SLB - Earnings call transcript Q3 2024

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Operator

Thank you everyone, for standing by. Welcome to the third quarter SLB Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to James R. McDonald, Senior Vice President of Investor Relations and Industry Affairs. ahead. go Please

James McDonald

earlier Good Quarter Leah. being welcome the meeting to from Thank Earnings morning, Conference Third held Board our XXXX York, is week. Call. SLB New you, following and this Today's hosted call

Le Joining Officer; Chief Officer. and are Financial Executive Chief Peuch, us Biguet, call on the Olivier Stephane

cause we'll differ like risks are our today forward-looking. other website. from matters involve I be Before all can in information, that making we would these begin, found to some filings, SEC our please be participants uncertainties our that those projected refer could and on which remind and materially latest to of results the statements statements. filing XX-K These to

today comments include measures. also Our financial non-GAAP

materials comparable in on with be GAAP financial Additional and statement can in statement And details measures SEC, our party's ChampionX the including which and with is website. quarter found on directly found registration be prospectus. press have our and release, website. or the SEC's a proposed from SLB acquisition, website proxy the conjunction finally, reconciliations to filed our most third These can a the with materials

will over call turn I to Olivier. that, With the

Olivier Le Peuch

this line questions. and on thank And by evolving will results, outlook topics. finally, Ladies leveraging operating Stephane full an differentiated environment. for morning. will we'll financial early James. details open joining discuss we quarter your the financial our provide will on a how leadership, navigate our year macro additional our Thank you, then market to digital and Paul, are efficiency our I to update results, ambitions our cover the you third I provide for will and reviewing gentlemen, I positioning, start us few will then I XXXX.

spending. cash resulted by expansion. driving XX.X%, commodity Let's was although free basis than revenue short-cycle In and very to revenue We delivered and and adjusted third cautious sequentially services capacity fueled continued expansions margin by growth continued accelerate, Sequentially, Middle saw as a to we more the strong Africa products digital international as the strong quarter. markets, efficiencies unchanged a to XX.X% and following quarter business, steady flat. production continue begin. for second by generated Meanwhile, North flow and expanded in remained prices in EBITDA recovery the discretionary billion. Asia, Latin activity strong more with in well America our in Europe was activity gas XX by and margin offshore results of as SLB SLBs Demand projects. East decline all as revenue a reactivity throughout strong we approach and Africa was largely $X.XX in lower offset strong despite points

was activity Turning constrained Gulf prices by in Mexico operators. by drilling to North U.S. capital Revenue X% activity of discipline offshore offset sequentially land lower gas the and the as in by higher America. as increased partially market remains ongoing

high. Next, digital revenue sequential let divisions. integration, reached of by the our In strong and touch delivered we which new a the digital growth business, me performance on led quarterly

digital and profitability, products that pace in by new full year achieve cost increase operating number today's discuss little to remains digital and expanding in to our continue growth will segment to a quarter high XX% on driven exciting announced also during business revenue We higher call. pretax the later revenue margins our of I a teens, Overall, optimization. and we the

future. as System East to our particularly business the the bookings System to see divisions. increasing performance benefiting also lines and this the continues the that development Turning we Mexico. of was proud while backlog in long-cycle secure most Asia contributed Middle to and in I from core to to for grow, continue sizable Gulf Production activity, Production

and spending As unique ability slightly construction activity portfolio evolving international technology the thank SLB's SLB our operating Overall, our performance want demonstrate declined and recovery customers our I'm in results strategy. North and focus and on our to discipline differentiated their by to continuing for our well of production I and and in the markets. and due efficiency. remains and this these America steady, continued supported positioning, international capital weaker team navigate by land offshore to deliver proud to broad extremely dynamic dedication shareholders market stable environment. performance to our for leveraging contribution

role growth, high-margin markets by accelerate delivering in leading customers drilling operations the space, to updates enhance have and this cloud, to quarter technology production I new we technology new strong digital. for on our and Next, in cost investments This with delivered returns. We cycle and in accelerate increase solutions transition for some digital their a of AI. our progress their lower as scaling times, taken data productivity, continue to creating wanted share another carbon is reduce growth digital and to and to operators for partnering opportunities and presenting disruptive

As partners solutions customers September, innovate part than are we digital in and to brought XXX journey, digital of shared hosted our more we this form where future.

