Second-quarter highlights

• Orders of $7.5 billion, including $3.5 billion of IET orders.
• RPO of $33.5 billion, including record IET RPO of $30.2 billion.
• Revenue of $7.1 billion, up 13% year-over-year.
• Net income attributable to the Company of $579 million.
• GAAP diluted EPS of $0.58 and adjusted diluted EPS* of $0.57.
• Adjusted EBITDA* of $1,130 million, up 25% year-over-year.
• Cash flows from operating activities of $348 million and free cash flow* of $106 million.
• Returns to shareholders of $375 million, including $166 million of share repurchases.

Baker Hughes Compan has announced results for the second quarter of 2024.

"Our strong second-quarter results further demonstrate that we are on the right path in executing our strategy. We continue to strengthen our operating performance, which is driving meaningful margin expansion across both segments. Following our first-half outperformance, we are raising the midpoint of our full-year guidance by 5% and are confident in our ability to drive margins structurally higher over the coming years," said Lorenzo Simonelli, Baker Hughes Chairman and Chief Executive Officer.

"Order momentum continues, highlighted by $3.5 billion of IET orders during the quarter that included a large SONATRACH award for gas-boosting in Algeria's Hassi R'Mel gas field. This marks the highest quarterly non-LNG equipment bookings in the Company's history and again underscores the breadth and versatility of our IET portfolio. New energy continues to gain momentum as we booked $445 million of orders, also a record for the Company."

"Across both segments, we delivered outstanding second-quarter results, leading to a 25% year-over-year increase in total company adjusted EBITDA and 46% growth in adjusted EPS. Total company adjusted EBITDA margins increased almost 150 basis points year-over-year to 15.8%. This is a testament to the enhanced operational rigor that is being exercised across our IET and OFSE segments."

"We continued the positive trend of returning meaningful cash to shareholders. In the quarter, we paid dividends of $209 million and repurchased $166 million of shares, remaining on course to return 60% - 80% of free cash flow to our shareholders."

"Our exceptional second-quarter results are a credit to the hard work and dedication of the employees at Baker Hughes; I recognize this and express my sincere thanks to all of you," concluded Simonelli.

* Non-GAAP measure.

Quarter Highlights

The Oilfield Services & Equipment ("OFSE") business segment continued to strengthen its relationship with Petrobras, receiving multiple significant contracts for integrated and mature assets solutions. Baker Hughes was awarded a major multi-year contract for workover and plug and abandonment services in pre-salt and post-salt fields offshore Brazil, as well as remedial tools, completion fluids and production chemicals. Separately, Petrobras awarded Baker Hughes a contract for seabed centrifugal pumping systems for the Jubarte field, which is expected to support Jubarte incremental field development and increase oil production while reducing operating costs.

OFSE's mature assets solutions continued to see growth with customers in other regions. The State Oil Company of Azerbaijan Republic signed a joint cooperation agreement with Baker Hughes to employ more than 150 electrical submersible pumps and the automated field production solution, Leucipa™, in the nation's oilfields, which is expected to drive optimization and efficiencies.

Industrial & Energy Technology ("IET") continued its leadership in gas technology. In Algeria, Baker Hughes was awarded a major Gas Technology Equipment ("GTE") contract for SONATRACH’s Hassi R’ Mel gas field, as part of a consortium with Tecnimont (MAIRE). For the project, Baker Hughes will provide the turbomachinery equipment for three gas-boosting stations.

GTE also secured two major offshore topside contracts to provide power generation systems for two innovative all-electric Floating Production Storage and Offloading units, which will be installed offshore in Latin America. These awards further build on IET's positive momentum in this specific market segment in recent years.

During the quarter, Baker Hughes signed a 10-year services frame agreement with Woodside Energy to support LNG operations in Australia. Gas Technology Services ("GTS") also extended a service agreement with a major North American LNG customer and was awarded a 25-year service agreement to support a customer's offshore operations in Latin America.

In Asia Pacific, Baker Hughes secured a major GTE and Climate Technology Solutions ("CTS") contract to supply electric-driven compression and power generation technology to a global energy operator, which is expected to enhance gas operations and power CO2 capture to reduce the carbon intensity at the customer's LNG facility.

Baker Hughes also continues to build on its strategic global collaboration with Air Products announced in 2021. It received multiple orders for advanced hydrogen, syngas and CO2 solutions in Air Products' projects across the globe. Orders secured for the quarter also included CO2 and hydrogen compressors, as well as pumps for one of Air Products' projects in North America.

In Germany, CTS also secured an order to provide Gasunie Deutschland with three ICL zero-emissions integrated compressors, providing increased compression capacity to handle the large volumes of gas entering the network from new LNG import terminals.

IET saw increased customer traction with its digital portfolio, securing a multimillion-dollar Global Frame Agreement to provide bp with an enterprise subscription for Cordant™ Asset Health, which is expected to enable the customer to deliver reliable, efficient condition monitoring and support its digital optimization strategy. The agreement covers all of bp's upstream and downstream installed base.

Revenue for the quarter was $7,139 million, an increase of 11% sequentially and an increase of 13% year-over-year. The increase in revenue year-over-year was driven by higher volume in both IET and OFSE.

The Company's total book-to-bill ratio in the quarter was 1.1; the IET book-to-bill ratio in the quarter was also 1.1.

Operating income as determined in accordance with Generally Accepted Accounting Principles ("GAAP"), for the second quarter of 2024 was $833 million. Operating income increased $180 million sequentially and increased $319 million year-over-year. Total segment operating income was $935 million for the second quarter of 2024, up 24% sequentially and up 28% year-over-year.

Adjusted operating income (a non-GAAP financial measure) for the second quarter of 2024 was $847 million, which excludes adjustments totaling $14 million before tax. A list of the adjusting items and associated reconciliation from GAAP has been provided in Table 1a in the section titled "Reconciliation of GAAP to non-GAAP Financial Measures." Adjusted operating income for the second quarter of 2024 was up 28% sequentially and up 34% year-over-year.

Depreciation and amortization for the second quarter of 2024 was $283 million.

Adjusted EBITDA (a non-GAAP financial measure) for the second quarter of 2024 was $1,130 million, which excludes adjustments totaling $14 million before tax. See Table 1b in the section titled "Reconciliation of GAAP to non-GAAP Financial Measures." Adjusted EBITDA for the second quarter was up 20% sequentially and up 25% year-over-year.

The sequential increase in adjusted operating income and adjusted EBITDA was driven by higher volume and pricing, partially offset by negative mix in IET and OFSE. The year-over-year increase in adjusted operating income and adjusted EBITDA was driven by higher volume and pricing in both segments and structural cost-out initiatives, partially offset by cost inflation and negative mix in both segments.

Corporate costs were $88 million in the second quarter of 2024, down 4% sequentially and down 9% year-over-year.