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Stephane Biguet

Thank you, Olivier. And good morning, ladies and gentlemen. First quarter earnings per share, excluding charges and credits was $0.72. This represents a decrease of $0.03 when compared to the first quarter of last year.
We recorded $0.14 of charges during the quarter. This included $0.11 of charges in connection with our cost-out program that we initiated last year. And $0.03 of merger and integration charges related to the ChampionX and Aker Subsea transactions.
Overall, our first-quarter revenue of $8.5 billion decreased 3% year on year. International revenue decreased 5% year on year, largely driven by reduced activity in Mexico, Saudi Arabia, offshore Africa, and Russia. North America revenue increased 8% year on year due to higher digital and subsea production system sales, as well as strong growth in our data center infrastructure solutions.
Company-wide adjusted EBITDA margin for the first quarter was 23.8%, up 18 basis points year on year. Pretax segment operating margin was 18.3%, representing a 60 basis point decline year on year, as two of our four divisions experienced lower margins, partially mitigated by the effects of our cost-out program. As we navigate the current market dynamics, we will continue to exercise cost discipline, and we will align our resources with activity levels in the coming quarters as necessary to protect our margins and cash flows.
As it relates to tariffs, the evolving landscape clearly introduces uncertainty, which makes it challenging to fully assess their impact at this time. Broadly speaking, we are partially protected by our activity needs, with approximately 80% of our revenue derived from international markets, as well as by our diversified supply chain network that includes in-country manufacturing and local sourcing.
However, parts of our operations are still potentially exposed to increasing tariffs, primarily from imports of raw material into the US in our production systems division, as well as exports from the US, subject to retaliatory tariffs.
Under the current tariff framework, the majority of the impact is on import and export flows between the US and China. So any resolution or conversely escalation between those two countries can significantly impact the tariffs we may be subject to.
While those discussions are taking place, we are taking proactive steps to mitigate the potential impacts. This includes reviewing how to further optimize our supply chain and manufacturing network, as well as diligently pursuing all applicable exemptions and drawbacks. We are also actively engaging with customers to recover tariff-induced cost increases through contractual adjustments.
We have made progress on all these fronts in the last two weeks, and we are stepping up those actions across the organization as we speak. As the second quarter progresses and ongoing trade negotiations continue, we will hopefully gain better visibility of where tariffs may settle and the extent to which we will be able to mitigate their effects on our business.
Let me now go through the first quarter results for each division. First quarter, digital and integration revenue of $1 billion increased 6% year on year, driven by 17% growth in digital revenue. This growth was partially offset by lower APS revenue due to a temporary pipeline disruption that impacted production in our projects in Ecuador. While this issue has been resolved, it did cost us $0.01 of earnings in the quarter.
Digital and integration margin of 30.4% expanded 380 basis points year on year, entirely due to improved profitability in digital. Reservoir performance revenue of $1.7 billion decreased 1% year on year as strong unconventional stimulation and intervention activity was upset by lower evaluation and exploration activity.
Margins of 16.6% declined 311 basis points as compared to the first quarter of last year due to the less favorable activity mix, as well as projects to costs.
Well construction revenue of $3 billion declined 12% and margins declined 71 basis points year on year on significantly lower drilling activity. Mexico and Saudi Arabia alone represented approximately two-third of the revenue decrease.
Finally, production systems revenue of $2.9 billion increased 4%, while margins of 16.2% grew 197 basis points year on year. These results were driven by the resilience of our portfolio in production and recovery activities and were augmented by significant revenue growth in our data center infrastructure solutions business.
Now turning to our liquidity. During the quarter, we generated $660 million of cash flow from operations, a significant increase compared to the first quarter of last year. We generated positive free cash flow of $103 million, despite the payment of annual employee incentives and the seasonal increase in receivables due to continued capital discipline and working capital. Despite the uncertain economic environment, we expect our cash flow generation to remain strong and to grow throughout the year, consistent with our historical trends.
Capital investments, inclusive of CapEx and investments in APS projects and exploration data were 557 million in the first quarter. For the full year, we are still expecting capital investments to be approximately 2.3 billion, excluding any impact from the anticipated closure of the ChampionX transaction.
Our net debt increased $2.7 billion sequentially to $10.1 billion. This increase largely reflects the $2.3 billion we spent on our accelerated share repurchase transactions during the quarter. This ASR transaction was completed in April and resulted in us reducing ultimately our shares outstanding by a total of $56.8 million shares. $47.6 million of its shares were received in the first quarter, while the remaining $9.2 million shares were received in April. The ASR transactions, together with the dividend increased announced last quarter, will allow us to meet our commitment to return a minimum of $4 billion to shareholders in 2025.
Let me conclude with an update on our pending M&A transactions. While these transactions are obviously taking more time to complete than initially anticipated, we are pleased with the progress made during the quarter and continue to work towards successful closure.
As it relates to ChampionX, as we announced a couple of weeks ago, the United Kingdom Competition and Markets Authority has agreed to consider our proposed actions to address their concerns as part of their Phase 1 review. We will continue our collaboration with the UK and other regulators towards an anticipated closing in the second quarter or early third quarter of 2025.
With respect to our overspending transactions, we now expect the divestiture of our interest in the Palliser APS project in Canada to close in the 2nd quarter. I will now turn the conference call back to Olivier

