TenQ

The SLB story

SLB is the largest oilfield services company, expanding in production equipment, software and data center infrastructure as it works to offset weaker drilling activity and Middle East disruptions.

Written from SLB's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $51.49share price, last close
  • $76.4Bmarket value
  • 20/36TenQ Score checks passed
  • 4.7%growth a year the price assumes

The story in brief

  • Acquisitions mask weakness. Revenue reached $8.97 billion in the quarter to June 2026, up 5% year on year, but declined 5% excluding ChampionX.
  • Digital gains ground. Digital revenue grew 18% year on year in the quarter to June 2026, while annualized recurring revenue rose 15% to $1.04 billion.
  • Expansion beyond oilfields. The August 2026 agreement to acquire Kelvion would expand SLB's data center infrastructure offering into thermal management and heat exchange technologies.

What drives the business

  • SLB serves national oil companies, large integrated oil companies and independent operators through Reservoir Performance, Well Construction, Production Systems and Digital, spanning reservoir evaluation, drilling, production equipment and software such as Delfi and Petrel.
  • The ChampionX acquisition in July 2025 strengthened production chemicals and artificial lift, with SLB issuing 141 million shares valued at $4.9 billion and expecting approximately $400 million in annual pretax synergies within the first three years after closing.
  • Production Systems generated $3.77 billion in revenue in the quarter to June 2026, and its OneSubsea joint venture secured a subsea boosting contract for bp's Thunder Horse development following awards for Kaskida and Tiber.
  • Data Center Solutions manufactures modular enclosures, cooling systems and other infrastructure, grew revenue 63% year on year in the first half of 2026, and was selected as a delivery partner for Meta's new 1GW data center in Canada.
  • The proposed Kelvion acquisition extends that infrastructure strategy, with Kelvion expected to generate approximately $2.3 billion to $2.4 billion in revenue in 2026, including between $1.2 billion and $1.3 billion from data centers.

What the price assumes

At $51.49, the reverse DCF implies free cash flow after stock pay grows 4.7% a year for ten years, using a 10.2% discount rate.

SLB delivered -3.3% annual growth on that measure over the last 10 years, while the TenQ check sets a 0.4% bar by moving that historical rate halfway toward 4%.

The implied growth therefore requires a reversal of the longer cash flow record, despite $4.8 billion in free cash flow over the last twelve months and a 6.3% free cash flow yield.

Value SLB on your own assumptions

What could change the story

  • Middle East revenue declined 13% sequentially in the quarter to June 2026 as conflict disrupted operations, and management says a full recovery depends on a durable resolution, infrastructure repair and changes to shipping logistics.
  • ChampionX contributed $870 million in revenue in the quarter to June 2026, but Production Systems revenue excluding the acquisition declined 1% year on year, leaving underlying demand weaker than reported growth suggests.
  • Revenue growth of 2.5% over the last twelve months trails the 8.3% annual pace over the last three years, while the 18.6% operating margin falls short of the TenQ sector benchmark of 20.8%.
  • Total debt of $11.1 billion compares with $6.6 billion in cash and short-term investments, and the near-term liquidity measure of 1.44 falls below the TenQ bar of 1.50.

What to watch next

  • The next releases will show whether revenue excluding ChampionX improves and whether Middle East activity recovers alongside demand for intervention services, equipment and infrastructure repair.
  • SLB's July 2026 outlook called for Data Center Solutions to exceed a $1 billion annualized revenue run rate by the end of 2026 and surpass $2 billion as it exits 2027, making progress on Meta and updates on Kelvion important measures of the expansion.
  • Digital recurring revenue and profitability will help distinguish sustained software adoption from exploration data licenses and transfer fees that supported the quarter to June 2026.
  • Management expects approximately $2.5 billion in capital investment for full-year 2026, including capital expenditures, exploration data costs and Asset Performance Solutions investments, against free cash flow of $716 million in the quarter to June 2026.

Sources

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