Schlumberger Limited (SLB) Q4 2025 Earnings Call Transcript

Schlumberger Limited (NYSE: SLB) Q4 2025 Earnings Call dated Jan. 23, 2026

Corporate Participants:

James R. McDonald — Senior Vice President, Investor Relations and Industry Affairs

Olivier Le Peuch — Chief Executive Officer

Stephane Biguet — Executive Vice President and Chief Financial Officer

Analysts:

Steve Richardson — Analyst

James West — Analyst

Arun Jayaram — Analyst

J. David Anderson — Analyst

Neil Mehta — Analyst

Marc Bianchi — Analyst

Scott Gruber — Analyst

Presentation:

operator

Sa. Excuse me ladies and gentlemen. Thank you for your patience. The call will begin momentarily. Thank you for your patience. The call will begin momentarily. Good morning, my name is Megan and I’ll be your conference operator today and would like to welcome everyone to the fourth quarter and full year 2025 SLV earnings call. At this time all participants are in a listen only mode. After the speaker’s remarks, there will be a Q and A session. If you would like to ask a question during the time, simply press STAR followed by the number one on your telephone keypad.

You may remove yourself from the queue by pressing star 2. As a reminder, this call is being recorded. I will now turn the call over to James R. McDonald, Senior Vice President of Investor Relations and Industry Affairs. Please go ahead.

James R. McDonald — Senior Vice President, Investor Relations and Industry Affairs

Thank you Megan Good morning and welcome to the SLB fourth quarter and full year 2025 earnings conference call. Today’s call is being hosted from Houston following our board meeting held earlier this week. Joining us on the call are Olivier La Push, Chief Executive Officer and Stephane Begay, Chief Financial Officer. Before we begin, I would like to remind all participants that some of the statements we will be making today are forward looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. For more information please refer to our latest 10k filing and other SEC filings which can be found on our website.

Our comments today also include non GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter and full year earnings press release which is on our website. With that I will turn the call over to Olivier.

Olivier Le Peuch — Chief Executive Officer

Thank you James Ladies and Gentlemen, thank you for joining us today. I will begin by reviewing our fourth quarter performance followed by an update on market conditions and the unique opportunities we see developing for our business. I will then share our outlook for the first quarter and expectations for the full year 2026. Stefan will then provide additional details on our financial results and finally we will open the line for your questions. Let’s begin. We ended the year with strong operational and financial performance in the fourth quarter, achieving sequential revenue growth, margin expansion and substantial cash flow generation.

This performance reflects the breadth of our portfolio and the impact of our strategy in a challenging macro environment. Sequentially, revenue increased by 9% driven by high single digit growth internationally and mid teens growth in North America excluding Champion X organic revenue increased by 7% internationally and 6% in North America. We saw sequential growth across all geographies for the first time since the second quarter of 2024. This demonstrates that global upstream activity has stabilized with key markets showing early signs of a rebound. This helped US to deliver approximately 500 million of organic revenue growth this quarter in addition to a roughly 300 million contribution from Schumpenhex resulting from an extra month of consolidation.

Let me briefly discuss a few highlights from the quarter. First, we benefited from stronger end product sales in production system globally, higher exploration data sales and strong demand for digital operation across all areas. Second, activity increased across the Middle east led by Saudi Arabia and with momentum in UAE due to a combination of sustained gas development and increased oil field intervention activity. Third, we delivered strong results across Asia with increased activity in Australasia, East Asia and Indonesia as this market continue to benefit from offshore gas development. Notably, this quarter also marked the return of growth in Saudi Arabia and across Sub Saharan Africa with flat revenue in Mexico.

These three basins actually accounted for the entire organic revenue decline in the full year of 2025 and directionally we expect activity in this market to improve as we move throughout 2026. Turning to the divisions in the fourth quarter, production system and Digital led the way. While reservoir performance was up slightly and well construction revenue was steady. The strength in production system was driven by increased demand for pollution chemicals, artificial lift and process technology and solutions as well as backlog execution completions and one subseat when excluding the Champion X contribution. This division still grew by double digits sequentially and maintained its momentum with several contract awards during the quarter.

As you can see from today’s highlights. Digital also continued to grow at a healthy rate driven by strong growth in digital exploration with year end sales in the Gulf of America, Brazil and Angola as well as robust increase in digital operation and platform application. Digital annual recurring revenue surpassed $1 billion, reflecting year on year growth of 15%. We also announced several exciting digital milestones in the fourth quarter including launching Tela, an AgentIQ AI assistant purpose built to transform the upstream energy sector and forming a partnership with ADNOC to launch an AI powered production system optimization platform.

These underscore the opportunity for AI to continue to reshape industry operations. Meanwhile, in reservoir performance, sequential growth was a result of increased simulation activity in Middle east and Asia and higher intervention activity in Europe and Africa in well construction. High offshore drilling activity in North America and Europe and Africa was offset by declines in some land markets. Additionally, our fourth quarter revenue benefited from resumption of production in APS projects of Ecuador. Overall, our fourth quarter results are a positive indication of the opportunity that lies ahead. I want to thank the entire SEBI team for delivering excellent performance for our customers throughout 2025 and finishing the year on such a strong note.

