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CI

CHART INDUSTRIES INC (GTLS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered broad-based demand: orders rose 28.6% to $1.50B with record service orders; sales grew 4.0% to $1.082B; adjusted EPS was $2.59 and adjusted EBITDA $267.3M .
  • Versus consensus, GTLS posted an EPS beat and a slight revenue miss: adjusted EPS $2.59 vs $2.51*; revenue $1.082B vs $1.105B* .
  • Management withdrew FY25 guidance and cancelled the earnings call due to the proposed acquisition by Baker Hughes; merger terms value common shares at $210 cash; Flowserve agreement was terminated (Baker Hughes pays $258M of the $266M termination payment) .
  • Operating momentum remained strong in HTS (LNG +37.6% YoY; adjusted OI margin +480 bps) and service; RSL sales declined due to a one-time emergency project in Q2’24 that did not repeat .
  • Near-term stock catalysts revolve around M&A milestones (regulatory approvals, shareholder vote) and the trajectory of LNG/data center backlog conversion and aftermarket growth .

What Went Well and What Went Wrong

What Went Well

  • Orders strength and mix: $1.50B orders (+28.6% YoY) across hydrogen, LNG, space, marine, nuclear; record service orders, and July continued momentum with new frameworks and bookings. “We booked $1.50 billion of orders… continued strength in our end markets” — CEO Jill Evanko .
  • Profitability resilience: fifth consecutive quarter of gross margin ≥33% (33.6% in Q2); adjusted operating margin 21.1%; adjusted EPS up 18.8% YoY to $2.59 .
  • Segment execution: HTS sales +24.8% YoY, LNG sales +37.6%; HTS adjusted OI margin 25.2% (+480 bps); CTS adjusted OI margin 18.2% (+700 bps) .

What Went Wrong

  • Top-line vs Street: revenue ($1.082B) missed consensus ($1.105B*) despite strength in multiple end markets .
  • RSL sales -6.2% YoY due to prior-year emergency repair project (~$25M) inflating Q2’24; RSL adjusted margin -460 bps YoY to 34.2% on mix .
  • Guidance visibility removed: FY25 guidance withdrawn and the Q2 earnings call cancelled due to the proposed Baker Hughes acquisition, reducing near-term transparency for investors .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.1068 $1.0015 $1.0823
Diluted EPS (GAAP) ($)$1.58 $0.94 $1.53
Adjusted EPS ($)$2.66 $1.86 $2.59
Gross Margin (%)33.6% 33.9% 33.6%
Operating Income ($USD Millions)$188.3 $152.3 $169.5
Adjusted EBITDA ($USD Millions)$283.6 $231.1 $267.3
Segment Sales ($USD Millions)Q4 2024Q1 2025Q2 2025
Cryo Tank Solutions$150.2 $153.2 $155.9
Heat Transfer Systems$288.8 $267.3 $295.3
Specialty Products$316.9 $276.1 $292.9
Repair, Service & Leasing$350.7 $304.9 $338.2
Consolidated$1,106.8 $1,001.5 $1,082.3
KPIsQ4 2024Q1 2025Q2 2025
Orders ($USD Billions)$1.5531 $1.3156 $1.4976
Backlog ($USD Billions)$4.8451 $5.1436 $5.5365
Free Cash Flow ($USD Millions)$261.0 $(80.1) $124.0
Net Leverage Ratio2.80 2.91 2.85
Estimates vs Actual (Quarterly)Q1 2025 ConsensusQ1 2025 ActualQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Billions)$1.0026*$1.0015 $1.1052*$1.0823
Adjusted/Normalized EPS ($)$1.83*$1.86 $2.51*$2.59

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (as of Q1 2025)Current Guidance (Q2 2025)Change
Sales ($USD Billions)FY 2025$4.65–$4.85 Withdrawn Withdrawn
Adjusted EBITDA ($USD Billions)FY 2025$1.175–$1.225 Withdrawn Withdrawn
Adjusted Diluted EPS ($)FY 2025$12.00–$13.00 (≈45.5M shares) Withdrawn Withdrawn
Tax Rate (%)FY 2025≈22% Withdrawn Withdrawn
Net Debt ($USD Billions)FY 2025 YE≈$3.0 (FCF $550–$600M) Withdrawn Withdrawn

Earnings Call Themes & Trends

Note: The Q2 2025 earnings call was cancelled due to the proposed Baker Hughes acquisition; current-period themes are derived from the press release and 8-K .