Olivier Le Peuch

Thank you, Stephane. I think, Megan, we are ready for taking the questions from the floor. Thank you.

Question and Answer Session

Operator

(Operator Instructions) David Anderson, Barclays.

Dave Anderson

So we've heard from a number of other service companies this week on the outlook, some have been more sobering than others. But I think we're starting to frame sort of some of the potential outcomes for international North America for the rest of the year.
You said, upstream spending, you're expecting to decline this year, but I was hoping you could maybe clarify a little bit how you see international North America from here at these oil prices. And how is the factor into your guide for mid-single-digit growth in the second half of the year in which you have a very different mix than your peers?

Olivier Le Peuch

Absolutely. Thank you, Dave, for the question. Indeed, I would like to clarify. So as you know and as we have allied in the prepared remarks, global upstream spend will be down year-on-year and with higher decline than originally anticipated. There is no argument against that, no against the currently big data in the penalty of the tariff it impact itself. It's already slowing down.
What is important is how SLB's position against this background. And now we see more downside exposure in NAM than international market in this negative revision. But first, if we look at NAM and our position there, we are now tied to the regional (inaudible)
And actually we are long in offshore, in digital, and in production in this market. And furthermore, we have a data center solution there. So I think if you look at it, our exposure here has been three factors due to the strategy we initiated about five years ago. And we're reaping now the benefit of having better resilience against the short cycle exposure we have as part of NAM because our offshore pollution, market exposure, digital, and now the new business. I've been excluding the data center infrastructure solution. A year on year would have been going year on year, proving that resilient is in place for now.
Now, flipping to international, we see less exposure or less decline proportionally directionally than in North America as the resilience, as I said, of Middle East and Asia, including offshore, including on commercial, including gas, will continue to play a role into holding better this this market.
So we have the right exposure offshore. We have the right exposure in gas internationally, partly on commercial. We are growing as you have seen our digital, and production recovery remain the nice exposure we have across the globe, speaking of which, I believe that the upcoming acquisition and integration of ChampionX would not only enhance our resilience, but improve our mix in North America and give us further digital and further offshore exposure across the world as well.
So I feel good about where we are in this cycle. And I think, just wanted to reconcile a bit why we have maybe a differentiated performance going forward, we expect.

Dave Anderson

Great, thank you. Very much appreciated on the different mix here. I wanted to focus on one of your kind of core countries of Saudi Arabia. You mentioned it got off to a bit of a slow start this year. We recently heard another rig company just talked about another rig being dropped. Can you talk how you see Saudi playing out kind of from here for the rest of the year?
On the one hand, do you think conventional oil activity maybe picks up later this year with these OPEC barrels coming back in the market? And then you have the unconventional natural gas activity ramping up. So I guess I'm wondering, overall, should we start to see sort of more sustained growth from Saudi starting later this year and into 2026. A lot of moving parts here. If you could help us understand those.