Turning to the market environment near term oversupply may continue to exert downward pressure on commodity price throughout the first half of 2026, while elevated geopolitical uncertainties should provide a price flow. ENP operators are therefore expected to remain cautious and to backload their 2026 budget as supply and demand continues to rebalance into 2027. Conditions will likely support a gradual recovery in upstream investment, with activity in key international markets and offshore deposit exiting 2026 at higher ledger level than 2025. Indeed, economic growth, increasing population and large scale manufacturing and infrastructure investment, partly in the US and China related to AI, will inherently drive more demand in both oil and gas.

Coupled with the natural decline of existing oil and gas assets, we believe this will be the key drivers for the rebalancing of supply and demand. In the meantime, our customers are focused on delivering the lowest cost incremental buys. This means capturing efficiencies at scale and in our view, that requires more technology, more integration and more digital solutions. Today, operators are increasingly prioritizing performance assurance across the asset lifecycle, reducing development timelines and accelerating optimization through digital solutions. SLB is uniquely positioned to deliver value in this environment by integrating equipment with intelligent and autonomous digital capabilities to reduce downtime, improve efficiency and increase productivity as witnessed by the rapid uptake in our digital operations.

Additionally, pollution recovery has emerged as a critical domain for value creation not only in brown feed and mature assets, but also across greenfield developments and tiebacks. This is not an either or proposition between CAPEX and opex, but an opportunity to increase our share of CAPEX spend and capture OPEX white space with new solutions with SLB’s expanded production portfolio including the addition of Champonnex, we are uniquely positioned to meet the developing demand in the production space. Globally, the international markets are stabilizing and trending upwards directionally with Latin America and Middle east and Asia leading the rebound in 2026.

Regionally, Middle east continues to represent the largest international market with positive investment opportunities. Indeed, there is a resurgence of oil production across the region driven by OPEC policy. While GAZ remains a strategic priority to meet regional demand and long term capacity expansion. In 2025 we witnessed double digit growth in the United Arab Emirates, Iraq, Kuwait, which was more than offset by the decline in Saudi Arabia in 2026. The Middle east market will be characterized by rebounds in drilling and workover activity in Saudi Arabia, with rig counts potentially returning to early 2025 levels by the end of 2026 and this has already begun.

Offshore also continues to present compelling long term growth opportunities for SLB partly in deepwater where we expect activity to inflect toward the end of 2026 as white space subsides. With one subsea, we have the unique ability to combine subsea processing capabilities, digital solution and SLB’s integrated port to process expertise across subsea intervention and integrated well construction to create differentiated value for customers specific to the subsea market. More than 500 subsea are expected to be awarded across 2026 and 2027, about 20% higher than 2025 run rate and this is an opportunity we aim to capitalize on.

In 2025, one subsea was about approximately $4 billion in subsea bookings and we see a path for cumulative bookings exceeding $9 billion over the next two years supported by this tendering activity. Finally, we’re excited about the strong progress in our data center solution business since its launch less than two years ago. This year we plan to expand our range of offering our customer base and the geography we serve paving the way for future growth. The opportunity is growing faster than anticipated and we expect to exit the year at the quarterly revenue run rate of $1 billion per year.

Overall, SLB is clearly positioned to fully benefit from a rebound in international activity as supply demand rebalance supported by ongoing investments for oil capacity, gas expansion project and a constructive long term outlook for deepwater. Regional activity. Dynamics further reinforce this several directional trajectory beginning in 2026. Let me now share our outlook for the year. The headwinds we face in 2025 in certain markets may become tailwinds for our business this year. We anticipate this will Translate into higher fourth quarter revenue exit rate in 2026 compared to the fourth quarter of 2025 for the full year. Assuming oil price remains range bound in the high 50s to low 60 range, we expect 2026 revenue to be between 36.9 billion and to 37.7 billion.

In North America we will benefit from the addition of seven months of activity from ShopenX, stronger offshore activity tied to customer plants and accelerated growth in data centers, while upstream land activity will continue to decline year on year. In international markets, revenue is expected to trend upwards over the year resulting in a slight year over year increase. Growth will come from Latin America and the Middle east and Asia, while Europe and Africa is anticipated to decline slightly. Let me now describe how these dynamics will unfold across the divisions in digital Revenue is expected to go at the same pace as 2025 driven by digital operations, production system will increase mostly benefiting from the full year of Champenix revenue.

Reservoir performance will be flattish while well construction will decline slightly. Revenue in the all over category will be flat year on year considering the loss of revenue from the divested Palisade asset will be offset by growth in the data center solutions. This revenue outlook translates into adjusted EBITDA between 8.6 billion to 9.1 billion with margins remaining in line with full year 2025 levels. Finally, with visibility into another year of strong cash flow, we will return more than $4 billion to shareholders in 2026 through the combination of the increased dividend that we announced this morning and share repurchase.

