Baker Hughes Delivers $7.9B Q4 Orders, Record $2.7B Free Cash Flow
Baker Hughes reported fourth-quarter orders of $7.9 billion and record RPO of $35.9 billion, including a $32.4 billion IET backlog. Full-year free cash flow reached a record $2.7 billion, adjusted EBITDA rose 5% to $4.8 billion and adjusted EPS held at $2.60, with management forecasting mid-single-digit organic EBITDA growth in 2026.
1. Fourth-Quarter Adjusted Profit Climbs 11%
Baker Hughes reported an adjusted net income of $772 million for Q4 2025, up 11% year-over-year, driven by robust bookings in its Industrial & Energy Technology (IET) division that offset a softening in Oilfield Services & Equipment (OFSE). Adjusted diluted EPS rose 12% to $0.78, while GAAP diluted EPS stood at $0.88. Revenue for the quarter was $7.4 billion, essentially flat year-over-year, with IET growth balanced by lower OFSE volumes. Adjusted EBITDA increased 2% to $1.337 billion, reflecting disciplined cost management in OFSE and higher-margin IET deliveries. Operating cash flow reached $1.662 billion, supporting free cash flow of $1.341 billion, up 50% from the prior year period.
2. Record Backlog and Orders Fuel Full-Year Momentum
For the full year 2025, Baker Hughes achieved a record RPO (Remaining Performance Obligations) of $35.9 billion, including a landmark $32.4 billion backlog in IET, and total orders of $29.6 billion, with IET orders of $14.9 billion — the highest on record and exceeding the top end of guidance. Annual revenue held steady at $27.7 billion. Attributable net income was $2.588 billion, translating to GAAP and adjusted diluted EPS of $2.60. Full-year adjusted EBITDA rose 5% to $4.825 billion. The company generated $3.810 billion in operating cash flow and $2.732 billion in free cash flow, underpinned by working capital efficiency and customer prepayments.
3. IET Strength and OFSE Resilience Drive Outlook
IET bookings of $4.0 billion in Q4 lifted the division’s book-to-bill ratio above 1.0, with non-LNG equipment orders comprising 85% of the total, illustrating end-market diversification. Key awards included liquefaction trains for NextDecade’s Rio Grande LNG and Commonwealth LNG, 7 GW of utility-scale BRUSH™ generators, and gas separation compression for Kazakhstan’s Tengiz complex. OFSE secured nearly $1 billion in Middle East production solutions contracts, including multi-year artificial lift systems for Kuwait Oil Company and ExxonMobil Guyana completions technology. Management forecasts mid-single-digit organic adjusted EBITDA growth in 2026, with IET margins expanding toward a 20% target and OFSE margins remaining stable, reinforcing cash flow durability and reduced business cyclicality.