Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 totaled $1.34 billion, contributing to a record full-year adjusted EBITDA of $4.83 billion, reflecting sustained momentum from the business system and positive performance in Industrial and Energy Technology (IET) [4][30] - Adjusted earnings per share rose to $0.78, resulting in a full-year adjusted EPS of $2.60, a 10% increase from 2024 [4] - Adjusted EBITDA margins for Q4 rose 30 basis points year-over-year to a record 18.1% [4] - For the full year, company-adjusted EBITDA margins increased by 90 basis points to a record of 17.4% [5] Business Line Data and Key Metrics Changes - IET achieved record fourth-quarter order bookings of $4 billion, contributing to a full-year total of $14.9 billion, exceeding guidance [6] - IET margins increased by 160 basis points to 20% in Q4, while OFSE margins declined due to market conditions [4][35] - OFSE revenue fell 8% to $14.3 billion for the full year, with EBITDA of $2.62 billion resulting in resilient margins of 18.3% [37] Market Data and Key Metrics Changes - LNG equipment orders in 2025 totaled $2.3 billion, with expectations for similar levels in 2026 [8] - New Energy orders reached a record $2 billion for the full year, well above the target of $1.4 billion to $1.6 billion [10] - Global LNG demand is expected to increase by at least 75% by 2040, primarily driven by growth across Asia [16] Company Strategy and Development Direction - The company is focused on scaling its power systems portfolio to capture growing demand, particularly in data centers and renewable energy [3][19] - The pending acquisition of Chart is expected to enhance the power generation portfolio and enable integrated trigeneration solutions [28][49] - The company aims to achieve a 20% adjusted EBITDA margin by 2028, supported by ongoing productivity improvements and cost management initiatives [45][49] Management's Comments on Operating Environment and Future Outlook - The global macro environment remains resilient despite geopolitical uncertainties, with expectations for modest GDP growth in 2026 [14] - The company anticipates continued investment in generative AI and digital infrastructure, which will drive energy demand [14][15] - Management expressed confidence in achieving the three-year IET orders target of at least $40 billion, supported by strong order momentum [47] Other Important Information - The company generated robust free cash flow of $1.3 billion in Q4, contributing to a record annual free cash flow of $2.7 billion [7] - The balance sheet remains strong, with cash increasing to $3.7 billion and a net debt to adjusted EBITDA ratio decreasing to 0.5 times [31] Q&A Session Summary Question: Can you elaborate on your strategy for further enhancing your current capabilities or sustaining growth from Power Systems? - Management highlighted a multi-year growth cycle in global power demand, driven by factors such as data centers and electrification, with a market opportunity of $100 billion annually for Power Systems by 2030 [52][54] Question: Can you walk through some of the moving pieces within the $14.5 billion IET order intake guide for 2026? - Management indicated that the order outlook reflects strength across the IET portfolio, with LNG, gas infrastructure, and power systems expected to drive growth [63][65] Question: Can you discuss the margin outlook for IET and OFSE? - Management expects IET margins to reach 20% in 2026, driven by higher-margin backlog conversion and productivity improvements, while OFSE margins are projected to remain resilient despite macro headwinds [70][73]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2025 totaled $1.34 billion, contributing to a record full-year adjusted EBITDA of $4.83 billion, reflecting sustained momentum from the business system and positive performance in Industrial and Energy Technology (IET) [4][30] - Adjusted earnings per share rose to $0.78, resulting in a full-year adjusted EPS of $2.60, a 10% increase from 2024 [4][30] - Adjusted EBITDA margins for Q4 rose 30 basis points year-over-year to a record 18.1% [4][30] - Free cash flow for Q4 was $1.3 billion, contributing to a record annual free cash flow of $2.7 billion, representing a conversion rate of 57% [7][30] Business Line Data and Key Metrics Changes - IET achieved record order bookings of $4 billion in Q4, contributing to a full-year total of $14.9 billion, exceeding guidance [6][34] - IET margins increased by 160 basis points to 20% in Q4, while full-year margins rose 170 basis points to a historical high of 18.5% [4][35] - OFSE revenue declined by 8% to $14.3 billion for the full year, with EBITDA of $2.62 billion