Baker Hughes Co
For the period ended Dec 31, 2025. Filed Feb 5, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 5, 2026
BKR$47.87+3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-04.
0001701605-25-000035
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-05.
0001701605-26-000007
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 165 previous paragraphs and 152 current paragraphs.
61 unchanged; 58 reworded; 29 added; 45 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
During 2025, we saw a decline in global upstream capital spending as a result of ongoing geopolitical tensions, uncertainty around international trade policy, and operator concerns about the accelerated return of idled supply from the Organization of the Petroleum Exporting Countries and its allies ("OPEC+").
Current report
As we look to 2026, during which we anticipate modestly stronger year-over-year GDP growth, oil prices are likely to reflect evolving market conditions, as markets assess geopolitical uncertainty and its potential impact on supply against rising OPEC+ and offshore production. Taking these macro factors into consideration, we forecast modest declines in global upstream spending. We believe further reduction in idled OPEC+ production, alongside more constructive oil supply-and-demand balances, is required before a broad inflection in oilfield services activity emerges. Longer term, the outlook remains constructive, particularly internationally and offshore, where significant investment will be required to sustain production growth and meet rising global oil demand. We also see continued growth in OpEx-driven upstream investment, as operators focus on enhancing recovery rates and extending the life of existing assets.
Current report
Following approximately 7% growth in LNG demand in 2025, we remain optimistic on the global natural gas outlook, supported by increasing demand for LNG and a continued shift towards natural gas developments. We believe the positive fundamentals are less affected by macro uncertainty but are driven by continued long-term energy demand growth, which is being driven by population growth, higher living standards, and accelerating electrification, with AI and data center expansion adding a new structural layer of power demand. Increasingly, natural gas is the source of this power due to its reliable, scalable, and dispatchable nature, coupled with its ability to lower emissions throughout the energy ecosystem.
Current report
In 2025, the Company generated revenues of $27.7 billion, a decrease of $0.1 billion compared to 2024. IET revenue increased $1.2 billion, or 10%, driven by strong growth in Gas Technology Equipment ("GTE") and Gas Technology Services ("GTS"). OFSE revenue decreased $1.3 billion, or 8%, driven by a decline in revenue in all regions. Net income was $2.6 billion, a decrease of $0.4 billion, or 13%, compared to 2024, with a decline in the mark-to-market adjustment for certain equity securities, change in mix, transaction related costs and lower volume, partially offset by cost out initiatives, net productivity and price.
Current report
As a part of our anticipated acquisition of Chart, Chart shareholders approved the acquisition of Chart by the Company (the "Chart acquisition") on October 6, 2025. With regulatory reviews still underway in certain jurisdictions, we presently expect closing in the second quarter of 2026, understanding that the timing may evolve as those processes progress. On portfolio management actions, we closed the acquisition of Continental Disc Corporation ("CDC") on August 7, 2025. The sale of Precision Sensors & Instrumentation to Crane Company and the creation of the Surface Pressure Control joint venture with Cactus closed on January 1, 2026.
Current report
•OFSE outlook: We expect continued soft market conditions through most of 2026, reflecting customer caution amid oil price uncertainty, with the potential for modest improvement later in the year as excess oil supply begins to moderate.
Current report
We also expect to see continued growth in new energy solutions specifically focused on reducing carbon emissions for the energy and broader industrial sectors. These include hydrogen; geothermal; CCUS; energy storage; clean power; and emissions abatement solutions. Continued signs of tightness in the aeroderivative supply chain, including extended lead times, will remain a factor to monitor and manage operationally.
Current report
Business Mix: Business mix is defined as period-over-period change in sales mix within segments.
Current report
Cost out initiatives: Cost out initiatives, including restructuring programs.
Current report
(1)The sale of our controls business was completed in April 2023.
Current report
Revenue decreased $0.1 billion to $27.7 billion. OFSE decreased $1.3 billion, or 8%, and IET increased $1.2 billion, or 10%.
Current report
Selling, general and administrative costs decreased $71 million, or 3%, to $2,387 million.
Current report
Research and development costs decreased $43 million, or 7%, to $600 million.
Current report
Restructuring charges were$215 millionin 2025, primarily related to employee termination expenses and footprint consolidation. In 2024, restru cturing charges were$260 million, primarily related to streamlining of the OFSE operating model.
Current report
Net income decreased $0.4 billion, or 13%, to $2.6 billion compared to 2024.
Current report
OFSE revenue of $14,324 million decreased $1,304 million, or 8%, in 2025 compared to 2024, due to reduced oilfield activity as reflected in the reduced rig count. From a geographical perspective, international revenue was $10,551 million, a decrease of $1,121 million, or 10%, from 2024, down in all regions. North America revenue was $3,773 million in 2025, a decrease of $183 million, or 5%, from 2024.
Current report
OFSE segment EBITDA of $2,618 million decreased $263 million, or 9%, in 2025 compared to 2024. The reduction of EBITDA in 2025 was a result of lower volume, change in mix, and inflation, partially offset by cost out initiatives, and overall productivity.
