SLB N.V. (NYSE:SLB)

Over the five-year period, significant changes are observed in both goodwill and intangible assets. Goodwill experienced a consistent increase, while intangible assets exhibited more fluctuation in net book value despite a steady rise in gross book value. A detailed examination of the components reveals specific trends within intangible assets.

Goodwill

Goodwill increased steadily from US$12,990 million in 2021 to US$16,794 million in 2025. The largest single-year increase occurred between 2024 and 2025, with an addition of US$2,201 million. This suggests potential acquisitions or increased valuation of existing reporting units during those periods.

Customer Relationships

Customer relationships demonstrated a consistent upward trend, growing from US$1,681 million in 2021 to US$2,783 million in 2025. The growth rate appears to have accelerated in the later years of the period, indicating a strengthening of customer base or increased valuation of existing relationships.

Technology/Technical Know-How

Technology and technical know-how also exhibited growth, increasing from US$1,264 million in 2021 to US$2,635 million in 2025. Similar to customer relationships, the rate of increase became more pronounced in 2024 and 2025, potentially reflecting investments in research and development or acquisitions of technology-focused companies.

Trade Names

Trade names showed a steady, albeit slower, increase from US$766 million in 2021 to US$1,067 million in 2025. The growth was relatively consistent across the period.

Other Intangible Assets

The ‘Other’ category of intangible assets fluctuated, increasing from US$1,529 million in 2021 to US$1,657 million in 2022, then decreasing to US$1,582 million in 2023 before rising again to US$1,637 million in 2025. This suggests potential reclassifications or impairments within this category.

Intangible Assets – Gross and Net Book Value

The gross book value of intangible assets increased consistently from US$5,240 million in 2021 to US$8,122 million in 2025, reflecting ongoing investment in intangible assets. However, the net book value experienced more variability. While increasing overall from US$3,211 million in 2021 to US$4,988 million in 2025, it decreased from 2021 to 2022 and again from 2023 to 2024. This is attributable to the increasing accumulated amortization, which rose from US$2,029 million in 2021 to US$3,134 million in 2025.

Total Goodwill and Intangible Assets

The combined value of goodwill and intangible assets increased from US$16,201 million in 2021 to US$21,782 million in 2025. The overall trend is upward, driven primarily by the growth in goodwill and the increasing gross value of intangible assets, despite the impact of accumulated amortization.

In summary, the organization demonstrates a pattern of increasing investment in both goodwill and intangible assets. The growth in goodwill is particularly notable, while the net book value of intangible assets is influenced by the consistent application of amortization. The accelerated growth in customer relationships and technology/technical know-how in the later years of the period warrants further investigation.

The financial information reveals a significant divergence between reported and adjusted figures for total assets and stockholders’ equity between 2021 and 2025. This discrepancy appears to stem from the removal of goodwill and intangible assets in the adjusted figures. Reported total assets demonstrate a consistent upward trend over the five-year period, increasing from 41,511 US$ millions in 2021 to 54,868 US$ millions in 2025. However, adjusted total assets exhibit a more moderate increase, rising from 28,521 US$ millions in 2021 to 38,074 US$ millions in 2025.

Total Assets

The difference between reported and adjusted total assets widens over time. In 2021, the difference was approximately 12,990 US$ millions, while in 2025, it reached 16,794 US$ millions. This suggests a growing proportion of assets are comprised of items being removed in the adjustment, likely goodwill and intangibles.

A similar pattern is observed in stockholders’ equity. Reported total stockholders’ equity increased substantially from 15,004 US$ millions in 2021 to 26,109 US$ millions in 2025. Conversely, adjusted stockholders’ equity shows a smaller, though still positive, increase, moving from 2,014 US$ millions in 2021 to 9,315 US$ millions in 2025. The gap between reported and adjusted equity expands considerably, from 12,990 US$ millions in 2021 to 16,794 US$ millions in 2025, mirroring the trend in total assets.

Stockholders’ Equity

The substantial difference between reported and adjusted stockholders’ equity indicates that a significant portion of the reported equity is attributable to goodwill and intangible assets. The adjusted equity figure provides a view of equity based on tangible assets and potentially more conservatively valued intangibles.

