SLB Reports Q1 2026 Earnings Amid Middle East Disruptions

Adjusted EBITDA margin stood at 20.3%, down 346 basis points year-over-year, affected by high decrementals on lost revenue and additional logistics costs. No major cost adjustments were made to preserve capacity for future recovery. The company acquired ChampionX last year, contributing to accretive growth.

revenue increased 23% year-over-year, driven by the ChampionX acquisition and rising demand in production markets. On a pro forma basis, ChampionX also grew year-over-year. Digital revenue rose 9%, fueled by 87% growth in digital operations and 45% in data center solutions.

Reservoir Performance and Well Construction divisions declined, mainly from Middle East impacts. Automated footage reading in digital operations surged 145% year-over-year. Data center solutions backlog supports a projected $1 billion run rate by year-end, with acceleration expected in 2027.

Over 500 million barrels of production have been lost, altering global supply-demand balance. SLB anticipates oil prices settling above pre-conflict levels, boosting energy security efforts and upstream investments. Recovery is expected to be gradual, with orderly shut-ins resuming faster than abrupt ones.

Short-cycle activities in North America and Latin America are likely to strengthen first, followed by long-cycle offshore developments in Africa, Asia, and Latin America. The company sees opportunities in Venezuela for expanded operations. Third-party reports indicate a strengthening FID pipeline for 2026, exceeding $100 billion in approvals, with deepwater resources prominent.

emphasized production recovery as critical for sustaining output from mature fields, combining ChampionX's capabilities with subsurface expertise. A recent production recovery summit in Houston engaged global customers. Digital business integrates AI and software for performance outcomes, with increasing adoption.

Data centers leverage engineering strengths, including a partnership with NVIDIA for modular AI factories. North America revenue is projected flat.

reservoirs in the Gulf region mostly have medium pressure, per data from Rystad and Goldman. Over half of Iran's reservoirs have very low pressure, according to a ZeroHedge report. Low pressure raises risks of permanent loss after shut-ins, due to water emulsions, clay swelling, and blockages.

Shut-ins are temporary halts often from maintenance, market, or geopolitical factors, with pressure differences affecting recovery.

“The fragility of the global energy complex we are witnessing today demonstrates the strategic importance and long-term value of oil and gas.”