Market and Outlook
Baker Hughes believes the underlying demand environment remains constructive across both traditional energy and industrial markets. The company expects these structural trends to continue supporting long-term growth despite ongoing regional volatility.
Baker Hughes expects the strength in LNG, power generation, and industrial infrastructure demand to continue supporting IET growth. Record backlog, improving Middle East activity, and the integration of Chart Industries reinforce confidence in achieving the midpoint of its full-year guidance. While geopolitical developments remain the principal uncertainty, management believes its diversified portfolio is increasingly reducing the company's dependence on traditional upstream cycles.
LNG, Power Infrastructure and AI
During the quarter, Baker Hughes reported record IET orders of $7.1 billion, lifting total remaining performance obligations to a record $40.1 billion, driven by LNG, gas infrastructure, and power generation demand.
The company secured major LNG awards from Venture Global, Cheniere, Bechtel, Golar, and Nigeria LNG while significantly expanding its presence in AI infrastructure. New agreements with Dynamis Power Solutions and Kodiak Gas Services added more than 2 GW of potential power generation capacity for North American data centers and energy infrastructure. Together with the recently completed Chart acquisition, Baker Hughes is steadily expanding beyond traditional oilfield services into industrial energy infrastructure.
Segment Revenue and EBITDA in Q2
Baker Hughes’s OFSE revenue increased 7% sequentially and EBITDA rose 7%, driven by improving Middle East activity, a 22% increase in Latin America revenue, and steady North America land performance. IET revenue remained broadly stable, but orders surged 45% sequentially and 101% year-over-year to a record $7.1 billion, lifting backlog to an all-time high and reinforcing LNG, power generation, and AI infrastructure as the company's primary long-term growth drivers.
Cash Flows Improved
Baker Hughes generated $1.85 billion of operating cash flow and $1.211 billion of free cash flow during 1H 2026, a significant improvement from 1H 2025 as working capital normalized. The company completed the acquisition of Chart Industries. Cash on hand increased to $15.7 billion, providing ample liquidity to integrate the acquisition while maintaining financial flexibility for future growth investments.
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