Baker Hughes

1) Strong Financial Performance
- Adjusted EBITDA for Q2 2026 reached $1.23 billion, exceeding guidance, driven by strong operational performance and a record 18.3% EBITDA margin, up 70 basis points YoY.
- Adjusted earnings per share were $0.64, a 2% increase YoY, despite impacts from divestitures.
- Free cash flow generated was $1.1 billion, supported by robust customer collections and improved working capital.
- Total company bookings were $10.5 billion, with IET orders doubling YoY to a record $7.1 billion, resulting in a 2.2x book-to-bill ratio.

2) Strategic Acquisitions and Growth Opportunities
- The acquisition of Chart Industries was completed, enhancing Baker Hughes' capabilities in thermal management, air and gas handling, and carbon capture.
- The integration of Chart is expected to deliver $325 million in annualized cost synergies by year three, with significant opportunities in data centers and gas infrastructure.
- The company anticipates $5 billion in annual revenue opportunity from expanded gas turbine and generator capacity by 2029, with a focus on disciplined capital deployment.

3) Market Dynamics and Segment Performance
- The IET segment saw strong demand across power systems, LNG, and gas processing, with orders reflecting broad-based growth.
- Power Systems orders totaled $2.6 billion, driven by demand for gas turbines and generator solutions, particularly in data centers.
- The OFSC segment reported revenue of $3.45 billion, a 7% sequential increase, despite ongoing disruptions in the Middle East, showcasing resilience and strong performance in other regions.

4) Challenges and Headwinds
- Geopolitical tensions in the Middle East have created uncertainty, impacting local supply chains and project timing, which could affect future performance.
- Inflationary pressures and logistical costs have been noted, particularly in the OFSC segment, which may impact margins moving forward.
- Global growth expectations have moderated, with the World Bank projecting a 2.5% growth rate for 2026, influencing market conditions.

5) Guidance and Outlook
- For Q3 2026, Baker Hughes expects revenue of $6.87 billion and adjusted EBITDA of $1.205 billion.
- Full-year revenue guidance has been raised to $27.35 billion, with adjusted EBITDA expected to exceed $4.85 billion.
- The company remains committed to managing short-term disruptions effectively while capitalizing on strong order momentum and expanding its backlog visibility.

Bottom line: Baker Hughes delivered a strong Q2 2026 performance with record orders and robust financial metrics, positioning itself well for future growth despite geopolitical challenges. The integration of Chart Industries is expected to enhance capabilities and drive long-term value, making Baker Hughes an attractive investment for shareholders.