Turning to the first quarter, we anticipate revenue to decline by high single digits sequentially similar to the prior year due to outsized year end product sales and project milestones in production systems in the prior quarter. We also expect adjusted EBITDA margin to decrease by 150 to 200 basis points versus the prior quarter. This seasonal dip will be followed by a rebound of activity during the second quarter with further expansion into the second half driven primarily by international markets. Finally, before I hand over to Stefan, let me briefly touch on Venezuela Sabbath is the only international service company actively operating in Venezuela today as we are delivering a diverse set of services for an IOC under their license with nearly a century of expense in Venezuela, we did maintain active facilities, equipment and local personnel on the ground.

Historically we have been linear in the country and we remain confident that with appropriate licensing, safety parameters and compliance measures in place, we can rapidly ramp up activities in support of of the oil and gas industry in Venezuela. We are excited and we are already receiving a lot of inquiries from our customers. I will now turn the call over to Stephane to discuss our financial results in more detail.

Stephane Biguet — Executive Vice President and Chief Financial Officer

Thank you Olivier and good morning ladies and gentlemen. Fourth quarter earnings per share excluding charges and credits was $0.78. This represents an increase of $0.09 sequentially and a decrease of $0.14 compared to the fourth quarter of last year. We recorded $0.23 of net charges during the fourth quarter. This includes an $0.11 goodwill impairment charge relating to our carbon capture business, $0.08 of merger and integration charges, $0.07 related to workforce reductions and $0.03 of overcharges. Offsetting these charges is a $0.06 credit relating to the reversal of a valuation allowance that was recorded against certain deferred tax assets.

Overall, our fourth quarter revenue of 9.7 million increased 817 million or 9% sequentially approximately 300 million of this increase is due to an additional month of activity from the acquired Champion X businesses. Excluding the impact of this transaction, SLB’s fourth quarter global revenue increased 6% sequentially. The sequential revenue step up was higher than expected and was driven by strong year end digital sales, significant backlog deliveries and project milestones in production systems as well as higher reservoir performance activity in international markets. Fourth quarter adjusted EBITDA margin of 23.9% increased 83 basis points sequentially, primarily driven by very strong digital performance.

Margin growth during the quarter was however constrained by a loss in a carbon capture project that negatively impacted margins by approximately 50 basis points. Let me now go through the fourth quarter results for each division. Fourth quarter digital revenue of 825 million increased 25% sequentially while pre tax operating margin expanded 557 basis points to 34%. These results were driven by strong year end sales in digital exploration and increased revenue in both digital operations and platforms and applications. Notably, for the full year Digital revenue of 2.7 billion grew 9%. The combination of its growth rate and the full year EBITDA margin of 35% well exceeded the widely recognized rule of 40.

In addition, digital annual recurring revenue surpassed $1 billion reflecting year on year growth of 15%. Finally, trading 12 month net recurring revenue was 103% at the end of the. Fourth quarter. Reservoir performance revenue of 1.7 million increased 4% sequentially driven by strong international activity, particularly in Saudi Arabia, East Asia, Qatar, Indonesia and Guyana. Pre tax operating margin of 19.6% increased 105 basis points largely due to a favorable activity mix. In the Middle east, well construction revenue of $2.9 billion decreased 1% sequentially primarily driven by declines in Middle east and Asia, while pre tax operating margin of 18.7% was slightly down. Production systems revenue of 4.1 billion increased 17% sequentially reflecting a full quarter of activity from Championex. Excluding the impact of this acquisition, Production Systems revenue increased 11% driven by strong sales of completions and artificial lift as well as project milestones in Process technologies, subsea and VARNs.

Pre tax operating margin of 16% increased 20 basis points due to improved profitability in completions and production chemicals. Now turning to liquidity. During the fourth quarter we generated 3 billion of cash flow from operations and 2.3 billion of free cash flow. This strong performance was due to the unwinding of working capital on significant customer collections and reduced inventory driven by year end product deliveries. For the full year we generated free cash flow of 4.1 billion, marking the third year in a row with free cash flow at or above $4 billion. As a result, net debt reduced by 1.8 billion during the quarter to end the year at 7.4 billion.

Capital investments, including CapEx and investments in APS projects and exploration data were 716 million in the fourth quarter and 2.4 billion for the full year. For the full year, we returned a total of 4 billion to our shareholders with approximately 2.4 billion in stock repurchases and 1.6 billion in dividends. Looking ahead, Let me now provide some additional color on our outlook for 2026. Building on the details Olivier shared earlier, we expect revenue to benefit from a full year of Championnex, which will result in incremental revenue of approximately 1.8 billion in 2026. This increase will be partially offset by the effects of the 2025 divestitures of our interest in the Palliser APS project in Canada and of our REIT business in the Middle East.

These two businesses accounted for approximately $350 million in combined revenue in 2025. As Olivier mentioned, adjusted EBITDA margin for 2026 will be relatively consistent with 2025 levels with differing dynamics by division. Digital margin will increase slightly year on year on continued top line growth. Production systems margin will increase primarily driven by synergies from the ChampionX acquisition, where we still expect to achieve approximately half of the 400 million of total synergies by the end of 2026, 30 million of which were achieved in 2025. About 75% of the synergies will benefit production systems, with the remaining portion benefiting well construction and reservoir performance.

