Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

SLB previously reported its results on the basis of four Divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. Commencing the third quarter of 2025, SLB's Digital business is reported as a separate Division. Additionally, SLB's Asset Performance Solutions ("APS"), Data Center Solutions and SLB Capturi, businesses are now reported in the All Other category. The acquired ChampionX's businesses are predominantly reported in SLB's Production Systems Division, with the exception of its digital business which is reported in SLB's Digital Division. Prior periods have been recast to conform to the current presentation.

Third Quarter 2025 Compared to Second Quarter 2025

					(Stated in millions)
	Third Quarter 2025								Second Quarter 2025
					Income								Income
	Revenue				Before Taxes				Revenue				Before Taxes
Digital	$	658			$	187			$	591			$	153
Reservoir Performance		1,682				312				1,691				314
Well Construction		2,967				558				2,963				551
Production Systems		3,474				559				2,932				491
All Other		397				96				583				155
Eliminations & other		(250	)			(86	)			(214	)			(80	)
						1,626								1,584
Corporate & other (1)						(203	)							(169	)
Interest income (2)						37								30
Interest expense (3)						(142	)							(139	)
Charges and credits (4)						(318	)							(21	)
	$	8,928			$	1,000			$	8,546			$	1,285

(1)

Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

(2)

Interest income excludes amounts that are included in the segments’ income ($- million in both the third quarter of 2025; $- in the second quarter of 2025).

(3)

Interest expense excludes amounts that are included in the segments’ income ($- million in the third quarter of 2025; $3 million in the second quarter of 2025).

(4)

Charges and credits are described in detail in Note 2 to the Consolidated Financial Statements.

Third-quarter 2025 revenue of $8.9 billion increased $382 million, or 4%, compared to the second quarter of 2025. The third-quarter revenue reflected two months of activity from the acquired ChampionX businesses (see Note 4 to the Consolidated Financial Statements), which contributed $579 million of revenue. This increase was largely offset by the loss of approximately $100 million of APS revenue due to production interruption arising from a pipeline disruption in Ecuador and the absence of $97 million of revenue following the divestiture of SLB’s interest in the Palliser APS project in Canada at the end of the second quarter. After adjusting for the revenue contribution from ChampionX and the absence of revenue from the two APS projects, revenue was essentially flat on a sequential basis.

This performance was achieved against the backdrop of a fully supplied oil market, an uncertain geopolitical environment and subdued commodity prices. In this context, international markets — aside from a few key countries — are proving resilient, with several countries across the Middle East and Asia continuing to exhibit growth. Looking ahead, SLB expects OPEC+ production releases to support investment across many countries in these regions where it is well established. It is more likely that the international markets will lead an activity rebound when supply and demand rebalance, supported by sustained investment for oil capacity, gas expansion projects, and a constructive outlook for deepwater. SLB is well positioned to benefit from such a recovery.

In this context, SLB foresees revenue growth in the fourth quarter driven by the international markets, Digital and a full quarter of activity from the acquired ChampionX businesses.

Digital

Digital revenue of $658 million grew 11% sequentially. Excluding the impact of the acquisition of ChampionX, Digital revenue increased 8% primarily driven by a $21 million increase (22%) in Digital Operations and a $17 million increase (28%) in Digital Exploration.

Digital pretax operating margin of 28% expanded 250 basis points (“bps”) sequentially. Profitability improved primarily due to strong Digital Exploration activity and robust revenue growth from Digital Operations.

Reservoir Performance

Reservoir Performance revenue of $1.68 billion declined 1% sequentially as higher activity in Europe & Africa was more than offset by lower revenue in the Middle East & Asia, mainly due to lower activity in Saudi Arabia.

Reservoir Performance pretax operating margin of 19% was essentially flat sequentially.

Well Construction

Well Construction revenue of $3.0 billion was flat sequentially as higher revenue in offshore Guyana and North America was offset by lower drilling activity in Saudi Arabia and Argentina.

Well Construction pretax operating margin of 19% was essentially flat sequentially.

Production Systems

Production Systems revenue of $3.5 billion increased 18% sequentially, reflecting two months of activity from the acquired ChampionX production chemicals and artificial lift businesses, which contributed $575 million of revenue. Excluding the impact of this acquisition, Production Systems third-quarter 2025 revenue decreased 1% sequentially.

Production Systems pretax operating margin of 16% contracted 66 bps sequentially driven by an unfavorable geographical mix in completions and lower subsea margins partially offset by accretive margin contribution from ChampionX which generated $106 million of pretax operating income.

All Other

Revenue of $397 million declined 32% sequentially primarily due to lower APS revenue following the divestiture of SLB's interest in the Palliser asset in Canada and the full month of production interruption arising from the pipeline disruption in Ecuador.

