Baker Hughes (NASDAQ:BKR) executives pointed to record results in Industrial and Energy Technology (IET) and strong cash generation in 2025, while acknowledging continued macro-driven softness in its Oilfield Services and Equipment (OFSE) segment. On the company’s fourth-quarter and full-year 2025 earnings call, Chairman and CEO Lorenzo Simonelli and CFO Ahmed (referred to as “Amit” in the opening remarks) outlined growth drivers in power systems, LNG, and “new energy,” and provided 2026 guidance that anticipates mid-single-digit organic adjusted EBITDA growth.
2025 results: record EBITDA, margin expansion, and strong cash flow
Management said adjusted EBITDA for the fourth quarter was $1.34 billion, above the midpoint of guidance, contributing to a record full-year adjusted EBITDA of $4.83 billion. Adjusted earnings per share were $0.78 in the quarter and $2.60 for the year, which the company said was a 10% increase from 2024.
Free cash flow was another highlight. Baker Hughes reported $1.3 billion of free cash flow in the fourth quarter and a record $2.7 billion for 2025, representing a 57% conversion rate for the year. Simonelli attributed the outperformance versus the company’s 45%–50% target to improved working capital efficiency and higher customer down payments.
Orders and backlog: IET sets records, led by power systems, LNG, and new energy
Executives emphasized IET’s order momentum. The company booked $4.0 billion of IET orders in the fourth quarter and a record $14.9 billion for the full year, above the high end of the company’s guidance range. For the second consecutive year, non-LNG equipment represented about 85% of total IET orders, which management said underscored portfolio diversity.
IET backlog reached a record $32.4 billion at year-end, and book-to-bill exceeded 1x. Management cited several notable awards and demand areas during 2025, including:
- LNG: $2.3 billion in LNG equipment orders in 2025, including liquefaction technology for Train Five at NextDecade’s Rio Grande LNG and equipment for Commonwealth LNG’s export terminal. The company also cited long-term service agreements for Cheniere’s Corpus Christi Trains 8 and 9 and remote monitoring for NextDecade’s Rio Grande Trains 1–3.
- Power systems: $2.5 billion of power systems orders in 2025, including $1 billion tied to data center applications. Baker Hughes said it booked about 2 GW of NovaLT industrial gas turbine orders across oil and gas, industrial, and data center markets, and it secured a slot reservation agreement for about 1 GW of NovaLT capacity that it expects to convert into a firm order in 2026.
- Grid infrastructure: A contract to supply more than 40 Brush generators for gas-fired utility-scale power plants, which management said would collectively deliver about 7 GW of power.
- New energy: $434 million of new energy orders in the quarter and a record $2.0 billion for the year, above the company’s $1.4–$1.6 billion target. Management referenced awards including turbomachinery for a U.S. blue ammonia project and geothermal strength in the U.S. and Hungary.
The company also highlighted its Cordant Solutions business, noting double-digit order growth for the third consecutive year and a 20% increase in software orders, which management linked to scaling digital offerings and expanding recurring revenue and lifecycle pull-through.
OFSE: resilient margins despite macro headwinds
In OFSE, Baker Hughes said it continued to see strong customer demand in deepwater and the Middle East, but macro headwinds weighed on broader activity. In 2025, the company secured about $3 billion of production solutions awards in the Middle East, including roughly $1 billion of multiyear contracts in the fourth quarter with Kuwait Oil Company, Petroleum Development Oman, and ADNOC. Management said the awards included deployments of advanced ESP systems, Leucipa, and AccessESP with digital monitoring services.
Subsea and surface pressure systems (SSPS) were a bright spot, with $1.1 billion of bookings in the quarter and a 1.4x book-to-bill. The company also noted a multi-year frame agreement related to the Coral North LNG project offshore Mozambique.
Financially, OFSE revenue was $3.57 billion in the fourth quarter and EBITDA was $647 million, with a 40-basis-point sequential margin decline to 18.1%. Management cited seasonal declines in the North Sea and Asia Pacific, continued softness in Mexico, and weaker year-end product sales as customers stayed cautious on capital deployment, partially offset by improving activity in Sub-Saharan Africa, Brazil, and Saudi Arabia. For the full year, OFSE revenue fell 8% to $14.3 billion, while EBITDA margin remained resilient at 18.3%.
2026 outlook, Chart acquisition timing, and integration planning
For 2026, Baker Hughes guided to $27.25 billion of revenue and $4.85 billion of adjusted EBITDA, implying mid-single-digit organic adjusted EBITDA growth. Free cash flow conversion is expected to approach 50%, and the effective tax rate is projected at 22%–26%. First-quarter 2026 guidance calls for $6.4 billion in revenue and $1.06 billion of adjusted EBITDA, including IET EBITDA of $600 million and OFSE EBITDA of $540 million.
In IET, management forecast 2026 orders of $13.5 billion to $15.5 billion, flat at the midpoint on an organic basis, with expectations for continued LNG momentum, a “stronger year” in FPSO and gas infrastructure awards, and sustained power systems strength. Baker Hughes also reiterated a goal of achieving its three-year Horizon Two target of more than $40 billion of IET orders (2026–2028). The company said it expects IET revenue of $13.5 billion and EBITDA of $2.7 billion in 2026, positioning the segment to reach its 20% margin target.
In OFSE, Baker Hughes expects revenue of $13.75 billion and EBITDA of $2.475 billion, with organic margins “relatively flat” year-over-year. Management cited cost actions and productivity improvements intended to offset higher tariff-related costs, mix, and pricing variability.
On capital allocation, CFO Ahmed said the balance sheet remained strong at year-end with $3.7 billion in cash, a net debt-to-adjusted EBITDA ratio of 0.5x, and $6.7 billion of liquidity. The company returned $1.3 billion to shareholders in 2025 through dividends and buybacks. Management said its near-term priority is maintaining balance sheet strength ahead of the pending Chart acquisition, which it expects to close in the second quarter of 2026, subject to regulatory reviews.
Executives also discussed portfolio actions, including the completion of the sale of the Precision Sensors and Instrumentation business and the formation of the Surface Pressure Control joint venture with Cactus, which they said generated about $1.5 billion in gross cash proceeds (subject to customary adjustments). Management said it expects $1 billion of additional proceeds from continued portfolio management initiatives and reiterated a post-Chart target of 1.0x–1.5x net debt-to-adjusted EBITDA within 24 months of closing, supported by free cash flow and portfolio actions.
Simonelli said integration planning for Chart has moved into “high-level day one operating model design,” and he reiterated confidence in achieving a $325 million cost synergy target. He also said the company has initiated additional cost-out programs with “quick paybacks” as part of its comprehensive evaluation, while maintaining a stated path to a 20% company adjusted EBITDA margin target by 2028.
About Baker Hughes (NASDAQ:BKR)
Baker Hughes is an energy technology company that provides a broad portfolio of products, services and digital solutions for the oil and gas and industrial markets. Its offerings span oilfield services and equipment — including drilling, evaluation, completion and production technologies — as well as turbomachinery, compressors and related process equipment used in midstream and downstream operations. The company also supplies aftermarket services, field support and integrated solutions designed to improve asset performance and uptime across the energy value chain.
The firm’s roots trace back to the merger of Baker International and Hughes Tool Company, and more recently it combined with GE’s oil and gas business in 2017 to form Baker Hughes, a GE company (BHGE); subsequent changes in ownership restored Baker Hughes as an independent publicly traded company.