resulting in resilient margins of 18.3% [37] Market Data and Key Metrics Changes - LNG demand increased by approximately 7% in 2025, with expectations of at least 75% growth by 2040, primarily driven by growth across Asia [15][16] - The global macro environment remains resilient, with modestly stronger year-over-year GDP growth anticipated in 2026 [14][13] - Data center power demand is projected to increase at a 12% compounded annual growth rate through 2040, driven by AI workloads [20][21] Company Strategy and Development Direction - The company is focused on expanding its power systems portfolio to capture growing demand, particularly in data centers and renewable energy [3][19] - Baker Hughes aims to achieve a net debt to adjusted EBITDA ratio of 1-1.5 times within 24 months following the closing of the Chart acquisition [32] - The company is targeting $40+ billion in IET orders over the next three years, reflecting confidence in market dynamics and growth opportunities [47][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth cycle in global power demand, driven by digitization, electrification, and the transition to lower carbon energy solutions [46][14] - The company anticipates organic adjusted EBITDA growth in the mid-single-digit range for 2026, supported by strong order visibility and productivity improvements [46][41] - Management highlighted the importance of maintaining a disciplined approach to cost optimization and portfolio management to enhance long-term value creation [33][45] Other Important Information - The company secured a large slot reservation agreement for approximately 1 gigawatt of NovaLT capacity to support data center applications, expected to convert into a firm order in 2026 [9] - The pending acquisition of Chart is expected to enhance the power generation portfolio and deliver integrated tri-generation solutions [28][48] Q&A Session Summary Question: Can you elaborate on your strategy for further enhancing your current capabilities or sustaining growth from Power Systems? - Management emphasized the belief in a global power demand growth cycle, with significant opportunities in data centers and digital infrastructure, projecting a market opportunity of $100 billion annually for Power Systems by 2030 [51][52][53] Question: Can you walk through some of the moving pieces within the $14.5 billion IET order intake guide for 2026? - Management indicated that the order outlook reflects strength across the IET portfolio, with robust pipelines in power systems and continued growth in gas infrastructure and new energy solutions [61][62][63] Question: Can you discuss the margin outlook for IET and OFSE? - Management expects IET margins to reach 20% in 2026, driven by higher-margin backlog conversion and productivity improvements, while OFSE margins are projected to remain resilient despite macro headwinds [70][71][68]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2025 totaled $1.34 billion, contributing to a record full-year adjusted EBITDA of $4.83 billion, reflecting sustained momentum from the business system and positive performance in Industrial and Energy Technology (IET) [4][5] - Adjusted earnings per share rose to $0.78, resulting in a full-year adjusted EPS of $2.60, a 10% increase from 2024 [4] - Adjusted EBITDA margins for Q4 rose 30 basis points year-over-year to a record 18.1% [4] - For the full year, company-adjusted EBITDA margins increased by 90 basis points to a record of 17.4% [5] Business Line Data and Key Metrics Changes - IET achieved strong fourth quarter order bookings of $4 billion, contributing to a record full-year total of $14.9 billion, exceeding guidance [5][31] - IET margins increased by 170 basis points to a historical high of 18.5% for the full year [5][33] - OFSE revenue declined by 8% for the full year, but margins remained resilient at 18.3% [35] Market Data and Key Metrics Changes - LNG demand increased by approximately 7% in 2025, with expectations of at least 75% growth by 2040, primarily driven by growth across Asia [13][14] - The global macro environment remains resilient despite geopolitical uncertainties, with modestly stronger GDP growth anticipated in 2026 [11][12] Company Strategy and Development Direction - The company is focused on expanding its power systems portfolio, targeting a market opportunity exceeding $100 billion by 2030 [20][21] - The strategy includes enhancing capabilities in power generation, grid stability, and energy management, with a strong emphasis on digital integration and lifecycle services [20][21] - The pending acquisition of Chart is expected to add thermal management capabilities and enhance the power