[indiscernible]. continue launched deploy During new XXX machine and accelerate and partners for learning and products Lumi which we data this AI and advanced platform, innovate data to capabilities scale offer capabilities SLB and customers we approximately across And the a work will customers of event, the for Today, ones. to at AI solutions. energy generate we and

Amazon to generative a industry with during energy for to fall. We with collaboration as This of partner cost a well access announcement also as Web a to the unveiled develop NVIDIA number AI applications solution includes and expand Services expand Amazon to and SLB partner digital to set capability platform as a key Infrastructure. the helps across Delphi in our agreements decarbonization industry. these and solution Each the of positions the sustainability Digital to from evaluate

me Next, let the discuss environment. macro

releases, market conditions, long-term energy gas by [indiscernible]. to of global we geopolitical oil increasing, energy tension part in commodity witnessed environment, months, OPEC+ weaker for in few around play to fluctuation higher is remains activity concern this the the gas approach China Europe. Middle has economic and is tied in from softer energy rates resulted many and by the cautionary our demand the market. third spend output in priority an plus evolving and as increasing Despite This producers, these growth as to prices East. a highlighted mix for all in the continue in commodity and a recent to under prices fundamental Over This oversupplied Demand place. customers remain security largely driven a believe due have non-OPEC results. transition, U.S. will quarter role In been and pressure. of past while uncertainty large an by for from the remain energy

in remain on production. Internationally, gas partially investment Sea Meanwhile, oil favorably. long expected core, offset potential this with our the increased decarbonization activity Overall, cycle Middle sustained energy. the due of diamond as strategic arrive. digital see rigs been by differentiated of short-cycle approach a to SLB result and Specific we further across America, to and and in East North and investment increases depot rebounding U.S. of challenged, expect strategically navigate to in rigs we come in and and oil Middle this and digital North remained is do multipronged evolving the to regardless in capacity in strong, economically more expansion Asia, upstream [indiscernible] investment decline oil portfolio a in the extending any industry East gas the level the grow in projects operating new has trends OPEC+ to investment we global efficiency. could decision to most and secular not macro term. be to years quickly near

my opening of anticipate conclude early margin partially year-end quarter, continued favorable year and certain muted by backdrop, the digital quarter. XXXX With XXXX. in remarks our we customers. growth U.S. in expect with revenue product full to exemption spending the me mix offset by that sales, thoughts and optimization, discussion cautious and cost regarding let will deliver EBITDA our fourth land a with sharing Specific budget expansion international And E&P from we we

to ongoing enable year EBITDA above full expansion margins the or XX%. For full will year margin adjusted at XXXX, us deliver

the coupled Canada of support announced our cash asset flows, strong base returns our increased Additionally, shareholders. sale will to our with in

the to on feedback customer to in down. America potential will grow flat XXXX, slightly depend for spending more upstream to the low be markets see on digits, budget. will outlook spending directional North international receive In This while the mid-single we we the in after geopolitics

further In conclusion, rationalization, results portfolio SLB strong financial cash margin deliver exposure to differentiated and support well offshore positioned remains international cost optimized digital to shareholders. higher generation increased returns expansion, will as leadership structure, key markets. and to and our

the to will over I call turn now Stephane.

Stephane Biguet

and and Olivier, you, gentlemen. ladies good Thank morning,

the last XX% third credits, quarter earnings this represents year. an per compared charges excluding increase when and of quarter to share, $X.XX or Third

to structure transactions certain ChampionX was the of the the we connection we and realign $X.X program recorded of last our started [indiscernible]. of ] revenue in of $X.XX [ essentially charges Overall, During $X.XX and support quarter billion in service organization. third delivery quarter with our quarter, optimize parts and

program despite However, integration the moderating. These mentioned. just and of combined optimization digital quarter growth I strong of margins expansion very quarter revenue by third effect both were margin with represented year-on-year rates cost sequential improvements another the driven the and

long-cycle backlog. journey, improvement resilient from growth systems benefiting business top production Additionally, strong its margin and continued the its line

level first Our representing pretax margin quarter XXXX. XX EBITDA the XX.X%, XX.X%. increased to adjusted XX of points to Company-wide margin, basis points segment operating highest basis the since

quarter results division. third for each me go Let through now the

of uptake our quarter of points and and growth was XX.X%. of driven delivery result digital million solutions was flat. expanding digital support margin increased revenue improved optimization as to The performance to due Third the higher digital structure. new The the basis higher digital a integration $X.X X% profitability strong digital by of and margins sequentially, entirely revenue sequential XXX with was sales

rig decreased performance lower Well in of certain technology X% XX basis in East. billion and was to Middle count Construction due the international of land revenue contracted in the intervention billion result projects Margins markets points $X.X higher Reservoir markets. drilling America XX decreased activity of by basis flat Saudi sequentially $X.X in mix. was as the evaluation and U.S. unfavorable lower lower offshore points revenue completion on revenue sequentially the offset activity. Margins a Latin of and as

and points profitability production Systems and lift sales of production led X% basis North by and completions, East to systems. surface Margins improved XX.X% Finally, revenue lift, the Middle expanded increased Production of artificial XXX $X.X in midstream systems, sequentially, million and on surface completions artificial driven America Asia. by higher

our With liquidity. regard to

as exploration and quarter. data in projects collections. quarter, third were of and inclusive during This a billion billion Our cash $X quarter flow of flow as increase in was generated we strong operations billion. the very cash $X.X represents CapEx from cash of to APS million compared flow $X.X flow due the performance investments free cash investments, largely to $XXX significant third Capital customer last free in and

the year, For $X.X expecting be billion. investments approximately are still full to we capital

of million, in approximately to XXX will us This direct transaction, M&A Palliser with for end interest to front, adjustments project conditions, am definitive a Under future abandonment that well significant balance this value announced a is to result intensity. transaction regulatory sell removing will allows the our and million. agreement also have and the in This will signed volatility $XXX I we we approximately as USD our receive APS as associating expected tipped the to of cash in sheet the as exposure approvals closing Canada. asset such terms subject is customary year. proceeds commodity to us On typical It transaction a reduce also obligations before capital close eliminate other are our from transaction. yesterday, pleased of to report agreement, This closing present prices subject our that the reduce to which liabilities. the of

the more pending acquisition. are pleased the first are on now sides to likely in XXXX. anticipate closely, and We have working been the to integration Turning making. progress the close ChampionX The we quarter both of with together teams extremely they transaction

$X.X Finally, total basis. approximately returns ] stock billion of to form on The was shareholders. year-to-date [ a

of for million price $XXX During the repurchased quarter, XX.X total shares purchase a third million. we

we reflecting in in our shareholders our result the maintain reaffirm performance, Furthermore, cash will of expect to buybacks $X in flows. that a $X generating quarter. a level return Consequently, billion our strong to minimum flow to will XXXX. billion ability of commitment fourth to return in exceed our XXXX, this we confidence our continue we previous As cash we to of shareholders

turn now Olivier. to the call will back I conference

Olivier Le Peuch

. Stephane. open you, and Thank floor questions. gentlemen, we'll the Ladies your to

Operator

question first our West with And James Evercore Instructions] [Operator is from ISI.

James West

maybe Stephane, margin drive, top just more journey, -- how put expected margin maybe unfolding know specifics line as So the I how see I there little Olivier, initiatives you go you on obviously, growth have you it. through but margin given continued could you how about year? think, of want bit you through the -- kind talk and too drivers that a I a many we as Could will 'XX to here, some the that you guess, help year we muted underway of the way lot expansion but give is budgets of a guys is to better quantified, see this us yet on or unfold. go being don't journey,

Olivier Le Peuch

Good question. Thank you, Yes. James.

our our combination XXXX will our yes, to have the XXXX we results we in reach the the exit technology team we obviously, on of on QX, the introduction the finally, in the favor on efficiency we and and indeed, ambition rate maintain expect out take as expansion we falling and some So and a journey of I already XXXX. now quarter made market delivered ambition year spend or to we accelerate of cost mix. with ambition the approximately at have they expansion in strong further which fourth a initiated enter this another have of and premium continue scale and the XXXX will we margin play America, statement favorably as I we we will operating this through for in I that our international growth. $X have technology the the as from benefit -- full with think kick indicate continue into tech bode growth will forward, point, some on and and results, our very of team billion looking to to And the is to think digital I power if year And guidance start focus journey and And again the have North may. outpacing this plays well margin from digital year enter have

James West

Got it.

of a we're And also of seemed month in form. at then, from you Great. some out recently, now uptake held initial on Okay. thoughts your you your could that least success tools wanted just I for your digital. But the the well. quality accelerating a me digital forum that all that the using not next to little cloud, mentioned we've accelerating digital the way but the on Clearly, share as over your It that. the you maybe billion uptake in that revenue. year, thoughts just on uptake, the of AI is digital and $X now is going get to But gotten but to

Olivier Le Peuch

fair. No,

very display first, likely number scale that forever the and join technology. our of came this number think I from and I'm report the to to size, that best customers attendance pleased of that came the on many aspects, was their of the own us, most partners

show we our partners to from to Gen an with are had integrated operations, including platform and that it value the I historical different platform, technology think subsurface industry proposition we the AI. digital for edge have show open having they we're domains approach the an now the extending across from the AI, on-prem cloud opportunity and [indiscernible] to have opportunity we

I customers reducing this into carbon impact going not we many in by in So space, all the and that of performance think forward. Geosel in the cost operation realization operation, resulted for unlock aspects and value can

game to capture they opportunity there And that as can more one the adoption toolbox is want to changing is to to from particularly operation. forward of of that in ecosystem they is think have developed. in AI there I I customers accelerate that the with offering. production customers, if to domain invested are last in competitive. the maturing believe that where And terms applications we see pickup, that have the the extract into is we this perform that the be that blossomed that as in will want really digital really to is is that's with our future. months TAM has realize XX is have the in expand I So digital drilling I edge benefit There maturity years autonomous optimization our partnership going any, this the last way expansion market XX accelerated we There operation as [indiscernible] efficiency

going the long business So the term, for as for growing cycle, beyond a longer term us.

Operator

with we have Anderson Next is from Barclays. question

John Anderson

customers spending, driven really second the was that half you're is your year. deepwater your digits sustained cycle, the -- here. next prior plateauing cautious So of the being development. clear International It look mid-single customers though low at ahead. moving are seems still more that of pretty projects cycle by was if you are But saying kind the

can is say, something So of the beyond $XXX billion 'XX. a my years. water last few question in growth, again be like FID driver once We've in

You today, announced the have Namibian just and horizon. on Serna I awards Petrobras slew a of

higher? question prices a cycle is, to improve that just of gross is reaccelerating? drive get kind So the in really my the need Or kind structurally of order enough spending to overall to function it of oil is

Olivier Le Peuch

Yes.

regions. I activity and short under across Africa, reserve these regain unlocked will of combination future will has as total realization FID soon that activity. think in the every some as come the seen community that back across think exploration price most promotion as back gas of and heard that the untouched. have it part Italy deepwater, price And or has Americas, is you traction. pipeline you pressure year And I and X Asia, feed know, will we $XXX you where have on a X next have for been the a representing will impacts is seen drills or the approach cycle expect is new soon impact of billion, at offshore killing. commodity it long cycle in as the and rate for decision East higher some of come in the of short likely timing South had But new this year. It remain because cycle, that across project appraised have that But Med $XXX across billion may a execution level on strong There and when that intervention year, we back This offshore impact FID come years. is pressure. and as

this be that's over cumulative the the $XXX offshore million 'XX, FID forward. 'XX for a engine growth beyond So and will beyond offshore industry that of going 'XX 'XX exceed will to will sign execute a of project

John Anderson

guess That's great business, the Palliser great is that to the now margins that behind that us been way we Glad that hear. forward. is Also, digital is had accretive hear it's -- at of much going sale digital and one I and you the of accretive form course, growth things put about it's more to been the on of to to of can focus And talked kind in that clearly, Block. already. has

well So you the otherwise, you coming would you Naturally, to new have have you're your growth tendon give target year. probably I'm see just ready But I to about where guess just billion talked yet, the $X about ask I do way on target from? what's to out production already And think side. that. you're of You don't is hitting I revenue next. your done wondering that next

also part driver And construction. this of wondering deepwater leg a to of the can business huge a the growth. So But forward. from coming that's digital big going been I'm maybe has well of be another if

Olivier Le Peuch

is already. It

defense category. think matters, well the making I offshore where and will already in operations our unlock future. autonomous I will in this automation deploying is of think optimization But split the some that operation cost huge and rig rigs I the we and something are construction

happened as you affects being in cloud a we adoption has X,XXX, our we'll at years and the we continue a for and of platform have transition to drive that that a think will a cycle, one it's happen will [indiscernible], cloud time, long customer I space across transition Delphi have long to transition, more this a than and long to customer X,XXX come continue transition that continue period driver. a see customers to -- that have, affecting growth our

see our as success of mentioned, division application, with are services both of production the of it by by seen as we the The second the as put production in and putting leg finally, of having on pickup emergence the growth and our seen, this and that have offering into data digital AI is, optimization And I the capability system the with and they and that the the operation, of COGS production you back our of reserves well mentioned, the third autonomous we edge our emergence you is customers this Delphi, that digital drilling it with we capability, in the is digital themselves. operation place. construction, have digital much drilling portfolio, and application, and are in new be Lumi emergence core

So combine we future these horizon. This will X over digital. be to continue the

growing be consequence, of continue and line deliver the be will to accretive company. margin and that a for growth to we a will the top an As to will be TAM accretive us. engine

the the I way with for this next, it. between not, but growth point, context. continue [indiscernible] will target set see that's we'll to we this see So at And 'XX

