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 ...

With U.S. stock futures trading lower this morning on Monday, some of the stocks that may grab investor focus today are as follows:Wall Street expects Steel Dynamics Inc. (NASDAQ:STLD) to report quarterly earnings at $1.69 per share on revenue of $4.57 billion before the opening bell, according to data from Benzinga Pro. Steel Dynamics shares rose 1.4% to close at $181.32 on Friday.Baker Hughes Co. (NASDAQ:BKR) posted upbeat results for the fourth quarter. The company posted adjusted earnings of 78 cents pe ...

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]

Group 1 - U.S. stock futures are trading higher, indicating a positive market sentiment [1] - Booz Allen Hamilton Holding Corp. is expected to report quarterly earnings of $1.29 per share on revenue of $2.75 billion [1] - Intuitive Surgical Inc. reported fourth-quarter revenue of $2.87 billion, exceeding analyst estimates of $2.75 billion, with adjusted earnings of $2.53 per share, surpassing estimates of $2.26 per share [1] - Webster Financial Corp. is anticipated to post quarterly earnings of $1.54 per share on revenue of $643.04 million [1] - Intel Corp. reported better-than-expected fourth-quarter results but provided a weak outlook, expecting first-quarter revenue between $11.7 billion and $12.7 billion, below estimates of $12.49 billion [1] - Analysts expect Slb NV to report quarterly earnings of 74 cents per share on revenue of $9.55 billion [1]

Core Viewpoint - Baker Hughes Company is expected to report its fourth-quarter and full-year earnings on January 25, 2025, with a focus on its Industrial & Energy Technology and Oilfield Services & Equipment segments [1] Group 1: Segment Performance - The company is anticipated to emphasize the strong performance of the Industrial & Energy Technology (IET) segment and the resilience of the Oilfield Services & Equipment (OFSE) segment during the conference call, particularly highlighting key contract wins in the Middle East [2] - The IET segment is projected to close 2025 with strong momentum, driven by improvements in the aero-derivative supply chain, which will enhance higher-margin Gas Tech Services revenues [2] - The OFSE segment is expected to deliver steady results, supported by U.S. Gulf activity, while international markets may face slight margin headwinds due to foreign exchange [3] Group 2: Quarterly Estimates - Inbound IET orders are estimated at $3.6 billion for the quarter, leading to full-year IET orders of $14.5 billion, which aligns with the full-year guidance range of $13.5 billion to $14.5 billion [4] - IET revenue is projected at $3.47 billion with EBITDA margins of 19.9%, slightly above guidance, resulting in IET EBITDA of $692 million, which is 1.8% above the midpoint guidance of $680 million for the fourth quarter [5] - OFSE EBITDA is expected to be $649 million, close to the guidance of $650 million, contributing to a total fourth-quarter EBITDA of $1.266 billion, slightly above the Street estimate of $1.259 billion [5] Group 3: Future Guidance - For 2026, the company's guidance includes recent M&A activities but excludes the GTLS merger, estimating IET revenue at $13.25 billion with $2.67 billion EBITDA (20.2% margin) [6] - OFSE revenue is projected to decline by 6.9% year-over-year with an 18% EBITDA margin, totaling $4.82 billion, compared to the Street's estimate of $4.88 billion [6] - At the time of publication, Baker Hughes shares were down 0.63% at $49.07 [6]

Core Insights - Baker Hughes Company (BKR) has a market capitalization of $45.5 billion and offers a wide range of products and services across the global energy and industrial value chain, operating through its Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments [1] Financial Performance - The company is expected to announce its fiscal Q4 2025 results on January 25, with analysts predicting an adjusted EPS of $0.66, a decrease of 5.7% from $0.70 in the same quarter last year [2] - For fiscal 2025, analysts forecast an adjusted EPS of $2.47, representing a 5.1% increase from $2.35 in fiscal 2024 [3] - In Q3 2025, Baker Hughes reported an adjusted EPS of $0.68 and revenue of $7.01 billion, but shares fell 3.3% the following day due to a 20% year-over-year decline in net income to $609 million [5] Market Performance - Over the past 52 weeks, BKR stock has increased by 12.6%, underperforming the S&P 500 Index's gain of 16.8%, but outperforming the State Street Energy Select Sector SPDR ETF's rise of 6.4% [4] Analyst Ratings - The consensus rating for BKR stock is bullish, with a "Strong Buy" rating from 14 out of 19 analysts, one "Moderate Buy," and four "Holds." The average price target for Baker Hughes is $55, indicating a potential upside of 19.3% from current levels [6]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **North America Energy Services & Equipment (ESE)** sector, with a particular emphasis on the outlook for 2026 and the dynamics of oil and gas markets [1][4][10]. Core Insights and Arguments - **Market Outlook**: North America is nearing a bottom in terms of oil prices, with international onshore growth driven by OPEC activity. However, offshore growth is expected to be muted due to moderating efficiency gains [1][5]. - **Earnings and Valuations**: The ESE sector has seen a rally of approximately **30%** since the lows post-Liberation Day, resulting in year-to-date gains of about **5%**. Despite this, earnings estimates have fallen, leading to higher EV/EBITDA multiples and tighter free cash flow yields, now aligning with historical median levels [4][15]. - **Spending Trends**: North American onshore spending is expected to remain constrained, while international activity is projected to be flat in 2026 before increasing in 2027, driven by OPEC+ activity and unconventional gas opportunities [5][10][26]. - **Offshore Activity**: The outlook for offshore spending is more cautious, particularly for deepwater projects, due to anticipated efficiency gains that will limit the need for additional rigs [9][10][26]. Key Themes for 2026 - **Power and Data Centers**: There is an emerging opportunity in power generation, with demand expected to grow at a **2.6% CAGR** through 2035, driven by data center growth and electrification. Companies like HAL and LBRT are positioned to provide power solutions directly to end-users [10][35][41]. - **Oil and Gas Price Forecasts**: Oil prices are expected to decline by approximately **20%** since the start of 2025, with a forecasted surplus of **~2 mb/d** in 2026, potentially reaching **~3 mb/d** in the first half of 2026. Brent prices are anticipated to drop to around **$60/bbl** before a recovery begins in mid-2027 [10][63][64]. - **Rig Counts and Efficiency**: The total US rig count has decreased by **~7%** since the beginning of 2025, with oil-directed rigs down by **~14%** and gas-focused activity up by **25%**. Efficiency improvements have led to a reduction in drilling days per well [77][80][86]. Company-Specific Insights - **Top Picks**: HAL is identified as a top pick due to its exposure to the Middle East and power generation opportunities. The strategic partnership with VoltaGrid is highlighted as a key differentiator [14][54]. - **NOV Downgrade**: NOV has been downgraded to equal-weight due to its significant offshore capex exposure and less resilience in oil and gas production opex compared to peers [14][54]. Additional Important Points - **Investment Strategy**: The report emphasizes a preference for stocks with defensive and unique revenue streams, favoring gas over oil-focused activities and spending tied to existing production [54][43]. - **Long-term Trends**: The report notes that oil capex represents only **~55%** of revenues for the covered companies, with significant contributions from gas capex and non-upstream markets, indicating a shift in revenue dynamics [45][50]. This summary encapsulates the critical insights and projections for the North America Energy Services & Equipment sector as discussed in the conference call, highlighting both opportunities and challenges in the current market landscape.