generation portfolio [25][44] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued strong demand for power systems driven by digitization, AI, and electrification trends [12][18] - The company expects to achieve a net debt to adjusted EBITDA ratio of 1-1.5 times within 24 months following the Chart acquisition [29] - The outlook for global energy infrastructure investment remains positive, particularly in gas, LNG, and power generation [43][44] Other Important Information - The company generated robust free cash flow of $1.3 billion in Q4, contributing to a record annual free cash flow of $2.7 billion [6][28] - The company returned $1.3 billion to shareholders in dividends and share repurchases in 2025 [28] Q&A Session Summary Question: Can you elaborate on your strategy for further enhancing your current capabilities or sustaining growth from Power Systems? - Management highlighted a global power demand growth cycle, with expectations for power demand to double by 2040, driven by data centers and electrification [50][51] - The company sees significant opportunities in AI infrastructure and has identified a $100 billion annual market opportunity for Power Systems by 2030 [51][52] Question: Can you walk through some of the moving pieces within the IET order intake guide for 2026? - Management indicated strong pipelines in power systems and continued growth in LNG and gas infrastructure, with expectations for robust order levels [60][61] Question: Can you discuss the margin outlook for IET and OFSE? - Management expects IET margins to reach 20% in 2026, driven by higher-margin backlog conversion and productivity improvements [69][70] - OFSE margins are expected to remain resilient despite macro headwinds, with ongoing cost actions supporting stability [70][71]

4Q 2025 Results January 26, 2026 Copyright 2024 Baker Hughes Company. All rights reserved. The information contained in this document is company confidential and proprietary property of Baker Hughes and its affiliates. Copyright 2026 Baker Hughes Company. All rights reserved. The information contained in this document is company confidential and proprietary property of Baker Hughes and its affiliates. It is used only for the benefit of Baker Hughes and may not be distributed, transmitted, reproduced, altere ...

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Core Insights - Baker Hughes Company (BKR) reported fourth-quarter 2025 adjusted earnings of 78 cents per share, exceeding the Zacks Consensus Estimate of 67 cents, and increased from 70 cents in the previous year [1] - Total quarterly revenues reached $7,386 million, surpassing the Zacks Consensus Estimate of $7,056 million, and also increased from $7,364 million in the year-ago quarter [1] Segment Performance - The company reorganized its operations into two segments: Oilfield Services and Equipment (OFSE) and Industrial and Energy Technology (IET) as of October 1, 2022 [3] - Revenues from the OFSE unit were $3,572 million, an 8% decrease from $3,871 million a year ago, and below the Zacks Consensus Estimate of $3,608 million [3] - EBITDA from the OFSE segment totaled $647 million, down 14% from $755 million in the fourth quarter of 2024, attributed to lower volume despite cost-cutting initiatives [4] - Revenues from the IET unit amounted to $3,814 million, a 9% increase from $3,492 million in the previous year, exceeding the Zacks Consensus Estimate of $3,468 million [4] - EBITDA from the IET segment was $761 million, up 19% from $639 million a year ago, driven by productivity, volume, and favorable pricing and foreign exchange movements [5] Financial Overview - Total costs and expenses for the fourth quarter were $6,858 million, higher than $6,572 million in the previous year [6] - Orders from all business segments totaled $7.9 billion, a 5% increase from $7.5 billion a year ago, surpassing the Zacks Consensus Estimate of $6.9 billion [7] - Free cash flow generated was $1.34 billion, compared to $894 million a year ago [8] Capital Expenditure and Balance Sheet - Net capital expenditure in the fourth quarter was $321 million [11] - As of December 31, 2025, cash and cash equivalents stood at $3.7 billion, with long-term debt of $5.4 billion and a debt-to-capitalization ratio of 24.3% [11] Outlook - The company expects IET orders to remain in line with 2025 levels, supported by growth in LNG, FPSO, and gas infrastructure projects, along with strong demand for power systems [12]