The positive effect of ChampionEX synergies on production system margins will be partially offset by unfavorable technology mix within the division in reservoir performance and web construction. Despite activity levels stabilizing margins will be down year on year due to activity mix and pricing headwinds in select markets. From a below the line perspective, corporate costs will increase year on year driven by an incremental 70 million of intangible asset amortization expense as a result of a full year of Champion X. Additionally, we expect our effective tax rate to be approximately 20%, representing a slight increase from 2025. While we expect overall activity to stabilize and increase from today’s level in certain key international markets, we will remain disciplined in our capital allocation in this regard.

We expect our total capital investments to be approximately 2.5 billion in 2026. This should lead to another year of strong free cash flow generation As a result, today we announced a 3.5% dividend increase and we expect to return more than 4 billion to our shareholders in 2026. Through a combination of dividends and stock buybacks. We are currently targeting to buy back the same 2.4 billion that we repurchased in 2025. However, this amount could increase as the year unfolds, depending on our free cash flow, generation progress and our visibility on the business outlook. I will now turn the conference call back to Olivier.

Olivier Le Peuch — Chief Executive Officer

Thank you, Stephane. I believe, Megan, that we are ready for the Q and A session.

operator

We will now begin the Q and A session. If you would like to ask a question, please press star followed by one on your telephone key. Your first question comes from the line of Steve Richardson from Evercore isi. Your line is open.

Steve Richardson — Analyst

Hi, good morning.

Olivier Le Peuch — Chief Executive Officer

Morning Steve.

Steve Richardson — Analyst

Hi. I was wondering if we could talk a little bit about CapEx. I understand appreciate you’ve given some outlook here on 2026. There seems to be something with investors of an old rule of thumb about your CapEx leading revenue expectations and I thought it’d be helpful if you could maybe give us some context around the trend line of capex. But also how is the capital intensity of your forward business different than perhaps it was in the past?

Olivier Le Peuch — Chief Executive Officer

Thanks for the question. Yes, so we increased CAPEX slightly compared to last year in total with APS and expiration to 2.5, 2.5 billion. As I just said, we think this is what we need to operate this year and to capture new opportunity as activity recovers gradually throughout the year, particularly in international markets. So yes, compared to the past, our capital efficiency has improved quite a bit in the last few years. We can do more with less basically. But clearly we will not miss any opportunity if activity recovers faster. We want to be ready for a ramp up and we’ll bring more equipment and tools, tools as needed by division.

Clearly reservoir performance is probably the highest capital intensity followed by well construction and production systems, especially with the addition of Champion X as quite lower capital intensity.

Steve Richardson — Analyst

Thank you. And on the Middle east, your comments are appreciated about the other regions picking up the slack in Saudi and your view on the full year improving. I was wondering if you could talk. What we’re seeing is the IOCs are seeing a lot more opportunity across North Africa and the Middle east and I was wondering if you could talk a little bit about your, you know, your mix or your expectation of your kind of customer mix as you go into 26 and how much of that is driving some of this optimism on improvement versus some of your traditional customers, the national oil companies.

Olivier Le Peuch — Chief Executive Officer

No, first I would comment reinforce the trust and the confidence we have in our national oil company to continue to execute the capital program. And I think indeed we are foreseeing and already witnessing the rebound of the Saudi Arigan drilling and walkover activity which is very favorable. And I think as I said coming from a deep in 2025 bounding at the end of 2026 to as we expect to the level of entry of 2025, which is a V shaped recovery, I think that will set the year very well and also the 2027 as a much stronger year going forward.

So beyond that, obviously the region still continues momentum, high momentum in Kuwait, in UAE and has been witnessing significant growth. But coming to international indeed Libya I think is eye tracking and there’s a conference this week, next week and Libya is attracting a lot of investment and we have been the early benefit of this and we see Libya high trajectory of growth. We have seen it in the last couple of years and we foresee this will continue well into 26 and 27 driven by investment coming back in country from an international company. Al Qa has been successful in the licensing round and I think is exploring unconventional in the south and also getting additional independence coming back into countries.

So we see a rebound in Algeria that will strengthen in 2027. Egypt, Egypt in the region I think is back in offshore. Additional rigs will mobilize in deepwater offshore Egypt as well as in Egypt due to the support that the government has provided. And again the return of investment into Egypt. And finally Iraq, I think as being an hour of growth last year will continue to be significant going forward. Iraq is where some international companies are investing and I think we are associated with this directly. So we have a strong exposure in all of these markets where international companies are joining.

And finally, I would say that the unconventional UAE is a place where newcomers are appraising the resource and ready to scale their investment from appraisal in 26 to 2027 developments going forward. So combination of oil attractiveness in the region. Libya, Iraq partially for international company and gas in the region. Qatar obviously steady, but also the upcoming UAE and unconventional and deepwater offshore East Med. So that’s the template and I’ve said the favorable outlook from NOC and international company in the Middle East.

Steve Richardson — Analyst

Thanks so much.

Olivier Le Peuch — Chief Executive Officer

Thank you.

operator

Thank you. Your next question comes from the line of James west with Melius Research. Your line is open.

James West — Analyst

Thanks. Good morning, Olivier. Stephanie.

Stephane Biguet — Executive Vice President and Chief Financial Officer

Morning.