Reported net income attributable to SLB consistently increased from 1,881 US$ millions in 2021 to 4,461 US$ millions in 2024, before decreasing slightly to 3,374 US$ millions in 2025. The adjusted net income attributable to SLB remains nearly identical to the reported net income for the years 2021 through 2024, but increases to 3,584 US$ millions in 2025. This suggests that the removal of goodwill and intangible assets does not materially impact net income in most periods, but does in 2025.

Net Income

The consistency between reported and adjusted net income for the majority of the period suggests that the impairment or amortization of goodwill and intangibles is not a significant driver of reported earnings. However, the difference in 2025 indicates a potential impact from adjustments related to these items on the bottom line.

In summary, the adjustments made to the financial statements demonstrate a substantial reduction in both total assets and stockholders’ equity when goodwill and intangible assets are removed. While these adjustments do not significantly affect reported net income in most years, a divergence is observed in 2025, suggesting a potential impact from these adjustments on profitability.

The financial performance metrics demonstrate a significant impact from the adjustment for goodwill. Reported ratios generally exhibit more moderate changes compared to their adjusted counterparts, highlighting the substantial influence of goodwill on the company’s financial position. A consistent pattern emerges where adjusting for goodwill results in notably higher values for asset turnover, financial leverage, and profitability ratios.

Profitability

Reported net profit margin shows initial improvement from 2021 to 2023, peaking at 12.68%, before declining to 9.45% in 2025. The adjusted net profit margin remains relatively stable, fluctuating between 12.25% and 10.04% over the period. The difference between reported and adjusted net profit margin is minimal, suggesting goodwill does not significantly distort reported profitability. However, the impact on ROE and ROA is substantial. Reported ROE increases from 12.54% to 21.11% between 2021 and 2024, then decreases to 12.92% in 2025. Adjusted ROE experiences a dramatic increase from 93.40% in 2021, peaking at 73.17% in 2022, and then declining to 38.48% in 2025. Similarly, reported ROA improves from 4.53% to 9.12% before falling to 6.15%, while adjusted ROA shows a more pronounced increase from 6.60% to 12.99% and a subsequent decrease to 9.41%. These differences indicate that goodwill significantly inflates the reported asset base, leading to higher ROE and ROA when not adjusted.

Asset Turnover

Reported total asset turnover steadily increases from 0.55 in 2021 to 0.74 in 2024, then decreases to 0.65 in 2025. The adjusted total asset turnover exhibits a more substantial increase, rising from 0.80 in 2021 to 1.06 in 2024, before decreasing to 0.94 in 2025. The consistent difference between reported and adjusted values suggests that goodwill reduces the apparent efficiency with which assets are used to generate revenue.

Financial Leverage

Reported financial leverage decreases consistently from 2.77 in 2021 to 2.10 in 2025, indicating a reduction in the company’s reliance on debt financing relative to its assets. Adjusted financial leverage, however, shows a dramatic initial increase from 14.16 in 2021 to 6.41 in 2022, followed by a gradual decline to 4.09 in 2025. This substantial difference highlights the significant impact of goodwill on the company’s reported asset base, and consequently, its leverage ratio. The adjusted figures suggest a much higher degree of financial risk than indicated by the reported ratios.

In summary, the adjustments for goodwill reveal a substantially different financial picture than the reported figures. While reported ratios suggest moderate and generally positive trends, the adjusted ratios indicate a more volatile performance, particularly in profitability and financial leverage. The consistent and significant differences between reported and adjusted values underscore the importance of considering the impact of goodwill when evaluating the company’s financial health and performance.

The period under review demonstrates a generally positive trajectory in profitability metrics, followed by a moderation in the most recent year. Both reported and adjusted net income attributable to SLB increased from 2021 to 2024, before experiencing a decline in 2025. The adjusted net income mirrors the reported net income values, indicating that adjustments made to net income do not significantly alter the overall profitability picture.

Reported Net Profit Margin

The reported net profit margin exhibited an upward trend from 8.20% in 2021 to 12.68% in 2023, representing a substantial improvement in profitability. This growth slowed in 2024, with a margin of 12.29%, and then decreased notably to 9.45% in 2025. This suggests a potential weakening of profitability in the latest period.

Adjusted Net Profit Margin

The adjusted net profit margin followed a similar pattern to the reported margin, increasing from 8.20% in 2021 to 12.68% in 2023. The margin remained relatively stable at 12.29% in 2024, before increasing to 10.04% in 2025. While the adjusted margin experienced a decline in 2025, the decrease was less pronounced than that observed in the reported net profit margin.

