NEW YORK, July 24, 2026 – SLB (NYSE:SLB) saw its shares climb more than 9% in early trading Thursday, as the oilfield services giant reported second-quarter results that beat analyst expectations, even as revenue excluding its recent ChampionX acquisition declined.
Shares of SLB rose 9.4% to $51.68 in New York trading. The company posted adjusted earnings of $0.55 per share, surpassing the $0.51 consensus estimate. Total revenue came in at $8.97 billion, approximately $300 million above forecasts.
On a reported basis, revenue increased 5% year-over-year. However, excluding the contribution from ChampionX, which added $870 million in the quarter, organic revenue fell about 5% to roughly $8.10 billion. The ChampionX acquisition more than doubled SLB's net revenue growth for the period.
The gains were driven by more than just an earnings beat. Investors responded positively to improving margins and a brighter outlook for the second half of the year. Adjusted EBITDA margins expanded, particularly in the digital and production systems segments, signaling operational strength beneath the headline numbers.
Digital and Production Systems Lead Growth
SLB's digital business delivered a standout performance, with revenue of $697 million and an EBITDA margin of 34.7%, well above the company-wide average of 21.2%. Digital solutions now represent 7.8% of total sales but contribute 12.7% of adjusted EBITDA. Revenue from data center solutions surged 80% year-over-year and 33% sequentially. Management is targeting a run rate exceeding $1 billion by year-end, with a goal of surpassing $2 billion by the end of 2027. Notably, Meta Platforms (NASDAQ:META) selected SLB for a proposed one-gigawatt data center project in Canada.
The Production Systems segment also benefited from the ChampionX acquisition, reporting a 29% increase in reported revenue. On a pro-forma basis, revenue was flat, but adjusted EBITDA margin improved 109 basis points quarter-over-quarter to 19.6%.
Traditional Drilling Remains Sluggish
Beneath the positive headlines, traditional drilling operations continued to face headwinds. Reservoir Performance revenue fell 8%, and Well Construction declined 7%. Sales in the Middle East and Asia dropped by $414 million. However, CEO Olivier Le Peuch noted that the quarter marked "a return to year-on-year revenue growth outside the Middle East," with offshore operations expanding in Latin America, Europe, Africa, and parts of Asia.
Outlook and Guidance
SLB expects third-quarter revenue to rise 3% to 4% sequentially, implying sales of approximately $9.24 billion to $9.33 billion. The company projects EBITDA margin expansion of about 75 basis points. For the fourth quarter, preliminary guidance calls for revenue to exceed $10 billion and adjusted EBITDA margin to reach around 24%, contingent on a rebound in Middle East revenue to between $2.1 billion and $2.2 billion.
Free cash flow in the quarter totaled $716 million, with $648 million allocated to share buybacks. SLB maintained its target of returning over $4 billion to shareholders in 2026.
Industry Context
SLB outperformed its main publicly traded rivals. Halliburton (NYSE:HAL) rose 2.0%, while Baker Hughes (NASDAQ:BKR) gained 3.1%. Halliburton had previously cautioned that the recovery in the Middle East remains dependent on day-to-day developments. James West, an analyst at Melius Research, highlighted SLB's global reach, stating, "Every international market is their backyard," and expects significant gains from increased production.
Risks to the outlook include a slow recovery in the Middle East. Any renewed disruptions could cut third-quarter revenue by $150 million and EBITDA by $75 million. Revenue excluding ChampionX continues to trail last year's levels. Baker Hughes is scheduled to report results on Sunday, which will provide further insight into whether SLB's margin rebound is reflected across the industry.