Olivier Le Peuch

Thank you. Yeah, a lot of moving parts indeed. And I think again you have to set the clock back to what happened last year. I think, an adjustment of the ambition from 13 to 12 [MSC] that has led to a steep decline of activity that is translating into what we are seeing today year on year on our related activity.
Now, when it comes to this year and next, I think, indeed, the priority of the Kingdom clearly to stabilize position and to be able to respond to this OPEC+ pool as they materialize in the short term at least and to continue to execute that gas ambition to go 40% to gas and beyond by 2030. And as such, the gas lands and unconventional gas will remain a priority that we see and receive further activity increase.
Now, if they are pending further reduction to adjust to the level of activity to adjust to the commodity price, like other countries will do possibly. But I think directionally, the commitment to long-term gas, the commitment to maintain, and the activity that relates to maintaining this $12 million by [LMNSC] will indeed represent likely an uptick as we go into 2026 for Saudi.
So that's what we expect. So yes, a lot of moving parts, but our exposure there is we love position in Saudi. I was just recently here with a few more members visiting the Kingdom, and I think have the opportunity to measure firsthand, the engagement, I would say, the proximity we have and the feedback on our performance that is stellar. And I think we're going to like to keep it that way and thank the team for what they are delivering on a difficult market condition.
But yes, I think I believe that the worst is behind us in terms of decline, and if there is some adjustment this year, I believe that the gas-led growth will help us rebound going forward.

Operator

Scott Gruber, Citigroup.

Scott Gruber

I want to ask about what EBITDA margin level you think you can defend in a modestly weaker market year on year. Previously, with the cost restructuring, it sound like you were targeting to defend 25%. It looks like take a margin slightly north of 25% in the second half to get there this year. But do you think you can get the EBITDA margin back to the 25% level in the second half, excluding the impact of ChampionX.

Olivier Le Peuch

I think excluding the ChampionX and excluding escalation of tariffs, I think, I believe that if we assume that the sellout condition we have put out, but oil price remaining in check with approximately current level. And the guidance we gave on the growth in the second half. And the leverage will have and the realization of our cost out program, the digital effect and the rest will have the ambition to grow our margin in the second half. And we'll try to keep our ambition to approximately 25% for the full year.
That's something that will ambition. But the tariff is a big question mark. And I think if the tariff were to stay or escalate from where they are, obviously the impact you will have as Stephane described. I think we will have -- will represent the headwind to this marginal expansion in the second half.

Scott Gruber

I appreciate the color. And then turning to digital. How do you think about the cadence of digital growth in this environment? On the one hand, digital is obviously an efficiency enabler. I think in that vein it could accelerate, but on the other hand, there is some exploration spend, some discretionary spend within the digital mix. How do you think about the resilience of digital growth in this environment? And should we continue to think about that high teen growth rate for the year?

Olivier Le Peuch

I think this remains our mission. We believe that this secular trend of digital adoption in the industry is actually accelerating. Now, there will be some discretionary decision. There will be some pressure here and there. There will be some projects that will be reconsidered.
But overall I think we believe that the realization of the efficiency gain, both productivity for the -- and effectiveness for the planning [geosound's] workflows and the direct impact on the performance of the cost of ownership or operational workflows, I think is still playing out and resonating very well for customers at the time they want to extract efficiency.
So against the global upstream CapEx, I think as we come out in the previous question that we declined year-on-year, we are still seeing mid- to high teens, clearly, growth into our digital business. driven by this secular trend that we are fully capturing.
Our technology strategy and our platform strategy is clearly playing out. And you have seen the diversity of the awards that we get different customers, different regions, geosounds, operation progress we are making with many customers across the world.

Operator

Arun Jayaram, JPMorgan.

Arun Jayaram

Olivier, I was wondering if you could elaborate on SLB strategy kind of to diversify the portfolio beyond oil and gas. I think you mentioned you're on pace to exceed maybe $1 billion of revenue this year versus, I think, $850 million last year, but maybe talk about some of the steps you're taking there and some of the longer-term growth potential.

