Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

First Quarter 2026 Compared to First Quarter 2025

First-quarter 2026 revenue of $8.7 billion increased 3% year on year. Excluding the impact of the ChampionX acquisition in the third quarter last year, revenue declined by $607 million, or 7%, year on year. This was due to a 7% decline in international revenue and an 8% decrease in North America revenue.

It was a challenging start to the year as widespread disruptions in the Middle East, which represents approximately 70% of SLB's Middle East & Asia first quarter revenue of $2.7 billion, impacted the business. This impact was most pronounced in the Well Construction and Reservoir Performance divisions, as SLB demobilized operations in a number of countries in response to customer actions to safeguard personnel and facilities.

SLB entered 2026 anticipating that global liquid supply and demand would gradually rebalance throughout the year and into 2027. However, the conflict in the Middle East has accelerated this rebalancing while exposing critical vulnerabilities in the global energy supply chain.

SLB expects postconflict liquid commodity prices to remain above preconflict levels. This reflects the near-term supply disruptions caused by infrastructure impairments, production impacts, and geopolitical risk premium.

In response, many countries are likely to prioritize supply diversification, invest in exploration and domestic resource development, and replenish strategic reserves once the conflict subsides. Alongside SLB's work supporting customers as they restore production capacity in the Middle East, SLB expects these trends to drive increased investment in short-cycle projects in North America and Latin America as well as long-cycle developments, particularly in deepwater offshore markets.

Absent a prolonged conflict leading to an economic slowdown and demand destruction, these supply responses reinforce SLB's conviction of a broad-based recovery in upstream markets in 2027 and 2028.

Digital

Digital revenue of $640 million increased 9% year on year primarily driven by a $66 million increase in Digital Operations. This growth was supported by increased digital services adoption and new technology introduction as well as the acquisition of ChampionX, which contributed $32 million of digital revenue during the first quarter of 2026.

Digital pretax operating margin of 21% slightly declined by 28 basis points ("bps") year on year.

Reservoir Performance

Reservoir Performance revenue of $1.6 billion decreased 6% year on year due to lower stimulation and intervention activity primarily driven by operational disruptions caused by the Middle East conflict.

Reservoir Performance pretax operating margin of 16% contracted 47 bps year on year primarily due to lower profitability in stimulation and intervention.

Well Construction

Well Construction revenue of $2.8 billion decreased 6% year on year primarily from lower activity due to the Middle East conflict.

Well Construction pretax operating margin of 15% contracted 463 bps year on year primarily due to lower profitability as a result of the Middle East conflict, compounded by pricing headwinds in select markets.

Production Systems

Production Systems revenue of $3.5 billion increased 23% year on year from the acquired ChampionX production chemicals and artificial lift businesses, which contributed $833 million revenue and $148 million in pretax operating income during the quarter.

Excluding the impact of the acquisition, Production Systems first-quarter 2026 revenue decreased 6% year on year due to the disruptions from the Middle East conflict.

Production Systems pretax operating margin of 14% contracted 240 bps year on year primarily due to lower profitability in surface production systems, SLB OneSubsea and completions.

All Other

All Other revenue of $443 million decreased 21% year on year driven by the absence of $118 million in Asset Performance Solutions ("APS") revenue following the divestiture of the Palliser asset in Canada in the second quarter of 2025 coupled with reduced revenue in SLB Capturi. This decline was partially offset by a $44 million, or 45%, increase in Data Center Solutions revenue.

All Other pretax operating income of $113 million decreased $49 million year on year primarily due to lower profitability in APS projects following the Palliser divestiture.

First Quarter 2026 Compared to Fourth Quarter 2025

First-quarter 2026 revenue of $8.7 billion decreased 11% sequentially as revenue declined 13% in the international markets and 2% in North America primarily due to seasonal effects and disruptions caused by the Middle East conflict.

Internationally, revenue decreased 17% on a sequential basis in the Middle East & Asia, 11% in Europe and Africa and 9% in Latin America due to seasonally lower activity following strong year-end product and digital sales. Revenue in the Middle East & Asia was also negatively impacted by disruptions from the conflict.

Revenue in North America declined 2% sequentially due to lower drilling activity on land and lower digital exploration sales following strong year-end sales in the fourth quarter of 2025. These declines were partially offset by higher revenue from Data Center Solutions.

Digital

Digital revenue of $640 million declined 22% sequentially due to seasonally lower activity following strong year-end digital sales in the fourth quarter of 2025.

Digital pretax operating margin of 21% contracted 13 percentage points sequentially reflecting the seasonally lower digital sales.

Reservoir Performance

Reservoir Performance revenue of $1.6 billion declined 9% sequentially reflecting the combined effects of seasonally lower activity in Europe & Africa and Asia, and the disruptions related to the Middle East conflict.

