SLB Limited Common Shares

followed by the number 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. As a reminder, this call is being recorded. I would now turn the call over to James R. McDonald, Senior Vice President of Investor Relations and Industry Affairs. Please go ahead.

Thank you, Megan. Good morning, and welcome to the SLB Second Quarter 2025 Earnings Conference Call. Today's call is being hosted from Paris following our board meeting held earlier this week. Joining us on the call are Olivier Lepuche, Chief Executive Officer, and Stephane Biguet, Chief Financial Officer. Before we begin, I would like to remind all participants that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. For more information, please refer to our latest 10-K filing and other SEC filings, which can be found on our website. Our comments today also include non-GAAP financial measures. Additional details and reconciliations for the most directly comparable GAAP financial measures can be found in our second quarter earnings press release, which is on our website. With that, I will turn the call over to Olivier.

Thank you, James. Ladies and gentlemen, thank you for joining us on the call. Before we begin, I would like to officially welcome the Champagnex team to SLB. Earlier this week, we shared the news that our transaction is now complete, and this is the start of an exciting new chapter for our company. I could not be prouder to lead the company at this juncture, building on an unmatched talent pool and portfolio of technologies to serve our customers and create value for our shareholders. Now, as we move into the score, I would like to start by walking you through our second quarter performance. Then I will share how we see the broader macro environment evolving, come out on our new chapter with ChampionX, and what that means for our business in the second half of the year. After that, Stéphane will provide more details on our financial performance, and then we will open the line for your questions. Let's begin. This was a solid quarter for SLB as we delivered steady revenue and slight EBITDA margins expansion despite the considerable macro headwinds and market volatility of the past few months. These results are a clear reflection of our broad operating footprint, our technology leadership, and our strong execution. In international markets, revenue grew by 2%, benefiting from pockets of growth in the Middle East, Asia, and North Africa, fully offsetting sequential headwinds in Saudi Arabia and certain offshore markets. Specific to the Middle East and Asia, long-term fundamental for oil remains strong, and both conventional and unconventional gas are providing an additional tailwind for activity across the region. During the quarter, we experienced strong growth in Iraq, the UAE, Kuwait, East Asia, China, and Australia. Meanwhile, in North America, although revenue declined sequentially, we continue to outpace the market, led by increased sales across most of our business lines in production systems, and higher digital sales in U.S. land. The revenue decline stems mostly from the seasonal spring breakup in Canada and non-repeat of exploration data sales in U.S. offshore. In the offshore market, certain projects have pushed to the right, most notably in sub-Saharan Africa. However, we continue to maintain a steady backlog in one subsea and there's a significant number of offshore projects preparing for FID. Altogether, these dynamics reinforce our confidence in the long-term growth for this market. Next, let me discuss the performance of our divisions. In the core, pollution systems led the way again this quarter, benefiting from increased sales of artificial lift and midstream pollution systems. Overall, our service quality and reliability continue to differentiate our frame in this space, and we have been awarded several new projects during this quarter. Meanwhile, in world construction, revenue was splashed sequentially with growth in Iraq, the UAE, North Africa, and Nigeria, offset by lower activity in Namibia and North America. In reservoir performance, revenue declined slightly due to lower evaluation and stimulation activity partially offset by solid intervention work. Turning to digital and integration. Our digital revenue remains steady, with double-digit growth across the combination of our platforms, application, and digital operations, offset by lower exploration data this quarter. We now have more than 7,800 users across the Delphi platform, representing double-digit growth year-on-year. This is a continued reflection of our customers' focus on unlocking, through digital, higher levels of performance and efficiency in their assets. Finally, we continued to exhibit growth in CCS, where we successfully executed several large-scale projects in the carbon market this quarter. We are now participating in the entire value chain from point-of-capture with SLB Capturing to permanent storage with SLB Sequestry. This combined offering is being successfully utilized at the Longship CCS project in Norway and we believe this will continue to present new opportunities for our carbon solution business. All in all, this quarter was challenging with lots of moving parts, yet we produced solid results. Considering the uncertainty and market volatility, the entire SLB team has delivered remarkably well. And having met with many customers during the quarter, I'm assured of our differential performance and the