Olivier Le Peuch

No. Thank you, Arun. I think, yes, I think we have initiated about three to four years ago, strategy with new energy. And I think the major aspect of that will continue to impact us in short term in three ways. First is yes, where we took a position to acquire capturing. And I think we have our SLB capture venture, I think, is the capture technology that I think we have four active projects and many projects in the field that will continue to materialize and create a growth pattern going forward.
So this, combined with our sequestration adjacent to the core capability in exploration and characterization of this reservoir sequestration capability, I think it's leading to a visible growth on our CCS, and this will continue. So we don't see the pattern slowing down. We see this as a long-term market position we want to continue to own and go.
Geothermal, starting from commercial geothermal has been something that has been getting more focused and more adoption for customers. And now there is a lot of pilot on new generation or next-generation geothermal that is being highly supported by the new administration, partly in the U.S.
I believe this is also something that would continue to grow. And finally, I will mention, the lithium -- direct lithium extraction where I think the pilots we have successfully completed last year. The first pilot at scale in the US, I think, is again resonating very well with the critical minerals priority of the current administration. And we see this in South America. We see this in Saudi, where we're actually participating into a pilot as well.
So this is successful. And separately you have seen that data center is something that we have used. I think the relationship, the engagement we had to position ourselves as a provider of manufacturing capability, manufacturing services, as well as modular cooling solutions for the data center. And the success is great. And I think I'm very pleased with the process of the team.
We have a plant in Louisiana that is serving this business. And we have a large compact that we are fulfilling, and that has been an area of growth in North America. We're expected to continue going forward this year and next clearly.
So yes, the ambition is to go from the $850 million plus to visibly more than $1 billion when we put all of this together. And we're not expect it to slow in '26 but to continue to accelerate.

Arun Jayaram

Great. That's helpful. Maybe my follow-up is for Stephane and just to maybe clarify some of the outlook comments. My team tried to estimate what your outlook comments would translate into 2025 EBITDA. We're getting to somewhere between to $8.5 billion. I don't know, Stephane, if you could maybe give some color if that makes sense. And maybe the clarification is, how are you treating Palliser in some of the tariff-related impacts in terms of the full year outlook?

Stephane Biguet

So Arun, we will stick with revenue only guidance for the rest of the year. As Olivier mentioned, the growth, assuming current oil price more or less stay at the current level. So we stick with revenue. We think it's premature to give you an EBITDA for the second half and hence, for the full year.
And some of the reason is indeed the tariff, the application of tariffs, we think giving you a number on tariff at this stage would not be useful for financial modeling, unfortunately, we'd love to, but it's quite difficult. But as I said, we are partially shielded by domestic manufacturing and sourcing. But it is clear, if it stays that way, we will have an impact. We will try to mitigate it, and we are already doing that through optimization of supply chain and through ultimately trying to pass the impact to customers.
But what matters at the end is that we are still seeing margin expansion in the second quarter despite tariff being affected now, and this is to the tune of 50 to 100 basis points, as we mentioned for Q2 sequentially. And for the second half of the year, margin expansion, assuming again that oil prices stay more or less at this level, we will have growth in H2. And this will come with margin expansion, but quantifying that margin expansion in H1 to H2, it would not be the right thing for us to do today.

Arun Jayaram

Totally understand. Thanks a lot, Stefan.

Stephane Biguet

Thank you.

Operator

Neil Mehta, Goldman Sachs.

Neil Mehta

So as you think about ChampionX, recognize there's some limitations about, what you can say around this, but where are we in terms of the gating items at this point? It does feel like we're in the end zone here, but curious -- red zone, but curious what your perspective is on what remains outstanding and confidence around closing.

Olivier Le Peuch

Yeah. I think as Stephane did come on in his prepared remarks, I think we are very pleased with the progress we made very recently, partly the UK CMA authorities and obtained that they have accepted that we're going to remedies extension of Phase 1 through remedies as it has been commented, and they have accepted remedies.
So we have now to walk through these remedies and income on them as soon as that effectively we can. And that's the reason why we have increased our confidence to conclude at the end of the quarter or early next quarter.
Now the other upstanding, I think Norway is known to be outstanding. And I think we have been engaged very effectively in the last few days and few weeks with the Norwegian Authority. And I believe as well that I think we are -- as we commented, going to hopefully a resolution there. So that's the reason why we maintain our confidence into the end of this quarter or early next quarter.

Neil Mehta

And Olivier, I would love you to share your thoughts on the macro, particularly from the supply side. You spent a lot of all around the world. Where do you expect activity if we're in a lower commodity price environment to be dialed back? Or do you think it's relatively price inelastic? Is there a price level at which point you see activity particularly cut back?
Just your perspective on the near-term macro? And then also your perspective on the long-term macro because you've had an underinvestment view that ultimately, long term, that's going to catch up here, does this reinforce that?

