SLB Q4 Revenue Jumps 9% to $9.7B, Barclays Lifts Target to $49
Q4 sequential revenue grew 9% to $9.7B with organic growth of 6% excluding ChampionX; digital unit revenue jumped 25% sequentially and margin expanded to 34%. The company generated $2.3B free cash flow, cut net debt by $1.8B to $7.4B, and Barclays raised its price target to $49 from $47.
1. SLB Reports Sequential Revenue Growth in Q4
SLB delivered fourth-quarter revenue of $9.7 billion, up $817 million or 9% sequentially. Management attributed approximately $300 million of the increase to an extra month of consolidation from the ChampionX acquisition. Excluding ChampionX, global revenue still rose 6% quarter-on-quarter, driven by improved upstream activity in both North America and key international markets, marking the first quarter of sequential growth across all regions since mid-2024.
2. Segment Performance Drives Margin Expansion
Digital solutions led the company’s momentum, with quarterly revenue of $825 million, a 25% sequential increase, and a pre-tax operating margin of 34%, up 557 basis points. Production Systems achieved $4.1 billion in revenue, a 17% lift driven by ChampionX integration and 11% organic growth, while margins edged higher by 20 basis points. Reservoir Performance rose 4% to $1.7 billion, with margin expansion of 105 basis points, and Well Construction held steady at $2.9 billion despite regional headwinds, sustaining an 18.7% margin.
3. Strong Cash Flow and Balance Sheet Improvement
SLB generated $3.0 billion of operating cash flow and $2.3 billion of free cash flow in the quarter, benefiting from working-capital unwinds and year-end deliveries. Net debt fell by $1.8 billion to $7.4 billion, extending a multi-quarter deleverage trend. For full-year 2025, the company delivered over $4.1 billion of free cash flow and returned $4.0 billion to shareholders through $2.4 billion in share repurchases and $1.6 billion in dividends.
4. 2026 Guidance Underpinned by Diversified Growth Engines
Assuming oil prices remain range-bound in the high-50s to low-60s per barrel, SLB guided 2026 revenue of $36.9 billion to $37.7 billion and adjusted EBITDA of $8.6 billion to $9.1 billion, with margins stable year-over-year. North America is expected to benefit from a full year of ChampionX contributions and offshore strength, while international revenue is forecast to rise modestly led by Latin America and Middle East & Asia. The company reiterated its commitment to return over $4 billion to shareholders and highlighted strategic growth drivers including digital AI platforms, subsea bookings pipeline, and rapid re-entry capability in Venezuela.