Baker Hughes(US:BKR)2025-10-24 14:32Financial Data and Key Metrics Changes - Adjusted EBITDA rose to $1.24 billion, reflecting a 2% year-over-year increase, with consolidated adjusted EBITDA margins increasing by 20 basis points to 17.7% [5][26] - Total company bookings reached $8.2 billion, with free cash flow generated amounting to $699 million [26][27] - Full-year adjusted EBITDA is now expected to exceed $4.7 billion, with a free cash flow conversion target of 45%-50% [5][27][36] Business Line Data and Key Metrics Changes - Industrial & Energy Technology (IET) orders totaled $4.1 billion, with revenue increasing by 15% year-over-year to $3.4 billion [6][31] - Oilfield Services and Equipment (OFSE) revenue was $3.6 billion, up 1% sequentially, with EBITDA of $671 million [32] - IET achieved a record backlog of $32.1 billion, while OFSE's EBITDA margins declined by 30 basis points to 18.5% [31][32] Market Data and Key Metrics Changes - LNG demand grew by 6% this year, driven by strong storage injection in Europe, with record LNG contracting activity reported [18] - The macro environment remains resilient despite geopolitical risks, with AI-driven investments projected to account for 30%-40% of U.S. GDP growth [15][16] - Global upstream spending is expected to decline in 2026, influenced by softening oil fundamentals [17][37] Company Strategy and Development Direction - The company is focused on achieving a 20% adjusted EBITDA margin by 2028, with a target of securing at least $40 billion in IET orders over the next three years [38][39] - The acquisition of Chart Industries is seen as a significant milestone, expected to enhance technology offerings and create commercial synergies [24][30] - The company aims to leverage its technology portfolio to capitalize on growth in LNG, power generation, and new energy markets [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong momentum across key end markets, particularly in natural gas and AI-driven power [19][20] - The outlook for LNG capacity expansion has been revised, with expectations for global LNG installed capacity to reach approximately 950 MTPA by 2035 [19] - The company anticipates continued growth in OPEX-driven upstream investment as operators focus on enhancing recovery rates [17] Other Important Information - The company secured significant contracts in various sectors, including a long-term service contract with BP for its Tangguh LNG facility and a major order for geothermal power solutions [11][14] - The integration planning for the Chart Industries acquisition is underway, with a focus on harmonizing systems and processes [30][87] Q&A Session Summary Question: Opportunities in Power Generation - Management highlighted strong demand growth across power generation solutions, including distributed power and geothermal opportunities, with $800 million in power generation-related orders booked this quarter [47][48][50] Question: Financial Targets in Horizon 2 - Management discussed the confidence in achieving $40 billion in IET orders and the importance of LNG and gas infrastructure in driving future growth [58][60] Question: Evaluation of Capital Allocation - Management emphasized the ongoing evaluation of capital allocation and business costs to enhance shareholder value, particularly in light of the Chart Industries acquisition [74][76] Question: Integration of Chart Industries - Management provided insights into the integration planning for Chart Industries, focusing on aligning cultures and driving commercial synergies [83][85]