01—Abstract
Summary
Summary of the 8-K filed July 24, 2026. Cited figures are marked; the original filing is the authoritative source.
SLB reported second-quarter 2026 results that showed sequential improvement but continued year-on-year weakness, driven largely by the Middle East conflict.
Revenue rose 3% sequentially to $8.97 billiona but fell 5% year on year when excluding the ChampionX acquisition, which contributed $870 million. GAAP diluted EPS was $0.52, up 4% sequentially but down 30% year on year, and EPS excluding charges and credits was $0.55, down 26% year on year. Adjusted EBITDA margin was 21.2%, up 83 bps sequentially but down 284 bps year on year.
Management highlighted broad sequential growth outside the Middle East, where revenue fell 13% sequentially, and a return to year-on-year revenue growth outside that region. Production Systems (up 7% sequentially) and Digital (up 9% sequentially, with 28% pretax margin) drove results. Data Center Solutions revenue grew 80% year on year in the quarter and 63% in the first half, and management targets exceeding a $1 billionb annualized run rate by year-end 2026 and $2 billion by exiting 2027.
Cash flow from operations was $1.36 billionc and free cash flow was $716 million in the quarter. Net debt increased to $8.73 billion from $8.22 billion in the prior quarter, with long-term debt rising to $11.14 billion.
SLB repurchased 12 million shares for $648 milliond and declared a quarterly dividend of $0.295 per share. Investors will be watching whether Middle East activity recovers and whether Data Center Solutions and offshore momentum can offset ongoing softness in Reservoir Performance and Well Construction.
02—Key points
Key Highlights
- Revenue of $8.97 billion, up 3% sequentially and 5% year on year (down 5% year on year excluding ChampionX's $870 million contribution)
- GAAP diluted EPS of $0.52, up 4% sequentially but down 30% year on year; EPS excluding charges and credits of $0.55, down 26% year on year
- Adjusted EBITDA of $1.90 billion (21.2% margin), up 7% sequentially but down 7% year on year; Middle East revenue fell 13% sequentially
- Production Systems revenue rose 7% sequentially to $3.77 billion; Digital revenue rose 9% sequentially to $697 million with a 28% pretax operating margin
- Data Center Solutions revenue grew 80% year on year to $186 million in Q2; management targets a $1 billion run rate by end-2026 and $2 billion by exiting 2027
- Free cash flow of $716 million and cash flow from operations of $1.36 billion; net debt rose to $8.73 billion from $8.22 billion sequentially
- Capital returns: $648 million in share repurchases (12 million shares) and a quarterly dividend of $0.295 per share payable October 8, 2026
03—Questions
Frequently Asked Questions
How much of SLB's revenue change is attributable to the ChampionX acquisition?
ChampionX contributed $870 million of second-quarter 2026 revenue, $607 million more than in the year-earlier period's reported base. Excluding this contribution, global revenue fell 5% year on year, with international down 6% and North America down 1%.
What is driving the year-on-year decline in profitability?
The decline is largely attributed to operational disruptions and lower activity in the Middle East from the regional conflict, plus lower profitability in Well Construction and Reservoir Performance. Pretax segment operating margin was 15.6%, down 289 bps year on year. The absence of a $149 million gain on the Palliser APS divestiture in the prior year also weighed on GAAP results.
What is the outlook for capital spending and Middle East recovery?
SLB expects full-year 2026 capital investment of approximately $2.5 billion, compared with $2.4 billion in 2025. Management said the timing of a full Middle East recovery remains uncertain and depends on a durable resolution of the conflict, and that returning to full production capacity will take time.
Why did net debt increase and how is the balance sheet positioned?
Net debt rose to $8.73 billion from $8.22 billion in the first quarter, driven by $648 million in buybacks, $440 million in dividends and $179 million in acquisitions, which together exceeded free cash flow. Long-term debt increased to $11.14 billion from $9.67 billion, while cash and short-term investments were $4.07 billion.
How significant is the Data Center Solutions business to SLB's growth?
Data Center Solutions is reported within All Other and generated $186 million of revenue in Q2 2026, up 33% sequentially and 80% year on year. Management is targeting over $1 billion in annualized revenue run rate by year-end 2026 and over $2 billion by the end of 2027, following a Meta 1GW data center project in Canada where SLB is a delivery partner.
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