Key Notes
- SLB’s third-quarter revenue rose 6% from a year earlier to $9.45 billion, while adjusted EPS fell to $0.64.
- The company generated $828 million in free cash flow and bought back $656 million of shares during the quarter.
- Data Center Solutions revenue increased 23% from the previous quarter as SLB develops a business beyond traditional oilfield services.
SLB (NYSE: SLB) reported third-quarter revenue of $9.45 billion, up 6% from a year earlier, as stronger oilfield activity and an expanding data center business helped sales. Profit measures were more mixed, with adjusted earnings per share below last year’s level.
The October 23 results showed adjusted EPS of $0.64, compared with $0.69 a year earlier and $0.55 in the preceding quarter. GAAP net income was $735 million, or $0.49 a share.
The report gives shareholders two growth themes to assess: demand for SLB’s traditional energy services and its effort to build a larger role supplying infrastructure for data centers.
Revenue Growth Includes the ChampionX Acquisition
Quarterly revenue increased 5% from the preceding three months. All geographical areas grew sequentially, with management citing recovering Middle Eastern activity, North American demand and international offshore projects.
The annual comparison includes a change in the scope of the business. ChampionX contributed $956 million of revenue in the latest quarter, compared with $579 million when only two months of the acquired operations were included a year earlier.
Excluding the acquisition’s impact, SLB said global revenue rose 2% year over year. North American revenue increased 13% on that basis, while international revenue was flat.
That underlying comparison is more useful for judging demand than treating the full reported 6% increase as organic growth. The acquisition adds scale, but it also changes the base against which the company’s performance is measured.
Earnings Improve Sequentially but Trail Last Year
Adjusted EBITDA reached $2.07 billion, up 9% from the second quarter and essentially unchanged from a year earlier. The adjusted EBITDA margin was 21.9%, compared with 21.2% in the preceding quarter and 23.1% a year earlier.
The figures show an improvement through the year without a complete recovery to the previous year’s profitability. Higher revenue alone has not produced a corresponding annual increase in every earnings measure.
Production Systems generated $4 billion in revenue, up 15% year over year on the reported basis. Well Construction and Reservoir Performance both grew from the preceding quarter but remained below their year-earlier revenue levels.
SLB’s prepared remarks frame the recovery around energy security, offshore development and efforts to restore production. Those are management’s expectations for the activity cycle, rather than evidence that all planned customer spending has already become revenue.
Data Centers Add a Different Growth Driver
Data Center Solutions revenue increased 23% from the preceding quarter, supported by demand, a broader range of services and expansion into Asia. SLB did not identify that percentage as a year-over-year growth rate.
The business gives the company exposure to investment outside conventional oilfield operations. However, its growth should be assessed alongside the scale and profitability of the established energy businesses, rather than treating SLB as a pure AI infrastructure company.
Its previously announced Kelvion agreement would add thermal-management and heat-exchange technology. The proposed transaction involves approximately $3.4 billion in cash and the assumption of around $700 million in debt, with closing expected in the first half of 2027 subject to approvals and other conditions.
That acquisition remains pending. The financial commitment and future integration work are part of the data center expansion story, alongside potential demand for cooling and related systems.
Cash Generation Funds Returns and Investment
SLB generated $1.51 billion in operating cash flow and $828 million in free cash flow during the quarter. It repurchased 12.9 million shares for $656 million, taking nine-month buybacks to $1.76 billion.
The board also approved a quarterly dividend of $0.295 a share, payable January 7, 2027, to holders of record on December 2. The distribution has been declared, but it is a future payment rather than cash returned in the reported quarter.
As we previously reported, cash generation and shareholder returns have also been central to recent mining results. For SLB, the next test is sustaining cash flow while funding the energy business, expanding data center capabilities and meeting its acquisition commitments.
