BKR — Baker Hughes Company
NASDAQ
Q4 2025 Earnings Call Summary
January 26, 2026
Baker Hughes Company (BKR) Q4 2025 Earnings Call Summary
1. Key Financial Results and Metrics
- Adjusted EBITDA: $1.34 billion for Q4, contributing to a record full-year adjusted EBITDA of $4.83 billion.
- Adjusted EPS: Increased to $0.78 for Q4, with a full-year adjusted EPS of $2.60, up 10% from 2024.
- Adjusted EBITDA Margin: Rose to 18.1% in Q4, with a full-year margin of 17.4%, marking a 90 basis point increase year-over-year.
- Free Cash Flow: Generated $1.3 billion in Q4, totaling a record $2.7 billion for the year, with a conversion rate of 57%.
- Total Orders: $7.9 billion in Q4, with IET (Industrial & Energy Technology) orders at $4 billion, leading to a record full-year total of $14.9 billion.
2. Strategic Updates and Business Highlights
- Power Systems Growth: Orders in the power systems segment increased significantly, totaling $2.5 billion in 2025, driven by demand in data centers and LNG projects.
- New Energy Orders: Achieved a record $2 billion in New Energy orders for the year, exceeding expectations and indicating strong growth in CCUS and geothermal solutions.
- Market Positioning: Baker Hughes is positioned to capitalize on a multiyear growth cycle in global power demand, driven by digitalization, electrification, and AI infrastructure.
- Acquisition Progress: Ongoing integration planning for the pending acquisition of Chart, expected to close in Q2 2026, with anticipated synergies of $325 million.
3. Forward Guidance and Outlook
- 2026 Guidance:
- Expected revenue of $27.25 billion and adjusted EBITDA of $4.85 billion, implying mid-single-digit organic growth.
- IET orders projected between $13.5 billion and $15.5 billion, maintaining strong backlog visibility.
- OFSE revenue expected to be slightly lower year-over-year but flat on an organic basis.
- Long-term Targets: Confident in achieving a 20% adjusted EBITDA margin by 2028, supported by operational improvements and strategic initiatives.
4. Bad News, Challenges, or Points of Concern
- Oilfield Services & Equipment (OFSE) Challenges: Revenue declined by 8% for the full year, with macro-driven headwinds impacting margins and performance, particularly in North America and certain international markets.
- Geopolitical Risks: Ongoing geopolitical and trade uncertainties could affect market conditions and operational performance.
- Tariff Costs: Increased tariff costs are expected to impact margins in the OFSE segment, alongside pricing variability and a changing revenue mix.
5. Notable Q&A Insights
- Power Systems Strategy: CEO Lorenzo Simonelli emphasized the strong growth potential in power systems, particularly driven by data centers and the transition to electrification.
- Order Growth Drivers: Simonelli noted that LNG and gas infrastructure would remain stable, while new energy solutions are expected to continue their upward trajectory.
- NovaLT Capacity: The company is on track to double NovaLT capacity by mid-2027, with current capacity fully committed through 2028, indicating strong demand.
- Comprehensive Evaluation: Ongoing strategic evaluation focused on optimizing the portfolio and enhancing long-term value creation, with updates expected as the process progresses.
Overall, Baker Hughes reported strong financial performance in 2025, driven by robust order growth in IET and strategic positioning in the evolving energy landscape, despite facing challenges in the OFSE segment and external market pressures.