Baker Hughes (BKR) Q1 2025 earnings summary

Executive summary

• Delivered strong Q1 2025 results with record revenue of $6.4B, adjusted EBITDA up 10% year-over-year to $1.04B, and margin expansion driven by IET performance, despite OFSE revenue declines and net income falling 12% to $402M due to equity security losses.

• Booked $6.5B in total orders, including $3.2B from IET, and achieved record RPO of $33.2B, with IET RPO at $30.4B.

• Returned $417M to shareholders through $229M in dividends and $188M in share repurchases, with a 10% dividend increase to $0.23 per share.

• Transformation, cost-out, and productivity initiatives drove margin improvements and efficiency gains.

• Secured major data center and LNG orders, enhancing long-term growth visibility.

Financial highlights

• Q1 2025 revenue was $6.427B, flat year-over-year; adjusted EBITDA was $1.037B (16.1% margin), up 10% year-over-year but down 21% sequentially.

• Net income was $402M, down 12% year-over-year; adjusted diluted EPS was $0.51, up 19% year-over-year.

• Free cash flow was $454M, down 10% year-over-year; cash flow from operations was $709M.

• Balance sheet remains strong with $3.3B in cash, net debt/EBITDA of 0.6x, and liquidity of $6.3B.

• Book-to-bill in IET was 1.1x; overall book-to-bill was 1.0.

Outlook and guidance

• 2025 outlook tempered by trade policy and tariff uncertainty, with a potential $100M–$200M EBITDA impact; management remains confident in strategy and portfolio resilience.

• Q2 2025 guidance: revenue $6.3B–$7.0B, adjusted EBITDA $1.04B–$1.2B.

• Full-year IET guidance: orders $12.5B–$14.5B, revenue $12.4B–$13.1B, EBITDA $2.2B–$2.4B.

• Global upstream spending expected to decline high single digits in 2025, with international down mid- to high single digits and North America down low double digits.

• OFSE margins expected to improve year-over-year despite revenue pressure; IET margins progressing toward 20% by 2026.