All Other pretax operating income of $96 million decreased $59 million sequentially primarily due to the effects of the divestiture of the Palliser asset and the pipeline disruption in Ecuador.

Nine Months 2025 Compared to Nine Months 2024

						(Stated in millions)
		Nine Months 2025								Nine Months 2024
						Income								Income
		Revenue				Before Taxes				Revenue				Before Taxes
Digital		$	1,836			$	465			$	1,734			$	370
Reservoir Performance			5,072				908				5,368				1,082
Well Construction			8,908				1,698				10,090				2,145
Production Systems			9,247				1,520				8,808				1,390
All Other			1,542				414				1,535				588
Eliminations & other			(642	)			(239	)			(530	)			(171	)
							4,766								5,404
Corporate & other (1)							(550	)							(568	)
Interest income (2)							103								98
Interest expense (3)							(425	)							(370	)
Charges and credits (4)							(546	)							(279	)
		$	25,963			$	3,348			$	27,005			$	4,285

(1)

Comprised principally of certain corporate expenses not allocated to the segments, stock-based compensation costs, amortization expense associated with certain intangible assets, certain centrally managed initiatives and other nonoperating items.

(2)

Interest income excludes amounts that are included in the segments’ income ($1 million in 2025; $31 million in 2024).

(3)

Interest expense excludes amounts that are included in the segments’ income ($7 million in 2025; $13 million in 2024).

(4)

Charges and credits are described in detail in Note 2 to the Consolidated Financial Statements.

Nine-month 2025 revenue of $26.0 billion decreased 4%, or $1.0 billion, year on year. Excluding the $579 million revenue contribution from the acquired ChampionX businesses, nine-month 2025 revenue declined 6% year on year primarily due to activity reductions in Saudi Arabia, Mexico and certain key offshore markets.

Digital

Digital revenue of $1.8 billion grew 6% year on year due to strong growth from both Digital Operations and Platforms & Applications partially offset by a $44 million decrease in Exploration Data.

Digital pretax operating margin of 25% expanded 399 bps year on year primarily driven by the higher revenue and efficiency gains.

Reservoir Performance

Reservoir Performance revenue of $5.1 billion decreased 5% year on year primarily due to a slowdown in evaluation and stimulation activity in the international markets.

Reservoir Performance pretax operating margin of 18% contracted 226 bps year on year due to the lower evaluation and stimulation activity.

Well Construction

Well Construction revenue of $8.9 billion decreased 12% year on year driven by a broad reduction in drilling activity both internationally, mainly in Mexico, Saudi Arabia, and offshore Africa, and in North America.

Well Construction pretax operating margin of 19% declined 219 bps year on year driven by the widespread activity reductions.

Production Systems

Production Systems revenue of $9.2 billion increased 5% year on year reflecting two months of activity from the acquired ChampionX production chemicals and artificial lift businesses, which contributed $575 million of revenue. Excluding the impact of this acquisition, Production Systems revenue decreased 2% year on year primarily due to decreased sales of subsea production systems.

Production Systems pretax operating margin of 16% was essentially flat year on year.

All Other

Revenue of $1.5 billion was flat year on year due to lower APS revenue following the divestiture of SLB’s interest in the Palliser asset in Canada and the full month of production interruption arising from the pipeline disruption in Ecuador offset by a 140% increase in Data Center Solutions revenue and the effect of the acquisition of SLB Capturi in the second quarter of 2024.

All Other pretax operating income decreased $174 million year on year, primarily due to the effects of the divestiture of the Palliser asset and the pipeline disruption in Ecuador.

Interest & Other Income

Interest & other income consisted of the following:

(Stated in millions)
	Third Quarter				Second Quarter				Nine Months
	2025				2025				2025				2024
Earnings of equity method investments	$	41			$	72			$	155			$	136
Interest income		37				31				104				129
Gain on sale of Palliser APS project		-				149				149				-
	$	78			$	252			$	408			$	265

Other

Research & engineering and General & administrative expenses, as a percentage of Revenue were as follows:

	Third				Second
	Quarter				Quarter				Nine Months
	2025				2025				2025				2024
Research & engineering		1.9	%			2.1	%			2.0	%			2.1	%
General & administrative		0.8	%			1.0	%			1.0	%			1.1	%

The effective tax rate was 23% for the third quarter of 2025 as compared to 18% for the second quarter of 2025, and 21% for the first nine months of 2025 as compared to 19% for the same period of 2024. These increases in the effective tax rate were primarily due to the charges and credits described in Note 2.