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
LNG demand and HTSQ4: record HTS orders/sales, Woodside Louisiana LNG award; strong LNG pipeline . Q1: HTS demand robust across LNG/data centers; backlog conversion driving margins .No Big LNG orders in Q2, but LNG sales in HTS +37.6% YoY; broad-based systems/solutions strength .Improving conversion; pipeline intact
Data centersQ4: ACHE orders for data centers contributed to record HTS . Q1: continued robust demand .Converting data center backlog supported HTS sales growth .Positive
Aftermarket/Service (RSL)Q4: record full-year metrics; strong backlog . Q1: record RSL orders; service frameworks up 10.7% since YE .Record service orders; frameworks up vs YE; assets connected to Digital Uptime grew 10.3% YTD .Strong, expanding
Tariffs/MacroQ1: ~$50M gross tariff impact anticipated; supply-chain regionalization to mitigate; price increases .No new tariff update; focus on transaction and operational execution .Watchful risk
Regulatory/Legal (M&A)—Proposed Baker Hughes acquisition; Q2 call cancelled; FY25 guidance withdrawn; Flowserve deal terminated with $266M payment (BKR paying $258M on Chart’s behalf) .Major corporate event

Management Commentary

  • “We booked $1.50 billion of orders in the second quarter 2025… Our sales in solutions and aftermarket… contributed to our adjusted operating income margin of 21.1% and our fifth consecutive quarter of gross margin… above 33.0%.” — Jill Evanko, CEO .
  • “Due to the proposed acquisition of Chart by Baker Hughes… we are withdrawing 2025 guidance… and we will not be hosting a webcast or conference call to discuss these results.” .
  • Q1 setup: “This marks our fourth consecutive quarter of reported gross profit margin above 33%… focus on debt paydown… net leverage ratio of sub 2.5 in 2025” .
  • Q4 backdrop: “Increasing demand for energy globally and a renewed focus on U.S. LNG contributed to record orders… setting up 2025 with strong backlog” .

Q&A Highlights

  • No Q&A occurred for Q2 2025; the earnings call was cancelled due to the proposed Baker Hughes acquisition. Management withdrew guidance and provided results via press release/8-K .

Estimates Context

  • Q2 2025: Adjusted EPS beat consensus ($2.59 vs $2.51*); revenue missed ($1.082B vs $1.105B*).
  • Q1 2025: Adjusted EPS beat ($1.86 vs $1.83*); revenue slightly below ($1.002B* vs $1.002B actual $1.0015B).
  • Street likely revises revenue trajectory modestly lower near-term given RSL YoY comp and call cancellation, while maintaining confidence in margin progression given solid HTS mix and sustained ≥33% gross margin .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q2 showed durable demand in LNG/data centers and service: orders +28.6% and record service orders support backlog conversion into H2’25, despite the absence of “Big LNG” awards this quarter .
  • Profitability trajectory intact: ≥33% gross margins continue; HTS and CTS margin expansion offset RSL normalization; adjusted EPS beat vs Street .
  • Revenue miss was modest; mix/comps (RSL prior-year emergency repair) explain variance; watch sequential conversion in HTS/Specialty into H2 .
  • Corporate overhang: Baker Hughes deal drives near-term trading on M&A path (approvals, shareholder vote, timeline); Flowserve termination costs largely borne by BKR per terms .
  • If the transaction closes, upside/downside shifts to deal certainty; if it does not, prior FY25 plan (sales $4.65–$4.85B, adj. EBITDA $1.175–$1.225B) remains a useful benchmark but is formally withdrawn .
  • Monitoring list: backlog-to-sales cadence, RSL frameworks/digital asset expansion, tariff developments, and FX impacts on sales and EPS .