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Call sheet · Q4'25

Baker Hughes (BKR)

Q4'25 earnings call · held January 26, 2026 · compared with the Q3'25 call · management-credibility review
11/12
Disclosure score
1 medium, 6 low flags
Financial quality
Bottom line
The sleeper story is BKR becoming the Dell of AI infrastructure - while everyone chases the chip shortage, BKR is solving the power bottleneck with NovaLT capacity sold through 2028. The obvious headline is beating numbers again, but the real story is structural margin expansion hitting 18.1% despite macro collapse. The binding constraint is manufacturing capacity, not demand - they can't build NovaLTs fast enough for data center demand. Lorenzo's most telling quote: 'Resilient power supply has emerged as a key bottleneck, which creates a significant opportunity for Baker Hughes.' Chart isn't just industrial diversification, it's thermal management for trigeneration solutions nobody else can deliver. My view changes if Chart integration stumbles or they guide 2026 power orders below $3B.

The 30-second version

  • Power systems becomes $3B data center franchise overnight - nobody's pricing in the acceleration
  • IET hits 20% margins while OFSE holds 18% despite macro collapse - margin quality is real
  • Chart integration planning reveals $325M cost synergies are conservative - commercial upside not modeled

What changed this quarter

MetricQ3'25Q4'25Change
Total Revenue$7.01B (Q3)$7.42B (Q4)+6% sequential acceleration
Adjusted EBITDA$1.24B (Q3)$1.34B (Q4)+8% sequential vs flat YoY
Adjusted EBITDA Margin17.7% (Q3)18.1% (Q4)+40bps sequential, +30bps YoY to record
Adjusted EPS$0.68 (Q3)$0.78 (Q4)+15% sequential, +12% YoY
Free Cash Flow$699M (Q3)$1.34B (Q4)+92% sequential blowout
IET Revenue$3.4B (Q3)$3.81B (Q4)+12% sequential beat vs guidance high end
IET EBITDA Margin18.8% (Q3)20% (Q4)+120bps sequential, hit 2026 target early
OFSE Revenue$3.6B (Q3)$3.57B (Q4)-1% sequential, seasonal decline
OFSE EBITDA Margin18.5% (Q3)18.1% (Q4)-40bps sequential but resilient
IET Backlog$32.1B (Q3)$32.4B (Q4)+1% sequential to new record

Accountability tracked

10 new promises made5 narrative shifts flagged7 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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