Olivier Le Peuch

Yeah. I think starting with the long term, yes, easier. I believe that the position of oil and gas to see the energy mix of the world and progress -- and driven by different demands, be the global south, be the AI, be the electrification, I think we will continue to pull for the long term. And this combined with the natural decline that is pressing on many bases as you've seen, we continue to call for replenishments and maintaining, if not increasing, the investment we see today.
So long term the view is intact. And I think the whole of offshore to address this, the whole of the commitment of execution to capacity expansion in the Middle East, the whole of gas partly to security of gas supply in Asia, and the development of unconventional international to address this, I think we continue to be the area of growth that we foresee long term to remain. And I'm not talking about digital here.
But in short term, I think it's very difficult to gauge. But I think generally speaking, the short-cycle activity will be the first exposed. And Americas has quite a few are of short cycle, starting with the US land, and I think this will be the first that certainly will have the most impact.
Internationally, I think the resilience, as we mentioned, of Middle East, many countries are committed here relatively the penalty of oil price for their capacity expansion. And be it UAE, be it Kuwait and activity in some other part of the country around the Middle East will continue to stay and/or if not accelerate.
Asia, driven by Energy Security, will also have resilience driven by deepwater activity delay. Offshore, deepwater activity there that is strong and not problem of China that is holding the activity because they base it on a 5-year plan, not necessarily on the oil price of today. So you combine all this, you still have quite a few exciting pocket of growth geographically.
And you have some secular trends in digital. You have increased production recovery. And you have unconventional internationally that will continue to be out of growth. So yes, there are opportunities to capture and there are ways to offset the decline of the short term decline we're expecting the total cap.

Operator

Roger Read, Wells Fargo.

Roger Read

Good morning. Maybe if we could, Olivier, just -- you were mentioning deepwater there. We certainly -- well, it didn't sound like exploration was an uplift for you in Q1. We've certainly seen the industry start to lean into exploration a little more.
And I was just wondering if you could kind of take us around the world a bit on where we are seeing things pick up. I mean West Africa has looked good. Certainly, Latin America, ex-Mexico has continued to look pretty good in South America. And then I was just curious, anything else on that front.

Olivier Le Peuch

Yeah, I think the reserve replacement ratio is still what drives the IOCs and many large independents and some critical NOCs to continue to explore. And we have seen a rebound in commitment to exploration in the last 18 months that I don't see changing directionally, although there will be some discussion taken by some customers. And we have to go one customer at a time to review this.
But directionally, I think the need for replacing reserve for mild measures and the need for developing long term oil long term gas play in Asia or in the offshore basin at large I think remains intact. And I think you are seeing it's translating to FID that we expect to be panning up in '26, '27 that will impact subsea business going forward.
But yes, exploration is not over. And exploration takes two forms. I think three forms I would say. One is the near field exploration in Metro basin, Gulf of Mexico, or even Brazil or the North Sea, including the Norwegian sector. And then you have the frontier basin, be it Namibia, be it Surinam, be it part of Asia, Indonesia particularly that have seen new fresh exploration investment.
And finally, you have the other way to explore, which is digital exploration. And I think this is what we are benefiting from as well, a lot of reprocessing, a lot of activity for data processing. And hence, we are exposed to those. So yes, I think that the exploration will remain healthy, but this year, may suffer from discretionary decision and from some lingering white space, as we call it, in deepwater.

Roger Read

Appreciate that. The other question I had, just because it was called out as part of this quarter, things softer in Russia. Ironically, there was an article in the press today implying that Russia activity was at a multiyear high in the first quarter. So a bit of a juxtaposition there. It's just -- if you could give us any more insights on what you're seeing there?

Olivier Le Peuch

I think I will restrict the comment on Russia because we have taken this position to implement sanction and critical control of our activity there. And this is what has led to deep decline in Russia, and we expect this to continue as we continue to restrain and take every measure to sanction technology access and technical support to our team.

Roger Read

Appreciate that. Thank you.

Operator

Stephen Gengaro, Stifel.

Stephen Gengaro

Thank you and good morning, everybody. I was wondering as you talked about the outlook, and I was sort of focused on the production segment here, can you talk a little bit about your views on the resiliency of that business versus other parts of the company? And maybe even the margin stability or contribution to margin expansion you see coming from that segment as we go through the year?

