SLB N.V. (NYSE:SLB)

The profitability metrics demonstrate a consistent upward trend through the first three quarters of 2023, followed by a period of stabilization and then a gradual decline into the forecast period. Generally, the company exhibits strong and relatively stable profitability, though recent quarters suggest a potential shift in this performance.

Gross Profit Margin

The gross profit margin experienced consistent growth from 16.43% in March 2022 to a peak of 20.56% in December 2024. However, the most recent quarters show a downward trend, decreasing from 20.56% to 18.22% by December 2025. This suggests potential pressures on cost of goods sold or pricing strategies.

Operating Profit Margin

Similar to the gross profit margin, the operating profit margin steadily increased from 12.56% in March 2022 to 16.55% in March 2024. The rate of increase slowed thereafter, and a decline is observed in the forecast period, falling to 12.23% by December 2025. This indicates increasing operating expenses relative to revenue, or a weakening of core operational efficiency.

Net Profit Margin

The net profit margin followed a comparable pattern, rising from 8.84% in March 2022 to 12.97% in September 2023, before stabilizing and then decreasing to 9.45% in December 2025. This suggests that factors beyond core operations, such as financing costs or taxes, may be contributing to the recent decline.

Return on Equity (ROE)

ROE exhibited substantial growth, increasing from 13.63% in March 2022 to a high of 21.47% in March 2025. A notable decrease is then observed, with ROE falling to 12.92% by December 2025. This decline could be attributed to decreasing net income or a reduction in shareholder equity.

Return on Assets (ROA)

ROA mirrored the trend of ROE, increasing from 4.98% in March 2022 to 9.12% in December 2024. The subsequent period shows a decline, with ROA decreasing to 6.15% by December 2025. This suggests a diminishing ability to generate profit from its asset base.

Overall, the company demonstrated strong profitability improvements through much of the analyzed period. However, the recent trend indicates a potential weakening of financial performance across all measured ratios, warranting further investigation into the underlying drivers of these changes.

The gross profit margin exhibited a consistent upward trend from March 31, 2022, through December 31, 2024, before experiencing a decline in subsequent periods. Simultaneously, revenue demonstrated overall growth throughout the analyzed timeframe, although with some quarterly fluctuations.

Gross Profit Margin Trend

Beginning at 16.43% in March 2022, the gross profit margin increased steadily each quarter, reaching a peak of 20.56% by December 2024. This indicates improving efficiency in managing production costs relative to revenue. However, from March 2025 onward, the margin began to decrease, falling to 18.22% by December 2025. This reversal suggests potential increases in the cost of goods sold, pricing pressures, or a shift in the product mix towards lower-margin offerings.

Revenue and Gross Margin Relationship

Revenue generally increased alongside the gross profit margin from March 2022 to December 2024. This suggests that the company was able to capitalize on increased sales volume while simultaneously maintaining or improving its profitability. The period from March 2025 to December 2025 shows revenue continuing to grow, but the declining gross profit margin indicates that this revenue growth was not translating into proportional gains in profitability. Revenue increased from $8,490 million in March 2025 to $9,744 million in December 2025, while the gross profit margin decreased from 20.42% to 18.22%.

Quarterly Fluctuations

While the overall trend is clear, some quarterly variations are present. For example, the increase in gross profit margin from June 2023 to September 2023 was relatively small (0.3%), compared to the increases observed in earlier periods. Similarly, the decline from September 2025 to December 2025 was more pronounced than the declines observed in the preceding quarters. These fluctuations warrant further investigation to understand the underlying drivers.

In summary, the analyzed period demonstrates a period of strong profitability improvement followed by a recent decline in gross profit margin despite continued revenue growth. Further analysis is recommended to determine the causes of the margin compression observed in the latter part of the period.

The operating profit margin exhibited a generally positive trend from the first quarter of 2022 through the fourth quarter of 2023, followed by a decline in subsequent periods. Initial values indicated a margin of 12.56% in March 2022, which progressively increased to a peak of 16.45% by September 2023. While remaining relatively stable in December 2023 at 16.43%, the margin began a consistent downward trajectory from March 2024 onwards.

Overall Trend

The period between March 2022 and September 2023 demonstrates a clear expansion of the operating profit margin. This suggests improving operational efficiency, effective cost management, or favorable pricing dynamics during that timeframe. However, the subsequent decline indicates potential pressures on profitability, possibly stemming from increased costs, competitive pricing, or shifts in revenue mix.

Growth Phase (Q1 2022 – Q3 2023)

The operating profit margin increased from 12.56% to 16.45% over this period, representing a cumulative increase of approximately 3.89 percentage points. The most substantial quarterly gains occurred between June 2022 and December 2022, and again between March 2023 and September 2023. This sustained growth suggests a period of strong operational performance.

Decline Phase (Q4 2023 – Q4 2025)

From September 2023 to December 2025, the operating profit margin decreased from 16.45% to 12.23%, a reduction of 4.22 percentage points. The rate of decline appeared to accelerate in the latter half of 2025, with a more pronounced decrease between September and December. This suggests increasing challenges to maintaining profitability.

Recent Performance (Q1 2024 – Q4 2025)

The operating profit margin decreased from 16.55% in March 2024 to 12.23% in December 2025. This represents a decline of 4.32 percentage points over ten quarters. The most recent quarterly value, 12.23%, is lower than the initial value observed in March 2022, indicating a return to earlier levels of profitability.

The observed trends warrant further investigation into the underlying drivers of both the initial margin expansion and the subsequent decline. Analysis of revenue composition, cost of goods sold, and operating expenses would provide a more comprehensive understanding of the factors influencing the operating profit margin.

