Our 2024 annual report

Dear fellow shareholders,

In 2024, Baker Hughes achieved strong results across the Company, demonstrating exceptional operational performance that set multiple records in a tremendous year for us.

Despite some macro headwinds, we achieved another record year of revenues and adjusted measures of EPS*, EBITDA* and EBITDA margins* — with greater than 20% EBITDA growth for the second consecutive year. Our EBITDA margins were up 1.7 percentage points to 16.5%, and I am proud to share that over half of that progress can be attributed to the transformation actions the team executed across the Company. This will continue to be a large contributor to our margin improvement as we progress through 2025.

Our company is clearly delivering results and is focused on continuing this momentum, with EBITDA to demonstrate another year of solid growth in 2025. Baker Hughes has evolved into a more profitable energy and industrial technology company: We are transforming the core, driving profitable growth and delivering results in new energy. Company results are benefiting from strong execution, sharpened commercial focus and improved productivity gains, and as we embark on our journey into horizon two next year, we are excited to seize the opportunities afforded by the versatility and breadth of our technology portfolio, as well as drive segment margins beyond our 20% targets.

In 2024, our new energy orders crossed the $1 billion mark for the first time, tripling awards since 2021. We remain confident in our ability to achieve our 2030 orders target of $6 billion to $7 billion with the expectation that deployment of decarbonization technologies will continue to gain momentum as policy support and technology advances drive improving project economics.

Demand for energy is only growing, driven by population growth and increasing power intensity across major developing countries. To meet this demand and ensure that energy is affordable, secure and sustainable for the long term, we must utilize every source of energy. Ultimately, we expect renewables to fall short of meeting both growing demand and replacing hydrocarbons to decarbonize the existing energy system. It will take an all-of-the-above strategy, focusing on the emissions and not the fuel source, to meet the increase in energy demand.

This is the Age of Gas. Natural gas is abundant, low-cost and has lower emissions compared to more carbon-intensive sources of energy, including coal, and it is our belief that it will sustain the shift toward decarbonization that we will see for decades to come. Last year was a pivotal year for gas, and by 2040 we expect natural gas demand to grow by almost 20% and global liquified natural gas (“LNG”) demand to increase at an even faster rate of 75%. This backdrop provides a very constructive environment in which Baker Hughes can flourish. We experienced a significant increase in gas infrastructure equipment orders and anticipate this trend will continue as many developing economies look to increase the use of natural gas within power generation and industrial applications. As we continue to lead in this space, we believe our technology solutions will continue to drive lower emissions, more efficient consumption and increased power output to ensure gas reaches its full potential as a transition and destination fuel.

Over the last year, we made tremendous progress to help our customers reduce emissions, improve efficiency and drive sustainable energy development — the balance needed to supply the world with the energy it needs today without adversely impacting the abundance and availability of energy tomorrow.

Sustainable energy development is based on these principles: using energy-efficient technology, expanding energy sources, including natural gas and renewables, and using energy responsibly, which includes efficient infrastructure.

We believe that our strongest contributions to sustainable energy development come from:

• Technology innovation that focuses on all sources of energy;
• Digital solutions that use data to its fullest potential and enable steady and continuous improvement;
• Partnerships that expand across industries, companies, governments and NGOs; and
• Integrated solutions for specific regional and commercial needs.

We have undergone significant change to differentiate ourselves as the leading energy technology company, laying the foundation to transform Baker Hughes. The change we see within our Company reflects the ever-evolving global energy landscape, and in 2024, our strategy yielded record results. The full potential of our diversified energy and industrial company is uniquely capable to optimize traditional sources of energy while abating emissions and enabling new energy. 

Our purpose — to take energy forward, making it safer, cleaner and more efficient for the planet — directly responds to the world’s energy needs. It is our guiding principle, and we believe that the long-term plans we announced in 2022 have set Baker Hughes on the path to succeed. Regardless of how the energy landscape progresses in the coming years, our customers will find what they need from our balanced portfolio of best-in-class technology solutions and services.

In 2025, Baker Hughes will strive for another year of strong results through proactive actions and strategic planning. We know what must transpire to repeat and exceed our 2024 accomplishments, and our vision is clear. I remain confident that our strategy will guide us to continued historic achievements that take energy forward.

Sincerely,

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Lorenzo Simonelli

Chairman, President and Chief Executive Officer

* EBITDA, EBITDA margin and adjusted EPS are non-GAAP measures. Please refer to the Baker Hughes Reconciliation of GAAP to non-GAAP Financial Measures at the end section of our Annual Report.