a long history of operating in a cyclical industry, SLB has extensive experience in working with its customers during difficult times to manage its accounts receivable. During weak economic environments or when there is an extended period of weakness in oil and gas prices, SLB typically experiences delays in the payment of its receivables. However, SLB has not historically had material write-offs due to uncollectible accounts receivables in its recent past. SLB has a global footprint in more than 100 countries. As of December 31, 2025, three of those countries individually accounted for greater than 5% of SLB’s net accounts receivable balance, of which only one (the United States) accounted for greater than 10% of such receivables.
As of December 31, 2025, the United States represented 13% of SLB’s net accounts receivable balance. As of December 31, 2025, Mexico represented approximately 6% of SLB's net accounts receivable balance. SLB’s receivables from its primary customer in Mexico are not in dispute and SLB has not historically had any material write-offs due to uncollectible accounts receivable relating to this customer.Goodwill, Intangible Assets and Long-Lived Assets
SLB records the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. The goodwill relating to each of SLB’s reporting units is tested for impairment annually as well as when an event, or change in circumstances, indicates an impairment may have occurred.
Under generally accepted accounting principles, SLB has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of one or more of its reporting units is greater than its carrying amount. If, after assessing the totality of events or circumstances, SLB determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, there is no need to perform any further testing. However, if SLB concludes otherwise, then it is required to perform a quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded based on that difference.SLB has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to perform the quantitative goodwill impairment test.
SLB elected to perform the qualitative assessment described above for purposes of its annual goodwill impairment test for each of its Digital, Reservoir Performance, Well Construction and Production Systems reporting units in 2025. Based on this assessment, SLB concluded it was more likely than not that the fair value of each of its reporting units was significantly greater than its carrying amount. Accordingly, no further testing was required.
SLB performed a quantitative goodwill impairment test for SLB Capturi, its remaining reporting unit, using the income approach to estimate its fair value. Based on the results of this test, SLB recorded a $210 million goodwill impairment charge during 2025 relating to this reporting unit.
The income approach estimates the fair value by discounting the reporting unit’s estimated future cash flows using SLB’s estimate of the discount rate, or expected return, that a marketplace participant would have required as of the valuation date. The more significant assumptions inherent in the income approach include the estimated future net annual cash flows for the reporting unit and the discount rate. SLB selected the assumptions used in the discounted cash flow projections using current and anticipated market conditions and estimated growth rates. SLB’s estimates are based upon assumptions believed to be reasonable.
The discount rate utilized to value the reporting unit was 14.75%. Assuming all other assumptions and inputs used in the discounted cash flow analysis were held constant, a 50-basis point increase in the discount rate assumption would have increased the goodwill impairment charge by approximately $32 million. Conversely, assuming all other assumptions and inputs used in the respective discounted cash flow analysis were held constant, a 50-basis point decrease in the discount rate assumption would have decreased the goodwill impairment charge by approximately $36 million.Long-lived assets, including fixed assets, intangible assets, and investments in APS projects, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing for impairment, the carrying value of such assets is compared to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. If such cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to reduce the carrying value of the long-lived asset to its estimated fair value. The determination of future cash flows as well as the estimated fair value of long-lived assets involves significant estimates on the part of management. If there is a material change in economic conditions or other circumstances influencing the estimate of future cash flows or fair value, SLB could be required to recognize impairment charges in the future.
Income TaxesSLB conducts business in more than 100 tax jurisdictions, a number of which have tax laws that are not fully defined and are evolving. SLB’s tax filings are subject to regular audits by the tax authorities. These audits may result in assessments for additional taxes that are resolved with the authorities or, potentially, through the courts. SLB recognizes the impact of a tax position in its financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits. Estimates of these tax liabilities are judgmental and are made based upon prior experience and are updated in light of changes in facts and circumstances. However, due to the uncertain25and complex application of tax regulations, the ultimate resolution of audits may result in liabilities that could be materially different from these estimates. In such an event, SLB will record additional tax expense or tax benefit in the period in which such resolution occurs.Revenue Recognition for Certain Long-term Construction-type ContractsSLB recognizes revenue for certain long-term construction-type contracts over time. These contracts involve significant design and engineering efforts in order to satisfy custom designs for customer-specific applications. Under this method, revenue is recognized as work progresses on each contract. Progress is measured by the ratio of actual costs incurred to date on the project in relation to total estimated project costs. Approximately 11% of SLB’s revenue in 2025, 9% in 2024, and 6% in 2023, was recognized under this method.The estimate of total project costs has a significant impact on both the amount of revenue recognized as well as the related profit on a project. Revenue and profits on contracts can also be significantly affected by change orders and claims. Profits are recognized based on the estimated project profit multiplied by the percentage complete. Due to the nature of these projects, adjustments to estimates of contract revenue and total contract costs are often required as work progresses. Any expected losses on a project are recorded in full in the period in which they become probable.
Pension and Postretirement Benefits
SLB’s pension and postretirement benefit obligations are described in detail in Note 17 to the Consolidated Financial Statements . The obligations and related costs are calculated using actuarial concepts, which include critical assumptions related to the discount rate and the expected rate of return on plan assets. These assumptions are important elements of expense and/or liability measurement and are updated on an annual basis, or upon the occurrence of significant events.
The discount rate that SLB uses reflects the prevailing market rate of a portfolio of high-quality debt instruments with maturities matching the expected timing of payment of the related benefit obligations. The following summarizes the discount rates utilized by SLB for its various pension and postretirement benefit plans:• The discount rate utilized to determine the liability for SLB’s United States pension plans and postretirement medical plan was 5.55% at December 31, 2025 and 5.70% at December 31, 2024.
• The weighted-average discount rate utilized to determine the liability for SLB’s international pension plans was 5.56% at December 31, 2025 and 5.67% at December 31, 2024.
• The discount rate utilized to determine expense for SLB’s United States pension plans and postretirement medical plan was 5.70% in 2025 and 5.25% in 2024.
• The weighted-average discount rate utilized to determine expense for SLB’s international pension plans was 5.67% in 2025 and 5.14% in 2024.
The expected rate of return for SLB’s retirement benefit plans represents the long-term average rate of return expected to be earned on plan assets based on expectations regarding future rates of return for the portfolio considering the asset allocation and related historical rate of return. The average expected rate of return on plan assets for the United States pension plans was 6.30% in 2025 and 6.00% in 2024. The weighted average expected rate of return on plan assets for the international pension plans was 6.57% in 2025 and 5.91% in 2024. A higher expected rate of return decreases pension expense.The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant, for SLB’s United States and international pension plans:
(Stated in millions)
Effect onEffect on 2025
Dec. 31, 2025Change in Assumption
Pretax Expense
Obligation
25 basis point decrease in discount rate+$8
+$33325 basis point increase in discount rate-$9
-$31725 basis point decrease in expected return on plan assets+$28-
25 basis point increase in expected return on plan assets-$28-26
The following illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant, for SLB’s United States postretirement medical plan:(Stated in millions)
Effect onEffect on 2025
Dec. 31, 2025Change in Assumption
Pretax Expense
Obligation
25 basis point decrease in discount rate
+$2
+$22
25 basis point increase in discount rate
-$2
-$2127