With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

Fortune collaborated with the Diligent Institute to rank the most innovative boards of directors among S&P 500.

Modern Board 2023-Baker Hughes

Primarily an energy services provider, Baker Hughes is rooted in the fossil fuel business. Still, it sees a pivotal role for its liquefied natural gas and energy transition products in a clean-energy future as companies migrate to electric power and seek greener fuel sources. The firm’s corporate governance charter emphasizes a commitment to sustainability targets, employee engagement, and ethics, the latter value demonstrated in its 2022 decision to sell the company’s Russian properties to a local operator months after Russia’s invasion of Ukraine. Lorenzo Simonelli, a GE veteran who has led Baker Hughes since it merged with GE Oil and Gas in 2017, chairs the board. He works with lead independent director W. Geoffrey Beattie, CEO of private equity firm Generation Capital. Though lean, with just nine directors, the Baker Hughes board is stacked with former CEOs from the energy, natural resources, and industrials sectors, including Lynn Elsenhans, former chair and CEO of Sunoco; Cynthia Carroll, former CEO of Anglo American; and Nelda Connors, former CEO of Atkore International, who now runs the women- and minority-owned investment firm Pine Grove Holdings. The company reported $289 million in profits in the year’s first quarter, beating analyst estimates.

Fortune Modern Board 25

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Modern Boards 2022 Baker Hughes

The board of Baker Hughes is led by W. Geoffrey Beattie, CEO of Generation Capital and former chairman of Thomson Reuters. Baker Hughes’ board scores highly in age dispersion, senior independent nonexecutive director representation, and ESG.  
 
As of spring 2022, Baker Hughes stock sat at almost 50% higher than its pre-pandemic levels. <a href="https://finance.yahoo.com/news/baker-hughes-bkr-stock-jumps-125512692.html">Analysts say</a> the company has a strong balance sheet and compares well to industry peers because of lower exposure to debt capital. The company rejoined the Fortune 500 in 2021 after previously being owned by GE for two years. Baker Hughes made the decision to pull out of Russia <a href="https://fortune.com/2022/03/19/baker-hughes-joins-oil-rivals-pausing-russian-operations-congress-houston-texas-zelensky-hailburton-schlumberger/">on March 19</a>, in the wake of Russia’s invasion of Ukraine. 
 
CEO Lorenzo Simonelli is also chairman of the board. His fellow directors include three current and former CEOs: Nelda Connors is the CEO of an investment firm and a former executive at Eaton and Ford and former CEO of Atkore International, a subsidiary of Tyco; Lynn Elsenhans is the former CEO and chairman of Sunoco; and Cynthia B. Carroll was the CEO of Anglo American, as well as a business unit CEO and president at Alcan Aluminum.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-140-Baker-Hughes

A world leader in hydrocarbon exploration, the company supplies the oil and gas industry with the tools needed for drilling and production.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-129-Baker-Hughes

Baker Hughes rejoins the Fortune 500 as a free-standing company after General Electric divested much of its ownership stake in the business in 2019. GE had acquired the energy technology and oil-field services company in 2017.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

Fortune Global 500

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Key Financials (last Fiscal Year)

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One of the big three oilfield services powers in the world along with SLB and Halliburton, Baker Hughes is the surviving offspring of Howard Hughes’s Hughes Tool business and Baker Oil Tools. The Baker Hughes name originated from the merger in 1987, when the company grew into a bigger global power. A failed takeover by Halliburton in 2016 led to General Electric taking a majority stake in Baker Hughes. But the Houston- and London-based company was spun off independently again and has since restored its position as a global powerhouse for drilling, well completions, oilfield and liquefied natural gas equipment, and much more, from the onshore U.S. to the deepwater subsea.

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Baker Hughes (BKR): Company Profile, Stock Price, News, Rankings

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Baker Hughes

baker hughes

Good day, ladies and gentlemen, and welcome to the Baker Hughes Company fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Chase Mulvehill, Vice President of Investor Relations. Sir, you may begin.

Thank you. Good morning, everyone, and welcome to Baker Hughes' fourth quarter and full year earnings conference call. Here with me are our Chairman and CEO, Lorenzo Simonelli, and our CFO, Ahmed Moghal. The earnings release we issued yesterday evening can be found on our website at bakerhughes.com. We will also be using a presentation with our prepared remarks during this webcast, which can be found on our investor website. As a reminder, we will provide forward-looking statements during this conference call. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for factors that could cause actual results to differ materially. Reconciliations of adjusted EBITDA and certain GAAP to non-GAAP measures can be found in our earnings release. With that, I will turn the call over to Lorenzo.

Thank you, Chase. Good morning, everyone, and thanks for joining us. First, I'd like to provide a quick outline for today's call. I will start with our strong fourth quarter and full year results, highlight key awards, and discuss the macro environment. Following this, I will walk through the progress we are making as we further scale our power systems portfolio and capture growing demand in this space. I will then hand it over to Ahmed, who will present an overview of our financial results, followed by an update on the progress we're making on Chart integration planning. To conclude, I will summarize the main points before we open the line for questions. Let us now turn to slide four. We continue to execute at a high level, delivering another quarter of strong results.

Adjusted EBITDA totaled $1.34 billion, surpassing the midpoint of our guidance range and contributing to a record full-year adjusted EBITDA of $4.83 billion. This achievement demonstrates sustained momentum from our business system and ongoing positive performance in Industrial and Energy Technology, which more than offset continued macro-driven softness in Oilfield Services and Equipment. Adjusted earnings per share rose to $0.78, resulting in a full-year adjusted EPS of $2.60, a 10% increase from 2024. Adjusted EBITDA margins for the fourth quarter rose 30 basis points year-over-year to a record 18.1%. While OFSE margins declined due to prevailing market conditions, IET margins increased by 160 basis points to 20%.

For the full year, company-adjusted EBITDA margins increased by 90 basis points to a record of 17.4%. OFSE margins remained resilient, even though revenue declined by 8%, while IET margins demonstrated another year of meaningful expansion, increasing 170 basis points to a historical high of 18.5%. Turning to orders, IET delivered strong fourth quarter order bookings of $4 billion, contributing to a record full-year total of $14.9 billion, exceeding the high end of our guidance range. For the second consecutive year, non-LNG equipment orders represented approximately 85% of total IET orders. This performance highlights the end-market diversity and versatility of our IET portfolio, led by growth in power generation and New Energy, alongside continued strength in energy infrastructure and LNG.

IET achieved a record backlog of $32.4 billion at year-end, while book-to-bill exceeded 1x. During the fourth quarter, we generated robust free cash flow of $1.3 billion, contributing to a record annual free cash flow of $2.7 billion. This represents a free cash flow conversion rate of 57% in 2025, above our 45%-50% target range. This strong performance was driven by enhanced working capital efficiency and higher customer down payments, which contributed to free cash flow for the year exceeding expectations. Now turning to slide five. As I highlighted, we maintained robust order momentum in IET throughout 2025. In LNG, we delivered another strong quarter of equipment orders, providing critical liquefaction technology for Train 5 at NextDecade's Rio Grande LNG facility and Commonwealth LNG's export terminal.

In 2025, we booked $2.3 billion of LNG equipment orders. Looking ahead to 2026, we expect similar levels of LNG awards, including material orders outside of the US. Building on these achievements, we are further strengthening the durability of our lifecycle model through major aftermarket service awards. This includes long-term service agreements for Cheniere's Corpus Christi Trains 8 and 9, as well as iCenter remote monitoring and diagnostics for NextDecade's Rio Grande Trains 1, 2, and 3. In Power Systems, orders increased significantly to $2.5 billion in 2025, including $1 billion tied to data center applications, reflecting accelerating demand and growing customer confidence in our solutions. Capitalizing on this strong momentum in Power Systems, 2025 marks a milestone year for our NovaLT industrial gas turbines, booking approximately 2 GW of orders across oil and gas, industrial, and data center markets.

In addition, during the fourth quarter, we secured a large slot reservation agreement for approximately 1 gigawatt of NovaLT capacity to support data center applications, which we expect to convert into a firm order in 2026. Additionally, our Power Systems business secured a major contract to supply over 40 Brush generators for gas-fired utility-scale power plants, which will collectively deliver approximately 7 gigawatts of reliable power and enhanced grid resilience, highlighting the critical role our technologies play in strengthening U.S. energy infrastructure. We also continued to capture synergy opportunities across our Power Systems and compression businesses, highlighted by a significant award to supply an integrated solution for Tengiz gas separation complex in Kazakhstan. This project underscores the value of our integrated portfolio in delivering complex, large-scale infrastructure solutions. Further, we are seeing increased commercial synergy potential across the enterprise.

By combining complementary surface and subsurface OFSE technologies with our extensive IET portfolio, we are unlocking growing synergy opportunities across field management, offshore production, geothermal, and CCS. This is most evident in New Energy, booking $434 million of orders in the quarter and a record $2 billion for the full year, well above our $1.4 billion-$1.6 billion target. During the quarter, notable New Energy awards included the supply of critical turbomachinery equipment for a blue ammonia project in the U.S., along with continued strength for geothermal orders in the U.S. and Hungary. Looking forward, we are targeting $2.4 billion-$2.6 billion of New Energy orders in 2026. IET's Cordant Solutions sustained robust momentum in 2025, achieving double-digit order growth for the third consecutive year and a 20% increase in software orders.

During the quarter, the business continued to scale its digital software offerings, reinforcing recurring revenue and lifecycle pull-through across our equipment installed base, while also increasing penetration of non-OEM equipment. As the global installed base of critical equipment continues to expand across energy, industrial, and power sectors, we are unlocking additional pull-through opportunities for Cordant, leveraging our comprehensive solutions to drive greater value for our customers. In OFSE, we continue to see strong customer demand across deepwater and Middle East markets, driven by brownfield and OpEx-led developments that leverage our digitally enabled production portfolio. These solutions directly lower operating costs and support recurring production-led spending for our customers. During 2025, we secured approximately $3 billion of Production Solutions awards in the Middle East, including approximately $1 billion of multiyear contracts in the fourth quarter from Kuwait Oil Company, Petroleum Development Oman, and ADNOC.

The awards with KOC and PDO cover the deployment of advanced ESP systems and Leucipa in over 1,000 wells. In addition, the ADNOC contract includes the deployment of our AccessESP system in the offshore Umm Shaif field, along with continuous digital monitoring services that support recurring revenue over the life of these assets. Momentum has also continued across subsea markets, driving a near-record order quarter for Subsea and Surface Pressure Systems, with bookings of $1.1 billion and a book-to-bill of 1.4 times. During the quarter, we were awarded a multi-year frame agreement for subsea production systems and services for the Coral North LNG project, offshore Mozambique. Now turning to the macro on slide six. Despite the ongoing geopolitical and trade-related uncertainty, the global macro environment remains resilient through 2025.

While these headwinds are expected to persist, we anticipate modestly stronger year-over-year GDP growth in 2026, supported by continued investment in generative AI, easing inflation, and a supportive fiscal backdrop in several major economies. This economic resilience is mirrored by the evolving landscape of global energy demand. Long-term energy demand continues to rise, driven by population growth, rising living standards, and accelerating electrification. At the same time, digital infrastructure, AI, and data centers are adding a new and durable layer of energy demand, reinforcing the need for reliable, scalable, and dispatchable power. Industry estimates suggest that AI infrastructure spending totaled more than $500 billion in 2025 and is expected to approach $1 trillion annually in the late 2020s.

Resilient power supply has emerged as a key bottleneck, which creates a significant opportunity for Baker Hughes as data center build-out increases demand for behind-the-meter power solutions, providing speed, reliability, and scale. Against this backdrop, we now expect to book approximately $3 billion of data center-related orders between 2025 and 2027. Given its abundance, cost-effective reliability, and comparatively lower emissions profile, natural gas continues to play a central role in powering data centers. Looking ahead to 2040, we expect global natural gas demand growth of approximately 20%. This strong growth in natural gas underpins accelerating investment in gas and power infrastructure, which we expect to represent an increasing share of our $40+ billion IET order target during Horizon 2. For LNG, demand continues its strong growth trajectory, increasing by approximately 7% in 2025.

Looking forward, LNG demand is expected to increase by at least 75% by 2040, driven primarily by growth across Asia. Reflecting this strength in near-term order visibility, we expect to exceed our 2024-2026 LNG FID outlook of 100 MTPA after reaching FID on 83 MTPA of projects over the last 2 years. This further reinforces our long-held view of 800 MTPA installed base by 2030 and advances progress towards our 950 MTPA outlook for 2035. Turning to oil. Against the backdrop of dynamic geopolitical risk, oil prices have remained somewhat volatile in recent months as markets weigh potential supply disruptions against rising OPEC+ and offshore production. We believe further reduction in idled OPEC+ supply, alongside more constructive oil supply and demand balances, is required before a broad inflection in oilfield services activity emerges.

That inflection is likely a 2027 catalyst for the sector and may mark the beginning of an upcycle. Taking current macro factors into account, we expect low single-digit declines in global upstream spending in 2026. In North America, spending is expected to decline at a mid-single-digit rate as operators maintain both capital discipline and inventory preservation. However, our production-weighted exposure positions us to outperform the market. International spending is expected to be slightly down, with resilience in the Middle East and Africa offset by continued softness in other regions. Longer term, the outlook remains constructive, particularly internationally and offshore, where significant investment will be required to sustain production growth and meet rising global oil demand.

We also see continued growth in OpEx-driven upstream investment as operators focus on enhancing recovery rates and extending the life of existing assets that will leverage our differentiated well construction and Production Solutions portfolio. Moving to slides seven and eight, I want to discuss how Baker Hughes is positioned to capture a significant growth opportunity in global power infrastructure spend and how our power systems portfolio is enabling reliability, efficiency, flexibility, and long-term decarbonization for customers. This portfolio builds on decades of aeroderivatives and heavy-duty gas turbine technology development, complemented by deliberate organic investment in our NovaLT gas turbine platform, our acquisition of Brush Power Generation, and the pending acquisition of Chart. Together, these actions have created differentiated capabilities that span power generation, grid stability, and energy management.

Looking ahead, we plan to continue advancing our power systems portfolio with a clear focus on expanding our solutions offering across these three capabilities. These strategic assets positions us strongly for what lies ahead. We believe that global power demand is entering a multiyear cycle. By 2040, global demand is expected to double to approximately 60,000 terawatt-hours. This increase implies a compounded annual growth rate of over 4%, with gas-fired power generation playing a significant role in this expansion. These developments are being driven by several long-term structural trends that are transforming global power markets. First, digitization and AI-driven compute are fundamentally reshaping power demand. Data centers are a rapidly growing source of energy demand, requiring uninterrupted and highly dependable power supply.

Estimates project that data center power demand will increase by a 12% compounded annual growth rate through 2040 as AI workloads increase in scale. Second, the ongoing transition toward electrification in both transportation and industrial sectors is contributing to a structural increase in electricity demand. The adoption of electric vehicles is rising rapidly, with projections indicating that the global EV fleet will approximately triple by 2030 and increase nearly ninefold by 2040.... Additionally, industrial companies are advancing their decarbonization initiatives by transitioning from fuel-based processes to electrically driven alternatives. This includes adopting advanced heat pump technologies and integrating electrified equipment into their industrial operations. Also, renewable integration, hydrogen production through electrolysis, and carbon capture systems all require significant incremental power, even as they reduce overall emissions intensity.

Collectively, these factors are expected to contribute to a prolonged period of growth in power demand, reinforcing the need for reliable, flexible, and energy-efficient power solutions. This trend will drive continued investment across generation, distributed power, and grid resilience, and it highlights the requirements for mission-critical power system solutions that can deliver both reliability today and transition-ready capability for the future. This is where Baker Hughes is uniquely positioned. Through our power systems portfolio, which is highlighted on slide eight, we sit squarely at the intersection of the key megatrends driving global power demand. Our strategy is deliberately built around fuel flexibility, electrification, digital integration, and portfolio expansion, enabling us to deliver full lifecycle power solutions across industrial, data center, grid, renewable, and oil and gas markets.

The portfolio addresses an annual market opportunity projected to exceed $100 billion by 2030, with solutions that are either currently available or under development, supported by ongoing organic investments. Let me briefly walk you through our power systems portfolio and how it differentiates Baker Hughes as we capture accelerating growth in global power infrastructure spending. Our power systems business is built around three core capabilities: power generation, grid stability, and energy management, with digital integrated systems and aftermarket services spanning across all three. For power generation, we offer solutions across simple and combined cycle configurations, alongside clean power offerings that include geothermal, flex-fuel, and our developing industrial-scale oxy-combustion solution.

This portfolio brings together a broad range of aero-derivatives and heavy-duty gas turbines for the oil and gas sector, alongside industrial gas turbines, steam turbines, turboexpanders, and generators that address a wide spectrum of power generation applications across diverse end markets. We are seeing the strongest growth in our NovaLT industrial gas turbines, engineered for distributed and behind-the-meter applications. The NovaLT is hydrogen-ready and capable of operating on natural gas, blended fuels, and up to 100% hydrogen, with development plans in place to enable ammonia fuel flexibility. Its high efficiency, fast start capability, and low NOx performance make it particularly well-suited for power generation across data center, industrial facilities, and the oil and gas markets, as well as the mechanical drive applications. Our core oil and gas markets also continue to drive strong demand for power generation.

In 2025, we secured orders of approximately 3 GW for oil and gas power applications, supporting distributed power across LNG facilities, FPSOs, refineries, petrochemical plants, and oil fields. Beyond gas turbines, we bring differentiated capabilities in steam turbines and turbo expanders, supporting geothermal, biomass, waste-to-energy, and pressure recovery applications. With an installed base of more than 700 steam turbines and turbo expanders globally, we have proven our experience in delivering reliable, efficient power across both renewable and industrial markets. We continue to advance our leadership in geothermal, highlighted by a recent order to supply the five organic Rankine cycle power plants at Fervo's Cape Station power generation project, which is expected to deliver 300 MW of clean, reliable, and affordable power to the grid.

In addition to the surface scope, Baker Hughes is also providing differentiated subsurface expertise, reflecting our ability to integrate subsurface capabilities with surface power generation. By combining these capabilities, we are uniquely positioned to enable scalable, repeatable geothermal developments, delivering firm, renewable baseload power with attractive project economics for our customers. Through our Brush Power Generation brand, we also provide generators, electric motors, and synchronous condensers, supported by lifecycle services and digital remote monitoring. These capabilities are increasingly critical as grids become more reliant on intermittent power and require greater inertia, voltage control, and resilience. Our controls, power electronics, and digital platforms, including Cordant, enable real-time optimization, emissions monitoring, and system-level reliability that enhance our power systems' value proposition to customers. We also offer industrial heat pumps and grid stabilization technologies, supporting electrification and decarbonization across industrial and power applications.

Looking ahead, the pending acquisition of Chart will add differentiated thermal management capabilities, further complementing our power generation portfolio and enabling the development of integrated trigeneration solutions for customers. To summarize, Baker Hughes offers a broad power solution portfolio with capabilities spanning generation, grid stability, and energy management that positions us to meet the diverse needs of customers across data centers, industrial, power, renewables, and traditional energy markets. As global electricity demand accelerates and energy infrastructure evolves, Baker Hughes is delivering solutions that drive long-term growth, operational resilience, and low carbon readiness, positioning us exceptionally well for the next phase of growth in the global power market. Before turning the call over to Ahmed, I want to reiterate the strength of our 2025 results.

Despite macro-related headwinds in OFSE and tariff-related trade friction, we delivered 90 basis points of margin expansion, driven by continued execution of the Baker Hughes Business System and a disciplined focus on pricing optimization and productivity enhancements. At the same time, the breadth and versatility of our portfolio supported a record year of IET orders, underscoring the durability of our strategy. These results demonstrate that Baker Hughes continues to execute and deliver for our customers and shareholders. With that, I'll turn the call over to Ahmed.

Thanks, Lorenzo. I'll begin on slide 10 with an overview of our consolidated results, and then speak to segment details before summarizing our first quarter and full year outlook. As Lorenzo mentioned, we delivered very strong orders in the fourth quarter, with total company orders of $7.9 billion, including $4 billion from IET. Adjusted EBITDA of $1.34 billion increased by 2% year-over-year, driven by continued IET growth, while OFSE results were impacted by macro-driven headwinds. Adjusted EBITDA margins expanded by 30 basis points year-over-year to 18.1%, exceeding 18% for the first time. GAAP diluted earnings per share were $0.88. Excluding $0.10 of adjusting items in the quarter, diluted earnings per share increased 12% year-over-year to $0.78.

We generated free cash flow of $1.34 billion for the quarter, supported by strong collections, customer down payments, and results from our ongoing working capital efficiency efforts. Turning to capital allocation on slide 11. Our balance sheet remains strong, with cash increasing to $3.7 billion, net debt to Adjusted EBITDA ratio decreasing to 0.5 times, and liquidity increasing to $6.7 billion at year-end. In 2025, we returned $1.3 billion to shareholders in dividends and share repurchases. Our near-term priority is to maintain the strength of our balance sheet in preparation for the closing of the Chart acquisition. With regulatory reviews still underway in certain jurisdictions, we currently expect closing in the second quarter, understanding that the timing may evolve as those processes progress.

As previously stated, our objective is to achieve a net debt to Adjusted EBITDA ratio of 1-1.5 times within 24 months following the close of the transaction. This reduction will be accomplished through a combination of ongoing free cash flow generation and proceeds from continued portfolio management initiatives, which are anticipated to yield $1 billion of incremental proceeds. Consistent with our portfolio management and capital allocation framework, we announced earlier this month the completion of the sale of the Precision Sensors and Instrumentation business, as well as the formation of the Surface Pressure Control joint venture with Cactus. These strategic transactions have generated approximately $1.5 billion in gross cash proceeds, subject to customary closing adjustments. These actions reflect our disciplined approach to portfolio management and our commitment to maximizing long-term value creation for shareholders.

We would like to express our sincere gratitude to the employees of PSI and SPC for their dedication and hard work, and wish them continued success going forward. In parallel with these portfolio actions, we're making progress on our comprehensive evaluation. We are also executing incremental targeted cost-out initiatives with quick cash paybacks that are expected to support durable margin expansion as we move through 2026. As we further advance our comprehensive evaluation, our top priority remains closing the Chart transaction and executing a seamless integration where we see compelling strategic and financial benefits. We're focused on delivering our integration priorities and capturing identified synergies while positioning the combined companies to enhance customer value, strengthen our industrial portfolio, and support sustainable, profitable growth. From an integration standpoint, we have now moved into high-level day one operating model design, placing strong emphasis on culture, integration, and execution planning.

Our two companies share significant commonalities, particularly in our highly complementary portfolios, which together enhance our solutions offering and deliver greater value for customers across the equipment lifecycle. Let's now turn to segment results, starting with IET on slide 12. During the quarter, we booked strong IET orders of $4 billion, primarily driven by continued power systems and LNG order momentum. For the full year, IET achieved a record $14.9 billion of orders, resulting in a book-to-bill of 1.1 times and a record RPO of $32.4 billion. Notably, this marks the 6th consecutive year of IET RPO growth. Our fourth quarter results reflect outstanding performance in IET, with revenue of $3.81 billion, exceeding the high end of our guidance range due to strong project execution and favorable project timing.