Current report
IET revenue of $13,409 million increased $1,208 million, or 10%, in 2025 compared to 2024, driven by GTE and GTS.
Current report
IET segment EBITDA of $2,482 million increased $432 million, or 21%, in 2025 compared to 2024. The improved performance in 2025 was driven by higher volume, price, FX, cost out initiatives, partially offset by inflation, and change in mix.
Current report
Research and development costs decreased $8 million, or 1%, to $643 million.
Current report
We recorded other income of $341 million and $544 million in 2024 and 2023, respectively, which included a net gain of $367 million and $555 million, respectively, from the change in fair value of equity securities.
Current report
Net income increased $1 billion, or 53%, to $3 billion compared to 2023.
Current report
Segment Revenues and Segment EBITDA
Current report
(1)The sale of our controls business was completed in April 2023.
Current report
On July 28, 2025, we entered into a definitive agreement to acquire all outstanding shares of Chart's common stock for $210 per share in cash, equivalent to a total enterprise value of approximately $13.6 billion. Our expected sources of funds for the acquisition include cash and cash equivalents to be generated from cash flow from operations, expected asset sales proceeds, and new debt financing. As a result, we entered into a senior unsecured 364-day bridge facility (the "Bridge Facility") and a senior unsecured delayed-draw term loan facility (the "DDTL"). The final structure of the new debt financing will be determined prior to transaction close. The incurrence of new indebtedness would increase our leverage and debt service requirements, which could impact our future financial condition and results of operations.
Current report
In 2025, net working capital cash generation was $713 million, mainly due to strong collections of receivables and contract assets, partially offset by progress collections.
Current report
In 2025, we completed the acquisition of CDC in the IET segment in an all-cash transaction for approximately $543 million.
Current report
In 2025, we entered into an agreement to acquire Chart. Under the terms of the agreement, we paid $258 million for the termination fee and the reimbursement of certain expenses on behalf of Chart to Flowserve Corporation ("Flowserve"), as a result of the termination of the merger agreement by and among Chart, Flowserve, and certain subsidiaries of Flowserve.
Current report
Management has elected to include summarized financial information for the Issuers, notwithstanding that SEC Rule 13‑01 would otherwise permit its omission because the combined assets, liabilities, and results of operations of the Issuers are not materially different from the corresponding amounts presented in Baker Hughes Company's consolidated financial statements. We believe the information will be useful in connection with future debt financing activities associated with the Chart acquisition.
Removed paragraphs (45)
Previous report
During 2024, Baker Hughes continued to deliver significant improvement across the company and in our financial results over 2023. We capitalized on market tailwinds to deliver substantial IET revenue growth, navigated an uneven market to deliver modest OFSE revenue growth, and realized widening benefits from our transformation efforts across the company. We also maintained strong order momentum in IET, led by significant growth in new energy and non-LNG equipment orders.
Previous report
As we look to 2025, we see a muted outlook for global upstream spending due to recent oil price volatility and an oil market that looks well supplied in the near term, which might affect activity across our OFSE portfolio. Continued discipline from the world's largest producers and the pace of oil demand growth will remain important factors to monitor. Geopolitics remain another element of uncertainty across the oil and gas markets affecting macroeconomic conditions and upstream spending.
Previous report
We are seeing customer spending trends shift more towards natural gas and low-carbon solutions, and we expect this trend to continue in 2025, which will continue to support strength across our IET portfolio. We remain optimistic on the LNG outlook, supporting the shift towards the development of natural gas and LNG. As a result, the global LNG project pipeline remains strong. Additionally, robust orders over the past few years are set to drive significant growth in our equipment installed base, which will underpin steady growth in Gas Technology Service over the coming years. Continued signs of tightness in the aeroderivative supply chain will remain an important factor to monitor.
Previous report
In 2024, the Company generated revenues of $27.8 billion, compared to $25.5 billion in 2023, increasing $2.3 billion or 9%. The increase in revenue was driven principally by IET. IET revenue increased $2.1 billion, primarily driven by Gas Technology Equipment revenue. OFSE revenue increased $0.3 billion driven by international revenue. Operating income was $3.1 billion compared to $2.3 billion in 2023, increasing $0.8 billion. The increase to operating income was driven by higher volume primarily from higher proportionate growth in Gas Technology Equipment ("GTE") and Subsea & Surface Pressure Systems ("SSPS") and price in both segments, and structural cost-out initiatives across the company, partially offset by cost inflation.
Previous report
As our journey of transformation continues, we have made progress in our efforts to improve efficiencies and modernize how the business operates. The business has undertaken significant structural changes and we see the operating benefits coming through in the margin performance.
Previous report
•OFSE North America activity: In 2025, we expect a second consecutive year of lower E&P spending due to recent commodity price volatility and E&P consolidation.
Previous report
•OFSE International activity: We expect spending outside of North America to be at similar or slightly lower levels in 2025 compared to 2024.
