Company: BKR
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0001701605-25-000107
Chunk: 101

Company: Baker Hughes Co
Filing Date: 2025-07-23
Form: 10-Q
Item: Part I, Item 2
Chunk 101
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the condensed consolidated financial statements and the related notes included in Item 1 thereto, as well as our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Annual Report").

Baker Hughes Company ("Baker Hughes," "the Company," "we," "us," or "our") is an energy technology company with a broad and diversified portfolio of technologies and services that span the energy and industrial value chain. We conduct business in more than 120 countries and employ approximately 57,000 employees. We operate through our two business segments: Oilfield Services & Equipment ("OFSE") and Industrial & Energy Technology ("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.

EXECUTIVE SUMMARY

Market Conditions

In the second quarter of 2025, we saw slowing activity across global oil markets primarily due to the ongoing geopolitical tensions, uncertainty around trade policy and tariffs, and slower global economic growth.

As we look to the rest of 2025, we remain positive on the global liquefied natural gas ("LNG") and natural gas outlook, while we see continued volatility in oil markets as weakening demand and rising production are balanced against persistent geopolitical risks in both the Middle East and Russia. We anticipate oil-related upstream spending will remain subdued until the Organization of the Petroleum Exporting Countries and its allies ("OPEC+") excess barrels are absorbed by the market. Based on the current macroeconomic and geopolitical backdrop, we expect 2025 global upstream spending to be lower than 2024, with pockets of resilience in select international markets. We maintain our expectation for producers to shift spending towards the optimization of mature fields.

We remain optimistic on the global natural gas outlook, as we see a continued shift towards the development of natural gas and LNG. We believe the positive long-term fundamentals for global natural gas are less affected by near-term macro uncertainty and supported by solid growth in demand, positive fundamentals for LNG contracting and the continued desire to reduce emissions across the energy ecosystem.

We will continue to monitor market conditions and assess potential risks, including uncertainty around the macroeconomic environment, trade policy and tariffs, the pace of OPEC+ restarted idled oil production, oil price volatility, changes in