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FY2025 Q4
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Baker Hughes Company earnings call
Buzzberg read
IET orders hit record $14.9B, 85% non-LNG for second year
Baker Hughes delivered a record 2025, driven by IET (orders up 10%, margins up 170bps), while OFSE saw 8% revenue decline but held margins flat. Management guided to continued earnings growth in 2026 led by IET's 20% margin target, and sees an inflection in the oilfield services cycle in 2027. The company is aggressively positioning for AI-driven power demand with NOVA LT turbines sold out through 2028. Record FY2025 adjusted EBITDA of $4.83B (up 10% YoY) and record IET orders of $14.9B (EPS $2.60), exceeding high-end guidance.
Buzzberg read IET orders hit record $14.9B, 85% non-LNG for second year Baker Hughes delivered a record 2025, driven by IET (orders up 10%, margins up 170bps), while OFSE saw 8% revenue decline but held margins flat. Management guided to continued earnings growth in 2026 led by IET's 20% margin target, and sees an inflection in the oilfield services cycle in 2027. The company is aggressively positioning for AI-driven power demand with NOVA LT turbines sold out through 2028. Record FY2025 adjusted EBITDA of $4.83B (up 10% YoY) and record IET orders of $14.9B (EPS $2.60), exceeding high-end guidance. Read full analysisCollapse analysis
Baker Hughes delivered a record 2025, driven by IET (orders up 10%, margins up 170bps), while OFSE saw 8% revenue decline but held margins flat. Management guided to continued earnings growth in 2026 led by IET's 20% margin target, and sees an inflection in the oilfield services cycle in 2027. The company is aggressively positioning for AI-driven power demand with NOVA LT turbines sold out through 2028. Record FY2025 adjusted EBITDA of $4.83B (up 10% YoY) and record IET orders of $14.9B (EPS $2.60), exceeding high-end guidance.
- 2026 guidance: total revenue of $27.25B, IET orders of $13.5-15.5B, and IET EBITDA margins expected to reach 20%.
- IET power systems orders reached $2.5B in 2025, with data center applications contributing $1B; NOVA LT capacity is fully booked through 2028.
- Raised 3-year data center order target to $3B (2025-27), more than doubling prior expectations, highlighting the AI-power demand surge.
Revenue$7.386BReported
EPS$0.78Reported
Gross margin23.73%Reported
Operating margin13.13%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
AI
Data center order target raised to $3 billion for 2025-2027
Supply
NOVA LT slots effectively full through 2028 after capacity doubling
Show 3 more callouts
Margins
2026 OFSE margins expected flat despite macro headwinds
Margins
IET to hit 20% margin in 2026, up 150 bps
Opportunity
Potential $0.5B Venezuela revenue opportunity if production ramps
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $7.386B | Reported |
| EPS | $0.78 | Reported |
| Gross margin | 23.73% | Reported |
| Operating margin | 13.13% | Reported |
| Free cash flow | $1.285B | Reported |
| Capex | $0.377B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Operating marginIET | FY2026 | 20% | 20% | Guided |
| RevenueIET | FY2026 | $13.5B | $13.5B | Guided |
| RevenueOFSE | FY2026 | $13.75B | $13.75B | Guided |
| Revenue | FY2026 | $27.25B | $27.25B | Guided |
| Revenue | FY2026 Q1 | $6.4B | $6.4B | Guided |
AI, capex & demand read
Management read
Upbeat
Management emphasized record results, strong order momentum, and raised expectations for power and data center growth, while acknowledging OFSE macro softness but framing it as temporary.
Management AI read
Management highlighted AI and data center buildout as a durable new layer of energy demand, driving a $3 billion data center-related order target for 2025-2027, with NOVA LT slots effectively full through 2028.
Investment and capacity
Management plans to double NOVA LT capacity by the first half of 2027, with slots fully committed through 2028; also executing incremental targeted cost-out initiatives with quick paybacks to support margin expansion.
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Companiesreturns since call
Customers
Customers
Lorenzo Simonelli
Baker Hughes booked orders for NextDecade's Rio Grande LNG Train 5, confirming continued expansion of that LNG project.
Evidence
“providing critical liquefaction technology for train five at next decade's Rio Grande LNG facility”
Customers
Lorenzo Simonelli
Baker Hughes was awarded a frame agreement for subsea systems on Eni's Coral North LNG project, securing a significant new scope of work.
Evidence
“multi-year frame agreement for subsea production systems and services for the Coral North LNG project offshore Mozambique”
Customers
Lorenzo Simonelli
Baker Hughes signed long-term service agreements with Cheniere for its Corpus Christi trains 8 and 9, securing a large recurring revenue stream.
Evidence
“long-term service agreements for Schneer's Corpus Christi Trains 8 and 9”
Partners
Partners
Lorenzo Simonelli
Baker Hughes' NOVA LT gas turbine capacity is effectively sold out through 2028 despite a planned doubling by early 2027, indicating severe supply tightness in behind-the-meter power generation. — The turbine supply bottleneck is shifting to electrical and grid balance equipment, which supports pricing power for Baker Hughes and highlights the criticality of the Chart acquisition to add thermal management capacity.
Evidence
“the pending acquisition of chart will add differentiated thermal management capabilities”
Partners
Ahmed
The deal to form a JV with Cactus closed on Jan 1, generating cash proceeds and deconsolidating Baker Hughes' surface pressure control business.
Evidence
“the formation of the surface pressure control joint venture with Cactus”
Supply chain
Supply chain
Ahmed
The 2026 OFSE margin outlook being flat (excluding SPC deconsolidation) implies Baker Hughes believes current cost-cutting can fully offset tariff cost increases and mix headwinds, a sign of aggressive structural cost reduction in a downcycle. — If Baker Hughes can hold margins flat on flat revenue in oilfield services, it will outperform its peers, who are likely still grappling with pricing pressure in a declining market.
Evidence
“For 26, the modest year of year decline with, you know, organic margins expected to be flat”
External signals
Supply-chain alpha · 3returns since call
Baker Hughes' NOVA LT gas turbine capacity is effectively sold out through 2028 despite a planned doubling by early 2027, indicating severe supply tightness in behind-the-meter power generation.
Evidence
“NOVA capacity is fully committed through 2028, but we are prepared to respond quickly if market conditions and customer demand warranted.”
Baker Hughes raised its 3-year data center order outlook from under $1 billion to $3 billion for 2025-2027, with $1 billion already booked in 2025, indicating a much faster ramp in AI-driven power demand than previously expected.
The 2026 OFSE margin outlook being flat (excluding SPC deconsolidation) implies Baker Hughes believes current cost-cutting can fully offset tariff cost increases and mix headwinds, a sign of aggressive structural cost reduction in a downcycle.
Methodology & coverage
Management-only analysis. All 7 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.