Olivier Le Peuch — Chief Executive Officer

Morning, James.

James West — Analyst

Olivier, Curious. So with the headwinds bottoming here, Saudi, Mexico, some of the white space and deep water, sub Saharan Africa and everything looking kind of up and to the right. How are you thinking about the exit rate for 26 versus the exit rate we saw in 25? Certainly it’s going to be higher, but what kind of. If you give us some observations or thoughts on kind of magnitude of how this upcycle will begin.

Olivier Le Peuch — Chief Executive Officer

I think first I think we have guided into our prepared remark that we expect the fourth quarter of 2026 to be higher than the fourth quarter of 2025 and this would be led by the international rebound. Secondly, as regarded the the first quarter has a marked decline compared to last year before where we see a gradual recovery again driven mostly by international market throughout the year. That is setting the scene as we said for 2027 to be favorable driven by first and foremost continuous regain momentum in Middle East. With the addition of the rebound activity in in Saudi and combination of what the factor I mentioned before Asia I think has been on a momentum.

Latin America as well, I think a bit offshore base in Latin America or beat in Argentina, we are experiencing a slight rebound of Mexico driven by deepwater activity in Mexico coming back and we will see, we expect that gradually and into 2027 the activity in Sub Sahar deepwater will resume to higher level, visibly higher level. The combination of FID in Namibia, in Mozambique, in Angola and the early pickup of activity in Nigeria are already showing sign of a very promising 2728 cycle. So directionally international gradually recovering and the exit rate in the end of this year to be driven by international addition so that it will result into Q4 of this year being higher than last year.

James West — Analyst

Okay, that’s helpful, thank you. Thanks Olivier. And then maybe a follow up on the digital side of the business. Obviously strong results in the fourth quarter, but my sense is we’re still fairly under penetrated on Lumi and Delphi and the cloud platforms and the AI platforms that you have. My numbers may be a little bit dated, but I think a couple 300 or so customers out of your 1500 or so customers were on the cloud as of maybe a year ago. Could you give us a sense of where that stands now or where you see that heading? I’m assuming everybody eventually goes there.

Most everybody goes there. But just the magnitude of what that could mean for your digital business, I’m assuming it’s pretty accretive.

Olivier Le Peuch — Chief Executive Officer

No, long term I think we believe that the potential of digital to transform our industry from the asset team productivity to the efficiency of digital operation between drilling or producing assets I think is very significant. I think we are just touching the early innings of that transformation and we’re using a multi pronged approach towards this first and foremost strategy built on a platform approach to it. And I think you mentioned the combination of Delphi, Lumi and Terra and we have been indeed gradually gaining a lot of traction for our customers to recognize that a platform is the approach to have the most benefit to combine the geosounds, the production, the drilling, the operation, workflow improvement that everybody is looking for.

But if we look at the momentum that we are benefiting from today, the momentum comes from digital operation that I think you have seen is getting significant benefits because it’s where I think the river hits the ground and where the customer are seeing and materializing the savings in drilling performance in production and PT reduction in production optimization and we are benefiting from that. But obviously we are pursuing adoption of data and AI. Lumi which we launch four or five quarter ago is already having more than 50 customers of an adoption. Tela that we launched less than three months ago has already more than a dozen customers that are engaging and working with us to create this foundation model that can transform their whole geoscience workflow or that can automatically detect and optimize autonomously some producing assets.

As you have seen with ADNOC announcement that we have done so, we are pleased with progress, surprised with the tech digital portion, but if this momentum continues and very confident that the secular trend that the industry is continuing to witness will benefit our platform approach and that Lumi, Delphi and Tela will be at the core of this industry transformation going forward.

Stephane Biguet — Executive Vice President and Chief Financial Officer

Thanks Luvier.

Olivier Le Peuch — Chief Executive Officer

Thank you.

operator

Thank you. Your next question will go to the line of Aaron Jerayero with JP Morgan. Your line is open.

Arun Jayaram — Analyst

Yeah, good morning, I was wondering if you could frame yeah, good morning. I was wondering if you could frame your thoughts on the near term and longer term opportunity for SLB in Venezuela. You mentioned you’re the only international service company now actively operating. But talk to us about what type of product lines could benefit if we do get a revitalization of the oil industry in Venezuela.

Olivier Le Peuch — Chief Executive Officer

Obviously we have to preface this with the condition. The right condition, including licensing, cleaning payments and operating license would have to be put in place. But assuming that the commission assessment for investment to resume and to accelerate not only from the customer that we are serving today and from new customer re entering or entering the country, we have kept. We have historically been the largest supplier, the largest partner of the national company and the largest supplier in service technology in country. Historically we had had about 10 years ago more than 3,000 people and we were recording visibly more than $1 billion revenue at that time.

So we have the track record in integration. We have a unique subsurface digital leading role that we had at that time that we can resume. And we have today a significant set of assets that are ready to be deployed across the drilling services across production with no less than 10 production set, across rig operation with rigs that we are ready to mobilize and I think across intervention, across drilling for infill drilling or production optimization. We believe to have a capacity in country and we believe that we have the access to the Venezuelan nationals. About 80 of them are already in country.

