Baker Hughes (BKR) Q2 2025 earnings summary

Executive summary

• Achieved strong Q2 results, meeting or exceeding EBITDA guidance for the 10th consecutive quarter, with significant margin expansion and robust cash returns to shareholders.

• Advanced portfolio optimization with three strategic transactions, including the acquisition of Continental Disc Corporation, sale of Precision Sensors & Instrumentation, and a joint venture with Cactus, expected to generate $1 billion in net proceeds.

• Sustained commercial momentum in data centers and gas infrastructure, with major orders and expanding pipeline in digital infrastructure and new energy markets.

• Revenue was $6.9 billion, down 3% year-over-year but up 8% sequentially, driven by IET growth offsetting OFSE softness.

• Net income attributable was $711 million, with GAAP diluted EPS of $0.71 and adjusted diluted EPS of $0.63, both up year-over-year.

Financial highlights

• Adjusted EBITDA rose to $1.212 billion, up 7% year-over-year, with a 170 basis point margin improvement to 17.5%.

• Orders reached $7.0 billion, up 9% sequentially but down 7% year-over-year; free cash flow was $239 million, up 127% year-over-year.

• Returned $423 million to shareholders, including $196 million in share repurchases.

• Ended quarter with $3.1 billion in cash, net debt-to-EBITDA ratio of 0.6x, and $6.1 billion in liquidity.

• Quarterly dividend increased to $0.23 per share.

Outlook and guidance

• Full-year guidance reestablished: total company EBITDA expected at $4.675 billion midpoint; IET revenue midpoint raised to $12.9 billion and EBITDA to $2.35 billion.

• 2025 revenue guidance: $26.5B–$27.7B; adjusted EBITDA: $4.45B–$4.9B; FCF conversion: 45%–50%.

• OFSE full-year guidance: $14.2 billion revenue and $2.625 billion EBITDA, with margin improvement despite lower revenue.

• Tariff impact for 2025 estimated at $100M–$200M on EBITDA, with mitigation actions in place.

• Upstream spending expected to decline globally in 2025; data center and new energy orders expected to exceed three-year targets ahead of plan.