Previous report
We have other businesses in our portfolio that are more correlated with various industrial metrics, including global GDP growth. We also have businesses within our portfolio that are exposed to new energy solutions, specifically focused around reducing carbon emissions of the energy and broader industry, including: hydrogen; geothermal; CCUS; energy storage; clean power; and emissions abatement solutions. We expect to see continued growth in these global businesses as new energy solutions become a more prevalent part of the broader energy mix.
Previous report
Operating income increased $763 million, or 33%, to $3,081 million, driven primarily by: increased volume primarily from higher proportionate growth in GTE and SSPS, favorable price, cost optimization, and, to a lesser extent, FX, partially offset by inflationary pressure.
Previous report
(1)Operating margin is defined as operating income divided by revenue.
Previous report
(2)Operating margin is defined as operating income divided by revenue.
Previous report
Revenue increased $4,350 million, or 21%, to $25.5 billion. OFSE increased $2,131 million and IET increased $2,219 million.
Previous report
Selling, general and administrative cost increased $101 million, or 4%, to $2,611 million, and our Corporate costs, which are primarily reported within this financial measure, decreased $36 million, or 9%, to $380 million. These decreases were driven primarily by cost optimization initiatives, partially offset by inflationary pressure.
Previous report
In 2023, restructuring, impairment, and other charges were$323 million reflecting costs to align the business with the Company's market outlook. In 2022, restructuring, impairment, and other charges were$705 million primarily associated with the discontinuation of our Russia operations, and costs to facilitate the reorganization into two segments.
Previous report
Operating income increased $1,133 million, or 96%, to $2,317 million, driven primarily by: increased volume primarily from higher proportionate growth in GTE and SSPS, favorable price, and continued benefit of cost optimization initiatives, partially offset by inflationary pressure.
Previous report
We recorded other non-operating income of $554 million in 2023, which included a net gain of $555 million from the change in fair value for certain equity investments. In 2022, we recorded $911 million of other non-operating losses primarily due to the loss of $451 million from the sale of part of the OFSE business in Russia and a loss of
Previous report
$265 million from the change in fair value for certain equity investments. Additionally, in December 2022, the Company, Baker Hughes Holdings, LLC ("BHH LLC") and GE entered into an agreement which resulted in the termination of the Tax Matters Agreement, and as a result, we incurred a charge of $81 million.
Previous report
We recorded income taxes in 2023 and 2022 of $685 million and $600 million, respectively. The difference between the statutory tax rate and the effective tax rate in both years was impacted by income in jurisdictions with tax rates higher than in the U.S. and losses with no tax benefit due to valuation allowances. In addition, the above noted impact to the effective tax rate in 2023 was partially offset by income subject to U.S. tax at an effective rate less than 21% due to valuation allowances while the effective rate in 2022 was further impacted by restructuring charges for which a majority had no tax benefit.
Previous report
(1)Operating margin is defined as operating income divided by revenue.
Previous report
OFSE revenue of $15,361 million increased $2,131 million, or 16%, in 2023 compared to 2022, as a result of increased activity as evidenced by an increase in the global rig count. From a geographical perspective, international revenue was $11,245 million, an increase of $1,779 million from 2022, primarily driven by the Middle East/Asia and Latin America regions, partially offset by lower volume due to the discontinuation of our Russia operations that occurred in 2022. North America revenue was $4,116 million in 2023, an increase of $352 million from 2022.
Previous report
OFSE segment operating income was $1,746 million in 2023 compared to $1,201 million in 2022. The improved performance in 2023 was primarily driven by higher volume, price and cost-out initiatives, partially offset by inflationary pressure and lower cost productivity.
Previous report
(2)Operating margin is defined as operating income divided by revenue.
Previous report
IET revenue of $10,145 million increased $2,219 million, or 28%, in 2023 compared to 2022. The increase was primarily due to higher volume in Gas Technology Equipment and, to a lesser extent, in CTS, Industrial Technology and Gas Technology Services.
Previous report
IET segment operating income was $1,310 million in 2023 compared to $1,135 million in 2022. The improved performance in 2023 was driven byhigher volume primarily from higher proportionate growth in GTE, price and cost-out initiatives, partially offset by unfavorable cost productivity, inflationary pressure, and higher research and development costs related to new energy investments.
Previous report
COMPLIANCE
Previous report
In the conduct of all of our activities, we are committed to maintaining the core values of our Company, as well as high safety, ethical, and quality standards as also reported in our Quality Management System. We believe such a commitment is integral to running a sound, successful, and sustainable business. We devote significant resources to maintain a comprehensive global ethics and compliance program ("Compliance Program") which is designed to prevent, detect, and appropriately respond to any potential violations of the law, the Code of Conduct, and other Company policies and procedures.
Previous report
Highlights of our Compliance Program include the following:
Previous report
•Comprehensive internal policies over such areas as anti-bribery; travel, entertainment, gifts and charitable donations to government officials and other parties; payments to commercial sales representatives; and, the use of non-U.S. police or military organizations for security purposes. In addition, there are policies and procedures to address customs requirements, visa processing risks, export and re-export controls, economic sanctions, anti-money laundering and anti-boycott laws.
