Jul 27, 2026 earnings call — Chart acquisition and record IET orders
IET orders hit a record $7.1 billion this quarter, driving a 2.2x book-to-bill and record RPO of $37.1 billion.
Next-quarter revenue outlook $6.9B
Key quotes
"Earlier this month, we completed the acquisition of Chart Industries, a significant milestone in the continued execution of our portfolio strategy."
"When this additional capacity comes online by 2029, we estimate it could support nearly $5 billion in annual Power Systems revenue opportunity at full utilization."
"OFSE delivered significantly stronger-than-anticipated quarter despite ongoing disruptions in the Middle East, further demonstrating the resilience of the portfolio and the benefits of its diversified geographic and product mix."
Analyst Q&A 5
Power Systems growth, mix, pricing, CapEx plans
Q (Arun Jayaram · JPMorgan): Analyst asked for more detail on the $5 billion Power Systems opportunity to 2029, specifically mix, pricing, revenue ramp and what it means for CapEx.
A: Management said $5 billion annualized revenue by 2029 is about a 3 to 4x increase from about $1 billion last year. Gas turbines are roughly half of the opportunity, with brush about 1/4 and other products making up the rest. CapEx will be phased between 2026 and 2028, focus on paybacks below 2 years, using existing manufacturing and a make-buy strategy.
"So on mix, -- of those capabilities I mentioned, gas turbines would represent roughly half of the opportunity." — Ahmed Moghal (CFO)
Commercial synergies from Chart acquisition
Q (Scott Gruber · Citi): Analyst wanted more color on commercial synergies from Chart, near-term opportunities, and underappreciated opportunities in new end markets.
A: Management said the combined portfolio covers power generation, thermal management, gas processing, cryogenic storage, digital monitoring and lifecycle services. Near-term they highlighted data centers and gas infrastructure as clear commercial opportunities. They also pointed to underappreciated longer-term areas like space, geothermal and mining.
"First, data centers is one of the clearest near-term commercial opportunities." — Lorenzo Simonelli (CEO·CHAIR)
OFS quarter drivers and second-half outlook
Q (John Anderson · Barclays): Analyst asked what drove OFS outperformance this quarter, including strong well construction and completions, and what moving parts they expect outside the Middle East in the back half.
A: Management said the team delivered a solid quarter with revenue and EBITDA up and margins slightly expanded. They attributed outperformance to stronger-than-expected international activity outside the Middle East, better-than-anticipated product revenue in the Middle East offset by softer service activity and logistics costs, and a strong SSPS quarter. For the back half they assume Middle East activity stays broadly stable, expect seasonal North America recovery in Q3, continued international improvement, and SSPS backlog conversion supporting results.
"On the second quarter, revenue and EBITDA both increased 7% sequentially and margins expanded 10 basis points." — Ahmed Moghal (CFO)
Drivers of record IET orders and margin outlook
Q (Carlos Andres E. Escalante · Wolfe): Analyst asked what drove record IET orders, market trends for heavy-duty versus smaller turbines, and thoughts on margins tied to recent IET orders.
A: Management said the record quarter reflects broad demand across data centers, LNG, gas processing and production infrastructure. Power Systems orders were $2.6 billion in the quarter, including approximately 150 gas turbines and large generator and gear orders, and data centers accounted for $2.2 billion of Power Systems orders. On margins, they said awards were secured within a disciplined commercial framework and current supply-demand dynamics and pricing strength should support favorable IET margin performance in 2027 and beyond.
"A key driver is the continued strength in Power Systems, where orders totaled $2.6 billion in the quarter." — Lorenzo Simonelli (CEO·CHAIR)
IET second-half factors and free cash flow
Q (Marc Bianchi · TD Cowen): Analyst asked for puts and takes for IET in the second half and why free cash conversion was kept the same despite strong first-half cash.
A: Management noted a strong first half with $12 billion of IET orders and backlog just over $37 billion. For the second half they keep a balanced outlook, assuming Middle East revenues stay broadly consistent, and cited project timing, local supply chains, Gastech equipment backlog conversion, aeroderivative supply chain progress, FX and trade policy as factors. They said first-half free cash flow was driven by favorable working capital, strong customer collections and milestone payments, but working capital movements can cause quarter-to-quarter variability while they remain committed to the overall free cash flow outlook.
"That was driven by some favorable working capital performance by strong customer collections, which come on the back of that type of order strength, but also milestone payments as we continue to progress on individual projects." — Ahmed Moghal (CFO)