SLB delivered strong second-quarter earnings driven by the offshore market, newfound success in the Middle East and Asia and an increase in North American revenue.

Evercore ISI analysts said SLB’s North American revenue was up 3% compared to the first quarter due to offshore digital, exploration data licenses and increased drilling.

But like competitor Halliburton, SLB saw diminished returns on land.

“This was partially offset by lower drilling revenue in U.S. land and lower production systems sales in the GoM,” Evercore analyst James West wrote in a July 19 report. “We are updating our forecast to reflect continued strength in international activity offsetting North American softness.”

For the quarter, SLB generated $9.14 billion in revenue, up 5% from the first quarter and 13% year-over-year (yoy).

Evercore said SLB’s international activity remains robust, with the Middle East and Asia driving revenue growth of “+24% YoY (+6% QoQ) to $3.3 billion.” Europe and Africa also demonstrated significant growth of 20% yoy to $2.4 billion, while Latin America increases were relatively subdued.

“All across the Middle East, we see growth year-on-year,” Olivier Le Peuch, CEO of SLB, said during a July 19 earnings call. “Hence, we benefit from this very large growth and multiple levels of activity growth in the Middle East and we foresee it continuing going forward.”

In the Middle East, SLB leveraged its technology and integration capabilities to benefit from investments in oil capacity expansion and conventional and unconventional gas development. Revenue in the Middle East and Asia grew due to increased sales of production systems and increased intervention and evaluation activity in Saudi Arabia.

Higher digital revenue across the area and increased drilling in the region, as well as the acquisition of the Aker subsea business in Australia, also contributed to the growth.

Offshore, the company’s OneSubsea joint venture secured numerous high-value contracts, Le Peuch said, employing advanced subsea production processing technologies to optimize reservoir recovery and reduce project cycle times.

“Through OneSubsea, we’re helping customers unlock reserves and reduce cycle times through an extensive subsea production processing technology portfolio,” he said. “And we are increasingly being offered the opportunity to partner with customers in early engineering phases to unlock the economics of the assets.”

SLB said its solutions in production and recovery are increasingly sought after by clients looking to offset natural decline and maximize asset value. The company’s production systems revenue increased to $3.03 billion, a 7% raise increase from the first quarter and a 31% increase yoy.

Growth was led by the Aker acquisition as well as strong activity in Europe and Africa.

“In production and recovery, we are seeing customers embrace our offerings as they work to offset natural decline, extend performance and maximize the value of their producing assets,” Le Peuch said. “We have many solutions to help customers access resource to our production system and reservoir performance division, and this is showing up in the strong results these divisions are achieving.”

Underpinning SLB’s strategies is commitment to digital innovation and AI, which are pivotal in accelerating returns and driving operational efficiencies, the company said. SLB anticipates significant opportunities for high-margin growth as clients increasingly prioritize digital infrastructure upgrades.

Looking ahead, SLB aims to strengthen its portfolio further with the pending acquisition of ChampionX, positioning itself to fully capitalize on emerging market opportunities.

Due to securities laws, SLB was unable to buy back stock until ChampionX’s shareholders approved the deal.

After ChampionX shareholders agreed to the deal, SLB resumed repurchasing stock in the second quarter. SLB bought back 9.9 million shares valued at $465 million.

Net income attributable to SLB increased by 4% from the first quarter to $1.11 billion. Adjusted EBITDA of $2.29 billion was up 11% from the first quarter.

SLB generated cash flow from operations of $1.44 billion and free cash flow of $776 million. For the full year, SLB said it expects to spend $2.6 billion in capital investments.

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