EBITDA increased 19% year-over-year to a record of $761 million, resulting in significant margin expansion of 160 basis points to 20%. This exceptional performance was driven by strong backlog pricing, productivity gains, and continued execution of the Baker Hughes Business System, reinforcing the operating leverage in the segment. For the full year, IET revenue increased 10% to $13.4 billion, while EBITDA rose 21% to $2.5 billion, with margins increasing 170 basis points to 18.5%. Historical highs for all three. This meaningful margin improvement was driven by strength across both Industrial Solutions and Gas Tech Equipment. In 2025, the recently divested PSI business contributed $374 million of revenue and $48 million of EBITDA. Turning to OFSE on slide 13.

We delivered another strong quarter of orders with SSPS bookings of $1.1 billion. This was led by continued strength in subsea project bookings, where we captured approximately 25% of the global subsea tree market in 2025. As a result, SSPS orders increased by 13% year over year to $3.5 billion in 2025, with a strong book-to-bill of 1.1 times, driving increased visibility and reflecting broadening customer penetration. Our fourth quarter OFSE performance reflected ongoing macro-related headwinds while continuing to demonstrate solid execution and cost discipline. Revenue totaled $3.57 billion, and the segment delivered EBITDA of $647 million, resulting in 40 basis points of sequential margin decline to 18.1%, with all metrics effectively in line with the midpoint of our guidance range.

Results were impacted by seasonal declines in the North Sea and Asia Pacific, continued softness in Mexico, and weaker year-end product sales as customers remained cautious with capital deployment. These pressures were partially offset by improving activity in Sub-Saharan Africa, Brazil, and Saudi Arabia, reflecting pockets of resilience across our international portfolio. For the full year, revenue fell 8% to $14.3 billion, while EBITDA of $2.62 billion resulted in resilient margins of 18.3%, effectively flat year-over-year, despite the meaningful top-line decline. This margin resilience reflects continued cost discipline and structural actions to remove duplication across the segment, preserving profitability through cycle downturns. In 2025, SPC contributed $627 million of revenue and $137 million of EBITDA.

These results will be deconsolidated in 2026, with our 35% minority ownership accounted for as an equity investment. Next, I would like to provide an update on our outlook for the first quarter and full year 2026. The detailed guidance can be found on slide 14, where both the ranges and midpoints are presented. For clarity, I'll focus on the midpoint of our guidance figures. Please note these figures exclude the recently divested PSI business and account for the deconsolidation of SPC results, as both transactions were completed on January 1. Also, all references to organic metrics exclude the results of businesses that have been divested, deconsolidated, or acquired since the beginning of 2025. Specifically, the results of PSI and SPC, as well as the recently acquired Continental Disc Corporation business, are excluded from organic references provided below.

This approach ensures that organic metrics accurately reflect the company's ongoing operations and provide a clear comparison by excluding the impact of such transactions. Following the closing of the Chart acquisition, full-year guidance will be updated to reflect our outlook for the combined business for the remainder of the year. Starting with full-year guidance, we anticipate company revenue of $27.25 billion, and adjusted EBITDA of $4.85 billion, implying organic adjusted EBITDA growth rate in the mid-single-digit range. Free cash flow conversion is expected to approach 50%, underscoring our progress to drive more durable free cash flow through cycles. The effective tax rate is projected to fall within the range of 22%-26%, and we continue to pursue initiatives aimed at further optimizing our tax rate beyond 2026.

In IET, we expect orders to remain at robust levels through this year, supported by continued momentum in LNG, a stronger year of FPSO and gas infrastructure awards, and sustained strength for power systems. Against this favorable backdrop, we project $13.5 billion-$15.5 billion of IET orders in 2026, which is flat at the midpoint on an organic basis and would mark the fourth consecutive year with at least $13 billion in orders. We also remain confident in achieving our three-year Horizon 2 target of more than $40 billion in IET orders. Importantly, these anticipated orders will provide significant backlog visibility for our equipment businesses, while also underpinning years, if not decades, of high-margin services growth. This outlook reinforces the durability and long-term value creation that is embedded within the company.

Supported by record backlog levels, we expect full year IET revenue of $13.5 billion, reflecting steady organic growth. Additionally, we project EBITDA of $2.7 billion, positioning IET to achieve its 20% margin target this year. This margin outlook is supported by ongoing productivity improvements, disciplined cost management in industrial products, and the conversion of higher margin backlog within Gas Tech Equipment. For OFSE, we anticipate revenue to be slightly lower year-over-year, but flat on an organic basis. This stability is primarily driven by robust growth in our SSPS business, which is anticipated to offset slight declines within the OFS portfolio. Based on our current outlook, we expect $13.75 billion in revenue and EBITDA of $2.475 billion.

When adjusted for the impact of the SPC transaction, this guidance implies relatively flat organic margins year-over-year. This resilient margin outlook is underpinned by ongoing productivity enhancements and continued efforts to rightsize our cost structure, which deliver quick cash paybacks. These cost actions are expected to offset higher tariff-related costs, unfavorable product mix, and pricing variability across different markets. Notably, our disciplined approach to cost optimization is fully aligned with our ongoing comprehensive review, with each initiative prioritized to drive structural margin improvement and enhance long-term competitiveness. Now, turning to first quarter guidance. We anticipate total company revenues of $6.4 billion and adjusted EBITDA of $1.06 billion. For IET, we expect results to demonstrate strong year-over-year EBITDA growth, led by Gas Technology. Overall, we expect IET EBITDA of $600 million.

The major factors driving our guidance ranges for IET will be the pace of backlog conversion in GTE, the impact of any supply chain tightness, foreign exchange rates, and trade policy. For OFSE, we anticipate results to reflect typical seasonality. Accordingly, EBITDA is expected to be $540 million for the quarter. Factors driving our guidance ranges for OFSE include execution of our SSPS backlog, near-term activity levels, trade policy, foreign exchange rates, and pricing across more transactional markets. In summary, we are extremely pleased with the company's operational performance in 2025. IET once again delivered record results, while OFSE margins demonstrated exceptional resilience despite a challenging macro environment. Together, these results clearly demonstrate that the Baker Hughes Business System is driving execution, productivity, and profitability across the organization.

We remain firmly committed to structurally improving free cash flow and margins, while also capitalizing on market opportunities through our differentiated solutions portfolio, with line of sight to our 20% company-adjusted EBITDA margin target by 2028. All of this is focused on delivering sustained long-term value for our shareholders. I'll turn the call back to Lorenzo.

Thank you, Ahmed. To close, we delivered an exceptionally strong quarter and an outstanding year in 2025, highlighted by record performance in IET, resilient margins in OFSE, record free cash flow, and consistent execution across the company. Looking ahead to 2026, we expect organic adjusted EBITDA to grow in the mid-single-digit range, led by another year of solid margin expansion. These achievements reflect the significant progress we are making towards structurally improving margins, strengthening the durability of our cash flow, and driving operating leverage through the Baker Hughes Business System. Further, the outlook for global energy infrastructure investment remains positive, particularly in key areas such as gas, LNG, power generation, and industrial energy systems. Rapidly increasing demand from digitization and electrification is reinforcing the need for reliable, scalable, and lower carbon energy solutions.

Baker Hughes is uniquely positioned to capitalize on these market dynamics, providing differentiated power systems and energy infrastructure solutions that meet the evolving needs of customers. Against this favorable market backdrop, we remain confident in achieving our three-year IET orders target of at least $40 billion. As part of our comprehensive review, we have initiated further cost out programs across the company that will result in quick paybacks and drive further margin expansion through 2026 and beyond. We have also made meaningful progress enhancing our portfolio, demonstrated by the three recently closed transactions and the pending Chart acquisition. As we move forward, our primary focus is on closing the Chart transaction and ensuring a seamless integration process.

We continue to make substantial progress in integration planning for the Chart transaction and are increasingly confident in our ability to achieve the $325 million cost synergy target. Our commercial synergy initiatives are also moving forward, with the potential to generate incremental value over time. As the company moves into Horizon 2.

These portfolio actions are positioning Baker Hughes to evolve into a stronger, more industrialized energy solutions company. This evolution is underpinned by an increasingly OpEx-levered business mix and a differentiated lifecycle portfolio, which are driving reduced cyclicality and enhanced cash flow durability. Accordingly, we remain confident in our ability to continue driving returns and margins higher for the company, with a path to achieving 20% company-adjusted EBITDA margin by 2028. In closing, I would like to thank the entire Baker Hughes team for consistently delivering outstanding results. As we look to the future, we are energized by the opportunities that lie ahead and remain committed to our customers and employees, with a disciplined focus on creating long-term, sustainable value for our shareholders. With that, I'll turn the call back over to Chase.

Operator, we can now open up for questions.

To ask a question, you'll need to press star, followed by the number one on your telephone keypad. We ask that you please limit yourself to one question. Thank you. Our first question comes from Arun Jayaram from JPMorgan Chase. Please go ahead. Your line is open.

Yeah, good morning, Lorenzo, Ahmed. Your prepared remarks underscored Baker's Power Systems capabilities across a broad range of end markets. You mentioned you booked $2.5 billion of power system orders in 2025. I know the business has been a strategic focus, thinking back to the Brush acquisition and your organic growth opportunities from the NovaLT gas turbine line. Can you elaborate on your strategy for further enhancing your current capabilities or sustaining growth from Power Systems on a go-forward basis?

Definitely, Arun, and thank you very much. Let me just start by reiterating that we believe that we're in a global power demand multiyear growth cycle. In fact, a demand decade, as we said last week, and we're very much in the early stages of that trend worldwide and in the United States. If you look at current projections indicate that power demand will double by 2040, driven by the factors such as data centers, digital infrastructure, artificial intelligence, widespread adoption of EVs, also the transition of industrial processes from fuel-based to electric power solutions, HVAC, cooling, across the board, a huge increase in demand. This really is a critical need that then manifests itself for reliable and scalable energy systems.

We think that, in particular on AI infrastructure, we expect to see a doubling in the investment, and it's gonna reach $1 trillion by the end of this decade, which presents a substantial opportunity for Baker Hughes. As you saw from the prepared pages, we've identified a market opportunity of $100 billion annually for Power Systems by 2030, and we've got a range of solutions available and also in development. In 2025, Power Systems orders totaled $2.5 billion, with $1 billion directly linked to data center applications.

So, you know, you look at also what we laid out, we now see data center orders to total $3 billion between 2025 and 2027, and it represents over 150% growth compared to last year's Power Systems orders, which is a clear indication of the acceleration that we're seeing and also the customer adoption. So there's a large, broad addressable market that is significant, and it goes, you know, beyond just the NovaLT. It really focuses on core capabilities around power generation, grid stability, and energy management.

As you look at, you know, some of the other things that are taking place, we also secured orders of 1.3 GW for aero-derivative gas turbines within the oil and gas, including upstream gas infrastructure, FPSOs, refining, which demonstrates, again, the aspects of good prospects for distributed power solutions in our core market. Also, geothermal, as you look at the order with Fervo, 300 MW, Organic Rankine Cycle, unique position with ourselves as being the geothermal subsurface and surface power generation capabilities. The 40 Brush generators for gas-fired utility-scale power plants, and collectively delivering approximately 7 GW of reliable power. Synchronous condensers technology that addresses the multibillion-dollar market that is projected to grow as renewable energy integration increases.

