Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $1.04 billion, a 10% increase year-over-year, driven by strong performance in the Industrial & Energy Technology (IET) segment [21][43] - GAAP diluted earnings per share were $0.40, while adjusted earnings per share were $0.51, reflecting a 19% increase compared to the same quarter last year [43] - Free cash flow generated during the quarter was $454 million, with a target for full-year free cash flow conversion of 45% to 50% [22][44] Business Line Data and Key Metrics Changes - IET segment booked $3.2 billion in orders, with a record backlog of $30.4 billion, and revenue increased by 11% year-over-year to $2.9 billion [21][47] - OFSE segment revenue was $3.5 billion, down 10% sequentially, primarily due to seasonal weakness and delayed discretionary spending [50][52] - IET EBITDA margin expanded by 240 basis points to 17.1%, while OFSE EBITDA margin improved by 80 basis points year-over-year to 17.8% despite revenue decline [48][52] Market Data and Key Metrics Changes - Global upstream spending is expected to decline by high-single digits in 2025, with a mid- to high-single-digit decrease internationally and a low-double-digit decrease in North America [10][61] - Natural gas demand increased by 115 bcm or 2.7% in 2024, with strong LNG contracting trends reported [14][15] - The company secured $1.7 billion in orders for U.S. LNG projects over the past two quarters, indicating a positive outlook for LNG demand [16][30] Company Strategy and Development Direction - The company is focused on profitable growth and sustained margin improvement, with a clear strategy to mitigate tariff impacts and enhance operational efficiency [5][19] - Emphasis on expanding into new markets such as data centers and gas infrastructure, with significant orders booked in these areas [24][27] - The company aims to maintain a strong balance sheet, with a net debt-to-EBITDA ratio of 0.6x and liquidity of $6.3 billion [45] Management's Comments on Operating Environment and Future Outlook - Management highlighted ongoing geopolitical tensions, trade policy uncertainty, and inflationary pressures as key challenges impacting the macro environment [8][10] - The company expects to outperform the broader North American market, supported by a production-weighted portfolio, despite limited visibility for the second half of the year [12][19] - Management remains confident in the long-term growth of global energy demand, particularly for natural gas, as part of the transition to lower emissions [68] Other Important Information - The company returned $417 million to shareholders in Q1 2025, including $229 million in dividends and $188 million in share repurchases [45] - Significant commercial momentum was noted, with record attendance at the Annual Meeting in Florence, Italy, indicating strong customer engagement [23] Q&A Session Summary Question: Guidance amidst tariff and OPEC+ uncertainty - Management acknowledged the uncertainty surrounding tariffs and OPEC+ policies, emphasizing the need for a flexible guidance framework [72][75] Question: Data center opportunities and macro impact on IET - Management expressed confidence in the data center market, highlighting strong order flow and a positive outlook for LNG and gas infrastructure [90][92] Question: Mitigation initiatives for tariff impacts - Management detailed proactive steps taken to mitigate tariff impacts, including leveraging a global supply chain and exploring domestic sourcing alternatives [101][104] Question: OFSE revenue decline and margin targets - Management discussed the impact of delayed discretionary spending and seasonal weakness on OFSE revenue, while reaffirming commitment to the 20% EBITDA margin target [115][121] Question: IET margin progression and future expectations - Management indicated expectations for continued margin improvement in IET, despite potential headwinds from tariffs and economic conditions [127][132]