Baker Hughes (BKR) Q4 2025 earnings summary

Executive summary

• Achieved record full-year 2025 results, with adjusted EBITDA of $4.83 billion and adjusted EPS of $2.60, driven by strong IET performance and margin expansion.

• Free cash flow reached a record $2.7 billion for 2025, with a 57% conversion rate, supported by working capital efficiency.

• IET segment delivered record orders of $14.9 billion, backlog, and margin expansion, offsetting macro-driven softness in OFSE.

• Executed strategic portfolio actions, including divestitures and the pending Chart acquisition, to enhance long-term value.

• Robust order momentum in Power Systems and New Energy, with major contract wins in LNG, data centers, and grid resilience.

Financial highlights

• Full-year revenue was $27.73 billion, flat year-over-year; Q4 revenue was $7.39 billion.

• Q4 adjusted EBITDA reached $1.34 billion, up 2% year-over-year; full-year adjusted EBITDA margin rose 90 bps to 17.4%.

• Adjusted EPS for Q4 was $0.78; GAAP diluted EPS was $0.88.

• Returned $1.3 billion to shareholders via dividends and buybacks in 2025.

• Free cash flow for the year was $2.7 billion, up 21% year-over-year.

Outlook and guidance

• FY'26 revenue guidance: $26.2B–$28.3B; adjusted EBITDA: $4.55B–$5.15B, with mid-single digit organic EBITDA growth targeted.

• Free cash flow conversion targeted at ~50% for 2026; adjusted effective tax rate guidance: 22%–26%.

• IET orders projected at $13.5–$15.5 billion, maintaining a robust pipeline; three-year IET order target of $40+ billion reaffirmed.

• OFSE revenue expected to be slightly lower year-over-year but flat organically, with resilient margins.

• Company targeting 20% adjusted EBITDA margin by 2028.