We have more than 1,000 Venezuelan natural country employees in the company and some of them will be welcoming to work back in Venezuela. And we have almost 2,000 alumni that I think we have kept in touch with that will be also ready to be joining us as we move forward. So as I said long term, under the right condition, we can be the leading partner for customers there. And I think I’ve quoted the number where we are before and I think the future will tell us when and how this can accelerate. But we are ready and we are already seeing a lot of incoming calls as I would say, to explore options going forward.

Arun Jayaram — Analyst

Great, that’s helpful. Olivier, my follow up is wondering if you could talk a little bit about your data center infrastructure business. You mentioned that you expect to reach a $1 billion run rate in revenue. If I hear you’re correct by year end. Can you talk a little bit about the solutions you’re providing today and maybe how you’re thinking about organic and even inorganic opportunities to grow that business over time?

Olivier Le Peuch — Chief Executive Officer

Yeah, I think you heard me correctly. I think this is amazing what you have put together in less than 18 months. I think the rate of growth, the the customer engagement that we are getting, the traction we are getting with hyperscalers and I think is amazing. And yes, we put together a setup that is focused on the modular manufacturing capability and co engineering of data center solution from several and cooling solution. And we are aiming at increasing not only our our scope but also our footprint as we have announced last quarter doubling our capacity to respond to the pipeline and to respond to the backlog we have.

And we continue to be expanding both in terms of scope, in terms of around this manufacturing design capability for modular data center solution. We will be this year going and growing internationally. We’ll be this year adding new customers to our portfolio and preparing ourselves to go throughout the year in 2027, $1 billion is their own rate, but will be significantly above this in 2027. And we believe that we see growth through the rest of the decade internationally and indeed, as we explore and respond to the requests from our customers who are looking for integrator in this space, we will look for complementing our current capabilities that we have built organically and to look at what could help complement this and accelerate our market penetration and make us as a fulfilled partner for customers going forward.

Technology throughout the life cycle of the data center for construction and operation.

Arun Jayaram — Analyst

Great, thanks.

Olivier Le Peuch — Chief Executive Officer

Thank you.

operator

Thank you. Your next question comes from the line of David Anderson with Barclays. Your line is open.

J. David Anderson — Analyst

Great, thank you. Good morning, Olivier. You know, if we compare Schlumberger today or SLB, if we compare SLB today versus 10 years ago, in addition to digital, I think the biggest shift is now the emphasis on production and recovery. I was wondering if you could talk a little bit more specifically about the growth opportunity the next few years. As we think about one subsea Champion X artificial lift. If I think about one subsea, I’m thinking about backlog conversion accelerating. Guyana, Venezuela, potentially Venezuela could be growth engines in chemicals and then artificial lift in the Middle East.

Could you sort of frame this growth opportunity for us over the next few years on this side of your business?

Olivier Le Peuch — Chief Executive Officer

No. Absolutely, Dave. I think pollution recovery as we call it, is a new chapter for the company, something that we have decided strategically to invest because we believe that first is a market that has significant opportunity for value creation through technology, through integration, through digital. And we believe that we needed to own and have access to a broader portfolio. Hence the access to the Champonix chemical OPEX and fulfilled lift technology and the digital platform addition that put us very well placed into that market. So now the customer response is very positive. And indeed I think if you look at the priority of our customers today into a challenging committee on pricing environment, it’s all about getting more from the asset that have and hence the return of the higher barrier for lower cost is a priority.

So we’re getting a lot of intake into our lift solution, into our digital production, as you have heard and indeed trying to realize and realizing today the benefit of chemistry, chemistry for not only production assurance, chemistry for but also chemistry for reservoir performance or recovery. So we believe that the integrated capability that we have built together will give us opportunity to create solution for the market. End to end solution that will help to improve the performance of existing producing assets, will help transform existing assets into with a solution for equovery solution for optimization and will help a cost to bring digital solutions.

So yes, leaf solution in the metro basin or into the most producing oil basin in the world, including Middle East. Yes, subsea as a beneficiary for the long term deepwater. But also the boosting processing capability we have in subsea that are quite unique and contribute to this recovery, production gain and goal we have. So yes, it is a new story for us, is a new chapter. We’re excited. Customer feedback is very strong because they believe that they need somebody that have the subsurface, have the technology and has the full integrated portfolio to respond to the transformation of production recovery landscape.

As we have contributed and helped the industry transform the well construction or exploration historically.

J. David Anderson — Analyst

That makes a lot of sense. Shifting gears a little bit to another area of potential growth in geothermal. You’ve been dabbling there for a number of years, but now as you noted in the release here, you’re working with ORMAT on a pilot project I believe later this year in enhanced geothermal. It looks a lot of this when we look at geothermal, a lot of this sounds a lot like shale in the early 2000s. We know the resources there, but it’s a matter of process and technique to solve for the economics. Do you agree with that conceptually and where’s your confidence that this can be scaled up to create say 100 plus megawatt geothermal plants in the next few years?