Reservoir Performance pretax operating margin of 16% contracted 348 bps sequentially due to the effects of the seasonally lower activity and disruptions in the Middle East.

Well Construction

Well Construction revenue of $2.8 billion declined 5% sequentially primarily reflecting the combined effect of seasonally lower activity in Europe & Africa and Asia and the disruptions related to the Middle East conflict.

Well Construction pretax operating margin of 15% contracted 350 bps sequentially due to the seasonally lower activity and disruptions in the Middle East.

Production Systems

Production Systems revenue declined 14% sequentially following strong year-end product sales internationally in the fourth quarter of 2025 as well as disruptions from the Middle East conflict.

Production Systems pretax operating margin of 14% contracted 212 bps sequentially reflecting seasonally lower profitability following the strong year-end product sales in the fourth quarter of 2025.

All Other

All Other revenue of $443 million declined slightly by 1% sequentially due to lower revenue from APS projects in Ecuador partially offset by $12 million of higher Data Center Solutions revenue.

All Other pretax operating income of $113 million increased $28 million sequentially due to an improved performance in SLB Capturi.

Interest & Other Income

Interest & other income consisted of the following:

Other

Research & engineering and General & administrative expenses, as a percentage of Revenue, for the first quarter ended March 31, 2026 and 2025 were as follows:

The effective tax rate was 20% for the first quarter of 2026 as compared to 22% for the same period of 2025. The decrease in the effective tax rate was primarily due to the effect of the charges and credits described in Note 2.

Charges and Credits

SLB recorded charges and credits during the first three months of 2026 and 2025. These charges and credits, which are summarized below, are more fully described in Note 2 to the Consolidated Financial Statements.

2026:

2025:

Liquidity and Capital Resources

Details of the components of liquidity as well as changes in liquidity are as follows:

Key liquidity events during the first three months of 2026 and 2025 included:

The following table summarizes the activity under the share repurchase program:

As of March 31, 2026, SLB had $3.4 billion of cash and short-term investments on hand and committed debt facility agreements with commercial banks aggregating $5.0 billion, all of which was available. SLB believes these amounts, along with cash generated by ongoing operations, are sufficient to meet future business requirements for the next 12 months and beyond.

SLB has a global footprint in more than 100 countries. As of March 31, 2026, only three of those countries individually accounted for greater than 5% of SLB's net receivable balance. Only one of those countries, the United States, represented greater than 10% of such receivables.

FORWARD-LOOKING STATEMENTS

This first-quarter 2026 Form 10-Q, as well as other statements we make, contain "forward-looking statements" within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as "expect," "may," "can," "believe," "predict," "plan," "potential," "projected," "projections," "precursor," "forecast," "outlook," "expectations," "estimate," "intend," "anticipate," "ambition," "goal," "target," "scheduled," "think," "should," "could," "would," "will," "see," "likely," and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about SLB's financial and performance targets and other forecasts or expectations regarding, or dependent on, its business outlook; growth for SLB as a whole and for each of its Divisions (and for specified business lines, geographic areas, or technologies within each Division); the benefits of the ChampionX acquisition, including the ability of SLB to integrate the ChampionX business successfully and to achieve anticipated synergies and value creation from the acquisition; oil and natural gas demand and production growth; oil and natural gas prices; forecasts or expectations regarding energy transition and global climate change; improvements in operating procedures and technology; capital expenditures by SLB and the oil and gas industry; the business strategies of SLB, including digital and "fit for basin," as well as the strategies of SLB's customers; SLB's capital allocation plans, including dividend plans and share repurchase programs; SLB's APS projects, joint ventures, and other alliances; the impact of ongoing or escalating conflicts on global energy supply; access to raw materials; future global economic and geopolitical conditions; future liquidity, including free cash flow; and future results of operations, such as margin levels. These statements are subject to risks and uncertainties, including, but not limited to, changing global economic and geopolitical conditions; changes in exploration and production spending by SLB's customers, and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of SLB's customers and suppliers; SLB's inability to achieve its financial and performance targets and other forecasts and expectations; SLB's inability to achieve net-zero carbon emissions goals or interim emissions reduction goals; general economic, geopolitical and business conditions in key regions of the world; foreign currency risk; inflation; changes in monetary policy by governments; tariffs; pricing pressure; weather and seasonal factors; unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays or cancellations; challenges in SLB's supply chain; production declines; the extent of future charges; SLB's inability to recognize efficiencies and other intended benefits from its business strategies and initiatives, such as digital or new energy, as well as its cost reduction strategies; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, and climate-related initiatives; the inability of technology to meet new challenges in exploration; the competitiveness of alternative energy sources or product substitutes; and other risks and uncertainties detailed in this Form 10-Q and our most recent Form 10-K and Forms 8-K filed with or furnished to the SEC.

If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this Form 10-Q regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social, and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Statements in this Form 10-Q are made as of April 29, 2026, and SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise.