Chart Industries Delivers Solid 2025 Results; Baker Hughes Acquisition in Focus

Key Financial Highlights for Investors

• Full Year 2025 Orders: \$5.68 billion, up 13.4% year-over-year. Book-to-bill ratio stands at an impressive 1.33, indicating strong demand and future revenue visibility.
• Full Year 2025 Sales: \$4.26 billion, a 2.5% increase over 2024. Excluding large non-recurring projects from 2024, sales grew 4.1%.
• Adjusted Operating Income: \$884.4 million (20.7% margin), up 6.2% adjusting for non-recurring items, but the margin decreased 40 basis points. Excluding non-repeat projects in 2024, adjusted margin improved by 50bps.
• Adjusted EBITDA: \$1.014 billion (23.8% of sales), essentially flat year-over-year, but with a 60bps margin decline due to mix and cost pressures.
• Free Cash Flow (FCF): \$204.8 million for the year; Q4 FCF was \$66.2 million, impacted by working capital changes, higher cash taxes, and acquisition-related costs.
• Q4 2025 Orders and Backlog: Orders of \$1.18 billion (down 23.8% due to prior-year large orders), book-to-bill of 1.10, and backlog at a record \$5.89 billion, up 21.5% year-over-year. 44% of backlog expected to ship in the next 12 months.
• Q4 2025 Sales & Margins: Sales of \$1.08 billion (down 2.5%), gross margin at 33.3%, adjusted operating margin at 19.1% (down 290bps on higher SG&A costs).
• Q4 2025 Adjusted EPS: \$2.51 per diluted share, compared to \$2.66 in Q4 2024. Reported EPS was \$1.01.
• Net Leverage Ratio: Ended Q4 at 2.83x.

Segment Performance (Q4 and FY2025)

Cryo Tank Solutions (CTS)

• Q4 2025 Orders: \$162.1 million (+17% YoY); Sales: \$163.9 million (+9.1% YoY). Growth driven by industrial gas markets, but adjusted operating margin dropped to 9.3% due to unfavorable mix.
• FY2025: Orders up 0.8%, sales down 2.1% due to lower industrial gas demand, and margin down 40bps to 12.8%.

Heat Transfer Systems (HTS)

• Q4 2025 Orders: \$208.7 million (-61.1% YoY, due to prior-year large orders); Sales: \$325.8 million (+12.8% YoY) as LNG and data center backlogs converted to sales.
• Adjusted Operating Margin: Soared to 33.4% (+630bps YoY) in Q4, and 30.1% for FY2025 (+670bps), reflecting improved mix and productivity.

Specialty Products

• Q4 2025 Orders: \$491.4 million (-3.5% YoY); Sales: \$259.5 million (-18.1% YoY), impacted by customer timing in hydrogen, space, and HLNG markets.
• Adjusted Operating Margin: 9.1% (down 830bps YoY) on higher production costs (notably a FOAK project) and lower HLNG vehicle tank sales.
• FY2025: Orders up 33.2%, sales down 1.4%, margin fell 210bps to 15.4% due to mix and FOAK project costs.

Repair, Service & Leasing (RSL)

• Q4 2025 Orders: \$322.0 million (-12.8% YoY); Sales: \$330.4 million (-5.8% YoY, mainly due to lower leasing sales).
• Adjusted Operating Margin: 29.2% (down 660bps), though gross margin (44.6%) remains healthy.
• FY2025: Orders up 11.1%, sales down 5%, margin down 470bps to 32.6% due to non-repeat of 2024’s large projects.

Strategic Developments & Outlook

• Pending Acquisition by Baker Hughes: On October 6, 2025, shareholders approved Chart’s acquisition by Baker Hughes at \$210 per share in cash. Regulatory reviews are ongoing, and the closing is expected in Q2 2026, subject to timing of approvals. This is a highly significant, price-sensitive event for shareholders.
• Big LNG Orders: No Big LNG orders in Q4 2025, but second-half 2025 orders increased 1.8% vs. first half. The backlog remains robust, and LNG-related backlog conversion drove HTS performance.
• Growth Markets: Q4 saw increased demand from data center customers, including the company’s first small-scale LNG solution for this market. Strong orders in carbon capture, nuclear, and marine end markets; RSL saw increased demand for spares and retrofit services.
• Customer and Asset Growth: 703 new customers added in 2025, Uptime asset connections up 29%, and assets under management/service agreements up 21% over 2024.
• Gross Margins: Achieved eleventh straight quarter above 30% gross margin, and seventh above 33%.

Other Noteworthy Items & Risks

• Termination Fee: \$266 million expense related to a terminated proposed merger with Flowserve impacted full-year results.
• Adjusted EPS Calculation: Now includes impacts of mandatory convertible preferred stock dividend, with restated prior periods for comparability.
• Risks Disclosed: The company highlighted risks around integration of acquisitions, supply chain volatility, inflation, geopolitical instability (Middle East, Russia/Ukraine), trade policy changes, and regulatory risk related to the Baker Hughes deal. The possibility that the deal may not close, or that expected benefits may not materialize, is explicitly noted as a shareholder risk.

Summary for Shareholders

For investors and shareholders, Chart Industries delivered a solid operating performance in 2025, with notable growth in order book and backlog, especially in LNG, data center, and clean energy markets. However, full-year and Q4 margins were pressured by higher SG&A and specific project costs, and some segments saw sales declines due to lower leasing and non-repeat large projects from 2024.

The most significant, price-sensitive event is the pending \$210/share cash acquisition by Baker Hughes. This transaction, if completed as expected in Q2 2026, would deliver a substantial premium to shareholders. However, any developments regarding regulatory approvals, deal timing, or completion risk could significantly impact the share price. Shareholders should monitor updates closely.

Additionally, Chart’s ongoing exposure to macroeconomic, supply chain, and integration risks remains, especially with large projects and sector volatility.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. All forward-looking statements are subject to risks and uncertainties, including those highlighted by Chart Industries in their official filings.

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