Baker Hughes Q2 2025: Unpacking Key Contradictions in Margins, Revenue, and Order Outlook

IET margin expansion and tariff impacts, OFSE revenue expectations, IET order performance and LNG impact, OFS margin progression and market conditions, IET order outlook and market demand are the key contradictions discussed in Baker Hughes' latest 2025Q2 earnings call.



Financial Performance and Margin Improvement:
- Baker Hughes Company reported adjusted EBITDA of $1.21 billion in Q2, reflecting a 170 basis point year-over-year improvement in margins.
- The margin improvement was driven by structural cost actions, operational execution, and the implementation of a business system that enhances efficiency and strategy execution.

Energy and Industrial Technology (IET) Segment Growth:
- IET secured $3.5 billion in orders during Q2, with a record RPO of $31.3 billion, up 18% year-over-year.
- Growth was driven by strong demand in data center solutions, no material LNG equipment orders, and increased activity in gas technology services and upgrades.

Distributed Power Solutions and Data Center Development:
- Baker Hughes booked over $550 million in power generation equipment orders for data centers in Q2, with a year-to-date total of $650 million.
- This growth is attributed to the increasing demand for lower carbon power solutions in support of digital infrastructure, particularly in data centers.

Portfolio Optimization and Strategic Transactions:
- The company announced strategic transactions in Q2, including divestitures and acquisitions, anticipating approximately $1 billion in net proceeds upon closure.
- These actions are part of Baker Hughes' ongoing effort to strengthen earnings durability and cash flow, focused on higher-margin, recurring revenue opportunities.