Previous report
•Global and independent structure of Chief Compliance Officer and other compliance professionals providing compliance advice, customized training and governance, as well as investigating allegations across all regions and countries where we do business.
Previous report
•Comprehensive employee compliance training program that combines instructor-led and web-based training modules tailored to the key risks that employees face on an ongoing basis.
Previous report
•Due diligence and monitoring procedures for third parties who conduct business on our behalf, including channel partners (sales representatives, distributors, resellers), and administrative service providers.
Previous report
•Due diligence procedures for acquisition activities.
Previous report
•Specifically tailored compliance risk assessments and audits focused on country and third party risk.
Previous report
•Compliance Review Board comprised of senior officers of the Company that meets quarterly to monitor effectiveness of the Compliance Program, as well as segment compliance review boards that meet quarterly.
Previous report
•Technology to monitor and report on compliance matters, including an internal investigations management system, a conflict of interest reporting and management system, a web-based anti-boycott reporting tool, global trade management systems and comprehensive watch list screening.
Previous report
•Data privacy compliance policies and procedures to ensure compliance with applicable data privacy requirements.
Previous report
•A compliance program designed to create an "Open Reporting Environment" where employees are encouraged to report any ethics or compliance matter without fear of retaliation, including a global network of trained employee ombudspersons, and a worldwide, 24-hour business helpline operated by a third party and available in approximately 200 languages.
Previous report
•Centralized finance organization with company-wide policies.
Previous report
•Anti-corruption audits of high-risk countries, as well as risk-based compliance audits of third parties.
Previous report
•We have region-specific processes and procedures for management of HR related issues, including pre-hire screening of employees; a process to screen existing employees prior to promotion into select roles where they may be exposed to finance and/or corruption-related risks; and implementation of a global new hire training module which includes compliance training for all employees.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (58)
Previous wording
We are an energy technology company with a broad and diversified portfolio of technologies and services that span the energy and industrial value chain. We operate through our two business segments: OFSE and IET. We sell products and services primarily in the global oil and gas markets, within the upstream, midstream and downstream segments, as well as broader industrial and new energy markets.
Current wording
We are an energy technology company with a broad and diversified portfolio of technologies and services that span the energy and industrial value chain. We operate through our two business segments: OFSE and IET. We sell products and services primarily in the global oil and gas and broader energy and industrial markets.
Previous wording
Baker Hughes remains committed to a flexible capital allocation policy that balances returning cash to shareholders and investing in growth opportunities. We increased our quarterly dividend in the first quarter of 2024 by one cent to $0.21 per share. For the full year of 2024, we returned a total of $1.3 billion to shareholders in the form of dividends and share repurchases.
Current wording
In the first quarter of 2025, we increased our quarterly dividend by two cents to $0.23 per share. For the full year of 2025, we returned a total of $1.3 billion to shareholders in the form of dividends and share repurchases.
Previous wording
Our business is exposed to a number of macro factors, which influence our outlook and expectations given the current volatile conditions in the industry. All of our outlook expectations are purely based on the market as we see it today and are subject to changing conditions in the industry.
Current wording
Our business is exposed to a number of macro factors, which influence our outlook and expectations given the current macroeconomic uncertainty and continued volatile conditions in the industry. All of our outlook expectations are purely based on the market as we see it today and are subject to changing conditions in the industry.
Previous wording
•IET outlook: We see continued strength in LNG, Floating Production Storage and Offloading ("FPSO"), gas infrastructure, and new energy, as well as increasing opportunities to leverage our versatile portfolio to enhance IET's position across industrial and distributed power markets.
Current wording
•IET outlook: We see sustained strength in LNG and gas infrastructure, as well as increasing opportunities to leverage our versatile portfolio to enhance IET's position across industrial and distributed power markets, with a growing emphasis on data centers.
Previous wording
Overall, we believe our portfolio is well positioned to compete across the energy value chain and deliver comprehensive solutions for our customers. Over time, we believe the world's demand for energy will continue to rise, and that hydrocarbons will play a major role in meeting the world's energy needs for the foreseeable future. As such, we remain focused on delivering innovative, low-emission, and cost-effective solutions that deliver step changes in operating and economic performance for our customers.
Current wording
Overall, we believe our portfolio is uniquely positioned to compete across the energy and industrial value chains and deliver integrated, high-impact solutions for our customers. Over time, we believe global energy demand will continue to rise, supported by durable, secular macroeconomic trends, with hydrocarbons continuing to play a fundamental role in meeting the world's energy needs. As such, we remain focused on delivering innovative, lower-emission, and cost-effective solutions that drive meaningful improvements in operational and financial performance for our customers.
Previous wording
The following discussion and analysis summarize the significant factors affecting our results of operations, financial condition and liquidity position as of and for the years ended December 31, 2024, 2023, and 2022, and should be read in conjunction with our consolidated financial statements and related notes.