Charges and Credits

SLB recorded charges and credits during the first nine months of 2025 and 2024. These charges and credits, which are summarized below, are more fully described in Note 2 to the Consolidated Financial Statements.

2025:

	(Stated in millions)
	Pretax Charge				Tax Benefit				Noncontrolling
	(Credit)				(Expense)				Interests				Net
First quarter:
Workforce reductions	$	158			$	10			$	-			$	148
Merger and integration		49				1				4				44
Second quarter:														-
Impairment of equity method investment		69				12				-				57
Workforce reductions		66				3				-				63
Other merger and integration		35				4				4				27
Gain on sale of Palliser APS project		(149	)			(4	)			-				(145	)
Third quarter:
Amortization of inventory fair value adjustment		66				15				-				51
Acquisition-related professional fees		61				-				-				61
Workforce reductions		57				4				-				53
Acquisition-related employee benefits		54				2				-				52
Impairment of equity-method investment		52				4				-				48
Other merger and integration		28				2				4				22
	$	546			$	53			$	12			$	481

2024:

	(Stated in millions)
									Noncontrolling
	Pretax Charge				Tax Benefit				Interests				Net
First quarter:
Amortization of inventory fair value adjustment	$	14			$	4			$	3			$	7
Merger and integration		11				2				2				7
Second quarter:
Workforce reductions		111				17				-				94
Merger and integration		16				1				5				10
Amortization of inventory fair value adjustment		15				4				3				8
Third quarter:
Workforce reductions		65				10				-				55
Merger and integration		33				6				4				23
Amortization of inventory fair value adjustment		14				4				3				7
	$	279			$	48			$	20			$	211

Liquidity and Capital Resources

Details of the components of liquidity as well as changes in liquidity are as follows:

	(Stated in millions)
	Sept. 30,				Sept. 30,				Dec. 31,
Components of Liquidity:	2025				2024				2024
Cash	$	3,014			$	3,086			$	3,544
Short-term investments		571				1,376				1,125
Short-term borrowings and current portion of long-term debt		(1,923	)			(1,059	)			(1,051	)
Long-term debt		(10,843	)			(11,864	)			(11,023	)
Net debt (1)	$	(9,181	)		$	(8,461	)		$	(7,405	)

	Nine Months Ended Sept. 30,
Changes in Liquidity:	2025				2024
Net income	$	2,651			$	3,461
Depreciation and amortization (2)		1,911				1,871
Impairment of equity method investment		121				-
Gain on sale of Palliser APS project		(149	)			-
Earnings of equity method investments, less dividends received		(59	)			(9	)
Deferred taxes		(89	)			32
Stock-based compensation expense		257				244
Increase in working capital		(1,273	)			(1,495	)
Other		114				108
Cash flow from operations		3,484				4,212
Capital expenditures		(1,178	)			(1,322	)
APS investments		(312	)			(390	)
Exploration data costs capitalized		(168	)			(141	)
Free cash flow (3)		1,826				2,359
Dividends paid		(1,176	)			(1,144	)
Stock repurchase program		(2,414	)			(1,236	)
Proceeds from employee stock plans		230				244
Net debt assumed in connection with ChampionX acquisition		(133	)			-
Proceeds from sale of Palliser APS project		338				-
Proceeds from sale of ChampionX Drilling Technologies business		286				-
Business acquisitions and investments, net of cash acquired		(144	)			(552	)
Purchase of Blue Chip Swap securities		(167	)			(136	)
Proceeds from sale of Blue Chip securities		144				92
Taxes paid on net settled stock-based compensation awards		(61	)			(86	)
Other		(34	)			27
Increase in net debt before impact of changes in foreign exchange rates		(1,305	)			(432	)
Impact of changes in foreign exchange rates on net debt		(471	)			(53	)
Increase in net debt		(1,776	)			(485	)
Net debt, beginning of period		(7,405	)			(7,976	)
Net debt, end of period	$	(9,181	)		$	(8,461	)

(1)

“Net debt” represents gross debt less cash and short-term investments. Management believes that Net debt provides useful information to investors and management regarding the level of SLB’s indebtedness by reflecting cash and investments that could be used to repay debt. Net debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt.

(2)

Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs, and APS investments.

(3)

“Free cash flow” represents cash flow from operations less capital expenditures, APS investments and exploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of our ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations.

Key liquidity events during the first nine months of 2025 and 2024 included:

Capital investments (consisting of capital expenditures, APS investments and exploration data capitalized) were $1.7 billion during the first nine months of 2025 compared to $1.9 billion during the first nine months of 2024. Capital investments for the full year 2025 are expected to be approximately $2.4 billion.