Financial Performance - Baker Hughes reported fourth-quarter revenue of $7,386 million, a 5% sequential increase and flat year-over-year[20]. - The company achieved a record full-year Adjusted EBITDA of $4,825 million, up 5% year-over-year[6]. - Fourth-quarter attributable net income was $876 million, a 44% sequential increase but a 26% decrease year-over-year[21]. - Adjusted diluted EPS for the fourth quarter was $0.78, reflecting a 14% sequential increase and a 12% year-over-year increase[27]. - Baker Hughes reported a net income attributable to the company of $876 million for Q4 2025, compared to $609 million in Q3 2025 and $1,179 million in Q4 2024, reflecting a decrease of 27% year-over-year[47]. - Revenue for Q4 2025 was $7,386 million, slightly up from $7,364 million in Q4 2024 and an increase from $7,010 million in Q3 2025[47]. - The company achieved free cash flow of $1,341 million in Q4 2025, compared to $699 million in Q3 2025 and $894 million in Q4 2024[44]. - Total revenue for the year ended December 31, 2025, was $27,733 million, a slight decrease from $27,829 million in 2024[49]. - Baker Hughes' adjusted net income attributable to the company for Q4 2025 was $772 million, compared to $678 million in Q3 2025 and $694 million in Q4 2024[43]. - The company incurred restructuring costs of $215 million in Q4 2025, down from $258 million in Q4 2024[47]. - Cash and cash equivalents at the end of Q4 2025 were $3,715 million, an increase from $3,364 million at the end of Q4 2024[51]. - The company paid dividends of $0.23 per Class A common share in Q4 2025, consistent with Q3 2025 and an increase from $0.21 in Q4 2024[47]. Orders and Bookings - IET (Industrial & Energy Technology) secured fourth-quarter bookings of $4 billion, contributing to a record full-year total of $14.9 billion[5]. - Remaining Performance Obligations (RPO) reached $35.9 billion in the fourth quarter, with IET RPO at $32.4 billion[25]. - OFSE orders for Q4 2025 were $3,862 million, a decrease of $206 million, or 5% sequentially, but an increase of $265 million, or 33% year-over-year[31]. - IET orders for Q4 2025 were $4,024 million, an increase of $269 million, or 7% year-over-year, driven by strength in Climate Technology Solutions and Industrial Technology[35]. - Total year 2025 orders were $29,585 million, a 5% increase from 2024[39]. Revenue and Segment Performance - OFSE revenue for Q4 2025 was $3,572 million, down $63 million, or 2% sequentially, and down $298 million, or 8% year-over-year[31]. - IET revenue for Q4 2025 was $3,814 million, an increase of $321 million, or 9% year-over-year, primarily from Gas Technology Equipment and Services[36]. - Total year 2025 segment revenue was $27,733 million, remaining relatively stable compared to 2024[39]. EBITDA and Margins - Segment EBITDA for Q4 2025 was $647 million, a decrease of $25 million, or 4% sequentially, attributed to lower volume[33]. - Segment EBITDA for IET in Q4 2025 was $761 million, an increase of $121 million, or 19% year-over-year, driven by productivity and volume[37]. - The EBITDA margin for OFSE in Q4 2025 was 18.1%, down 0.4 percentage points sequentially and down 1.4 percentage points year-over-year[30]. - Total year 2025 segment EBITDA was $5,100 million, a 3% increase from 2024[39]. Future Outlook - Baker Hughes anticipates organic Adjusted EBITDA growth in the mid-single digits range for 2026, with IET margins targeting 20%[8]. - The company plans to discuss its future outlook and results in an investor conference call scheduled for January 26, 2026[56]. Operational Context - Baker Hughes operates in over 120 countries, providing energy technology solutions to industrial customers worldwide[60]. - The company emphasizes the impact of geopolitical risks, including conflicts in petroleum-producing regions like Russia and Ukraine, on its operations[59]. - Economic conditions, such as inflation and interest rates, significantly affect Baker Hughes' supply chain costs and customer demand[58]. - The company faces risks related to the volatility in crude oil and natural gas prices, which can impact exploration and production expenditures[58]. - Baker Hughes is focused on executing orders and revenue performance obligations (RPO) in accordance with agreed specifications[58]. - The company highlights the importance of OPEC policies and adherence to production quotas on market conditions[58]. - Baker Hughes is committed to making energy safer, cleaner, and more efficient through innovative technologies developed over a century[60]. - The company is exposed to cybersecurity risks and potential attacks that could disrupt operations[59]. - Baker Hughes acknowledges the potential impact of severe weather conditions on energy demand and exploration activities[58]. - The company is actively monitoring the effects of government disruptions and sanctions on its business operations[58].