Olivier Le Peuch

I mean I will not comment directionally on the margin. I think we don't provide guidance on margins on our divisions. However, I think the strength of the production system division, I think it stems from the adoption of this technology and the success we have in market position across the globe, both international in North America. It has been a growing market in North America, US land particularly lately.
So I think we have a market share market gain, market position due to technology. We have fit technology. We have a unique electrical completion technology. We have -- we are unlocking some efficiency in performance in artificial lift. And we have some success in subsea, partly in processing that is in combination giving us this distraction into this market. So that's the first.
Secondly, I think, indeed, as you said, we expect that the long cycle side of this production system will be more resilient against this market uncertainty as we see it. And some of the short cycle, it's all about performance.
If we maintain our performance as we have in the US land market, I think, we'll maintain our market position are against the tide and be able to grow in those markets. So I feel confident about the ability of the production system to continue grow this year and is going to gain market position or to leverage the long-cycle exposure partly order for success.
So I feel confident, but I'm not comment on the margin. We are confident that the team is executing very well and has -- will contribute to protecting our margin and contribute to margin expansion going forward.

Stephen Gengaro

Great. And then the second question I have was around your confidence in free cash generation for the year. I mean, you're obviously committed to returning a significant amount of cash. How do we think about you sort of stress testing that against the uncertain macro and sort of preservation of cash and balance sheet versus returning capital? Like is there a stage at which you slow that down or your confidence is pretty high?

Stephane Biguet

So first, thanks for the question, Stephen. So we did start the year on cash flow as we expected, even a bit better, as I mentioned. And we are still quite confident that it will follow the pattern we usually see every year, and it will increase significantly in the following quarters. And the second half is really when we make the majority of the free cash flow for the year.
So yes, you're absolutely right. We do stress testing. H2 is uncertain, as we said, in a lower activity scenario, which is not the best case today, but in case commodity pricing drop further. We would actually expect headwinds on earnings to be partially offset by lower working cap requirements that would provide quite a buffer.
So in many cases, we believe actually, our free cash flow for the year will continue clearly to support our commitment of minimum $4 billion returns to shareholders. So we are confident on our cash flow. And we are confident that clearly, this commitment is not going to change.

Stephen Gengaro

Great. Thank you.

Dan Kutz

Thank you.

Operator

Keith MacKey, RBC Capital Markets.

Keith Mackey

Hi, good morning. Just wanted to start out maybe on the margins now. Olivier, without commenting on segment margins, specifically, certainly, we did see production systems and digital up nicely year over year, which seem to support the business very well.
But can you just comment on the strategy from here relative to what you're seeing in the cycle in terms of where ultimately the business goes relative to what we're seeing as the cycle being a later cycle in the general oil and gas market? And just how you think that all plays out with the different segments and being a more across E&P life cycle business?

Olivier Le Peuch

Yeah. I believe the strategy we have, first and foremost, to continue to I think leverage the market position we have, just the strategy we had in the NAM as I mentioned. I think it's fit for this market condition going forward.
We believe that our exposure internationally, very diverse, broad exposure, both onshore and offshore and gas exposure, including and commercial, digital and production, as you mentioned, actually will continue to support and position us -- I would call it position recovery, and I think that includes element of our reserve performance division as well as our production systems division.
I think, it will have resilience going forward. The drilling, as you have seen, I think, is more directly linked to the rig activity that I think in this uncertain environment has and will continue to be getting downward pressure. But I think from -- as you commented earlier from the margin, we will continue to anticipate, take cost action, and continue to extract efficiency from our organization to partially offset this and continue to focus on maintaining our margins.
So we believe that, as we said, the ambition remain intact to protect our margins with all the commentary and provision of oil price and tariffs. I think ambition mass impact that in this mix, we believe that digital growth and the growing success we have in production system and containing the margin pressure on the result performance and well construction will results into maintaining and protecting our margin as much as we can, excluding tariffs as we come up with.

Keith Mackey

Yeah. I appreciate the comments there. Maybe just one more on tariffs. I know the situation is certainly incredibly fluid. But does the guidance that you've provided imply a continuation of existing tariffs that are on or -- or can you help us think about those pieces a little bit more?

Stephane Biguet

Well, for the second quarter, absolutely, yes. It's assuming current tariffs unchanged. But 50 to 100 basis point margin extension sequentially includes the current tariff framework. And again for the second half, it will depend on the final tariff framework which we all know will change in one way or another. So it will -- the margin expansion will fluctuate based on that.

