Baker Hughes delivered a strong second-quarter performance, driven by record orders in its Industrial & Energy Technology (IET) business, resilient oilfield operations and growing demand from power generation, LNG and data center markets.
The energy technology company reported $10.5 billion in total orders, up 49% from a year earlier, while remaining performance obligations (RPO) climbed to $40.1 billion, including a record $37.1 billion for IET. Revenue came in at $6.74 billion, while adjusted EBITDA rose to $1.23 billion. The company generated $1.35 billion in operating cash flow and $1.11 billion in free cash flow during the quarter.
Despite a challenging operating environment in the Middle East, Baker Hughes said disciplined execution helped it outperform expectations, prompting management to raise its full-year outlook for IET orders.
"Baker Hughes delivered another strong quarter, reflecting the breadth of our portfolio and continued momentum across data center, gas infrastructure, and upstream markets. Disciplined execution and our ability to effectively navigate ongoing Middle East challenges contributed to Adjusted EBITDA exceeding the high end of our guidance range.
"Looking ahead, favorable underlying fundamentals support our confidence in achieving the midpoint of our full-year guidance as we continue to manage through the Middle East uncertainty," said Lorenzo Simonelli, the chairman, president and chief executive officer (CEO) of Baker Hughes.
The company's Industrial & Energy Technology business emerged as the standout performer, securing $7.1 billion in orders, more than double the level recorded a year ago. Backlog increased 19% to a record high as demand strengthened across power generation and LNG infrastructure projects.
"IET delivered another exceptional quarter of orders, with record bookings doubling year-over-year to $7.1 billion and backlog increasing 19% to a new all-time high. The strength was driven by robust demand across Power Systems and LNG, with particularly strong momentum in power generation.
"Given broadening customer demand, a growing pipeline across industrial and energy infrastructure markets, and our decision to further expand capacity, we are raising our full-year IET order guidance and increasing our Horizon 2(1) IET orders outlook to more than $45 billion," the CEO said.
Oilfield Services & Equipment also exceeded expectations, with higher activity in the Middle East late in the quarter and solid contributions from North America and Latin America offsetting inflationary pressures and operational challenges.
"OFSE delivered an impressive quarter, with EBITDA exceeding the high end of our guidance range despite a complex operating environment. Increased activity and higher product shipments late in the quarter in the Middle East, along with solid performance in North America land and Latin America, drove the upside and demonstrated the resilience and durability of our portfolio despite higher inflationary costs," he added.
During the quarter, Baker Hughes continued to reshape its portfolio through strategic acquisitions and divestments. The company agreed to sell Waygate Technologies to Hexagon for approximately $1.45 billion in cash and completed its acquisition of Chart Industries, significantly expanding its capabilities in thermal management, gas handling, compression and lifecycle services.
"Our second-quarter performance further reinforces confidence in Baker Hughes’ strategic direction. Energy security and rising power demand are driving investment across both energy and industrial value chains, and our expanding portfolio is increasingly aligned with the most attractive growth opportunities across our core end markets," he added.