Current wording
The following discussion and analysis summarizes the significant factors affecting our results of operations, financial condition, and liquidity position as of and for the years ended December 31, 2025, 2024, and 2023, and should be read in conjunction with our consolidated financial statements and related notes.
Previous wording
Our revenue is predominately generated from the sale of products and services to major, national, and independent oil and natural gas companies worldwide, and is dependent on spending by our customers for oil and natural gas exploration, field development and production. This spending is driven by a number of factors, including our customers' forecasts of future energy demand and supply, their access to resources to develop and produce oil and natural gas, their ability to fund their capital programs, the impact of new government regulations, and their expectations for oil and natural gas prices as a key driver of their cash flows.
Current wording
Our revenue is predominantly generated from the sale of products and services to major, national, and independent oil and natural gas companies worldwide, and is dependent on spending by our customers for oil and natural gas exploration, field development, and production. This spending is driven by a number of factors, including our customers' forecasts of future energy demand and supply, their access to resources to develop and produce oil and natural gas, their ability to fund their capital programs, the impact of new government regulations, and their expectations for oil and natural gas prices as a key driver of their cash flows.
Previous wording
Outside North America, customer spending is influenced by Brent oil prices. In North America, customer spending is influenced by WTI oil prices and natural gas prices are measured by the Henry Hub Natural Gas Spot Price.
Current wording
Outside North America, customer spending is influenced by Brent oil prices. In North America, customer spending is influenced by WTI oil prices and natural gas prices as measured by the Henry Hub Natural Gas Spot Price.
Previous wording
(1)Energy Information Administration ("EIA") Europe Brent Spot Price per Barrel
Current wording
(1)Energy Information Administration ("EIA") Europe Brent ("Brent") Spot Price per Barrel
Previous wording
(2)EIA Cushing, OK West Texas Intermediate ("WTI") spot price
Current wording
(2)EIA Cushing, OK West Texas Intermediate ("WTI") Spot Price per Barrel
Previous wording
Rig counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. Therefore, rig counts may act as a leading indicator of market activity and reflect the relative strength of energy prices however, these counts should not be solely relied on as other specific and pervasive conditions may exist that affect overall energy prices and market activity.
Current wording
Rig counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active or operating, they consume products and services produced by the oil service industry. Therefore, rig counts may act as a leading indicator of market activity and reflect the relative strength of energy prices; however, these counts should not be solely relied on as other specific and pervasive conditions may exist that affect overall energy prices and market activity.
Previous wording
The rig counts are summarized in the table below as averages for each of the periods indicated.
Current wording
The rig counts are summarized in the table below as averages for each of the periods indicated based on our published rig counts on our website at www.bakerhughes.com.
Previous wording
The discussions below relating to significant line items from our consolidated statements of income (loss) are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, have quantified the impact of such items. In addition, the discussions below for revenue and cost of revenue are on a total basis as the business drivers for product sales and services are similar. All dollar amounts in tabulations in this section are in millions of dollars, unless otherwise stated. Certain columns and rows may not add due to the use of rounded numbers.
Current wording
The discussions below relating to significant line items from our consolidated statements of income are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, have quantified the impact of such items. In addition, the discussions below for revenue and cost of revenue are on a total basis as the business drivers for product sales and services are similar. All dollar amounts in tabulations in this section are in millions of dollars, unless otherwise stated. Certain columns and rows may not add due to the use of rounded numbers.
Previous wording
Our consolidated statements of income (loss) displays sales and costs of sales in accordance with SEC regulations under which "goods" is required to include all sales of tangible products and "services" must include all other sales, including other service activities. For the amounts shown below, we distinguish between "equipment" and "product services," where product services refer to sales under product services agreements, including sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs), which is an important part of our operations. We refer to "product services" simply as "services" within Management's Discussion and Analysis of Financial Condition and Results of Operations.
Current wording
Our consolidated statements of income display sales and costs of sales in accordance with SEC regulations under which "goods" is required to include all sales of tangible products and "services" must include all other sales, including other service activities. For the amounts shown below, we distinguish between "equipment" and "product services," where product services refer to sales under product services agreements, including sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance, and repairs), which is an important part of our operations. We refer to "product services" simply as "services" within MD&A.
Previous wording
Our results of operations are evaluated by the Chief Executive Officer on a consolidated basis as well as at the segment level. The performance of our operating segments is primarily evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and before the following: net interest expense, net other non-operating income (loss), unallocated corporate expenses, significant restructuring plans, impairment and other charges, inventory impairments, and certain gains and losses not allocated to the operating segments.
Current wording
Our results of operations are evaluated by our chief operating decision maker, who is the Company's Chief Executive Officer, on a consolidated basis as well as at the segment level. The performance of each segment is evaluated based on segment EBITDA, which is defined as income (loss) before income taxes and before the following: net interest expense, costs associated with significant restructuring programs, depreciation and amortization, and unallocated corporate costs and other income (expense).
