SLB (SLB) Q3 2024 earnings summary

Executive summary

• Achieved strong Q3 2024 results with adjusted EBITDA margin expanding to 25.6%, free cash flow of $1.81 billion, and net income of $1.19 billion, driven by digital adoption, cost optimization, and long-cycle project contributions, despite flat sequential revenue at $9.2 billion.

• Digital & Integration division achieved record quarterly revenue and margin, with digital business on track for high-teens full-year growth.

• Announced sale of Palliser asset in Canada for $430 million and progress on ChampionX acquisition, expected to close in Q1 2025.

• Closed a carbon capture JV with Aker Carbon Capture ASA, paying $0.4 billion for 80% of the business.

• North America revenue rose 3% sequentially, led by offshore Gulf of Mexico activity, while international revenue remained steady with growth in Middle East & Asia offsetting Latin America declines.

Financial highlights

• Q3 2024 revenue was $9.16 billion, up 10% year over year and flat sequentially; adjusted EPS was $0.89, up 5% sequentially and 14% year over year.

• Adjusted EBITDA margin reached 25.6%, highest since Q1 2016, and pretax segment operating margin expanded 48 bps to 20.8%.

• Free cash flow was $1.8 billion, up $1 billion from Q2, driven by strong customer collections.

• Capital investments for the year expected at $2.6 billion; Q3 CapEx was $644 million.

• Total shareholder returns YTD at $2.4 billion; Q3 buybacks totaled $501 million.

Outlook and guidance

• Q4 revenue growth expected to be muted, with favorable digital/product sales mix and continued EBITDA margin expansion; full-year 2024 adjusted EBITDA margin projected at or above 25%.

• 2025 international upstream spending projected to grow low- to mid-single digits; North America flat to slightly down.

• Commitment to return at least $4 billion to shareholders in 2025.

• Most projects progressing as planned despite some customers adopting cautious near-term capital spending.