And so we're seeing lots of new opportunities, as well as energy storage, being able to leverage our turboexpander and generator portfolio as we look to see more integrated power solutions, as you also saw in the Tengiz project in Kazakhstan. And not to forget, also in the nuclear space, where we provide steam turbine generators to support the small modular reactor projects, and on the overlay, the Cordant digital hardware and software solutions and the aftermarket service business. So you've got a lot of range of applications and markets, and as we look to Chart, that's gonna further strengthen the power portfolio by adding thermal management capabilities and deliver integrated trigeneration power solutions. So very excited, and I think in summary, you're looking at a multi-year cycle.

It's driving long-term growth, operational resilience, low carbon readiness, and we've got a versatile portfolio that's gonna add significantly as growth for Baker Hughes going forward.

Our next question comes from Scott Gruber from Citigroup. Please go ahead. Your line is open.

Yes, good afternoon on your end. Lorenzo-

Hey, good afternoon. You offered a very robust, you know, $14.5 billion IET order intake guide for 2026. Can you walk through some of the moving pieces, you know, within that guide? Which segments are seeing some growth, which may be down some? Sounds like LNG will be stable, but what are the moving pieces? And then inbound, you know, exceeded your initial expectations last year. You know, what could drive upside this year? Would that, you know, most likely come from the power vertical? Thank you.

Yeah, definitely, Scott, and, again, I think as you look at the 2026 order outlook, it reflects the underlying strength that I mentioned previously as well across the broad and versatile IET portfolio. And it's really a strong start to achieving the 3-year $40+ billion target for Horizon 2 between 2026 to 2028. And I think if you take a step back and just reflect on the prior few years of Horizon 1, you know, that order strength has been highlighted as we've gone through the years of 2023, 2024, and 2025. As you look at, you know, LNG being strong in 2023, then in 2024, gas infrastructure, and last year, power systems.

Since 2023, our non-LNG equipment orders have delivered a compounded annual growth rate of over 20% and really represent about 85% of the total IET orders for both 2024 and 2025, which again further demonstrates the breadth and diversification of our offerings. Looking at 2026, again, it's gonna be the aspect of strong pipelines in power systems. You know, we see our $2.5 billion orders from last year as a foundation for further growth, also taking up our data center intake. And as you see from the three-year data center order outlook, going to $3 billion, reflecting a healthy and growing pipeline. Gas infrastructure, as you continue to see the growth in gas, we see continued increase in natural gas production to meet the global energy demands.

As you look at New Energy, you know, we set a record in 2025 with $2 billion in orders and expect this trajectory to continue, led by CCUS, flex fuel power, and geothermal solutions. And we've got, you know, a forecast for $2.4-$2.6 billion. And excited about geothermal, as you heard from the Fervo example in 2025, with our technology that we feel is very well positioned, as well as then the legacy geothermal as well. And as we go forward, strength in really being able to seamlessly integrate subsurface expertise with subsurface power generation and the topside as well. So, as we look at 2026, again, feel good about that, and overall, another robust year, and there's potential to continue to have some upside.

We've given our order guidance at the midpoint. There's a number of projects that, again, will materialize in 2026, 2027, and feeling good about that $40+ billion over the three-year order target.

Our next question comes from Saurabh Pant from Bank of America. Please go ahead. Your line is open.

Hi, Lorenzo, Ahmed. If you don't mind, I want to pivot to the margin side of things a little bit. Clearly, very resilient margins, especially on the OFSE side of things. Ahmed, I think, if I got you right, you were talking about practically flat margins, SPC consolidation, right? That's better than what I was thinking. That despite all the headwinds between mix and pricing and tariffs, so if you don't mind just stepping through that and how it's cost out helping that, and if you don't mind, just the moving pieces on the IET margin, outlook as well, please.

Yeah. No, for sure, Saurabh. Look, I find this always easier to build it up by segment. So starting with IET, you know, the team's done a great job on the margin front, and we expect this trajectory to continue into 2026. So achieving 20% margin in 2026 would represent about 150 basis points year-over-year increase. And for context, of course, this is 500 basis points improvement since 2023. And that really has been driven by the success of both our commercial and operational efforts and as we continue to scale our business system across IET. So just breaking it down in terms of, you know, how we expect to drive towards that 20%, it's a few key drivers.

First, I would say, is just the continued conversion of our higher-margin Gas Tech equipment backlog. So that's gonna be, you know, a foundational component. Growth in Gas Tech services, we expect to outpace the broader segment. And then Cordant—you saw, you know, the robust order momentum, we'll enter the year with higher margin backlog, and that business can drive quite a bit of operating leverage. And look, we're also gonna continue to optimize cost in IET in areas where we know margins have lagged, so there's opportunity there. And then just to round out this piece, you know, that impact of PSI and CDC, you know, they're just very modestly accretive to margins in 2026. So-

With that context, you know, I feel with the strong backlog visibility and the continued productivity actions we're gonna drive, we're confident in achieving the 20% for IET in 2026. So that's IET. So when you look at OFSE, you know, the 2026 outlook we gave really reflects a theme that you've seen, which is a resilient margin profile, despite the headwinds on a macro scale. So at the midpoint of our 2026 guidance, and when you compare that actually to peak 2024 results, our 2026 outlook actually implies only about 50 basis points of margin decline on roughly 10% decline in revenue, and that's on our organic basis.

So, you know, we've been able to achieve that, through what you've seen us, you know, systematically do around cost actions, quick cash paybacks, and structural changes to how we operate, which has resulted in that durability. So for 2026, you know, the modest year-over-year decline, with, you know, organic margins expected to be flat. The major components, I'd say, is first, increased tariff costs, as you mentioned, you know, impacting margins. That's gonna be an annualized impact carrying from 2025 into 2026. The second is a slight change in revenue mix, with SSPS growing organically, while our higher margin OFS business is projected to decline slightly. And the last thing I'd say is, you know, what I mentioned around overall market pricing variability in different markets, and that'll have a modest impact.