Earnings Expectations - Steel Dynamics Inc. (NASDAQ:STLD) is expected to report quarterly earnings of $1.69 per share on revenue of $4.57 billion [1] - Nucor Corp. (NYSE:NUE) is anticipated to post quarterly earnings of $1.91 per share on revenue of $7.87 billion [1] - W R Berkley Corp. (NYSE:WRB) is projected to report quarterly earnings of $1.13 per share on revenue of $3.66 billion [1] - Sanmina Corp. (NASDAQ:SANM) is expected to report quarterly earnings of $2.13 per share on revenue of $3.08 billion [1] Recent Performance - Baker Hughes Co. (NASDAQ:BKR) reported adjusted earnings of 78 cents per share, exceeding market estimates of 67 cents per share, with quarterly sales of $7.386 billion, surpassing expectations of $7.068 billion [1] - Steel Dynamics shares rose 1.4% to close at $181.32 on Friday [1] - Nucor shares increased by 0.8% to close at $181.65 on Friday [1] - W R Berkley shares fell 0.6% to close at $67.12 on Friday [1] - Sanmina shares decreased by 0.9% to close at $177.83 on Friday [1] - Baker Hughes shares fell 1.2% to close at $53.80 on Friday [1]

Core Insights - Baker Hughes reported an 11% increase in adjusted profit for the fourth quarter, driven by strong demand for its gas technology equipment and services, which compensated for the weakness in its oilfield services [1] Financial Performance - The adjusted profit for the fourth quarter rose by 11%, indicating a positive trend in profitability [1] - The demand for gas technology equipment and services was a significant factor in this profit increase, highlighting a shift in market focus [1] Market Dynamics - The performance in gas technology contrasts with the weakness observed in oilfield services, suggesting a potential area of concern for the oil sector [1] - The overall demand dynamics indicate a growing preference for gas-related technologies over traditional oilfield services [1]

Core Insights - Baker Hughes Company reported exceptional performance in 2025, achieving record full-year Adjusted EBITDA, driven by strong execution, active portfolio management, and positive performance in Industrial & Energy Technology (IET) [4][5][19] Fourth-Quarter Highlights - In Q4 2025, Baker Hughes generated orders of $7.9 billion, including $4.0 billion from IET, with a total revenue of $7.4 billion, remaining flat year-over-year [7][19] - The company reported an attributable net income of $876 million, with GAAP diluted EPS of $0.88 and adjusted diluted EPS of $0.78 [7][20][27] - Adjusted EBITDA for Q4 was $1,337 million, reflecting a 2% year-over-year increase, driven by volume and productivity improvements [7][22][23] Full-Year Highlights - For the full year 2025, Baker Hughes achieved total revenue of $27.7 billion, flat compared to 2024, with an attributable net income of $2.588 billion [7][38] - The company generated record annual free cash flow of $2.7 billion, supported by working capital efficiency and customer down payments [5][7] - IET orders reached a record $14.9 billion for the year, contributing to a backlog of $32.4 billion at year-end [5][7] Segment Performance - IET demonstrated strong performance with Q4 orders of $4.0 billion, up 7% year-over-year, and revenue of $3.814 billion, a 9% increase year-over-year [36][37] - OFSE reported Q4 orders of $3.862 billion, down 5% sequentially, with revenue of $3.572 billion, an 8% decrease year-over-year [32][33] - The overall book-to-bill ratio for the company in Q4 was 1.1, indicating strong order intake relative to revenue [19] Key Awards and Achievements - IET secured significant contracts for LNG projects, including awards for gas turbine technology and critical liquefaction equipment, highlighting the company's role in meeting global energy demand [10][11] - OFSE experienced strong demand for Production Solutions, securing nearly $1 billion in contracts in the Middle East [16][18] Financial Metrics - Remaining Performance Obligations (RPO) at the end of Q4 2025 were $35.9 billion, with IET RPO at $32.4 billion [25] - Cash flows from operating activities for Q4 were $1.662 billion, with free cash flow of $1.341 billion [27][46]