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Call sheet · Q1'26

Baker Hughes (BKR)

Q1'26 earnings call · held April 24, 2026 · compared with the Q4'25 call · management-credibility review
10/12
Disclosure score
4 medium, 2 low flags
Financial quality
Bottom line
The sleeper story is energy security fundamentally reshaping BKR's addressable market - Lorenzo explicitly raised the Horizon 2 target beyond $40B because customers now want 'greater redundancy, more diversified infrastructure,' not just cheap energy. This creates stickier, higher-margin revenue streams. However, Chart integration is showing stress - closing pushed back again with hedging language after 15+ months of regulatory review. The binding constraint is NovaLT capacity (sold out through 2028) in their fastest-growing segment, while they're losing normal seasonality in Gas Tech Services. Lorenzo's money quote: 'It's not just about adding supply. It's about building a more resilient energy system that supports industrial outcomes.' My view changes if Chart closing gets pushed to Q3 or if Q2 results show the Middle East disruption was worse than the 20% decline they're guiding.

The 30-second version

  • Middle East conflict reveals structural shift: Energy security driving $40B+ IET orders
  • Q1 beats mask Q2 guidance that screams uncertainty
  • Chart integration already showing stress fractures

What changed this quarter

MetricQ4'25Q1'26Change
Total Revenue$7.39B (Q4)$6.59B (Q1)-11% sequential, seasonal decline
Adjusted EPS$0.78 (Q4)$0.58 (Q1)+13% YoY despite Middle East disruption
Adjusted EBITDA$1.34B (Q4)$1.16B (Q1)+12% YoY, exceeded guidance range
Company EBITDA Margin18.1% (Q4)17.6% (Q1)+140 bps YoY expansion
IET Orders$4.0B (Q4)$4.9B (Q1)Record level, 3rd consecutive quarter >$4B
IET Revenue$3.81B (Q4)$3.35B (Q1)+14% YoY at high end guidance
IET EBITDA Margin20.0% (Q4)20.2% (Q1)+310 bps YoY, sustained >20%
OFSE Revenue$3.57B (Q4)$3.24B (Q1)-9% sequential, above guidance midpoint
OFSE EBITDA Margin18.5% (Q4)17.4% (Q1)-70 bps sequential decline
Free Cash Flow$1.34B (Q4)$210M (Q1)Seasonal weakness plus payment delays

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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