In January 2025, SLB announced a 3.6% increase to its quarterly cash dividend from $0.275 per share of outstanding common stock to $0.285 per share, beginning with the dividend payable in April 2025. Dividends paid during the first nine months of 2025 and 2024 were $1.2 billion and $1.1 billion, respectively.

During the third quarter of 2025, SLB repaid its $0.5 billion 1.40% Senior Notes due 2025.

During the third quarter of 2025, SLB fully repaid all the $0.6 billion of debt assumed in connection with the acquisition of ChampionX.

During the third quarter and concurrent with the close of the ChampionX acquisition, the ChampionX Drilling Technologies business was disposed of and SLB received $286 million of proceeds.

As of September 30, 2025, SLB had cumulatively repurchased approximately $5.9 billion of SLB common stock under its $10 billion share repurchase program.

The following table summarizes the activity under the share repurchase program:

(Stated in millions, except per share amounts)
	Total cost				Total number				Average price
	of shares				of shares				paid per
	purchased				purchased				share
Nine months ended September 30, 2025	$	2,414				60.0			$	40.23
Nine months ended September 30, 2024	$	1,236				26.6			$	46.47

During the second quarter of 2025, SLB completed the sale of its interest in the Palliser APS project in Canada in exchange for net cash proceeds of $338 million, of which $22 million were received in the third quarter of 2025. SLB recorded revenue of approximately $0.2 billion relating to this project during the six months ended June 30, 2025 and approximately $0.5 billion during 2024.

During the second quarter of 2024, SLB issued $500 million of 5.00% Senior Notes due 2027, $500 million of 5.00% Senior Notes due 2029, and $500 million of 5.00% Senior Notes due 2034.

As of September 30, 2025, SLB had $3.6 billion of cash and short-term investments on hand and committed debt facility agreements with commercial banks aggregating $5.0 billion, all of which was available. SLB believes these amounts are sufficient to meet future business requirements for at least the next 12 months and beyond.

SLB has a global footprint in more than 100 countries. As of September 30, 2025, only two of those countries (the United States and Mexico) individually accounted for greater than 10% of SLB’s net receivable balance. As of September 30, 2025, the United States and Mexico each represented 11% of SLB's net accounts receivable balance. While SLB has recently experienced delays in payment from its primary customer in Mexico, these receivables are not in dispute and SLB has not historically had any material write-offs due to uncollectible accounts receivable relating to this customer.

FORWARD-LOOKING STATEMENTS

This third-quarter 2025 Form 10-Q, as well as other statements we make, contain “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “precursor,” “forecast,” “outlook,” “expectations,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “scheduled,” “think,” “should,” “could,” “would,” “will,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about SLB’s financial and performance targets and other forecasts or expectations regarding, or dependent on, its business outlook; growth for SLB as a whole and for each of its Divisions (and for specified business lines, geographic areas, or technologies within each Division); the benefits of the ChampionX acquisition, including the ability of SLB to integrate the ChampionX business successfully and to achieve anticipated synergies and value creation from the acquisition; oil and natural gas demand and production growth; oil and natural gas prices; forecasts or expectations regarding energy transition and global climate change; improvements in operating procedures and technology; capital expenditures by SLB and the oil and gas industry; the business strategies of SLB, including digital and “fit for basin,” as well as the strategies of SLB’s customers; SLB’s capital allocation plans, including dividend plans and share repurchase programs; SLB’s APS projects, joint ventures, and other alliances; the impact of ongoing or escalating conflicts on global energy supply; access to raw materials; future global economic and geopolitical conditions; future liquidity, including free cash flow; and future results of operations, such as margin levels. These statements are subject to risks and uncertainties, including, but not limited to, changing global economic and geopolitical conditions; changes in exploration and production spending by SLB’s customers, and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of SLB’s customers and suppliers; SLB’s inability to

achieve its financial and performance targets and other forecasts and expectations; SLB’s inability to achieve net-zero carbon emissions goals or interim emissions reduction goals; general economic, geopolitical and business conditions in key regions of the world; foreign currency risk; inflation; changes in monetary policy by governments; tariffs; pricing pressure; weather and seasonal factors; unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays or cancellations; challenges in SLB’s supply chain; production declines; the extent of future charges; SLB’s inability to recognize efficiencies and other intended benefits from its business strategies and initiatives, such as digital or new energy, as well as its cost reduction strategies; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, and climate-related initiatives; the inability of technology to meet new challenges in exploration; the competitiveness of alternative energy sources or product substitutes; and other risks and uncertainties detailed in this Form 10-Q and our most recent Form 10-K and Forms 8-K filed with or furnished to the SEC.

If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this Form 10-Q regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social, and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Statements in this Form 10-Q are made as of October 22, 2025, and SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise.