SLB Limited Common Shares

Good morning. My name is Megan and I'll be your conference operator today and would like to welcome everyone to the third quarter SLB earnings call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star 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 will 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 Third Quarter 2025 Earnings Conference Call. Today's call is being hosted from Houston following our board meeting held earlier this week. Joining us on the call are Livia LaPouche, Chief Executive Officer, and Stephane Begay, 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 to the most directly comparable GAAP financial measures can be found in our third 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. I'll begin today by discussing our third quarter performance. Then I will describe the near-term outlook for oil and gas markets. And finally, I will share our guidance for the fourth quarter. Stéphane will then provide more details on our financial results and the structure of our new digital division. After that, we'll open the line for your questions. Let's begin. Our fourth quarter unfolded in line with expectations, as we achieved sequential revenue growth driven by the addition of two months of activity from ChampionX, our digital business, and the resilient performance of our core. In international markets, revenue rose 1% sequentially, with notable increases in several countries across the Middle East and Asia. Across this region, sequential growth was seen in Iraq, the United Arab Emirates, Oman, Egypt, China, East Asia, Indonesia, Australia, and India, alongside broader improvements in offshore activity across Guyana, sub-Sahara Africa, and Scandinavia. Meanwhile, revenue in North America grew 17% sequentially, This was driven mainly by the contribution of ChampionX, followed by higher offshore activity, which more than offset a decline in U.S. land activity, as U.S. shared operators focused on further efficiency gains and cash reservations during the quarter. We also experienced strong growth in our data center solution business, extending our reach with upper scanners to a new market for SLB. This quarter marks the first time we have disclosed our data center revenue, which has more than doubled year on year Looking ahead, we foresee expansion beyond the US, along with the onboarding of new customers. Next, let me discuss the performance of our divisions. I'll begin with digital, as this is the first quarter we are reporting digital as a standalone division. As you have seen in our release this morning, our digital business is comprised of four categories, where SLB offers solutions that help unlock productivity for geoscientists and engineers, that have stepped change in efficiency and safety in operations, help our customers in delivering better wealth and higher producing assets these solutions embedded in platform and applications digital operations digital exploration and professional services each of which stefan will describe in more detail a little later in this morning's call specific to the third quarter digital revenue increased 11 percent sequentially this was given by 39 increase in digital operations which enables digital services and automation capabilities augmenting our offering from our core divisions. Of note, automated drilling footage increased by more than 50% year-on-year. This was also supported by the addition of new connected assets from ChampionX. Following the integration, we now have a combined total of more than 20,000 connected assets deployed in the field, providing additional digital insights and optimization for our customers. One of the reasons digital operation is such an exciting area of growth is because it presents the opportunity to enhance every service and piece of equipment that we deliver by embedding digital capabilities that enhance performance and unlock the power of autonomous operations, creating an adjacent and fast-growing digital market that strengthens our core offerings. In the earnings release published this morning, you will have seen a broad range of examples of platform and application being adopted by customers across all basins, customer types, and life cycles. These examples demonstrate the global reach of our digital brand, the impact of our platform strategy, and the emergence of AI as a transformative force in our industry. This quarter, for example, we secured key contracts awarded for our OptiSight production suite, which enables customers to process comprehensive data streams through cloud-based application to drive productivity and efficiency across assets and facilities in the field. We also announced a collaboration with AIQ to deploy its Energy AI agentic AI solution for AdNoc, powered by SLB Lumi data and AI platform. These are meaningful milestones that speak to the momentum behind our digital business, and you can expect to hear more announcements in the weeks ahead that further demonstrate the impact and scale of these solutions. Turning to the financial performance of this business, we expect our digital revenue to continue growing at a rate that visibly outperforms global upstream spending and that exceeds the growth rate of our core business by double digits. At the same time, we expect digital to continue delivering highly accretive margins to the company. In the core, I was very pleased with the resilient performance of this quarter, given the challenging macro environment Excluding the impact of the Champenex contribution, the core divisions of ZERA performance, well construction, and production systems were essentially flat sequentially. This demonstrates how our global footprint and broad portfolio helps us to navigate regional uncertainties and offset localized headwinds. Specific to our production system division, we are already benefiting from the addition of Champenex, which delivered revenue growth and margin contribution ahead of expectations. We are very pleased with the integration so far, and in addition to the strong delivery of the team, we continue to receive positive feedback from our customers. For example, we recently delivered a combined ESP string using a Champenex pump with an SLB induction motor for a