Baker Hughes — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue was $8.0 billion, a 19% increase sequentially and 14% increase year-over-year.
• Attributable net income was $411 million, a 40% decrease sequentially and 33% decrease year-over-year.
• GAAP diluted EPS was $0.41, down 40% sequentially and 33% year-over-year.
• Adjusted net income was $695 million, an 8% increase sequentially and 2% increase year-over-year.
• Adjusted diluted EPS was $0.70, an 8% increase sequentially and 2% increase year-over-year.
• Adjusted EBITDA was $1,415 million, a 15% increase sequentially and 14% increase year-over-year.
• Cash flow from operating activities was $1,005 million, an 8% increase year-over-year but a 25% decrease sequentially.
• Free cash flow was $769 million, a 10% increase year-over-year but a 31% decrease sequentially.
• Depreciation and amortization was $505 million.
• Income tax expense was $97 million.
• Other (income) expense, net was $157 million, primarily driven by transaction-related costs.
• Capital expenditures were $236 million.
• Remaining Performance Obligations (RPO) ended at $46.4 billion, up $6.4 billion sequentially.
• IET RPO was $39.4 billion; OFSE RPO was $3.4 billion; Chart RPO was $3.6 billion.
• Total book-to-bill ratio was 1.3; IET book-to-bill ratio was 1.7.

Guidance and Future Outlook:

• Raised full-year IET order guidance.
• Raised Horizon 2 (2026-2028) IET order outlook to $50 billion plus.
• Management cited record RPO, robust order pipeline, growing installed base, and inflecting energy upstream market as drivers for durable growth.
• Outlook supported by broad-based demand across data centers, space, LNG, and gas infrastructure.

Business Segments and Product Lines:

• Industrial & Energy Technology (IET):
  • Orders were $5.9 billion, including $5.9 billion of IET orders (total segment orders $5.886 billion).
  • Revenue was $3.477 billion, up 3% year-over-year.
  • Segment EBITDA was $685 million, up 8% year-over-year.
  • Key orders included a 1.1 GW power generation order for a U.S. technology company (43 NovaLT™ and Frame 5 packages), a Cloud Connector Pipeline order for Venture Global (13 Frame 5/2E systems), and a 500 MW power generation order for a U.S. energy company.
  • Secured a long-term service agreement with SBM Offshore for 27 LM2500 gas turbines.
  • Secured an integrated FPSO equipment order and key Cordant™ wins in data center, LNG, and industrial markets.
  • Climate Technology Solutions orders were significant, contributing to the 42% year-over-year order growth.
• Oilfield Services & Equipment (OFSE):
  • Orders were $4.047 billion, up 19% sequentially and down 1% year-over-year.
  • Revenue was $3.660 billion, up 6% sequentially and 1% year-over-year.
  • Segment EBITDA was $659 million, up 9% sequentially.
  • Subsea and Surface Pressure Systems orders were $1.090 billion, up 63% sequentially.
  • Key awards included contracts with OGDC (Pakistan), Searah North Ganal Limited (Indonesia), bp (UK North Sea), Eni (Cyprus and Côte d'Ivoire), Kuwait Oil Company (KOC), and awards in Türkiye.
  • Revenue growth driven by higher activity in Europe/CIS/Sub-Saharan Africa and Latin America, partially offset by a decrease in Middle East/Asia due to the Surface Pressure Control disposition.
• Chart:
  • Orders were $831 million ($587 million Original Equipment, $244 million Aftermarket).
  • Revenue was $888 million ($623 million Original Equipment, $265 million Aftermarket).
  • Segment EBITDA was $156 million with a 17.6% margin.
  • Results reflect activity from the acquisition date of July 16, 2026.
  • Key orders included launch-pad equipment for commercial space customers, cryogenic cold boxes for Golar LNG, and air coolers for Bechtel.

Market and Competitive Landscape:

• Demand drivers include energy security, rising demand for AI, and emerging opportunities in growth markets.
• IET saw strong demand for power generation, compression, digital, and lifecycle service capabilities.
• OFSE saw momentum in international markets, led by the Middle East, with customers prioritizing maximizing recovery and extending asset life.
• Chart integration is progressing at a strong pace with early synergy actions reinforcing value creation confidence.
• Baker Hughes is positioned across attractive energy and industrial markets with a growing installed base.

Risks and Challenges:

• Risks include economic and political conditions, inflation, interest rates, tariffs, and changes in global trade policy.
• Risks related to orders and RPO execution, conversion to revenue, and cash flow.
• Oil and gas market conditions, including price volatility, drilling activity, and OPEC policy.
• Geopolitical risks, including war, terrorism, labor disruptions, and cybersecurity incidents.
• Sequential net income decline was driven by reduced productivity benefits, inflation, and change in business mix.
• Year-over-year net income decline was driven by reduced productivity benefits, change in business mix, and inflation.

Management Commentary and Tone:

• Management described the quarter as "strong," reflecting "disciplined operational execution and broad-based commercial momentum."
• Simonelli noted the "strength of our expanded portfolio" and the "growing value of our complementary capabilities."
• Management expressed confidence in "durable growth, stronger earnings power and long-term value for shareholders."
• Integration of Chart is described as progressing at a "strong pace."
• Management highlighted the "inflecting energy upstream market" and "record RPO" as key indicators of future success.

Other Key Points:

• Completed the all-cash acquisition of Chart Industries, Inc. on July 16, 2026.
• The acquisition added complementary capabilities, increased the installed base, and expanded recurring aftermarket opportunities.
• Transaction-related costs were $158 million in the quarter.
• Amortization of Chart intangible assets was $143 million.
• Inventory step-up charges were $25 million.
• Restructuring costs were $28 million.
• Cash dividend per Class A common stock was $0.23.
• Outstanding Class A common stock was 993 million shares as of September 30, 2026.
• Total assets were $59.063 billion, with goodwill increasing to $13.897 billion and other intangible assets to $9.773 billion due to the Chart acquisition.
• Long-term debt increased to $17.476 billion from $5.398 billion at the end of 2025.
• Proceeds from issuance of long-term debt were $2.0 billion in the quarter.
• Net cash paid for acquisitions was $14.15 billion in the quarter.