01—Abstract
Summary
Summary of the 10-Q filed July 29, 2026. Cited figures are marked; the original filing is the authoritative source.
SLB reported second-quarter 2026 revenue of $8.97 billiona, up 5% year over year from $8.55 billion and up 3% sequentially from the first quarter.
Growth was driven by the ChampionX acquisition (closed July 2025) and strength in Latin America, Europe & Africa, and Asia, which offset a meaningful drag from Middle East disruptions. Net income attributable to SLB fell to $786 millionb ($0.52 diluted EPS) from $1,014 million ($0.74) a year earlier, reflecting lower pretax income ($1,019 million vs. $1,285 million), higher cost of sales, $69 million of merger and integration charges, and lower interest & other income, which included a $149 million one-time APS gain in the prior-year period. Six-month revenue rose 4% to $17.7 billion, but excluding ChampionX, revenue declined 6%, largely due to a 12% drop in Middle East revenue.
Cash generation was steady but thinner. Operating cash flow for the first six months was $1.85 billionc, versus $1.80 billion a year earlier, and free cash flow was $693 million, versus $725 million. SLB returned capital through $1.10 billion of buybacks and $866 million of dividends, and it raised the quarterly dividend 3.5% to $0.295 per share.
Net debt widened to $8.73 billiond from $7.42 billion at year-end 2025, as the company issued $2.0 billion of senior notes in the second quarter and long-term debt rose to $11.14 billion. Management guides to approximately $2.5 billion of full-year 2026 capital investment and says $4.1 billion of cash and short-term investments plus $5.0 billion of undrawn committed facilities are sufficient for the next 12 months. Key watch items for investors are the duration and severity of the Middle East disruption, margin recovery in Reservoir Performance and Well Construction, and the trajectory of net debt as buybacks continue against a rising debt load.
02—Key points
Key Highlights
- Q2 2026 revenue of $8.97B, up 5% YoY and 3% sequentially; six-month revenue of $17.69B, up 4% YoY (down 6% excluding ChampionX).
- Q2 2026 diluted EPS of $0.52 vs. $0.74 a year ago; net income attributable to SLB of $786M vs. $1,014M, pressured by lower pretax income and a non-recurring $149M APS gain in the prior-year period.
- Middle East conflict cut Middle East revenue 12% in the first half and 13% sequentially in Q2 to $1.66B, weighing on Reservoir Performance (margin 15%) and Well Construction (margin 15%).
- Digital and Production Systems were bright spots: Digital revenue rose 9% sequentially with a 28% pretax margin, while Production Systems revenue rose 7% sequentially to $3.77B with a 16% margin.
- Net debt increased to $8.73B from $7.42B at year-end 2025 after $2.0B of new senior notes in Q2 and continued buybacks; long-term debt reached $11.14B.
- Free cash flow was $693M for the first six months, slightly below $725M a year earlier, while operating cash flow rose to $1.85B.
- Dividend raised 3.5% to $0.295 per quarter; $1.10B spent on buybacks in the first half, with about $3.0B remaining under the $10B program.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 29, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $8.97B$8.55B | +5.0% |
| R&D Expenses | $171.00M$180.00M | −5.0% |
| Interest Expense | $128.00M$142.00M | −9.9% |
| Net Income | $786.00M$1.01B | −22.5% |
| EPS (Basic) | $0.53$0.75 | −29.3% |
| EPS (Diluted) | $0.52$0.74 | −29.7% |
| Shares Outstanding (Basic) | 1.49B1.35B | +10.2% |
| Shares Outstanding (Diluted) | 1.51B1.37B | +10.2% |
05—Questions
Frequently Asked Questions
Why did SLB's earnings decline despite higher revenue?
Revenue rose, but pretax income fell to $1.02B in Q2 from $1.29B. Drivers include Middle East disruptions that lowered activity and margins in Reservoir Performance and Well Construction, higher cost of sales, $69M of merger and integration charges tied to ChampionX, and the absence of the $149M gain on the Palliser APS sale recorded in Q2 2025. Interest & other income also fell to $76M from $252M.
How is SLB's balance sheet and leverage changing?
Net debt rose to $8.73B at June 30, 2026, from $7.42B at December 31, 2025. Long-term debt increased to $11.14B after SLB issued $2.0B of senior notes in Q2 and repaid $729M of debt in the first half. Liquidity remains solid, with $4.1B of cash and short-term investments and $5.0B of undrawn committed credit facilities.
Is SLB's dividend and buyback program still sustainable?
The company raised its quarterly dividend 3.5% to $0.295 per share, and dividends paid were $866M in the first half. Buybacks totaled $1.10B in the first half, and cumulative repurchases reached about $7.0B under the $10B program. Free cash flow of $693M in the first half did not fully cover the combined $1.97B of dividends and buybacks, so the gap was funded partly by new debt and cash on hand.
What is the outlook for the Middle East disruption and capital spending?
The filing does not provide quantitative guidance on Middle East recovery; management says activity has begun to recover in some countries but remains constrained by production shut-ins and security challenges in others. Full-year 2026 capital investments are expected to be about $2.5B, versus $1.2B in the first half, implying higher spending in the second half.
What did the ChampionX acquisition contribute?
ChampionX contributed about $1.7B of revenue and $307M of pretax operating income in the first six months of 2026 within Production Systems. Excluding it, Production Systems revenue declined 3% year on year, and total company revenue would have declined about 6%. Integration costs continued, with $110M of merger and integration charges in the first half.
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