Olivier Le Peuch — Chief Executive Officer

Let me know. Absolutely. I think, Dave, I think. Let me first step back and explain the reason why we have partnered with OMAT and the potential we see in this partnership. First is to put together the two leading companies in the field. We are subsurface leader in geothermal, helping to characterize the geothermal source and then develop the wells and develop the solution to produce the heat and the hot water from those wells. And our MAT is leaders into building geothermal power plants and understanding the full lifecycle. So putting this together and providing industry with one integrated offering I think was very well received by the industry and will help accelerate providing conventional geothermal bridge power or base power for some of the data center in the future.

So that’s clearly one, the first aspect, the second, obviously we have put this together because we believe that we want to together optimize, explore and optimize through a development of an asset or two assets in the future, in the near future into the unconventional geothermal. And yes, we believe this is a field that has significant potential, but we want to do it right we want to do science, we want to do technology, want to do with digital modeling of the process so that we get it right and we understand how to scale it economically, how to make it viable, how to make it safe and then how to afford it together to the market in the near future.

So that’s the ambition. So we have done this for a reason. And I think we will be developing these assets, we’ll be experimenting this asset appraising and then getting ready with technology, digital and with joint offering to offer this at scale to the market in the US and beyond.

J. David Anderson — Analyst

Very exciting. Thank you.

operator

Thank you, thank you. Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.

Neil Mehta — Analyst

Yeah, thank you so much Olivia and team. I guess the first question is more of a macro question. Olivia, you have a unique perspective on this big debate that’s in the market right now about how much OPEC spare capacity really lives there in markets like the Middle East. And you know, of course recognizing that there’s probably limitations about what you could say, your perspective on that question I think would be helpful for us as we think about the back end of the oil curve.

Olivier Le Peuch — Chief Executive Officer

I think you have been reading what I’m reading and I think, I don’t want to reveal more, but I think OPEC has been unwinding 2.2 million bar. And I think when you fast forward in a year from now when the unbalance that still exists today will start to subside and then the market will balance itself, I don’t think there will be much spare capacity available. Sign of which you see by the reinvestment into all capacity, sustenance, investment that are happening to the cost across the Middle east and oil intervention and intervention activity in which we have a strong exposure is benefiting from this.

So yes, I don’t think you have some of the OPEC member beyond the Middle east that are not necessarily having an easy path towards sustaining their existing production. So Orin, I think it bodes very well to our focus on production recovery, which is focusing on providing a technology integrated capability to sustain production enhanced recovery. And I think that’s where we will see adoption of this. But I don’t think there is significant spare beyond what has been released back to the market. Hence the market will tighten in rebalance into 27 and beyond. Hence we set the condition for a better outlook as an investment backdrop for industry from 27 and beyond.

Neil Mehta — Analyst

Yeah, that makes sense to us. And then another market we’d love to get your perspective on is Mexico. Olivia, this is probably the most constructive I’ve heard you on Mexico in a little bit that we’re in a bottoming phase and maybe even a cash recovery phase. Your perspective on that market and how it should evolve from here as we think about slp.

Olivier Le Peuch — Chief Executive Officer

Yeah. The market that we say has normalized from a market that has dropped significantly and had had the need for getting the confidence of the oil industry to reinvest, I think as normalized in the last few months. I think we anticipate this to be steady from the land activity for the foreseeable short to midterm. And we expect the conditions are gradually in place, getting in place for reinvestment going forward in 2026. However, where we see the upside is in offshore activity in Mexico, where the Deepwater asset that we are developing that is being developed by the Woodside will give us an upside, whereas the activity in land now will make the assumption it is steady.

But we’ve got the potential to start to strengthen as we move into 2027.

operator

Thank you, sir.

Olivier Le Peuch — Chief Executive Officer

Thank you.

operator

Thank you. Your next question comes from the line of Mark Bianchi with TD Cowan. Your line is open.

Marc Bianchi — Analyst

Hey. Thank you. Good morning. I wanted to ask. So we’ve got these activity. Good morning. You’ve got these activity increases in your outlook for 26 for certain international markets. Earlier, I think a few months ago there was some discussion of some pricing potential weakness. Can you talk about what that looks like today and what your expectation is embedded in the outlook here?

Olivier Le Peuch — Chief Executive Officer

Yeah, I think first to comment that I think the industry has been under pricing pressure in the last couple of years, starting with North America. And I don’t see a change there. I think although we believe in North America we are shifted to the mix of the portfolio we have and exposure. We have data center and digital and our exposure in Deepwater and Gulf of Maca is proportionally bigger. And also the OPEX exposure we have, Champenix, is a bit of a shield towards some of the pricing pressure in North America. Internationally, the model has been, and I keep repeating every time I get to comment on this, has remained highly competitive for a large tender in international markets.

And the market has been keeping pressure, considering that the market has been declining the last 18 months or 12 months in international market, hence the pricing pressure has been sustained in some clinical market. And we have been responding with this to this pressure when we felt it was appropriate things to do to keep participating to the market. At the same time, I think we are able to maintain our margin steady in 2026 compared to 2025, building on our synergy, building on the digital growth margin accretive business. And therefore we are doing to continue to use technology performance as differential to protect where we can margin against the pricing pressure.

