Schlumberger's 2025 Q1 Earnings Call: Navigating Contradictions in Upstream Spending, Digital Growth, and Tariff Impacts
Earnings DecryptFriday, May 9, 2025 3:40 am ET

Global upstream spending and Schlumberger's exposure, digital growth and market potential, digital growth and resilience, tariffs and revenue impact are the key contradictions discussed in Schlumberger's latest 2025Q1 earnings call.
Revenue and Market Performance:
- reported a total revenue of $8.5 billion for Q1 2025, a 3% decrease year-on-year.
- The decline was primarily due to reduced activity in international markets, particularly in Mexico, Saudi Arabia, offshore Africa, and Russia, which together accounted for significant revenue decreases.
Regional Performance and Growth:
- International revenue decreased by 5% year-on-year, while North America revenue increased by 8% due to higher sales in digital and subsea production systems.
- International regions like the United Arab Emirates, North Africa, Kuwait, Argentina, and China saw double-digit growth, contributing to outperformance in international rig counts.
Divisional Performance and Margin Expansion:
- The Core Production Systems division experienced steady revenue growth and increased margins by 197 basis points year-on-year.
- The margin expansion was driven by favorable activity mix, execution efficiency, and conversion of improved-price backlog, particularly in surface production systems and completions.
Digital and Data Center Solutions:
- Digital revenue grew 17% year-on-year, contributing to the overall company's growth in this segment.
- Data center infrastructure solutions also showed significant growth, with a large contract award for manufacturing services and modular cooling units, enhancing diversification beyond oil and gas.
Tariffs and Cost Management:
- Tariffs introduced uncertainty, impacting import and export flows between the U.S. and China, posing a potential headwind to margins if escalated.
- is proactive in optimizing its supply chain and pursuing exemptions to mitigate these impacts and maintain margin stability.
SLB Total Revenue YoY, Total Revenue
Revenue and Market Performance:
- reported a total revenue of $8.5 billion for Q1 2025, a 3% decrease year-on-year.
- The decline was primarily due to reduced activity in international markets, particularly in Mexico, Saudi Arabia, offshore Africa, and Russia, which together accounted for significant revenue decreases.
Regional Performance and Growth:
- International revenue decreased by 5% year-on-year, while North America revenue increased by 8% due to higher sales in digital and subsea production systems.
- International regions like the United Arab Emirates, North Africa, Kuwait, Argentina, and China saw double-digit growth, contributing to outperformance in international rig counts.
Divisional Performance and Margin Expansion:
- The Core Production Systems division experienced steady revenue growth and increased margins by 197 basis points year-on-year.
- The margin expansion was driven by favorable activity mix, execution efficiency, and conversion of improved-price backlog, particularly in surface production systems and completions.
Digital and Data Center Solutions:
- Digital revenue grew 17% year-on-year, contributing to the overall company's growth in this segment.
- Data center infrastructure solutions also showed significant growth, with a large contract award for manufacturing services and modular cooling units, enhancing diversification beyond oil and gas.
Tariffs and Cost Management:
- Tariffs introduced uncertainty, impacting import and export flows between the U.S. and China, posing a potential headwind to margins if escalated.
- is proactive in optimizing its supply chain and pursuing exemptions to mitigate these impacts and maintain margin stability.

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