main operator in the Permanent Basin. By bringing together these two basin-class technologies, we improved performance for unconventional waste and enabled faster installation, reducing downtime and strengthening project economics for our customers. And in the Middle East, we have received several contract awards for our well-testing and pollution chemical technologies that leverage the combination of SLB and champagne solution and engineering capabilities. Moving forward, in the context of tighter industry economics and mounting pressure from production declines, our customers are placing greater emphasis on production recovery solutions to unlock additional barrels at the lowest possible cost and with maximum capital efficiency. This presents an exciting growth opportunity for companies who can offer solutions and technology to optimize production and maximize recovery from maturing assets. And technology will be the key. This is where SLB has a distinct advantage and why we have made production and recovery a strategic focus for our business. By combining our deep subsurface expertise, the industry brought us lift intervention and chemical technology portfolio With unique integration and digital capabilities, we offer a differentiated value proposition to our customers. This offering now includes Champonnex, which brings unique technical capabilities and strong track record of customer success, from production chemicals to our shell lifts, enhanced with digital capabilities. And we continue to develop our portfolio with strategic investments, including our recent acquisitions of Resman Energy Technology and Steamline Digital. Altogether, our production recovery offerings add another level of growth to our business. We've combined exposure to CAPEX and OPEX spend, complementing our leadership in upstream exploration and development. Now turning back to our quarterly results and considering the market condition we faced during the past few months, I'm pleased with our performance. We achieved resonant results across the core divisions, delivering early success with ChampionX and continuing the momentum in digital. and there are several bright spots on the horizon. Thank you to the entire SLB team, including our new colleagues from ChopinX, for your excellent contribution this quarter. Next, I will discuss the ongoing macro environment and the near-term outlook for oil and gas markets. In an environment with increasingly challenging commodity prices, and insolent demand-supply balance, the industry has so far proven discipline and most long-cycle and international activity demonstrating resilience. While it is difficult to predict the exact outcome of further production increases and ongoing geopolitical developments, the fundamentals for oil and gas remain constructive. Global inventories still reside at multi-year lows, and the need to offset natural production decline accounts for nearly 90% of annual upstream investment. These dynamics create a supportive environment for stable investment in near to mid-term buying a dramatic shift in commodity prices. Against this backdrop, with the exception of three to four well-known markets where activity has recessed, global activity has stabilized with many locations still on the rise. To touch on international markets, many countries remain poised for investment growth tied to long-term capacity expansion plans and assurance of energy supply. particularly for gas. Notably, while OPEC plus production release are currently being filled using capacity behind the pipes, additional release will eventually require new infiltrating or new development to meet the higher supply output from these countries. This present a positive catalyst for activity in member countries and reinforces the potential for higher activity in 2026. Specific to deep water markets, the pipeline remains very healthy with favorable economics. We expect further investment in countries across the Atlantic supported by oil and in Asia driven by gas. And while short-term scheduling uncertainties have resulted in white space, particularly in South-South Africa, we expect this to progressively disappear as there are a number of FID plans for 2026 and early 2027. Meanwhile, in North America, operators continue to prioritize pollution maintenance as a result of community prices. Underpinned by efficiency improvements, leading to muted activity in the near to mid-term. In this context, considering the current industry dynamics and community price environment, we believe the conditions are set when the supply-demand rebalances for the international markets to lead the future activity rebound, and SLB is well positioned to benefit from such an event. Now that we have discussed the market condition, let me describe how we see the fourth quarter unfolding for our business. We expect that we will achieve a sequential step-up in results in the fourth quarter of high single-digit top-line growth as we report a full quarter of ChampagneX and generate seasonally higher year-end digital and product sales. With the third quarter results behind us, we are now in a position to confirm that second-half revenue will be within the midpoint of our previous guidance range of $18.2 billion to $18.8 billion. We also expect a fourth quarter adjusted EBITDA margin to expand 50 to 150 BPS sequentially. This will be driven primarily by increased earnings contribution from both digital and production system end-of-year sales, including a full quarter of ChampionX results and fully restored operation on our APS Equal Assets. Specific to the digital business, we expect a significant increase in the fourth quarter on seasonally higher sales across the portfolio. As a result, we believe our digital division will be able to achieve double-digit growth year-on-year with EBITDA margin reaching 35% on a full-year basis. Overall, SAB continues to demonstrate resilience in navigating the challenging market environment, and our strength in digital, coupled with our growing presence in the production recovery space, will expand our leadership in the sector and help us drive positive outcomes for our customers. I will now turn the call over to Stéphane to discuss our financial results in more detail.