SLB's quarterly results fell short of expectations, primarily due to severe geopolitical disruptions in the Middle East that led to lower revenue and compressed profits.

Revenue $8.7 billion, organic basis down 7% year-on-year; adjusted EBITDA margin 20.3%, contracting 346 basis points year-on-year; earnings per share $0.52, down $0.20 year-on-year.

Despite the challenges, the digital business grew 9% year-on-year, with annualized recurring revenue reaching $1.02 billion, up 15%. Data center solutions revenue grew 45% year-on-year, on track to reach $1 billion in annualized revenue by year-end. The integration of the ChampionX acquisition continues, with profits and synergies in line with expectations.

Management expects that if Middle East disruptions ease in the mid-to-late second quarter, the region will bring an additional negative impact of $0.06-0.08 per share, but international market growth can fully offset this, achieving mid-to-high single-digit revenue growth and margin improvement. North America revenue is expected to be flat. The digital business full-year EBITDA margin target is at least 35%.

Management's tone is cautious, emphasizing a "challenging start", and is preserving capacity in anticipation of a recovery without significantly adjusting the cost base. At the same time, the strong growth in data center and digital businesses, as well as key partnerships such as NVIDIA, send positive signals.