Baker Hughes Company (BKR:NASDAQ) stock is currently at $55.42, up 2.78% (+$1.50), with a market cap of approximately $54.7 billion
Quarterly Results
Baker Hughes reported fourth-quarter 2025 revenue of $7.4 billion, reflecting flat performance year-over-year but a 5% increase sequentially. GAAP net income was $876 million, a 26% decrease from the $1,179 million reported in the fourth quarter of 2024. GAAP diluted earnings per share (EPS) stood at $0.88, compared to $1.18 in the prior year.
Adjusted diluted EPS was $0.78, representing a 12% year-over-year increase. Adjusted EBITDA reached $1,337 million. Total orders for the fourth quarter were $7.9 billion, a 5% year-over-year increase. Cash flows from operating activities were $1.7 billion, while free cash flow reached $1.3 billion.
Annual Performance Context
For the full year 2025, Baker Hughes recorded total revenue of $27.7 billion, remaining flat compared to 2024. Full-year orders reached $29.6 billion, driven by record IET orders of $14.9 billion. Attributable net income for the year was $2,588 million.
Adjusted EBITDA for 2025 was $4,825 million, a 5% increase year-over-year. The company generated $3.8 billion in cash flow from operating activities and record annual free cash flow of $2.7 billion, supported by the company’s working capital efficiency. Remaining performance obligations reached $35.9 billion.
Business and Operations Update
The IET segment reported a 7% year-over-year increase in orders during the fourth quarter. Key contract awards included supplying liquefaction equipment for the Rio Grande LNG facility and LM9000 gas turbines for Commonwealth LNG. IET also secured contracts for over 40 generators to support 7 GW of power for utility-scale plants.
The OFSE segment saw fourth-quarter revenue decline 8% year-over-year to $3.6 billion. However, OFSE secured nearly $1 billion in Production Solutions contracts in the Middle East, including artificial lift systems for Kuwait Oil Company and electrical submersible pumps for Petroleum Development Oman. International revenue for OFSE was $2.6 billion, while North American revenue was $943 million.
Forward Outlook
For 2026, Baker Hughes projects organic Adjusted EBITDA growth in the mid-single digits. The company expects organic IET orders to remain at levels similar to 2025, supported by gas infrastructure awards and demand for power systems. The IET segment aims to expand margins toward its 20% target, while OFSE performance is expected to remain relatively flat.
Management noted that recent portfolio actions are positioning the company for its “Horizon Two” phase from 2026 to 2028, focusing on a production-oriented business mix to reduce cyclicality and enhance cash flow durability.
Performance Summary
The 2025 results were characterized by record orders and free cash flow despite macro-driven softness in the OFSE segment. The book-to-bill ratio for the fourth quarter was 1.1x, and the IET backlog reached $32.4 billion. Capital expenditures totaled $1.1 billion.
Baker Hughes ended the period with $3.7 billion in cash and cash equivalents. In Sub-Saharan Africa, the company secured a frame agreement with Eni for the Coral North LNG project. Digital awards for the fourth quarter and 2025 included supporting Asset Performance for China National Petroleum Corporation Kunlun Digital