SLB’s digital revenue grew 20% in 2024 to $2.44 billion as customers adopted its cloud computing and AI solutions.

CEO Olivier Le Peuch sees that growth helping offset an expected flat year for oil and E&P in 2025.

RELATED

US Drillers Cut Oil, Gas Rigs to Lowest Since December 2021, Baker Hughes Says

Digital operation is SLB’s fastest-growing segment, Le Peuch said on SLB’s earnings call Jan. 17.  

“The rate of adoption depends on the value we demonstrate and the ability we have to connect to the digital operation workflow for the customers and do it for every well and do it for every pad, for every producing asset and every rig. And I think this is happening at scale.”

SLB has 1,500 customers in its digital portfolio, Le Peuch said, many of whom are transitioning to cloud computing on SLB’s Delfi platform.

The platform “allows our customer to get the benefit of cloud computing at scale and to create new workflows on the clouds. And this adoption is coming one customer at a time.”

About 200 are starting the transition to the cloud, “and we expect there are another 1,000 that will over the years to come,” Le Peuch said. “And every time we transition we see an uplifting to our SaaS [software as a service] and into our total revenue.”

Customers are also starting to use SLB’s AI solution called Lumi for data management and modeling that helps inform their decisions, Le Peuch said.

“Here you have a combination of digital operation, cloud transition and data and AI that give us multiple growth paths that are all independent and decoupled from the capex and opex spend,” he said. “As you can see, this year ambition [is] still very high on a market that is about flat.”

The rising digital performance countered downward trends elsewhere.

SLB’s revenue in Russia declined to 4% of its global revenue in 2024 from 5% in 2023, Le Peuch said.

He said the company believes the voluntary measures it has taken, such as suspending shipments of products and technology to Russia, are aligned with U.S. sanctions following Russia’s invasion of Ukraine in 2022.

SLB reported net income of $1.1 billion on revenue of $9.28 billion in the fourth quarter and announced a 3.6% increase in its quarterly cash dividend to approximately $0.28 per share.

For 2025, Bernstein Research analysts said they expect steady revenue through 2025 on higher margins but said that "all eyes now on planned ChampionX acquisition."

In April, SLB entered into an agreement to buy ChampionX in an all-stock transaction that valued the company at roughly $7.74 billion. During the third-quarter, SLB said it expected to close the acquisition in first-quarter 2025.

"While were initially skeptical on the planned ChampionX acquisition, we became more constructive last May," Bernstein's Guillaume Delaby said in a Jan. 17 report. "The increased 2025 dividend and cost reductions done in 3Q24 and 4Q24 strengthen our view that SLB will be able to achieve its targeted $400 [million] of synergies. We also view the likely reshuffle of the company’s reporting segments — with the likely isolation of the Digital business — as a further catalyst for the shares."

Comments