Operator

from is Gruber Citigroup. with question Scott next Our

Scott Gruber

want year. still we that separate from question try you leverage hear glad ask results in that to see growth I margin some drivers. where to operating next growth other to I'm a

margin that the in you continue that there So I to assume challenge of you is for expanding and expansion organization we certain could digitalized you spending years, further upstream if achieve a would a flattish and cost margins flat through is optimization level growth X assume think further backdrop. that the next

be? what Just margin curious improvement rate potential that could of

Stephane Biguet

Yes.

several in say, and comes it It only actually And activities from of you mix would components. upstream [indiscernible]. I as not our spending margin and primarily, into outlook. the see expansion XXXX, that in -- QX further comes do on from we various First, mentioned,

will optimization, margins of general an the contract last quarter only focus as to look the will we yes, optimization at of from a but quarter started there's or activities, from cost, on is -- booster at As overall Olivier sorry, margins, structure. in also our mix, not last we well. program, pushes cost to end continue we to resources element technology our performance performance of digital level the company further delivery And QX, continue in based for of indicated, on beginning adjust our continuous and

So margins it's these of continue a mix all will push to components into XXXX. our that

Scott Gruber

it. impacted How Got Stephane, EBITDA How the comes much how Palliser be And financials would the by comes out? much CapEx on? sale?

Stephane Biguet

Yes.

we of So XXs. -- pretax margins this with on revenue comes year the Palliser, the on we generate per in million approximately in $XXX asset. And the high

Now year important. you of also to we a to that every very It something number. quite inject mentioned removes maintain this bit need investment

about is which CapEx are the as as is well in underestimate million, I per discounted are about but close million not it's something billion. year. $XXX future $X removing to my mentioned remarks, to prepared liabilities, And abandonment So $XXX undiscounted

our from So going sheet and capital will away earnings thing. is it and intensity. and P&L, reduce that's it's good This a balance volatility -- both

Operator

Next, we with Jayaram Arun go to JPMorgan.

Arun Jayaram

just Olivier, little America, dynamics you expectations relative wondering internationally, bit could with -- the -- resiliency cycle current expansion and you deepwater how in framed of your some -- a that of margin short-cycle characterize of from cautiousness some would opportunities. how markets, to gas pricing international North oil you I in was you're if long the the price seeing here?

Olivier Le Peuch

constructive, would positive, I we say. that comment is think I believe pricing still the

place. is integration and as spare opportunity changing to realizing much. current technology don't no industry move a And has first, environment to us very give and the the capacity think to industry capital our see and it And that still consequence, discipline. the I in capabilities pricing support I performance,

Arun Jayaram

on had Energy. I New enough. follow-up Fair a

about your in recovery alleviated extraction frame on guys How growth you in could could if to quarter costs which commercialize existing lithium? kind opportunity versus maybe just technologies? this talk an very are highlighted You technology. competitive the today I wondering wondering next press steps from the the the of update high Nevada, was you a if pilot I DLE release lithium rate

Olivier Le Peuch

been process to and pointed that in as using dental demonstration this have it are our very optimize and realize We, you Nevada lithium we putting IP concentration using -- and purification it and technology and pleased tune textile milestones have we a from using the I some to brine working we milestones think to out, for from and with plant carbonate months together integrated this. achieved to first, again, digitally our has these produce extraction to

So customers. a forward our to that exists partners the quantity used with is use big partners to some can work in demand that plan how DLE as and coming respond customers [ have this to lithium in produce and of prospective and technology ] large to see to announced plans to our some be and years. method extract and

this license to partner forward customers and looking into prospect it look good a as performance are new and plant it. partners. going in for way again, us first or such we So will with our as application long-term scale forward -- we prospect exciting benchmark this very to [indiscernible] technology technology technology a for where we develop run And the and space. That's for and

Operator

Goldman question from next comes with Neil our Mehta And Sachs.

Neil Mehta

we about XXXX think summer, of on 'XX the as Maybe EBITDA billion target a XX% had you CAGR. $XX talked about financial A Yes. that questions. over for couple

can in to Just of just lot a that macro just some And of relates of like I'd kind as I those light of tie us the to out. you talk given that moving pieces, think moving you've pieces commentary, of some but guide? it about

Stephane Biguet

Neil. sense, makes So

EBITDA been year-on-year for laser consecutive focused really, intend margin this. XX we are expansion again, -- for we and increasing quarters, We've So on is to margins don't yes, stop.