Marc Bianchi — Analyst

Okay, thank you for that. And the other question I had was related to the offshore outlook. So you’ve talked about an expectation for improvement in offshore and you know, I think if we go back a year or two, there was an expectation for offshore improvement that didn’t really materialize. So what are you seeing now that that you think is different from that prior period and gives you the confidence to make those comments?

Olivier Le Peuch — Chief Executive Officer

The comments I’m making is that I believe that the FID and the booking will improve in 2026. Setting the right setup and context for 2027, 2028 offshore cycle rebound. Whether this is material in 2026. Yes, in certain markets in East Asia, the activity of Indonesia, the market will strengthen in Deepwater. And I think this reflects into this year in Sub Saharan Africa. This is more trend of FID of project from Namibia to Angola and Mozambique. That will set the context for a marked rebound going forward. And this FID are happening as we speak, being negotiated and being pending.

And in Americas, I think the continuous momentum in Brazil, in Guiana or Suriname, and I think are here to stay with the metro basin, Gulf of America, metro basin of the North Sea remaining steadied somehow, although with a slight decline in the North Sea. So we believe that the fid, the economics are favorable and the pipeline of FID across Africa and Asia are set to create a rebound of activity going forward as we turn into 2020.

Marc Bianchi — Analyst

Thank you very much.

Olivier Le Peuch — Chief Executive Officer

Thank you.

operator

Thank you. Your last question comes from the line of Scott Gruber with Citigroup. Your line is open.

Scott Gruber — Analyst

So I want to come back to the data center solutions business. Olivia, you mentioned expanding the business abroad. So does the billion dollar target capture any of that international growth opportunity opportunity or that be future upside? And how quickly could this materialize? And ultimately as you leverage your global relationships, could the international opportunity become even larger than your US business?

Olivier Le Peuch — Chief Executive Officer

Difficult to say whether it could become larger, but easy to tell you that it will grow. And this year will be the first step into establishing ourselves in Asia and to provide this modular manufacturing solution to our customer there. Also we initiate a partnership to design a next generation data center in one country in the Asia region. And then we expect to also look at our relationship to embed and go further, including Middle east in the near future. So these are the, these are a place where we have ambition to leverage our hyperscaler relationship and our modular manufacturing capability.

Ability to source locally, ability to manufacture everywhere. I think it’s something unique that not so many companies can do and scale and replicate what we have done the last 18 months. So that’s what we look forward and that’s where we’re excited about the international market. But US is still the hot market and US is where we believe we have the most exciting pipeline in 2016 and 27 coming our way and will not miss that market.

Scott Gruber — Analyst

Oh, got it. Appreciate that color. And I want to come back to the question Stephen asked at the beginning on CapEx. So your $2.5 billion of CapEx this year will support the second half growth rate that you’ll achieve, which we led by digital and data center solutions. Some contribution from the core, but overall the capital intensity of the portfolio is improving. So my question is, can you sustain similar growth rate for a couple years into the Future at a capex level that’s still broadly around 2.5 billion given those kind of less capital intensive drivers of growth, or do you think capex would need to creep a bit higher?

Stephane Biguet — Executive Vice President and Chief Financial Officer

Look, as I said before, we do what it takes to not miss any opportunity. But again, we have really improved our capital efficiency over the last five to six years so we can really operate with less. But if growth really comes at high growth rates, we will have to increase beyond the 2.5 billion for sure. But as a percentage of revenue that will still remain pretty low compared to what we were doing before and still quite in the low range. In the low end of the range we had guided before 5 to 7% of revenue.

That’s excluding APS and exploration data. So yes, we’ll increase as necessary, but it will go with increased cash flow as well. And some of the growth that we will be seeing is production and recovery as we elaborated on before as well as digital and that doesn’t require as much capex as the web centric businesses. So this is how we can maneuver within that range basically.

Scott Gruber — Analyst

So without some acceleration in the kind of core business, you would expect the capex to sales ratio to continue to improve over the next couple years, Is that fair?

Stephane Biguet — Executive Vice President and Chief Financial Officer

It will be more or less as a percentage of revenue it will stay within that 5 to 7% we guided before, but it’s more below. As you have seen, we’ve been closer to 5 and 7 so we will remain at the low end of that range in the future.

Scott Gruber — Analyst

I appreciate the call. Thank you.

Stephane Biguet — Executive Vice President and Chief Financial Officer

Thank you.

Olivier Le Peuch — Chief Executive Officer

Thank you Scott, ladies and gentlemen. Yeah, thank you. Thank you, Megan. Ladies and gentlemen, as we conclude today’s call, I would like to leave you with the following takeaways. First, our strategy focus on production recovery, including Chantonnex digital and data center solutions present new pathways for growth, supporting a full year revenue and margin guidance. Second, I’m confident that we continue to generate strong cash flows, enabling us to return more than $4 billion of shareholder return in 2026. Third, in the longer term, the outlook is becoming more positive for slb. The recovery of Saudi Arabia, the positive pipeline in subsea, the growth dynamic in both digital and data centers are all catalysts and Venezuela represents an upside.

In summary, the current cycle is recovering towards the strength of slb. With this, I will conclude today’s call. Thank you all for joining.

operator

This concludes today’s conference call. You may now disconnect. Sa.