Baker Hughes (Nasdaq: BKR) reported a solid end to 2025, showcasing resilience and strategic execution amidst varied segment performance. Fourth-quarter revenue held steady at $7.4 billion, mirroring the full-year revenue of $27.7 billion, which remained flat year-over-year. However, the company’s order book demonstrated robust growth, with fourth-quarter orders reaching $7.9 billion and full-year orders hitting $29.6 billion.
A significant driver of this order strength was the Industrial & Energy Technology (IET) segment, which secured a record $14.9 billion in orders for the full year. This pushed the year-end IET Remaining Performance Obligations (RPO) to a substantial $32.4 billion, indicating strong future revenue visibility. The company’s ability to maintain and grow this backlog is a critical indicator of its market position and the demand for its advanced technological solutions in areas like liquified natural gas (LNG) and industrial power generation.
Financially, Baker Hughes reported attributable net income of $876 million for the fourth quarter, translating to $0.88 in GAAP diluted earnings per share, or $0.78 on an adjusted basis. For the full year, attributable net income stood at $2.588 billion, with adjusted diluted EPS at $2.60. Adjusted EBITDA saw a healthy 5% year-over-year increase to $4.825 billion, highlighting operational efficiency and effective cost management.
Crucially, the company achieved a record $2.732 billion in free cash flow for the full year 2025. This strong free cash flow generation is a key metric for investors, demonstrating the company’s ability to convert earnings into readily available cash. This financial flexibility allows for strategic investments, debt reduction, and potential shareholder returns, signaling a mature and financially disciplined operation.
Looking ahead, Baker Hughes anticipates continued strength in its IET segment, projecting mid-single-digit organic Adjusted EBITDA growth for 2026 and sustained robust order levels. This outlook is supported by ongoing momentum in LNG projects, an anticipated increase in Floating Production Storage and Offloading (FPSO) and gas infrastructure awards, and sustained demand for its power systems. The company’s strategic focus on portfolio reshaping and evolving into a more industrialized energy solutions provider appears to be yielding positive results, positioning it for reduced cyclicality and enhanced cash flow durability in the coming years.
Despite the overall positive trends, the Oilfield Services & Equipment (OFSE) segment presented a mixed picture. While OFSE EBITDA margins remained resilient due to cost controls, segment revenue declined by 8% year-over-year, and EBITDA fell by 14%. This performance underscores the differing market dynamics impacting Baker Hughes’ diverse business lines. The strength in IET, particularly in long-cycle projects and technology-driven solutions, is effectively offsetting the more cyclical pressures within the OFSE segment. Investors will be closely monitoring how the company continues to navigate these segment-specific challenges and leverage its technological advantages to drive growth and profitability across its entire portfolio.
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