Revenue Rebounds as Acquisition Masks Core Decline
Revenue reached $8.97 billion as cash generation strengthened from the previous quarter.
The energy-technology company SLB (SLB) rebounded in the second quarter as adjusted EBITDA rose 7% sequentially, reversing a 24% decline in the first quarter.
The recovery remained dependent on ChampionX. Reported revenue increased 5% from a year earlier, while revenue excluding the acquisition fell 5%; ChampionX contributed $870 million.
Revenue rose 3% sequentially after falling 11% in the first quarter. Adjusted earnings increased to $0.55 a share from the previous quarter and remained 26% below the year-earlier period.
Regional results reflected continued pressure in the Middle East. North American revenue increased 4% sequentially and international revenue rose 3%, while Middle East revenue fell 13% because of conflict-related disruptions.
Production Systems drove the sequential improvement, with revenue rising 7% to $3.77 billion as Reservoir Performance and Well Construction each declined 2%. ChampionX supplied $865 million of Production Systems revenue, leaving the division down 1% year over year excluding the acquisition.
Digital provided an organic source of growth. Revenue increased 18% from a year earlier to $697 million, and pretax margin recovered to 27.8% after a sharp first-quarter contraction. Annualized recurring revenue reached $1.04 billion at June 30, up 15% from a year earlier.
Data Center Solutions revenue climbed 80% year over year. The business remains on track to exceed a $1 billion annualized run rate by the end of 2026 and $2 billion exiting 2027.
Operating cash flow increased to $1.36 billion from $487 million in the first quarter, and SLB repurchased 12 million shares for $648 million. The company also completed its acquisition of reservoir-modeling company Tachyus, and the timing of a full Middle East recovery remains uncertain.