Baker Hughes delivered a solid QQ1 2026, underscoring the durability of its diversified energy portfolio and the momentum in the IET segment. Adjusted EBITDA reached $1.16 billion (up 12% YoY), with an expanded EBITDA margin of 17.6% (+140 bp YoY), driven by strong IET pricing, backlog realization, and productivity gains, offset by Middle East disruptions impacting OFSE. IET booked a record $4.9 billion in orders for the quarter and posted a book-to-bill of 1.5x, lifting the rolling 4-quarter orders to $16.6 billion and leaving RPO at a trailing record $33.1 billion. Total company revenue was $6.587 billion, with net income of $930 million and GAAP diluted EPS of $0.93; adjusted EPS was $0.58, up 13% YoY. Free cash flow was $210 million, though the first quarter is seasonally weak for cash flow and was modestly pressured by delayed customer payments.
Strategically, Baker Hughes continued portfolio optimization and integration progress. The company announced and expect to close the Chart acquisition in Q2 2026, and highlighted substantial synergy potential (targeting $325 million in cost synergies). Proceeds from the company’s divestiture program (Waygate Technologies sale to Hexagon, PSI sale to Crane, SPC joint venture with Cactus) are expected to generate roughly $3 billion in gross proceeds in 2026, supporting balance-sheet strength and deleveraging toward the 1–1.5x net debt-to-adjusted-EBITDA target within 24 months post-Chart close. The macro backdrop remains challenged by the Middle East conflict, with global LNG volatility and oil-supply dynamics implying higher risk premiums and the potential for continued volatility, albeit with long-term structural upgrades in energy security and grid modernization that align with Baker Hughes’ differentiated, end-to-end capabilities.
Looking ahead, revenue and EBITDA guidance remain intact for 2026, with IET expected to achieve at least the midpoint of a $14.5 billion order guidance and EBITDA near the $2.7 billion midpoint. Horizon 2 IET orders are targeted to exceed $40 billion, supported by continued demand across energy infrastructure (Power, LNG, gas infrastructure) and stronger downstream digital monetization through Cordant and other platforms. Investors should monitor macro risk from the Middle East, LNG maintenance timing in GTS, FX movements, and the pace of backlog conversions, as well as the realization of Chart-related synergies and portfolio actions.