Previous wording
Volume: Volume is defined as the increase or decrease in products and/or services sold period-over-period excluding the impact of foreign exchange and price. The volume impact on profit is calculated by multiplying the prior period profit rate by the change in revenue volume between the current and prior period. Volume also includes price, which is defined as the change in sales price for a comparable product or service period-over-period and is calculated as the period-over-period change in sales prices of comparable products and services.
Current wording
Volume: Volume is defined as the increase or decrease in products and/or services sold period-over-period excluding the impact of FX and price. The volume impact on profit is calculated by multiplying the prior period profit rate by the change in revenue volume between the current and prior period.
Previous wording
Foreign Exchange ("FX"): FX measures the translational foreign exchange impact, or the translation impact of the period-over-period change on sales and costs directly attributable to change in the foreign exchange rate compared to the U.S. dollar. FX impact is calculated by multiplying the functional currency amounts (revenue or profit) with the period-over-period FX rate variance, using the average exchange rate for the respective period.
Current wording
FX: FX measures the translational foreign exchange impact, or the translation impact of the period-over-period change on sales and costs directly attributable to change in the FX rate compared to the U.S. dollar. FX impact is calculated by multiplying the functional currency amounts (revenue or profit) with the period-over-period FX rate variance, using the average exchange rate for the respective period. This also includes the period-over-period variance of transactional foreign exchange, aside from those foreign currency devaluations that are reported separately for business evaluation purposes.
Previous wording
Productivity: Productivity is measured by the remaining variance in profit, after adjusting for the period-over-period impact of volume and price, foreign exchange, and (inflation)/deflation as defined above. Improved or lower period-over-period cost productivity is the result of cost efficiencies or inefficiencies, such as cost decreasing or increasing more than volume, or cost increasing or decreasing less than volume, or changes in sales mix among segments. This also includes the period-over-period variance of transactional foreign exchange, aside from those foreign currency devaluations that are reported separately for business evaluation purposes.
Current wording
Productivity: Productivity is measured by the remaining variance in profit, after adjusting for the period-over-period impact of volume, price, business mix, FX, and (inflation)/deflation as defined above. Improved or lower period-over-period cost productivity is the result of production, schedule and cost efficiencies or inefficiencies.
Previous wording
(2)For the years ended December 31, 2024, 2023 and 2022, total new energy orders incorporates CTS in IET of $1.0 billion, $0.6 billion, and $0.4 billion, respectively.
Current wording
(2)For the years ended December 31, 2025, 2024, and 2023, total new energy orders incorporates Climate Technology Solutions ("CTS") in IET.
Previous wording
The RPO relate to the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations. As of December 31, 2024, RPO totaled $33.1 billion, of which OFSE totaled $3.0 billion and IET totaled $30.1 billion.
Current wording
The RPO relate to the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations. As of December 31, 2025, RPO totaled $35.9 billion, of which OFSE totaled $3.5 billion and IET totaled $32.4 billion.
Previous wording
We recorded other non-operating income of $382 million in 2024, which included a net gain of $367 million from the change in fair value for certain equity investments. In 2023, we recorded $554 million of other non-operating income. Included in this amount was a net gain of $555 million from the change in fair value for certain equity investments.
Current wording
We recorded other expense of $243 million in 2025, which included $107 million of transaction costs related to business acquisition and disposal activities and anet loss of $103 million from the change in fair value of equity securities. In 2024, we recorded $341 million of other income. Included in this amount was a net gain of $367 million from the change in fair value of equity securities.
Previous wording
Net interest expense incurred in 2023 was $216 million, which includes interest income of $84 million. Net interest expense decreased $36 million compared to 2022, primarily driven by higher interest income.
Current wording
Net interest expense incurred in 2025 was $222 million, which includes interest income of $82 million. Net interest expense increased $25 million compared to 2024.
Previous wording
Segment Revenues and Segment Operating Income
Current wording
Segment Revenues and Segment EBITDA
Previous wording
Revenue increased $2,323 million, or 9%, to $27.8 billion. OFSE increased $268 million and IET increased $2,055 million.
Current wording
Revenue increased $2.3 billion, or 9%, to $27.8 billion. OFSE increased $0.3 billion, or 2%, and IET increased $2.1 billion, or 20%.
Previous wording
Selling, general and administrative cost decreased $153 million, or 6%, to $2,458 million, and our Corporate costs, which are primarily reported within this financial measure, decreased $17 million, or 5%, to $363 million. These decreases were driven primarily by a continued focus on cost optimization, partially offset by inflationary pressure.
Current wording
Selling, general and administrative costs decreased $153 million, or 6%, to $2,458 million driven primarily by a continued focus on cost optimization, partially offset by inflationary pressure.
Previous wording
Restructuring, impairment, and other charges were$301 million in 2024, primarily related to streamlining of the OFSE operating model. In 2023, restructuring, impairment, and other charges were$323 million reflecting costs to align the business with the Company's market outlook.
Current wording
Restructuring charges were$260 million in 2024, primarily related to streamlining of the OFSE operating model. In 2023, restructuring charges were $313 million reflecting costs to align the business with the Company's market outlook.