types So made of of this components. is our mission. I And explained, several it's as

finish the possible CAGR XXXX current and 'XX to the to long-term to on be we that sorry, question high EBITDA 'XX will outlook, your CAGR our that macro for than Apple, to with value to again, the rather it exclude indeed, teens in compare absolute of the Now possible refined the with to apples moment, but compared breaking just 'XX ChampionX, it's to if [indiscernible]. is ambition, 'XX

Neil Mehta

quite the all, talk by has you a go just then I'll and helpful. CapEx, about about collections. And Can working which first really including just forward cash constructive bit, free model into you flow again, capital well, [indiscernible] was of thinking for year for our a profile super you're as how next free That's been, talk quarter the -- in guys about a way. it very strong beat trending

Stephane Biguet

totally. Yes,

maintain yes, we discipline sure. So capital for

So the talk going capital predictable, CapEx quite to assured will rest it's be is this there too macro and to is theme -- bit considering a it's but environment. the clearly, -- soon of for discipline, this about

half, yes, of So now specifically in flow, the flow. this of cash in second free in way the year we to cash free exacerbate more than always QX, was generate our here. a QX And most

collection. So of to as you a on collections see, catch-up strong. dependent customer there's a to we strong. driven another. It dependent bit as effect. will bit was essentially collections. from little QX low In a you and so those be will will in really And was quarter really as by volatility very customer collections, be But way, also on -- a was yes, highlighted And it on QX be do can experience we it's a mentioned,

cash as it in flow with us, cash of billion shareholders We'll next or soon addition are definitely the we this continue high $X into continue the will for only release again, going finish be not we for reaffirm flow year. to So course, flow, the but capital finish is quite comfortable relates XXXX, target of it but because free to will cash to 'XX. free than next year too ChampionX. why a higher push. to working definitely, returns you we'll as increase give And a from work and note bit And number to will year, to free year

Operator

Next, to we your Hallead phone have with Hallead, Kurt you Benchmark. muted? do go Mr.

Kurt Hallead

more highlight you a Olivier, did as to XXXX. you into tempered outlook go

of is of some So along that. we the growth the There's appreciate In moderate usually little come that context a those of kind that. with a more markets some goes into or go industry a bit slowdown. of into dynamics, as kind maybe

driving of different what be with conversations Just your those customer what see discussions starting to customers kind some with may the wondering to or to of -- if if base? around. you're starting not, go the And have that's

Stephane Biguet

Yes.

on will at in our that loss to and credit think the aspect. we value. product we operation, We point a from foremost, that, exceed I will relieve perform operation under customer of and pressure I competitive first cycle as long to expectation that believe any all performance from get or pressure the from pressure think and/or a cycle, as our think, competitive under value of always come customers I continue in any could

lately a capital continue as industry say. the as technology, deliver capacity I -- satisfaction discipline the our a customer that restrained think we But our long performance, tight that continue to would of I as has believe critical and high to long as capacity, value new we Secondly, risk, strong demonstrated is on through this our maintain has technology, very industry proposition. integrated on

our protect it growth and matters when I and pricing any think into our relieve moderating we pricing has will that a further pressure hence, going it our could defend margins arise environment and forward. improve

of this matter cycle is I'm condition a I at the the of it's a but discipline matter industry. also different and And believe in capital have execution. relationship, what the looking than this bit past, a it's constructively. across of a we matter in So suffered It's

Kurt Hallead

generative surprising those going to X AI your Okay. by product. clients on what great post or to way. were concept maybe X follow-up, that meetings for What That's the came coming the Maybe with of forth, of didn't so that kind forum, meetings great. great. things -- a in discussions or digital your was so full potential in? That's circle you anticipate of the out and you yours event, and a What

Olivier Le Peuch

them XXX our think, and XX many of than more customers were presented customers, their other to of first, I them application I papers themselves by think of participated were, presented digital customers. the own

lot digital do So I was a each learnings to other of and how to use to learn customers each and other think from it technology from watch value. for unlock they

customer AI digital production. think away, expands across domains are different a on and think, I we cloud, than high value just application cloud, if that have level, we and that stack and the realized on-prem, edge sensing [indiscernible] more technology continental proposition a one take I So and at different across high,

a of surprise think. now customers we on proposition the offering. and think have continue did have That's value I full to digital, expand we very the as takeaway, So first I many comprehensive the

to inbound us Mistral growth it And data sort emergence lot be have And all unlock unlock will one create use full The across like performance. is Delphi Lumi this and domains the liberate just x requests heard industry AI and factor NVIDIA, of across new data physics I AI platform create would to our recognized into of domain, applications unlock as and that platform to of develop of to insights getting AI is framework the integrate and or second lot framework digital data the the as Lumi value have announcement future partners AI for have And the a digital the you a science announced a of think unlock that data factor full application. others. new for application That's there to as of complements an E&P a performance as rich, say. putting to as and latest and the all finally, in in more datasets access to we more data latest that we full XXX of a I technique allow is, of on different it, deployed, industry seamlessly. application a with value the that is in certainly the hence, through of engineered we and from as heard, data you realize as industry

