How did Baker Hughes perform in the fourth quarter of 2025?

Revenue was $7.4 billion, flat year-over-year and up 5% sequentially. Orders were $7.9 billion. GAAP net income attributable to Baker Hughes was $876 million, down 26% year-over-year, largely due to a higher year-ago base and Q4 restructuring and other charges. Adjusted EBITDA was $1.34 billion, up 2% year-over-year, and free cash flow was $1.34 billion.

What is driving growth in the IET segment?

IET growth is driven by strong demand for LNG liquefaction equipment, gas turbines and compressors, power systems for data centers and utilities, and long-term aftermarket service agreements. The segment's record $32.4 billion RPO and roughly 85% non-LNG equipment orders indicate diversified demand, supporting visibility into future revenue.

Why is OFSE underperforming, and what is expected for 2026?

OFSE revenue declined 8% year-over-year in Q4, mainly from lower volumes in Subsea & Surface Pressure Systems and Middle East/Asia, reflecting macro-driven softness. Management said margins remained resilient through cost actions and guided to a roughly flat OFSE segment in 2026.

How much of the GAAP earnings in Q4 2025 came from one-time items?

Q4 GAAP net income of $876 million included a $309 million net release of deferred tax valuation allowances and $148 million of tax benefits tied to planned dispositions. It also absorbed a $215 million restructuring charge, $74 million of equity securities fair-value losses, and $49 million of transaction costs. Adjusted net income excluded these items and was $772 million.

What is the outlook for free cash flow and capital returns?

Full-year 2025 free cash flow was $2.7 billion, with operating cash flow of $3.8 billion and capital expenditures of $1.1 billion. The filing does not provide explicit 2026 free cash flow guidance. Dividends paid totaled $910 million in 2025, and the company repurchased $384 million of stock, with a quarterly dividend of $0.23 per share.

BKR 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed January 26, 2026. Cited figures are marked; the original filing is the authoritative source.

Baker Hughes (BKR) reported fourth-quarter and full-year 2025 results on January 25, 2026, with a mixed but generally solid picture.

Q4 orders were $7.9 billion^a (down 4% sequentially, up 5% year-over-year), including $4.0 billion from Industrial & Energy Technology (IET). Revenue was $7.4 billion, up 5% sequentially but flat year-over-year. GAAP diluted EPS was $0.88 and adjusted diluted EPS was $0.78, up 12% year-over-year on an adjusted basis.

Adjusted EBITDA was $1.34 billion^b, up 2% year-over-year, and free cash flow reached $1.34 billion, up 50% year-over-year. Full-year free cash flow was a record $2.7 billion, aided by working capital efficiency and customer down payments. The IET segment was the main driver.

Full-year IET orders hit a record $14.9 billion^c, and IET remaining performance obligations (RPO) reached a record $32.4 billion at year-end. Q4 IET revenue grew 9% year-over-year, and segment EBITDA margin expanded to 20.0%. In contrast, Oilfield Services & Equipment (OFSE) continued to soften, with Q4 revenue down 8% year-over-year and segment EBITDA down 14%, though management noted margins were resilient due to cost actions.

Looking ahead, management guided to similar levels of organic IET orders in 2026, mid-single-digit organic Adjusted EBITDA growth, IET margins expanding to its 20% target, and a roughly flat OFSE. Management framed 2026-2028 ("Horizon Two") as a period in which portfolio actions shift the company toward a more production-oriented, less cyclical mix. Investors should note that GAAP results in Q4 were affected by a $309 million^d valuation allowance release and a $215 million restructuring charge, and that the filing contains forward-looking statements subject to the risks described in the Form 10-K.

02—Key points

Key Highlights

Record full-year IET orders of $14.9 billion, exceeding the high end of guidance, and a record IET RPO of $32.4 billion, with book-to-bill above 1.0x.
Q4 2025 orders of $7.9 billion and total book-to-bill of 1.1x; record total RPO of $35.9 billion.
Record full-year free cash flow of $2.7 billion (up from $2.3 billion in 2024), though partly boosted by working capital and customer down payments.
Q4 GAAP diluted EPS of $0.88 versus adjusted diluted EPS of $0.78; full-year adjusted diluted EPS of $2.60, up from $2.35 in 2024.
IET Q4 revenue up 9% year-over-year with segment EBITDA margin of 20.0%, up 1.6 points year-over-year.
OFSE Q4 revenue down 8% year-over-year and segment EBITDA down 14%, reflecting macro-driven softness, particularly in Subsea & Surface Pressure Systems and Middle East/Asia.
2026 guidance: similar organic IET orders, mid-single-digit organic Adjusted EBITDA growth, IET margins reaching 20%, and roughly flat OFSE.

03—Questions

Frequently Asked Questions

How did Baker Hughes perform in the fourth quarter of 2025?
Revenue was $7.4 billion, flat year-over-year and up 5% sequentially. Orders were $7.9 billion. GAAP net income attributable to Baker Hughes was $876 million, down 26% year-over-year, largely due to a higher year-ago base and Q4 restructuring and other charges. Adjusted EBITDA was $1.34 billion, up 2% year-over-year, and free cash flow was $1.34 billion.
What is driving growth in the IET segment?
IET growth is driven by strong demand for LNG liquefaction equipment, gas turbines and compressors, power systems for data centers and utilities, and long-term aftermarket service agreements. The segment's record $32.4 billion RPO and roughly 85% non-LNG equipment orders indicate diversified demand, supporting visibility into future revenue.
Why is OFSE underperforming, and what is expected for 2026?
OFSE revenue declined 8% year-over-year in Q4, mainly from lower volumes in Subsea & Surface Pressure Systems and Middle East/Asia, reflecting macro-driven softness. Management said margins remained resilient through cost actions and guided to a roughly flat OFSE segment in 2026.
How much of the GAAP earnings in Q4 2025 came from one-time items?
Q4 GAAP net income of $876 million included a $309 million net release of deferred tax valuation allowances and $148 million of tax benefits tied to planned dispositions. It also absorbed a $215 million restructuring charge, $74 million of equity securities fair-value losses, and $49 million of transaction costs. Adjusted net income excluded these items and was $772 million.
What is the outlook for free cash flow and capital returns?
Full-year 2025 free cash flow was $2.7 billion, with operating cash flow of $3.8 billion and capital expenditures of $1.1 billion. The filing does not provide explicit 2026 free cash flow guidance. Dividends paid totaled $910 million in 2025, and the company repurchased $384 million of stock, with a quarterly dividend of $0.23 per share.

04—Continue

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