Previous wording
We recorded income taxes in 2024 and 2023 of $257 million and $685 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily impacted by the $664 million reversal of a valuation allowance in 2024, with the rate in both years also reflecting income generated in jurisdictions with tax rates higher than in the U.S. and losses with no tax benefit due to valuation allowances. The valuation allowance on the associated deferred tax assets has been released as a result of the U.S. moving into a cumulative three-year profit position, which is supported by an increasing pattern of profitability, recent demonstration of tax credit utilization, and the forecasted continuation of profitability in the U.S.
Current wording
We recorded income taxes in 2024 and 2023 of $257 million and $685 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily impacted by the$664 million reversal of a valuation allowance in 2024, with the rate in both years also reflecting income generated in jurisdictions with tax rates higher than in the U.S. and losses with no tax benefit due to valuation allowances. The valuation allowance on the associated deferred tax assets has been released as a result of the U.S. moving into and maintaining a cumulative three-year profit position, which is supported by an increasing pattern of profitability, recent demonstration of tax credit utilization, and the forecasted continuation of profitability in the U.S.
Previous wording
OFSE revenue of $15,628 million increased $268 million, or 2%, in 2024 compared to 2023, driven by SSPS. From a geographical perspective, international revenue was $11,673 million, an increase of $428 million from 2023, primarily driven by the Europe/CIS/Sub-Saharan Africa regions, partially offset by the Latin America and Middle East/Asia regions. North America revenue was $3,955 million in 2024, a decrease of $161 million from 2023.
Current wording
OFSE revenue of $15,628 million increased $268 million, or 2%, in 2024 compared to 2023, driven by Subsea & Surface Pressure Systems ("SSPS"). From a geographical perspective, international revenue was $11,673 million, an increase of $428 million, or 4%, from 2023, primarily driven by the Europe/CIS/Sub-Saharan Africa regions, partially offset by the Latin America and Middle East/Asia regions. North America revenue was $3,955 million in 2024, a decrease of $161 million, or 4%, from 2023.
Previous wording
OFSE segment operating income was $1,988 million in 2024 compared to $1,746 million in 2023. The improved performance in 2024 was a result of higher price, cost-out initiatives, and, to a lesser extent, volume with higher proportionate growth in SSPS, partially offset by inflationary pressure.
Current wording
OFSE segment EBITDA of $2,881 million increased $286, or 11%, in 2024 compared to 2023. The improved performance in 2024 was a result of higher price, cost-out initiatives, and, to a lesser extent, volume with higher proportionate growth in SSPS, partially offset by inflationary pressure.
Previous wording
IET revenue of $12,201 million increased $2,055 million, or 20%, in 2024 compared to 2023. The increase was primarily in GTE, and, to a lesser extent, in Gas Technology Services, CTS and Industrial Technology.
Current wording
IET revenue of $12,201 million increased $2,055 million, or 20%, in 2024 compared to 2023. The increase was primarily in GTE, and, to a lesser extent, in GTS.
Previous wording
IET segment operating income was $1,830 million in 2024 compared to $1,310 million in 2023. The improved performance in 2024 was driven by higher volume primarily from higher proportionate growth in GTE, price, and cost-out initiatives, partially offset by inflationary pressure.
Current wording
IET segment EBITDA of $2,050 million increased $523, or 34%, in 2024 compared to 2023. The improved performance in 2024 was driven by higher volume primarily from higher proportionate growth in GTE, price, and cost-out initiatives, partially offset by inflationary pressure.
Previous wording
Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources, and financial flexibility in order to fund the requirements of our business. We continue to maintain solid financial strength and sufficient liquidity. At December 31, 2024, we had cash and cash equivalents of $3.4 billion compared to $2.6 billion at December 31, 2023.
Current wording
Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources, and financial flexibility in order to fund the requirements of our business. We continue to maintain solid financial strength and sufficient liquidity. At December 31, 2025, we had cash and cash equivalents of $3.7 billion, compared to $3.4 billion at December 31, 2024.
Previous wording
In the U.S. we held cash and cash equivalents of approximately $0.6 billion as of December 31, 2024 and 2023, and outside the U.S. of approximately $2.8 billion and $2.0 billion as of December 31, 2024 and 2023, respectively. A substantial portion of the cash held outside the U.S. at December 31, 2024 has been reinvested in active non-U.S. business operations. If we decide at a later date to repatriate certain cash to the U.S., we may incur other additional taxes that would not be significant to the total tax provision.
Current wording
In the U.S. we held cash and cash equivalents of approximately $0.7 billion and $0.6 billion as of December 31, 2025 and 2024, respectively, and outside the U.S. of approximately $3.0 billion and $2.8 billion as of December 31, 2025 and 2024, respectively. A substantial portion of the cash held outside the U.S. at December 31, 2025 has been reinvested in active non-U.S. business operations. If we decide at a later date to repatriate certain cash to the U.S., we may incur other additional taxes that would not be significant to the total tax provision.