Operator

of Saurabh with America. to go Bank we Next, Pant

Saurabh Pant

of upstream think have don't but secular had know we as if and one digital, questions its I the , drivers. growth specific digital you one, about know own been has I lot a maturing cycle slowing, I on mind, conceptual SLB there drivers,

each XX% are digital relative slows upstream the they growth we too about Olivier, growth be market doing? to digital the So to Or how let's the low much is in spending to, upstream materially to spending. But should growth from say, if should variance, to digital So what conceptually, unrelated mid-single upstream in do opportunity growth think digit, other? outlook? sensitivity to versus it does different

Olivier Le Peuch

I As market of largely us correlated. early a adoption of see uncorrelated digital, we the operation, digital of create autonomous edge long believe, TAM, be are data largely lease Lumi are And and curve at this in in I for very we that total or growth will AI with point. the the for opportunity think, will

Now And I decision long to I that I a tomorrow. is positive trend would think a today. visual, the for differentiate performance affect say, I customers to the now long continue can a think, opportunity trend, aspect is for hence, of and believe secular that credit but be discretionary on their value short-term, opportunity will realizing investment

Saurabh Pant

Right, right.

up, of is year, percentage flow year, sense, to pretty like $X Olivier. want accelerating going Okay. that looks for you're target $X a That cash This flow your you our assume think as XX%, Conceptually, Stephane, you we go conceptually, your cycle? follow year. continues close -- makes free you. cash the it are just to the a return target. that, next percentage it shareholders to be Stephane up at of shareholders. you matures. return cycle billion might billion And Obviously, have that lot But as free least fair maybe to to to cash for as the is of This about to which

Stephane Biguet

a Well, XX%. of true back it is we set minimum few years a

yes. So

were and able quite We actually exceed we I'm have that cleared that. happy to

it mean investment opportunity. I on depends really So

XX% already I to balance few very -- think tell Deleveraging has [indiscernible]. can a XXX% get for It's to hard focus I happy in we you is. mean been sheet number. it are if it's it's our really a -- good years. where with a is

returns priority moment. to that remains to shareholders the We little. Depending deleveraging have at the from focus turned opportunities, on investment

guidance will for percentage initial sure. So yes, that's XX%, our clearly that of see above you

Saurabh Pant

Yes. No, XX% XX%, but of you Stephane. it was to lot a all to as that's essentially perfect. makes expecting that from not I raise sense

Operator

Next, Read we Wells Roger to go with Fargo.

Roger Read

I day. back to come digital end want at of the the to

the So Olivier. question you, let ask me differently for

about think to it, you've you customers high As get on got board. growth,

to and have got internally, available of right, people offerings. the terms opportunities You've in

as got in to you the about think $X we not people be making see they to just as and the here. right external in or having the place items and center with front really 'XX what rate do right you've billion, So client inroads bottlenecks, growth that, beyond your The deal the potential but internal to that base.

Olivier Le Peuch

the for question. thanks Roger, No,

nothing new. there's I think

and last both and can the I I off think that growth. I X offering And the multi-cloud I they have think better what for. think think, and has -- the it's been I to is And digital cloud, quarters. comes think go-to-market the And on more in understanding an been I I it few from going our customers, think I think to, growth. understanding internal for X have think, been and environment from and paying unlock working this back, looking unlocking going we taken going from to evolution the what we hybrid success for we are we down have do engaging cloud capability on-prem years

focused directly more data sort out as customers of that and application, focus the unlock seen that willing the but to don't the we they and unlocking the realization think some address AI data I is on and have to on The adopt having suite. are opposed accessing as operation necessarily other are a to Lumi interested customers this. platform the Hence, are And data a to full through platform into I data.

investment We customers help into some have done to fit-for-basin tailor to factory application to collaborate needs. innovation our for their

gone all it So No. we have this. already cycle through resolved? Is of

customer time, the as I said, a adoption on it's I one cloud. at think,

by for of transaction insights production some services drilling autonomous being This and into equipment. such edge, time. optimization delivered at one that that at the our think construction reservoir as the the as or getting customers are of successful or is of there's well digital operation accelerating lot fact think I led digital core the well are operation wellbore that is and system, something I our performance surveillance help adoption new are at is us transformation However, system production our And of and division, pushing this a digital agents and time. the becoming they time is real one

of this will think, under of umbrella are and to a in and at if and the read we believe coalesce this pace made have see we in we here, continue. the may, offering operation the I hence, -- office, planning is And adoption. least I happening into platform, one the adoption to So think, to today, of offering I push unlocking

to So that's customers our if what with ecosystem they and unlock, work provide recognize that we doing working to you with. partners they options like, the more are so to

