10-Q · April 29, 2026
SLB's Q1 2026 earnings report highlighted a modest 3% year-over-year revenue growth to $8.72 billion, exceeding expectations and prompting an EPS of $0.52, in line with estimates. However, key segments like Well…
Earnings analysis · 10-Q
SLB earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
SLB posted Q2 revenue of $8.972 billion, up 3% sequentially and about 5% year on year, while diluted EPS of $0.55 rose from $0.50 in Q1 but remained below $0.74 a year earlier. Growth in Production Systems, Digital,…
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SLB posted Q2 revenue of $8.972 billion, up 3% sequentially and about 5% year on year, while diluted EPS of $0.55 rose from $0.50 in Q1 but remained below $0.74 a year earlier. Growth in Production Systems, Digital, North America, and offshore international activity outweighed continued Middle East disruption, where revenue fell 13% sequentially to $1.66 billion. Liquidity is adequate, but first-half net debt increased by $1.303 billion to $8.727 billion and working capital consumed $1.344 billion; management maintained expected 2026 capital investments of approximately $2.5 billion.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $0.55
What stood out
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Revenue rose 3% sequentially and beat consensus
Q2 revenue was $8.972 billion, up $251 million, or 3%, from $8.721 billion in Q1 2026 and up $422 million, or about 5%, from $8.550 billion in Q2 2025. The result exceeded the supplied consensus estimate of $8.688 billion by about $284 million.
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EPS improved sequentially but trailed prior year
Diluted EPS of $0.55 increased 10% from $0.50 in Q1 2026, though it remained 26% below $0.74 in Q2 2025. EPS exceeded the supplied $0.52 estimate by $0.03.
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Production Systems led segment growth
Production Systems revenue increased 7% sequentially to $3.771 billion, supported by OneSubsea, artificial lift, valves, surface production systems, and completions. Its pretax operating margin expanded 138 bps sequentially to 16%.
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Digital delivered strong growth and margin expansion
Digital revenue increased 9% sequentially to $697 million and pretax operating margin expanded 683 bps to 28%. Digital Exploration revenue rose 25%, or $25 million, while Platforms & Applications sales increased $17 million.
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Operating cash flow grew despite investment needs
First-half operating cash flow increased to $1.846 billion from $1.802 billion a year earlier. Capital investments were $1.153 billion ($802 million capex, $226 million APS investments, and $125 million exploration-data capitalization), implying $693 million of first-half free cash flow.
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Liquidity remains substantial and buybacks continued
SLB had $4.071 billion of cash and short-term investments at June 30, 2026 and $5.0 billion of fully available committed facilities. The company also repurchased $1.099 billion of shares in the first half, while $3.028 billion remained under the authorization at quarter-end.
What to watch
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No formal risk update; Middle East disruption persists
Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. Nevertheless, Middle East revenue fell 13% sequentially to $1.66 billion, showing the current operational effect of the regional conflict.
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Conflict pressure remains broad across core services
Middle East disruptions drove a 2% sequential decline in Reservoir Performance revenue to $1.556 billion and a 2% decline in Well Construction revenue to $2.742 billion. Reservoir Performance margin contracted 121 bps to 15%.
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Debt and working-capital use increased
Net debt increased to $8.727 billion at June 30, 2026 from $7.424 billion at December 31, 2025, following $2.0 billion of senior-note issuance during Q2. First-half working-capital investment consumed $1.344 billion of cash.
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Well Construction faces volume and pricing pressure
On a six-month basis, Well Construction revenue declined 7% to $5.539 billion and its pretax operating margin contracted 401 bps to 15%, with management citing Middle East disruption and pricing headwinds in select markets.
Management's outlook
No revenue or EPS guidance was provided in the 10-Q. SLB expects full-year 2026 capital investments of approximately $2.5 billion and states that $4.1 billion of cash and short-term investments plus $5.0 billion of undrawn committed facilities are sufficient for the next 12 months and beyond.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.