trust that our customers continue to place in us. Next, I will discuss what we are seeing in the macro environment, how we expect this to evolve over the second half of the year. During the first half of the year, the oil and gas industry demonstrated its strength and resilience, proving that it can operate through uncertainty without a significant drop in upstream spending, highlighting the different attributes of this cycle. As we look to the second half of the year, the macro environment continues to be uncertain, particularly with the announcement of the OPEC Plus super releases into a well-supplied market. For the moment, incremental buyers are being absorbed by peak summer demand, China restocking, and the replenishment of global crude inventories that are sitting below five years' historical average. All in, while sustained release could exert pressure on commodity price in the near term, the removal of the overhang of OPEC Plus volatile cuts would allow for market stabilization over time. While it is difficult to predict the outcome from the combination of further super-release, persistent geopolitical risk, and lingering TAIF negotiations, it is fair to assume sustained resilience in the market outlook, absent of a dramatic shift in commodity price. Regionally, the Middle East and Asia will continue to display the most resilience in the short term, driven by lower break events and a sustained focus on energy security. Meanwhile, advantage of offshore projects will lend support to a steady market across Europe, Africa, and the Americas. In contrast, land activity across North America and Latin America have the greatest downside risk due to short cycle span. Globally, we expect operators to remain focused on critical in-flight development projects and an acceleration of efficiency gains with a heavier focus on production recovery and continued investment in digital and AI. Next, let me describe this growing market and the opportunities that we see with ChampionX. Today, customers are on a quest to unlock and optimize the full production potential of their assets. while improving efficiency in the reservoir recovery phase of their operations. This is creating a less cyclical and growing market opportunity that is more OPEX-driven and is less sensitive to short-term quality cycles. The addition of Champonnex enhances our portfolio by providing the capability we need to lead this effort. Champonnex's strengths in production chemicals and natural yeast enhance our portfolio in two essential and fast-growing segments that are critical to long-term asset performance. In pollution chemicals, Champenex adds scales, vertical integration, and a strong global manufacturing footprint to diverse solutions to address the rising demand from aging infrastructure and complex wells. Our combined actual portfolio has the breadth to optimize pollution across the full lifecycle of the well. Additionally, Champenex brings a unique digital pollution technology portfolio that will expand into new markets and new applications. Integrating these capabilities in the SLB existing portfolio will allow for greater innovation and customer value creation, as we take a further step toward delivering a fully integrated service offering anywhere in the world, from reservoir to surface facility, from completion to decommissioning. Geographically, this acquisition also expands our world global reach. Champenex DIPS, present in North America, pairs with while with S&D's international leadership enabling us to bring their technologies to new markets while also deepening our capabilities in the U.S. Taken together, this is a highly complementary fit, one that strengthens our portfolio, accelerates our growth in the regional market, and reinforces our ability to deliver value at every stage of the production lifecycle. And just as important, we are combining two organizations that share a strong culture of innovation operation excellence, and customer focus. Overall, this would enable us to integrate the full production landscape with the best people, the deepest domain expertise, and most innovative technology solutions, guided by a shared passion for innovation and a commitment to delivering for customers in every basin around the world. I'm truly excited to welcome the Shumperdex team to SLB and look forward to what we will achieve together. Now, before I hand over to Stéphane, Let me quickly share our guidance for the second half of the year. Starting August 2025, we will begin consolidating ChampionX into our results. Therefore, we expect second half revenue to be between $18.2 billion and $18.8 billion for the second half. This second half increase will be a result of the five-month contribution of ChampionX combined with steady revenue in our legacy SLB business compared to the first half. driven by growth in production systems and digital, fully offsetting the anticipated activity decline in the U.S. and certain deep-water markets. Moreover, revenue will be back-loaded in the fourth quarter, affecting a full quarter of Champagnex as well as a seasonal uplift from year-end digital and product sales. We also expect second-half EBITDA margins to be flat compared to the second quarter, inclusive of the Champenex contribution and inclusive of about 20 to 40 basis points for tariff impact. I will now turn the call over to Stéphane to discuss our financial results and the plan for Champenex financial integration in more detail.