The consistency between reported and adjusted net profit margins throughout the period suggests that the adjustments applied are not materially impacting the overall assessment of profitability. The decline in both margins in 2025 warrants further investigation to determine the underlying causes, such as increased costs, decreased revenues, or changes in the business mix.

Overall, the company demonstrated improving profitability from 2021 through 2023, but experienced a downturn in 2025. The adjusted net profit margin provides a consistent view of this trend, reinforcing the need to understand the factors contributing to the recent decline.

Analysis reveals a consistent divergence between reported and adjusted total asset turnover ratios over the observed period. While the reported total asset turnover demonstrates an initial increase followed by a slight decline, the adjusted total asset turnover exhibits a more pronounced upward trend before leveling off.

Reported Total Asset Turnover

The reported total asset turnover ratio increased from 0.55 in 2021 to 0.74 in 2024, indicating improving efficiency in generating revenue from reported assets. However, a decrease to 0.65 is observed in 2025, suggesting a potential slowdown in asset utilization towards the end of the period. This ratio is sensitive to the inclusion of goodwill and intangible assets in the total asset base.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio, calculated using adjusted total assets, shows a clear upward trend from 0.80 in 2021 to 1.06 in 2024. This indicates a substantial improvement in revenue generation relative to assets excluding goodwill and intangible assets. The ratio experiences a slight decrease to 0.94 in 2025, but remains significantly higher than the 2021 level. This suggests that the company’s core operational assets are becoming more efficiently utilized.

Asset Base Composition

The difference between reported and adjusted total assets widens over time, increasing from approximately US$13 billion in 2021 to approximately US$16.8 billion in 2025. This expansion suggests a growing proportion of goodwill and intangible assets relative to the total asset base. The increasing gap between the two turnover ratios highlights the impact of these non-operational assets on the overall reported asset efficiency.

The sustained increase in adjusted total asset turnover, coupled with the widening difference from the reported ratio, suggests that the company’s core business operations are becoming more efficient. However, the inclusion of goodwill and intangible assets significantly lowers the reported asset turnover, potentially presenting a less favorable picture of overall asset utilization.

An examination of the financial information reveals significant trends in both reported and adjusted financial leverage over the five-year period. While reported financial leverage demonstrates a consistent decline, adjusted financial leverage, though decreasing, remains substantially higher and warrants closer scrutiny. The differences between reported and adjusted figures stem from the treatment of goodwill and intangible assets.

Reported Financial Leverage

Reported financial leverage exhibits a steady downward trend, decreasing from 2.77 in 2021 to 2.10 in 2025. This indicates a strengthening of the company’s reported equity position relative to its reported total assets. The rate of decline slows over time, with the largest decrease occurring between 2021 and 2022.

Adjusted Financial Leverage

Adjusted financial leverage begins at a high level of 14.16 in 2021 and decreases to 4.09 in 2025. Although a clear downward trend is present, the adjusted leverage ratio remains considerably elevated compared to the reported ratio throughout the period. This suggests that the exclusion of goodwill and intangible assets from the adjusted total assets and equity calculations significantly impacts the leverage assessment.

Total Assets – Reported vs. Adjusted

Reported total assets increase consistently from US$41,511 million in 2021 to US$54,868 million in 2025. Adjusted total assets also increase, but at a slower pace, moving from US$28,521 million to US$38,074 million over the same period. The difference between the two figures widens over time, indicating a growing proportion of goodwill and intangible assets within the overall asset base.

Stockholders’ Equity – Reported vs. Adjusted

Reported total stockholders’ equity shows a consistent increase, rising from US$15,004 million in 2021 to US$26,109 million in 2025. Adjusted total stockholders’ equity also increases, but from a much lower base, progressing from US$2,014 million to US$9,315 million. This disparity highlights the substantial impact of goodwill and intangibles on the reported equity position.

The substantial difference between reported and adjusted financial leverage suggests that a significant portion of the company’s assets and equity is comprised of goodwill and intangible assets. While the reported leverage ratio presents a more favorable picture, the adjusted ratio provides a potentially more conservative assessment of the company’s financial risk profile. The continued decline in both ratios is positive, but the magnitude of the adjusted leverage warrants ongoing monitoring and consideration.

