Executive Summary
Baker Hughes delivered a solid Q1 2025 with revenue of $6.427 billion and a resilient gross margin of 22.95%, underscored by a strong operating profit of $0.752 billion and net income of $0.402 billion. Despite a QoQ revenue decline of 12.7% (vs. Q4 2024), the company produced robust free cash flow of $0.409 billion and healthy operating cash flow of $0.709 billion, supported by disciplined cost management and favorable product mix. Net debt remained comfortable at approximately $2.75 billion with a solid liquidity base ($3.28 billion cash), underpinning ongoing capital allocation to dividends and buybacks while maintaining a prudent balance sheet. In summary, the quarter reflects margin resilience, cash-generation discipline, and a constructive, albeit cyclical, growth outlook aligned with upstream capex cycles and subsea/digital opportunities.
Key Performance Indicators
QoQ: -65.90% | YoY:-11.65%
QoQ: -65.55% | YoY:-10.87%
Key Insights
Revenue: $6.427B; YoY revenue: +0.14%, QoQ: -12.72% | Gross Profit: $1.475B; Gross margin: 22.95%; YoY gross margin: +15.41%, QoQ: -3.59% | Operating Income: $0.752B; Margin: 11.70%; YoY: +13.94%, QoQ: +13.08% | Net Income: $0.402B; Margin: 6.25%; YoY: -11.65%, QoQ: -65.90% | EPS: $0.41 (diluted $0.40); YoY: -10.87%, QoQ: -65.55% | Free Cash Flow: $0.409B; CFO: $0.709B; Cash at end of period: $3.277B | Net debt: ~$2.747B; Total debt: $6.024B; Cash: $3.277B | Cash conversion cycle: ~106.6 days; D...
Financial Highlights
Revenue: $6.427B; YoY revenue: +0.14%, QoQ: -12.72% | Gross Profit: $1.475B; Gross margin: 22.95%; YoY gross margin: +15.41%, QoQ: -3.59% | Operating Income: $0.752B; Margin: 11.70%; YoY: +13.94%, QoQ: +13.08% | Net Income: $0.402B; Margin: 6.25%; YoY: -11.65%, QoQ: -65.90% | EPS: $0.41 (diluted $0.40); YoY: -10.87%, QoQ: -65.55% | Free Cash Flow: $0.409B; CFO: $0.709B; Cash at end of period: $3.277B | Net debt: ~$2.747B; Total debt: $6.024B; Cash: $3.277B | Cash conversion cycle: ~106.6 days; DSO ~93.96 days; DIO ~93.80 days; DPO ~81.15 days
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
6.43B |
0.14% |
-12.72% |
| Gross Profit |
1.48B |
15.41% |
-3.59% |
| Operating Income |
752.00M |
13.94% |
13.08% |
| Net Income |
402.00M |
-11.65% |
-65.90% |
| EPS |
0.41 |
-10.87% |
-65.55% |
Key Financial Ratios
operatingProfitMargin
11.7%
operatingCashFlowPerShare
$0.72
freeCashFlowPerShare
$0.41
Management Commentary
Note: Earnings transcript data not provided in the dataset. Management commentary themes could not be quoted directly from the transcript. The following highlights synthesize the quantitative results and typical management emphasis observed in energy-services quarterly calls: (1) Margin resilience amid a mid-cycle environment, with gross margin near 23% and operating margin near 11.7%, supported by cost discipline and favorable mix (OFS, TPS, and DS contributions). (2) Cash flow leadership, evidenced by operating cash flow of $0.709B and free cash flow of $0.409B, enabling continued shareholder returns and debt metrics that remain conservative for the sector. (3) Balance sheet strength, with total debt of $6.024B and net debt of $2.747B, cash position of $3.277B, and liquidity to weather cycle volatility. (4) End-market exposure remains cyclical but supported by subsea, digital, and health-monitoring solutions, implying leverage to capex cycles in upstream, midstream, and LNG/infrastructure segments.
Forward Guidance
No formal quantitative guidance was provided in the Q1 2025 release. Given Baker Hughes’ diversified mix (OFS, TPS, DS) and the cyclical nature of oilfield activity, the plausible trajectory combines stable-to-modest revenue growth with continued margin discipline and cash-flow generation. We expect: - Revenue: modest YoY growth supported by higher-margin DS and TPS contributions and improving subsea activity, offset by seasonality and timing of large projects (QoQ variability likely). - Margins: maintenance of mid-teens EBITDA margins as price/volume mix improves and cost initiatives mature. - Capital allocation: sustained dividend payout around 50-60% of net income and ongoing modest share repurchases within a prudent balance-sheet framework. Monitoring points: upstream capex cycle signals, subsea project wins, DS adoption and data-driven serviceability, inbound commodity prices, and any changes to working capital that could affect free cash flow.