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Call sheet · Q2'26

Schlumberger (SLB)

Q2'26 earnings call · held July 24, 2026 · compared with the Q1'26 call · management-credibility review
7/12
Disclosure score
3 high, 5 medium flags
Financial quality
Bottom line
The data center story is real with $2B locked in backlog, making this a hidden AI infrastructure play that nobody's pricing in yet. The Middle East recovery narrative is correct directionally but management is playing games with the timing to manage expectations, evident from their specific Q4 $10B target after vague Q3 commentary. The binding constraint isn't Middle East recovery, it's OneSubsea execution, where margins collapsed to 14.4% and management went into hiding mode by stopping disclosure. 'Our ambition is to become an industrial technology partner to the data center industry' is the quote that matters, not the Middle East discussion. My view changes if OneSubsea margins don't recover above 16% by Q4 or if data center gross margins come in below 15%.

The 30-second version

  • Data Centers are the real sleeper: $2B exit rate by end-2027, backlog already secured
  • Middle East recovery is happening but Wall Street's modeling the timing wrong
  • OneSubsea margins collapsed to 14.4% and management buried it in division results

What changed this quarter

MetricQ1'26Q2'26Change
Revenue$8.7B (-10.5% QoQ)$9.0B (+3% QoQ)+$300M sequential recovery
EPS (ex-items)$0.52 (-$0.20 YoY)$0.55 (+$0.03 QoQ, -$0.19 YoY)Modest sequential improvement
Adjusted EBITDA Margin20.3%21.4%+110 bps sequential expansion
Middle East Revenue$1.5B (estimated)$1.36B (-13% QoQ)Worse than guided deterioration
Digital Revenue$640M (+9% YoY)$697M (+9% QoQ)Acceleration to double-digit sequential
Digital EBITDA Margin26.1%34.7%+860 bps explosion
Production Systems Revenue$3.5B (+23% YoY)$3.8B (+7% QoQ)ChampionX driving sequential beat
OneSubsea Margins14.4% (Q1 disclosure)Not disclosedBack to hiding after Q1 disaster
Free Cash Flow-$23M$716M+$739M sequential surge
Net Debt$8.2B$8.7B+$500M despite FCF generation

Accountability tracked

8 new promises made5 narrative shifts flagged7 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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