Baker Hughes In Q2: TAKE THREE

Baker Hughes (BKR) executed three key strategic transactions in Q2 2025, including the formation of an OFSE JV, a $1.15 billion divestment, and an acquisition to bolster its IET portfolio. Total orders rose 9% sequentially to $7.0 billion. While OFSE posted modest gains in Q2, its management expects its growth to slow or reverse, while it raised guidance for the IET segment. Cash flow from operations improved and share buybacks continued in Q2.

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Q2 Strategic Changes: BKR's orders increased by 9% to $7.0 billion in Q2 compared to Q1 2025, while its total book-to-bill ratio was unchanged at 1.0x in Q2. During Q2, it embarked on three strategic transactions. These included forming a JV by contributing the OFSE segment, selling the Precision Sensors & Instrumentation product line for $1.15 billion, and acquiring Continental Disc Corporation to strengthen the IET Industrial Products portfolio.

Among the key agreements in Q2 was supporting the critical data center projects announced earlier and following up with the signing of an MoU with DataVolt in Saudi Arabia. In Q2, it received an award for four gas turbines to support Aramco’s Master Gas System III pipeline project. It received several aftermarket services contracts for Gas Technology Services in Q2. In New Energy, its bookings swelled to $1.25 billion year-to-date. In OFSE, too, its order book improved with awards in Angola, Kazakhstan, and Norway. In North America, OFSE secured a multi-year contract to provide drag-reducing chemicals.

Revenue and EBITDA increased in Q2 : In the IET segment, revenues increased by 12% quarter-over-quarter, driven primarily by higher revenues from Gas Technology Services and Climate Technology Solutions. EBITDA went up by 17% in Q2, reflecting structural cost improvements and higher productivity. Revenues in the Oilfield Services & Equipment segment improved less sharply in Q2 (3% up).

The company's management expects the IET segment to continue to grow, while the OFSE segment's growth may pause or decline. As a result, it revised its revenue and EBITDA guidance upward for the IET segment.

Cash Flows Improved : BKR's cash flow from operations increased by 8% in the first half of 2025 compared to the same period last year. Its FCF also increased by 22% during this period. Debt-to-equity (0.35x) decreased marginally compared to December 31, 2024. During Q2, it repurchased shares worth $196 million. You may read more about the company in our previous article here .

Thanks for reading the BKR Take Three, designed to give you three critical takeaways from BKR's earnings report. Soon, we will present a second update on BKR earnings, highlighting its current strategy, news, and notes we extracted from our deeper dive.

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