The net profit margin exhibited a generally positive trajectory from March 31, 2022, through September 30, 2023, followed by a declining trend through December 31, 2025. Initial values indicated a margin of 8.84% which progressively increased, reaching a peak of 12.97% by September 30, 2023. Subsequent quarters demonstrate a consistent, albeit moderate, decrease in this metric.

Overall Trend

The period began with a net profit margin of 8.84% and concluded with a value of 9.45%. While the initial phase showed substantial improvement, the latter portion of the analyzed timeframe reveals a contraction in profitability as measured by this ratio.

Growth Phase (Mar 31, 2022 – Sep 30, 2023)

From the first observed period to the peak in September 2023, the net profit margin increased by 4.13 percentage points. This growth suggests improving operational efficiency, effective cost management, or favorable pricing dynamics during this period. The most significant increases occurred between March 31, 2022, and June 30, 2022 (1.72 percentage points) and between June 30, 2023, and September 30, 2023 (0.34 percentage points).

Decline Phase (Dec 31, 2023 – Dec 31, 2025)

Following the peak, the net profit margin decreased by 3.52 percentage points over nine quarters. This decline could be attributed to rising costs, increased competition, changes in revenue mix, or other factors impacting profitability. The largest single decrease occurred between September 30, 2025, and December 31, 2025 (1.09 percentage points).

Recent Performance

The most recent two quarters (March 31, 2025, and June 30, 2025) show a stabilization of the decline, with a smaller decrease from 11.62% to 11.53%. However, the final quarter observed (December 31, 2025) shows a further decrease to 9.45%, indicating the downward trend may be continuing.

The observed fluctuations in net profit margin warrant further investigation to determine the underlying drivers of both the initial growth and the subsequent decline. A comprehensive analysis of revenue, cost of goods sold, and operating expenses would provide valuable insights into the factors influencing this key profitability metric.

Return on Equity (ROE) demonstrates a clear upward trend throughout much of the observed period, followed by a recent decline. Initially, the metric increased from 13.63% in the first quarter of 2022 to a peak of 21.43% in the third quarter of 2023. This positive trajectory suggests improving profitability relative to shareholder equity. However, the latter portion of the period reveals a weakening of this performance, with ROE decreasing to 12.92% by the fourth quarter of 2025.

Overall Trend

The period began with a consistent increase in ROE, indicating enhanced efficiency in generating profits from equity financing. The rate of increase slowed between the first and second quarters of 2023, before stabilizing. The subsequent decline in the final quarters suggests a potential shift in the company’s profitability or equity structure.

Growth Phase (Q1 2022 – Q3 2023)

From March 31, 2022, to September 30, 2023, ROE experienced substantial growth. This coincided with increases in both net income attributable to SLB and total SLB stockholders’ equity, though net income growth was not always consistent. The equity increases suggest reinvestment of earnings or other equity-raising activities. The consistent ROE improvement during this phase indicates that the increases in net income outpaced the growth in equity, leading to a more efficient use of shareholder investments.

Decline Phase (Q4 2023 – Q4 2025)

Beginning in December 2023, ROE began a downward trend. While net income remained relatively stable for the first two quarters of this phase, the rate of equity growth accelerated. This suggests that the company was increasing its equity base at a faster rate than its ability to generate profits, thus diluting the return for shareholders. The final two quarters of the period show a decrease in net income alongside continued equity growth, further exacerbating the decline in ROE.

Key Observations

The fluctuations in ROE appear to be influenced by the interplay between net income and total stockholders’ equity. Periods of strong net income growth, coupled with moderate equity increases, resulted in higher ROE. Conversely, periods of slower net income growth or declining net income, combined with significant equity increases, led to lower ROE. The recent decline warrants further investigation to determine the underlying causes and potential implications for future performance.

The observed changes in ROE should be considered in conjunction with other financial metrics and industry trends to gain a comprehensive understanding of the company’s financial health and performance.

The Return on Assets (ROA) demonstrates a generally positive trend over the observed period, with some fluctuations. Initially, the ROA increased consistently from March 31, 2022, to December 31, 2022, before stabilizing and then experiencing a decline towards the end of the period.

Initial Growth (Mar 31, 2022 – Dec 31, 2022)

The ROA began at 4.98% in March 2022 and steadily increased each quarter, reaching 7.98% by December 2022. This indicates improving profitability relative to the asset base during this timeframe. The increase suggests the company was becoming more efficient in utilizing its assets to generate income.

Stabilization and Slight Decline (Jan 1, 2023 – Dec 31, 2023)

From March 2023 through December 2023, the ROA fluctuated between approximately 8.76% and 9.12%, indicating a period of stabilization at a relatively high level. While not exhibiting the same growth as the prior period, the ROA remained strong.

Recent Downward Trend (Jan 1, 2024 – Dec 31, 2025)

Starting in March 2024, a noticeable downward trend in ROA emerges. The ratio decreased from 9.06% to 6.15% by December 2025. This decline suggests a weakening in the company’s ability to generate profits from its assets. The decrease is particularly pronounced in the latter half of 2025.

Net Income and Total Assets Relationship

The increase in ROA through December 2022 correlates with increases in both net income attributable to SLB and total assets. However, the subsequent decline in ROA, despite relatively stable or increasing total assets, suggests that net income growth has not kept pace, driving the ratio lower. The most significant drop in ROA coincides with a period where net income decreased while total assets continued to rise.

Overall, the ROA trend indicates a period of strong performance followed by a recent decline. Further investigation into the factors driving the decrease in net income relative to assets would be warranted to understand the underlying causes of this shift.