01—Abstract
Summary
Summary of the 10-Q filed April 25, 2025. Cited figures are marked; the original filing is the authoritative source.
SLB LIMITED/NV (SLB) reported a decrease in revenue and net income for the first quarter of 2025 compared to the same period in 2024.
Total revenue was $8.49 billiona, down from $8.71 billion in Q1 2024, while net income attributable to SLB decreased to $797 million ($0.58 per diluted share) from $1.068 billion ($0.74 per diluted share) in the prior year. The company experienced a notable decline in its Well Construction segment, which saw revenue drop 12% year-over-year, largely due to reduced drilling activity in key regions like Mexico and Saudi Arabia. However, the Production Systems segment showed resilience with a 4% revenue increase, driven by strong demand in North America.
The company also highlighted significant restructuring and merger-related charges impacting profitability in the current quarter. SLB demonstrated a strong commitment to returning capital to shareholders, notably with a substantial stock repurchase program amounting to $2.3 billionb in Q1 2025, alongside a 3.6% increase in its quarterly dividend. Despite the revenue headwinds and increased charges, the company maintained a positive free cash flow of $103 million and believes its liquidity position is sufficient to meet future business requirements.
02—Key points
Key Highlights
- Total revenue for Q1 2025 was $8.49 billion, a 3% decrease compared to $8.71 billion in Q1 2024.
- Net income attributable to SLB for Q1 2025 was $797 million, down from $1.068 billion in Q1 2024, resulting in diluted EPS of $0.58 versus $0.74.
- Significant charges of $158 million for workforce reductions and $48 million for merger and integration costs impacted Q1 2025 results.
- Well Construction segment revenue declined 12% year-over-year, driven by reduced drilling activity in several international markets.
- Production Systems segment revenue increased 4% year-over-year, boosted by strong demand in North America.
- The company executed a large stock repurchase program totaling $2.3 billion in Q1 2025 and increased its quarterly dividend by 3.6%.
- Free cash flow for Q1 2025 was $103 million, a positive turnaround from a negative free cash flow of $(222) million in Q1 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 25, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $8.49B$8.71B | −2.5% |
| R&D Expenses | $172.00M$182.00M | −5.5% |
| Interest Expense | $147.00M$113.00M | +30.1% |
| Net Income | $797.00M$1.07B | −25.4% |
| EPS (Basic) | $0.58$0.75 | −22.7% |
| EPS (Diluted) | $0.58$0.74 | −21.6% |
| Shares Outstanding (Basic) | 1.37B1.43B | −4.5% |
| Shares Outstanding (Diluted) | 1.38B1.45B | −4.6% |
05—Questions
Frequently Asked Questions
What drove the decrease in revenue for SLB in the first quarter of 2025?
The primary drivers for the revenue decrease were softer international markets, particularly a significant reduction in drilling activity in Mexico and lower activity in Saudi Arabia, Russia, Egypt, Australia, and India. The Well Construction segment, which is heavily impacted by drilling activity, saw a 12% year-over-year revenue decline. This was partially offset by growth in North America, driven by digital sales and production systems.
What impact did the restructuring and merger-related costs have on SLB's earnings?
SLB incurred $158 million in severance charges for workforce reductions and $48 million in merger and integration-related costs during the first quarter of 2025. These charges directly reduced reported net income and also increased the effective tax rate for the quarter.
How is SLB managing its capital for shareholders and future investments?
SLB is actively returning capital to shareholders through dividends and share repurchases. In Q1 2025, the company increased its quarterly cash dividend by 3.6% to $0.285 per share and completed an accelerated share repurchase program of $2.3 billion. The company also generated $103 million in free cash flow and maintains a strong liquidity position with $3.9 billion in cash and short-term investments, which it believes is sufficient for future business needs.
What are the key risks and uncertainties SLB faces moving forward?
SLB faces risks related to fluctuating commodity prices, global economic and geopolitical conditions, changes in customer spending on exploration and production, regulatory requirements, supply chain challenges, and the potential impact of energy transition initiatives. The company also notes risks associated with the pending ChampionX acquisition, including regulatory approvals and integration challenges.
06—Continue