Previous wording
We have a $3 billion committed unsecured revolving credit facility ("the Credit Agreement") with commercial banks maturing in November 2028. The Credit Agreement contains certain representations and warranties, certain affirmative covenants and negative covenants, in each case we consider customary. No related events of default have occurred. The Credit Agreement is fully and unconditionally guaranteed on a senior unsecured basis by Baker Hughes. At December 31, 2024 and 2023, there were no borrowings under the Credit Agreement.
Current wording
We have a $3.0 billion committed unsecured revolving credit facility (the "Credit Agreement") with commercial banks maturing in November 2028. The Credit Agreement contains certain representations and warranties, certain affirmative covenants and negative covenants, in each case we consider customary. No related events of default have occurred. The Credit Agreement is fully and unconditionally guaranteed on a senior unsecured basis by Baker Hughes. At December 31, 2025 and 2024, there were no borrowings under the Credit Agreement.
Previous wording
During the year ended December 31, 2024, we dispersed cash to fund a variety of activities including certain working capital needs, capital expenditures, the payment of dividends, repayment of long-term debt, and repurchases of our common stock.
Current wording
During the year ended December 31, 2025, we dispersed cash to fund a variety of activities, including certain working capital needs, capital expenditures, business acquisitions, the payment of dividends, and repurchases of our common stock.
Previous wording
Cash flows provided by operating activities were $3,332 million, $3,062 million, and $1,888 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Current wording
Cash flows provided by operating activities were $3,810 million, $3,332 million, and $3,062 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Previous wording
Cash from operating activities is primarily generated from net income or loss adjusted for certain noncash items (including depreciation, amortization, gain or loss on equity securities, stock-based compensation cost, deferred tax benefit or provision, and the impairment of certain assets).
Current wording
Cash from operating activities is primarily generated from net income or loss, adjusted for certain noncash items (including depreciation, amortization, change in fair value of equity securities, stock-based compensation cost, deferred tax benefit or provision, and the impairment of certain assets).
Previous wording
In 2024, net working capital cash generation was $7 million, mainly due to progress collections mostly offset by an increase in receivables, inventory, and contract assets as the business continues to expand. Included in the cash flows from operating activities in 2024 are payments of $217 million made primarily for employee severance as a result of our restructuring activities.
Current wording
In 2024, net working capital cash generation was $7 million, mainly due to progress collections, mostly offset by an increase in receivables, inventory, and contract assets as the business continued to expand.
Previous wording
Cash flows used in investing activities were $1,016 million, $817 million, and $1,564 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Current wording
Cash flows used in investing activities were $2,044 million, $1,016 million, and $817 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Previous wording
Our principal recurring investing activity is the funding of capital expenditures including property, plant and equipment ("PP&E") and software, to support and generate revenue from operations. Expenditures for capital assets were $1,278 million, $1,224 million, and $989 million for 2024, 2023, and 2022, respectively, partially offset by cash flows from the disposal of PP&E of $203 million, $208 million, and $217 million in 2024, 2023, and 2022, respectively. Proceeds from the disposal of assets are primarily related to equipment that was lost-in-hole, predominantly in OFSE, and PP&E no longer used in operations that was sold throughout the period.
Current wording
Our principal recurring investing activity is the funding of capital expenditures including property, plant and equipment ("PP&E") and software, to support and generate revenue from operations. Expenditures for capital assets were $1,273 million, $1,278 million, and $1,224 million for 2025, 2024, and 2023, respectively, partially offset by cash flows from the disposal of PP&E of $195 million, $203 million, and $208 million in 2025, 2024, and 2023, respectively. Proceeds from the disposal of assets were primarily related to OFSE equipment that was lost-in-hole, and PP&E no longer used in operations that was sold throughout the period.
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Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Price: Price is defined as the change in sales price for a comparable product or service period-over-period and is calculated as the period-over-period change in sales prices of comparable products and services.
Current report — wording carried from elsewhere
We recorded income taxes in 2025 and 2024 of $253 million and $257 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily the netimpact of$308 million and$664 million reversal of valuation allowances in 2025 and 2024, respectively, with the rate in both years also reflecting income generated in jurisdictions with tax rates higher than in the U.S. and losses with no tax benefit due to valuation allowances. The valuation allowances on the associated deferred tax assets have been released as a result of the U.K. and the U.S. moving into and/or maintaining cumulative three-year profit positions, demonstrating an increasing pattern of profitability, along with recent tax credit utilization, and the forecasted continuation of profitability in both jurisdictions.
Current report — wording carried from elsewhere
Included in the cash flows from operating activities in 2025, 2024, and 2023 are payments of $182 million, $217 million, and $142 million, respectively, made primarily for employee severance as a result of our restructuring activities.
Current report — wording carried from elsewhere
We increased our quarterly dividend by two cents to $0.23 and one cent to $0.21 per share in 2025 and 2024, respectively. We paid dividends of $910 million, $836 million, and $786 million to our Class A stockholders in 2025, 2024, and 2023, respectively.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Segment Revenues and Segment Operating Income