Market Overview - The Dow Jones Industrial Average and other stock indexes have extended gains, indicating a bullish market move [1] - Investors are advised to patiently await new breakouts using The IBD Methodology while methodically raising exposure [1] Company Performance - Jones Lang LaSalle (JLL) has shown rising price performance, earning an upgrade to its IBD Relative Strength Rating from 76 to 81 [1][2] - Baker Hughes (BKR) has also seen an improvement in its price strength, with its IBD Rating upgraded to 71 [4] - Baker Hughes achieved a significant jump in its RS Rating to 82, clearing key benchmarks [4]

Financial Performance - Baker Hughes reported strong 3Q 2025 results, with revenues of $7010 million, a 1% increase compared to 2Q 2025 and 1% increase year-over-year[25] - Adjusted EBITDA for 3Q 2025 was $1238 million, up 2% from 2Q 2025 and up 2% year-over-year, with an adjusted EBITDA margin of 177%, a 10 bps increase sequentially and a 20 bps increase year-over-year[25] - Adjusted diluted EPS was $068 per share, a 9% increase compared to 2Q 2025 and a 3% increase year-over-year[25] - Free cash flow was $699 million, a 192% increase compared to 2Q 2025 and a (7)% decrease year-over-year[25] Orders and Growth - Total orders reached $8207 million, showing a 17% increase compared to 2Q 2025 and a 23% increase year-over-year[25] - Industrial & Energy Technology (IET) orders were $4139 million, up 17% sequentially and 44% year-over-year, driven by LNG equipment and power generation awards[6, 31] - Subsea and Surface Pressure Systems (SSPS) orders hit a record $12 billion, boosted by subsea tree awards in Brazil and Turkiye[6] - New energy orders year-to-date reached $16 billion, hitting the high end of the 2025 order guidance range[16] Segment Performance - IET revenue was $3374 million, up 2% sequentially and 15% year-over-year, with an EBITDA of $635 million, up 9% sequentially and 20% year-over-year, and an EBITDA margin of 188%[31] - Oilfield Services & Equipment (OFSE) revenue was $3636 million, up 1% sequentially and down (8)% year-over-year, with an EBITDA of $671 million, down (1)% sequentially and (12)% year-over-year, and an EBITDA margin of 185%[34] Guidance - The company provided 4Q 2025 revenue guidance of $6650 - $7450 million and adjusted EBITDA guidance of $1145 - $1365 million[37] - Full year 2025 revenue guidance is $27000 - $27800 million and adjusted EBITDA guidance is $4630 - $4850 million[37]

Core Insights - Baker Hughes has received a multi-year agreement from Aramco to expand its integrated underbalanced coiled tubing drilling (UBCTD) operations in Saudi Arabia's natural gas fields, increasing its fleet from four to ten units [1][2][4] Group 1: Agreement Details - The agreement includes the provision of integrated solutions for coiled tubing drilling units, underbalanced drilling services, operational management, well construction, and geosciences [2][6] - Work under the expanded agreement is set to commence in 2026, reinforcing Baker Hughes' established presence in the region since entering the UBCTD market in 2008 [4][6] Group 2: Technological Advancements - Baker Hughes will utilize its industry-leading CoilTrak™ bottomhole assembly system and enhanced reservoir analysis from GaffneyCline™ energy advisory to improve drilling efficiency [3] - The integrated approach aims to enhance production efficiency, speed, and safety while reducing reservoir damage compared to traditional methods [3] Group 3: Historical Context and Collaboration - The project is a culmination of nearly two decades of collaboration between Baker Hughes and Aramco, setting a standard for UBCTD operations [3] - Baker Hughes maintains a strong health, safety, and environment (HSE) record while delivering operational excellence through its existing UBCTD units in Saudi Arabia [4]