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Call sheet · Q2'26

Baker Hughes (BKR)

Q2'26 earnings call · held July 27, 2026 · compared with the Q1'26 call · management-credibility review
7/12
Disclosure score
1 high, 3 medium, 3 low flags
Financial quality
Bottom line
The market will cheer the $1.1 bn free cash flow and record orders, but the real story is the collapsing order‑to‑revenue conversion - IET bookings are up 45% while revenue is flat, threatening cash generation beyond 2027. Management’s upbeat headline of “adjusted EBITDA beat guidance” masks a margin gain that is largely one‑off and a net‑debt ratio that is artificially low due to the Chart cash infusion. The binding constraint now is **Nova LT capacity and the ability to convert the $37 bn RPO into cash**, which hinges on a still‑uncertain Middle‑East environment and the timing of new turbine build‑outs. If the Nova LT build‑out stalls or backlog burn slows, earnings and cash flow will erode sharply.

The 30-second version

  • Sleeper: Order‐to‑cash conversion is collapsing - orders doubled but revenue barely budged
  • Headline: Adjusted EBITDA beat guidance but the win is thin‑skinned
  • Red flag: The metrics they love are disappearing

What changed this quarter

MetricQ1'26Q2'26Change
Adjusted EBITDA$1.16 bn (+12% YoY)$1.23 bn (+2% YoY)+70 bps margin, +$70 m
Adjusted EPS$0.58$0.64+$0.06 (+10%)
GAAP EPS$0.93$0.68-$0.25 (-27%)
Total Revenue (approx.)$6.59 bn$6.75 bn+$0.16 bn (+2.4%)
IET Revenue$3.35 bn$3.30 bn-$0.05 bn (-1.5%)
IET EBITDA margin20.2%20.6%+40 bps
OFSC Revenue$3.24 bn$3.45 bn+$0.21 bn (+6.5%)
OFSC EBITDA margin17.4%17.5%+10 bps
Free Cash Flow$210 m$1,100 m+$890 m (+424%)
Net Debt / Adj EBITDA0.3×0.1×-0.2×

Accountability tracked

5 new promises made5 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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