X dimensions changing X bear transfer the into are that So and we years it forward. and starting or fruits X in months, starting that to and going we these growth, see don't with to X the or XX have last are worked

Roger Read

sounds like incremental I cascade then and with to appreciate get Yes, that. it this. eventually, we

time, growth right As CapEx a digital the capital investment trail E&P follow-up for with on intensity investments? Does maybe obviously think the not of to eventually capital to decline? there's easy to about What's terms revenue the capital sale that a to capital that? an about declines capital would investment there it Stephane, way intensity continues, mentioned period does way Or way ops. elsewhere, a -- rely think here of in growth for us crossover so about think much Canada intensity exceeded? that, Is where you the does it the the in but in

Stephane Biguet

it's core related a There's the lag cycle. little business. core CapEx and deployment In investment in our or the of from business tool different field. digital, in reasonable clearly between it's our a a longer lag So the much

it's first, So not CapEx.

we investments -- done and say to you you the if research As want, over the and all in product development, basically development, tempted has expense last years. the know, investments because categorize been this you can them are

up seeing a solutions investing make always, not need new continue are our bit the we We We in given there. every year. enrich with to there's platform. spikes of But within So to to lot. tragedies come course,

smooth that for offering intensity incremental been the it's made enriching the the many, investments years, platform and many . over now would So I capital supporting really our have is customer. because the in enriched already growth digital trigger just in doesn't the heavy past say

Operator

last with from our will question Gengaro Stephen Stifel. come And

Stephen Gengaro

Two for me.

impact as the the short The little term thinking about sort about the we normal of even big curious the maybe that quarter fourth in just look a first, activity. the the the talk of Gulf puts fourth of any sort if just get every you versus And storm and on and year. from bit sort also at takes of been I'm we quarter. Can there's seasonality Mexico,

Olivier Le Peuch

sure we your Not got second question.

question. You are part of concerned second the -- your about

Stephen Gengaro

there's storms. been Gulf much Mexico the from of Whether impact

Olivier Le Peuch

So operation, quarter I muted and that been sequentially. for Mexico the Gulf will start growth impact with Mexico a our in the of this on storm driver third to Gulf say in have we seen the has of

think, it system sphere positive the As is I think side, boost to I that takes, in the and seasonality, Nova some there and and will puts to production part from sequence both of of either product the a yes, And comes sales part of year-end quarter is fourth starting on element budget effect revenue. and the there the your exertion part U.S. to are is digital of our a on land. an question, which will seasonality see that the normally create and

consent that growth sequentially. forward So we and the that's takes forward. and are entered mutate be a as going And the But see think see going partially puts offset, assets. will I we we seeing

Stephen Gengaro

going team through to optimism was but the earlier, comment these? willing kind been Great. And process has anything then you've talk your Has front. on of sure thought been or about this, changed -- can sort you're second that not there the question or increased on I'm on that integration really you you've CHX mentioned of as the

Stephane Biguet

on said, -- on sides -- quite Well, originally integration more the and with really transaction giving than us we seeing even we we both had a and the is been teams confidence we are as the and on working bit have are we synergies. what

quite synergy planning clearly our change to are seeing with target are we that time, going not are but we confirm and we integration in So it, what this we process. happy at

Operator

closing the comments. SLB to for And conference I'll turn back

Olivier Le Peuch

conclude call, following we to would Thank leave with you, today's you and takeaways. I gentlemen, the Leah. like Ladies as

navigate footprint. unique operating from positioned well SLB to First, remains commodity our price benefiting fluctuations,

high-margin and capture our gas markets. Moving deepwater deployment integration to to opportunities, harness forward, due international technology capabilities and the

look remains new business This industry. financial And to our in differentiator while will digital door markets. margin drive our growth key the and Second, opening solid conclude shareholders. I higher and performance cash higher to the with us a continue on third, efficiency, to we morning. returns to joining generation forward increased this further for our focus you margin expansion, call. Thank that, deliver operating With will

Operator

your your you for conference for participation. that and conclude Thank does Ladies gentlemen, today.

You may now disconnect.

Schlumberger Limited (SLB) 18 Oct 242024 Q3 Earnings call transcript