Keith Mackey

Okay. Thanks very much.

Olivier Le Peuch

Thank you.

Operator

Dan Kutz with Morgan Stanley.

Dan Kutz

Hey, thanks a lot. Good morning. So I was maybe hoping we could dig in a little bit deeper on new energy across your kind of five pillars and I guess, the -- I don't know if you want to call it the sixth pillar with the data center infrastructure.
But I think you guys have done a great job of quantifying the opportunities around data center infrastructure and kind of get the sense that among the five other pillars, CCUS is maybe the largest. But as you think about your $3 billion 2030 new energy revenue target, how do you think about the contributions across those five pillars. Where do you see kind of the more or less growth potential, more or less contribution? Any color you can share there would be great. Thank you.

Olivier Le Peuch

Yeah. We're not ready to -- we are not here to comment as an update on our $3 billion ambition for new energy. But indeed, I think CCS all in, as I call it, okay, both the sequestration and all the services, including digital that we have there will be a large component of that, okay, clearly.
Geothermal has quite a good momentum. And I think it's too soon to say whether the unconventional, or next-generation geothermal has is being pursued both in Europe and in the US with the support of the authority everywhere, I think will unlock and give us the second leg of growth clearly, too early to say.
The lithium, as I commented, I think, is a smaller opportunity, but I think it's quite exciting. And we are getting a lot of inbound request to use the pilot and to test against the critical mineral ambition that many of our prospect customers have, be it a mining company or be it a few companies that are former and that are stepping into that business.
Alvogen is more a next decade ambition that we have and the same for energy storage, I would say. And data center, I think the ambition we have is continue to consolidate and leverage the success we have with this engagement we have developed and success growth that we have developed and expand towards low carbon solutions that are the need for decarbonizing the power source of this data center as well as providing effective cooling and support some manufacturing capacity deployed and deliver these data centers.
We will have -- at the end of this year, they've supported more than 15 data center solution across the US. So that's quite something that we are proud of. So again, you can see all of this as a sum of business that it will grow at a higher rate than the oil and gas sector for the years to come. Hence, it is again adding to the to the resilience and to the ability we have to navigate a difficult time as we have today and keep extracting off or resilience across the other.

Dan Kutz

Awesome. That's all really helpful. And then maybe a quick one just on the EPS on the Asset Performance Solutions business. I'm sure the highest priority is kind of giving the Palliser deal across the finish line, but how do you think about the remainder of that portfolio. My understanding is the Ecuador asset, which is kind of fairly oil levered is the biggest remaining or perhaps only remaining component.
Is that something that you guys could potentially be divesting at some point in the future? Or is that an asset that you're planning on keeping. Just wondering how you think about the APS portfolio moving forward following the Palliser transaction?

Stephane Biguet

Yes. So indeed, following Palliser will only be left with Ecuador, and it will remain that way. And in Ecuador, we have three projects. And as we explained in the past, these projects are quite different from equity positions, such as we have in Canada. They are more like service contracts with the local NOC with the operator.
So you are actually closer to our core business here. The only difference, if I may say, is that we are paid in in production equivalent through a barrel instead of an invoice for services. So at this stage, we -- it's quite economic. These projects are providing a lot of cash flow for for the company, they are providing good profitability.
So considering the nature of the projects, they are likely to stay at least for -- they have a finite contractual term actually, which we can negotiate and extend with our customer. But at this moment, for the next few years, you have to assume they will stay within our portfolio.

Dan Kutz

Understood. Thank you both very much. I'll turn it back.

Olivier Le Peuch

Ladies and gentlemen, as we conclude today's call, I would like to leave you with the following takeaways. First, while the market outlook remains uncertain, SLB is positioned to demonstrate resilience to our strategy leveraging our global reach, innovation capabilities, differentiated digital offering, diversification beyond oil and gas and disciplined cost management.
Second, we are confident in our ability to continue generating strong cash flows despite the evolving market dynamics and remain focused on productive margins and committed to increase return to shareholders in 2025.
And finally, we look forward to creating value for our customers, partners and shareholders in the coming quarters. With this, I will conclude today's call. Thank you all for joining.

Operator

This concludes today's conference call. You may now disconnect.