The period between 2021 and 2025 demonstrates significant fluctuations in both reported and adjusted financial performance metrics. Reported net income attributable to SLB increased from US$1,881 million in 2021 to US$4,461 million in 2024, before decreasing to US$3,374 million in 2025. Adjusted net income followed a similar pattern, rising from US$1,881 million to US$4,461 million and then declining to US$3,584 million. Stockholders’ equity exhibited consistent growth over the period, increasing from US$15,004 million in 2021 to US$26,109 million in 2025, for the reported figures. However, adjusted stockholders’ equity showed a more dramatic increase, starting at US$2,014 million and reaching US$9,315 million in 2025.

Reported Return on Equity (ROE)

Reported ROE increased steadily from 12.54% in 2021 to a peak of 21.11% in 2024, before declining to 12.92% in 2025. This suggests a strong improvement in profitability relative to equity, followed by a reduction in efficiency. The decrease in 2025 aligns with the decline in reported net income.

Adjusted Return on Equity (ROE)

Adjusted ROE experienced substantial volatility. It began at a high of 93.40% in 2021, then decreased to 73.17% in 2022, 68.85% in 2023, 68.24% in 2024, and finally fell to 38.48% in 2025. This significant decline indicates a decreasing return on the adjusted equity base. The substantial difference between reported and adjusted ROE suggests that adjustments to equity have a considerable impact on the calculated return. The magnitude of the adjusted ROE in earlier years warrants further investigation into the nature of these adjustments.

The divergence between reported and adjusted ROE highlights the importance of understanding the components of equity. While reported ROE provides a standard measure of profitability, the adjusted ROE suggests that the reported equity figure may not fully reflect the underlying economic reality. The consistent growth in reported equity, contrasted with the more volatile adjusted equity, indicates that a significant portion of the reported equity may be attributable to items excluded in the adjusted calculation. The decreasing trend in adjusted ROE, despite increasing adjusted equity, suggests that the growth in adjusted equity is not translating into proportional increases in adjusted net income.

Analysis reveals a consistent divergence between reported and adjusted return on assets (ROA) figures over the five-year period. Both reported and adjusted ROA demonstrate overall positive trends initially, followed by a decline in the most recent year presented. The adjusted ROA consistently exceeds the reported ROA throughout the period, indicating the impact of adjustments made to net income and total assets.

Reported ROA Trend

Reported ROA increased from 4.53% in 2021 to a peak of 9.12% in 2024. This represents a substantial improvement over the period. However, 2025 shows a decrease to 6.15%, suggesting a potential shift in profitability relative to total assets. The increase correlates with growth in reported net income and reported total assets.

Adjusted ROA Trend

Adjusted ROA exhibits a similar pattern to the reported ROA, rising from 6.60% in 2021 to 12.99% in 2024. The adjusted ROA also experiences a decline in 2025, falling to 9.41%. The magnitude of the increase and decrease is more pronounced in the adjusted ROA, highlighting the significance of the adjustments applied to net income and total assets. The adjusted ROA consistently remains higher than the reported ROA.

Net Income Impact

Reported net income attributable to SLB increased from US$1,881 million in 2021 to US$4,461 million in 2024, before decreasing to US$3,374 million in 2025. Adjusted net income follows a similar trajectory, with a final value of US$3,584 million in 2025. The difference between reported and adjusted net income is minimal across all years, suggesting adjustments are not significantly altering the overall profitability picture.

Asset Base Impact

Reported total assets grew steadily from US$41,511 million in 2021 to US$54,868 million in 2025. However, adjusted total assets show a considerably smaller growth rate, starting at US$28,521 million in 2021 and reaching US$38,074 million in 2025. This substantial difference in asset values indicates that a significant portion of the reported asset base is being excluded in the adjusted figures, likely representing items such as goodwill or intangible assets that are being re-evaluated or excluded for analytical purposes. The lower adjusted asset base contributes to the higher adjusted ROA.

ROA Divergence

The consistent gap between reported and adjusted ROA suggests that the company’s reported financial performance is influenced by the accounting treatment of certain assets. The adjustments to total assets appear to have a more substantial impact on the ROA calculation than adjustments to net income. The decline in both reported and adjusted ROA in 2025 warrants further investigation to determine the underlying causes and potential implications for future performance.