Just to round out, you know, similar to PSI and CDC and IET, for SPC, the deconsolidation will be modestly dilutive to OFSE margins in 2026. So all of this, you know, what we're doing for OFSE specifically is just to address the headwinds, just ongoing productivity, supply chain optimization, that's gonna be very key, and just those overall efforts, all with the line of sight to quick cash paybacks. So that will help us position OFSE in a very strong manner as market conditions improve later this year or into 2027. So to round out total company, you know, our guidance implies nearly 18% in 2026, which then implies 200 basis points improvement in achieving the 20% target by 2028.

and we're confident in, you know, the strategy to reach this milestone, and that's driven by performance across both segments. So hopefully that gives a bit of color, Saurabh.

Yeah, no, absolutely, Ahmed. Thank you. Thanks a lot.

Our next question comes from James West from Melius Research. Please go ahead. Your line is open.

Thanks, and good afternoon, Lorenzo and Ahmed.

Hey. So I was wondering if you could provide, an update on the progress of the, your comprehensive, strategic evaluation, and, you know, beyond the, the targeted cost out initiatives that you, that you mentioned, are there additional aspects of the evaluation that you can discuss, you know, kind of at this time? And then maybe additionally, can you elaborate on what, investors and we should expect from, from Baker Hughes in the, the near future regarding, this announcement?

Yeah, James, I want to emphasize, you know, our comprehensive evaluation is a disciplined, ongoing process, really designed to ensure Baker Hughes continues to create sustainable, long-term value creation for shareholders. The evaluation represents a strategic, operational, and financial assessment through which we are considering a broad range of strategic options. The comprehensive evaluation remains closely aligned with our key execution priorities. These include the closure and integration of Chart, driving operational performance improvements, optimizing our portfolio, and disciplined capital allocation. These strategic priorities, combined with the evolving market conditions and the broader strategic landscape, help shape the board's perspective of the company's long-term direction and the available strategic options. As we continue to advance our comprehensive review, our immediate focus is on completing the pending Chart acquisition and subsequently ensuring a disciplined, value-creating integration.

In summary, I think, you know, our ongoing comprehensive evaluation is focused really to position Baker Hughes for strong returns, sustainable growth, and the creation of long-term value for our shareholders. As we progress, the evaluation will provide timely updates.

Our next question comes from Mark Bianchi from TD Cowen. Please go ahead. Your line is open.

Hey, thank you. Could you describe your opportunity in Venezuela?

Yeah, definitely. And, you know, obviously, a lot happening in Venezuela at the start of the year with some of the political changes and the opportunity for incremental production out of the country. Unlocking that is gonna require a new investment in the country's oil and gas sector, and we're taking a prudent long-term view as we continue to evaluate opportunities and also the activity we have in the market. To give you a historical context, because Venezuela is not new to us, and as you look at Baker Hughes, both from the oil field services and equipment as well as the industrial energy technology segment side, we've generated in the past, and 2012 as a reference point, $500 million of revenue in Venezuela, and we've had a large presence in the country.

We're one of the only American service companies that's maintained the ongoing presence in Venezuela, supporting the licensed operators with activities as they've gone forward. And we've got a large technology base and the largest installed base of oilfield power generation and more than 1,200 oil production systems, as well as flexible pipe and other energy infrastructure. And as you think about Venezuela's production decline and aging infrastructure, we expect moderate production increases will require substantial investment in well integrity, off-grid power generation, equipment replacement, upgrades, and services. And there's a significant ramp in oil production would provide opportunities across Baker Hughes enterprise on the oilfield services as well as the industrial energy technology standpoint. And as we go forward, we're obviously working with the authorities.

Main consideration is the safety and being able to ensure the safeness of our employees and the operating conditions, and having also the clarity on legal and regulatory framework as we go in for the long-term aspects. And the incremental opportunity of revenue is significant and will be obviously programmatic as we go back. And there's a lot of work in progress, and we'll evaluate as we get clearer line of sight. And we look forward to the continued conversations as the opportunity emerges and we see the activity increase.

Our next question comes from David Anderson from Barclays. Please go ahead. Your line is open.

Thank you. Good morning. A lot to digest today, Lorenzo. I wanted to focus on the NovaLT, if we could. You've now doubled your three-year data center order target to $3 billion. Does this also mean you've expanded NovaLT capacity as well? I think it was about a year ago you announced the doubling of the initial capacity. So are you sold out for 2027 deliveries, and is this further capacity expansion? Is this related to that 1 GW for the slot reservation for new data center that you showed in the presentation this morning? Thank you.

Hi, Dave. Yeah, it's... I'll give some color on this. So, as you said, you know, we are on track to double our Nova capacity by the first half of 2027. And the way to think about it is really as you include those planned capacity additions, our Nova slots are effectively full through 2028, which reflects obviously that strong and diversified demand you've seen across multiple end markets, including behind-the-meter power applications. So that incremental capacity will come online in the first half of 2027, and it will support the 2 GW of Nova orders that we booked to backlog during 2025. But going forward, you know, we continue to monitor the market closely through our dynamic planning process.

So, you know, you can be sure that any decision to further expand NovaLT capacity beyond the current doubling will be based on, you know, a disciplined assessment that we would carry out on medium- to long-term supply and demand fundamentals, and, of course, guided by very clear return thresholds. So to sum it up, really, our current plan, NovaLT capacity, is fully committed through 2028, but we are prepared to respond quickly, you know, if market conditions and customer demand warrant it.

Thank you. That was our last question. I will hand you back to Mr. Lorenzo Simonelli, Chairman and Chief Executive Officer, to conclude the call.

Thank you to everyone for taking the time to join our earnings call today, and I look forward to speaking with you all again soon. Operator, you may now close out the call.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect. Have a great day.

Baker Hughes (BKR) Q4 2025 Earnings Call Transcript

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