Baker Hughes closed the most consequential deal in its modern corporate history on July 16, 2026, completing the all-cash acquisition of Chart Industries. The transaction, originally announced in late July 2025, is the single largest strategic move in management's pivot from pure-play oilfield services toward what CEO Lorenzo Simonelli now describes as an "industrialized energy solutions" franchise. The deal lands in the same quarter that management decided to raise the full-year Industrial & Energy Technology order guidance and lift the multi-year Horizon 2 IET orders outlook to more than $45 billion, a figure that places Baker Hughes on a steeper industrial-recovery trajectory than peers SLB and Halliburton have communicated. The simultaneous announcement that Baker Hughes is divesting Waygate Technologies to Hexagon for approximately $1.45 billion in cash shows the portfolio-shaping logic at work in both directions: lean into data center, gas, and LNG; exit the legacy nondestructive testing business.
The Q2 2026 numbers themselves, reported July 27, 2026 for the period ended June 30, 2026, came in at the high end of guidance on profitability. Revenue of $6,742 million was up 2% sequentially but down 2% year-over-year, with the year-over-year decline driven entirely by the prior-year dispositions of the Precision Sensors & Instrumentation and Surface Pressure Control businesses. Adjusted EBITDA reached $1,231 million, up 6% sequentially and 2% year-over-year, exceeding the high end of management's prior guidance range. Adjusted diluted EPS landed at $0.64, up 12% sequentially, while GAAP diluted EPS of $0.68 was held back by adjustments. The standout is free cash flow of $1,109 million in a single quarter, a striking figure that reflects working capital tailwinds and progress collections tied to the surging IET backlog. The order book tells the real story: total orders of $10.5 billion, IET orders of $7.1 billion (more than doubling year-over-year), and Remaining Performance Obligations of $40.1 billion with IET RPO of $37.1 billion at a record high.
The thesis is that Baker Hughes has spent five years quietly transforming itself from an upstream-services company into an industrial-energy infrastructure provider, and the Q2 2026 print is the moment the data center, LNG, and gas-fired power thesis moves from narrative to numbers. The mechanism is the IET book-to-bill of 2.2 in the quarter, which means Baker Hughes is booking more than two dollars of new orders for every dollar of IET revenue, and that gap shows up directly in the 19% sequential jump in IET RPO. The market has not yet repriced BKR for an industrial compounding profile layered on top of the cyclical OFSE base, and we read the $0.31 per share gap between GAAP and adjusted EPS, plus the $125 million mark-to-market gain on equity securities inside Other Income, as evidence that reported GAAP earnings are currently understating the underlying earning power of the franchise.
The single load-bearing risk is execution on the Chart integration and on the capacity expansion that the raised IET order guidance implies. Management has guided to capacity additions in power generation equipment and LNG modules, and a slip in those expansions would compress the 2027-2028 conversion that the Horizon 2 outlook assumes. The near-term data point to watch is Q3 2026 results, expected in late October, where management should provide first disclosures of pro forma Chart contribution and updated capacity-expansion spending. A clean print there, with pro forma revenue growth at or above the implied high-single-digit rate, would re-anchor the multiple toward the higher-quality industrial peer group.