Executive Summary

Q4 2024 delivered double‑digit top-line growth and record profitability mix: sales $1.11B (+10% YoY), gross margin 33.6%, adjusted operating margin 22.0%, and adjusted EBITDA $283.6M (25.6% of sales) as cost synergies and aftermarket mix expanded margins .
Order momentum accelerated: $1.55B orders (+29% YoY) drove book‑to‑bill 1.40 and year‑end backlog to $4.85B, anchored by Woodside Louisiana LNG Phase 1; management expects book‑to‑bill ≥1.0 in 2025 .
Cash generation and deleveraging advanced: Q4 FCF $261M; net leverage at 2.80x with target 2.0–2.5x reiterated for 2025; 2025 outlook maintained (Sales $4.65–$4.85B, Adj. EBITDA $1.175–$1.225B, Adj. EPS $12.00–$13.00, FCF $550–$600M) despite FX headwinds (~2% sales impact if rates hold) .
Key 2025 catalysts: LNG revenue conversion (6–8 months post‑order), broadening IPSMR® adoption (MSAs with ExxonMobil, Cheniere MSA), rising NRU opportunity, and RSL growth via LTSAs/digital uptime; potential tariff impacts expected within guidance range given diversified footprint .

What Went Well and What Went Wrong

What Went Well
- Record Q4 orders ($1.55B) with LNG Phase 1 (Woodside Louisiana) plus strength across hydrogen, mining, space, carbon capture, data centers; backlog reached $4.85B .
- Margins expanded meaningfully: Q4 gross margin 33.6% and adjusted operating margin 22.0% on CBE execution and aftermarket mix; HTS posted record margins; RSL consistent high‑40% gross margin .
- Management tone confident on LNG and IPSMR® traction; revenue starts ~6–8 months after large LNG orders, supporting 2H25 step‑up; “We expect to receive Phase 2 in 2025” for Woodside .
What Went Wrong
- EPS headwinds: adjusted diluted EPS of $2.66 faced a ~$0.33 combined headwind (FX, tax rate delta, share count, interest expense) vs forecast; FX also reduced Q4 sales vs plan by ~$17M .
- Specialty Products Q4 gross margin down 120 bps YoY due to Theodore (Teddy2) start‑up inefficiencies and third‑party issues (though +110 bps sequentially vs Q3); management does not expect these to repeat .
- CTS sales/orders were softer YoY on EMEA industrial gas slowdown and lapping large 2023 projects; backlog declined YoY, though management sees 2025 pick‑up and early 2025 orders trending better .

Financial Results

Quarterly performance (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Sales ($M)	$1,040.3	$1,062.5	$1,106.8
Gross Margin (%)	33.8%	34.1%	33.6%
Operating Income ($M)	$167.8	$178.5	$188.3
Adjusted Operating Margin (%)	21.7%	22.2%	22.0%
Adjusted EBITDA ($M)	$257.3	$260.7	$283.6
Diluted EPS (GAAP)	$1.10	$1.34	$1.60
Adjusted Diluted EPS (non‑GAAP)	$2.18	$2.18	$2.66
Free Cash Flow ($M)	$88.0	$174.6	$261.0
Orders ($M)	$1,164.7	$1,167.5	$1,553.1
Backlog ($M)	$4,426.0	$4,535.3	$4,845.1
Book‑to‑Bill (x)	—	1.10	1.40
Vs. S&P Global Consensus	N/A (see note)	N/A (see note)	N/A (see note)

Note: S&P Global consensus estimates were unavailable at time of analysis due to data access limits; therefore, vs‑consensus comparisons could not be completed.

Segment breakdown – Q4 2024

Segment	Sales ($M)	Gross Margin (%)	Operating Margin (%)
Cryo Tank Solutions (CTS)	$150.2	24.4%	14.0%
Heat Transfer Systems (HTS)	$288.8	31.8%	26.2%
Specialty Products	$316.9	27.4%	16.1%
Repair, Service & Leasing (RSL)	$350.7	44.8%	24.4%
Consolidated	$1,106.8	33.6%	17.0%

KPI snapshot

KPI	Q4 2024	Commentary
Book‑to‑Bill	1.40	Broad‑based demand incl. LNG; Specialty, HTS, RSL strength .
Backlog ($B)	$4.85	Up from $4.54B in Q3; Woodside Phase 1 booked .
Net Leverage (x)	2.80	Target 2.0–2.5x reiterated for 2025 .
Operating Cash Flow ($M)	$281.5	Working capital contributed; strong collections .
Capex ($M)	$20.5	Capex normalizing; ~ $110M planned for 2025 .
Free Cash Flow ($M)	$261.0	FCF conversion strong; supports deleveraging .

Non‑GAAP note: Adjustments include Howden step‑up amortization, deal/integration, restructuring and other one‑time items; reconciliations provided by the company .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Sales	FY 2025	$4.65–$4.85B	$4.65–$4.85B	Maintained
Adjusted EBITDA	FY 2025	$1.175–$1.225B	$1.175–$1.225B	Maintained
Adjusted Diluted EPS	FY 2025	$12.00–$13.00	$12.00–$13.00	Maintained
Free Cash Flow	FY 2025	$550–$600M	$550–$600M	Maintained
Tax Rate	FY 2025	~22%	~22%	Maintained
Net Debt (EOY)	FY 2025	~ $3B	~ $3B	Maintained

Management expects a 2H25 step‑up vs 1H25 on LNG and project timing; FX could be a ~2% sales headwind if current rates persist .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2, Q-1)	Current Period (Q4 2024)	Trend
LNG/IPSMR®	Q2: Expanding Big LNG pipeline; modular preference; IPSMR® traction; record data center ACHX order . Q3: Exxon Mozambique selected IPSMR® (pre‑backlog); Woodside transition; LNG orders surged in HTS .	Woodside Louisiana LNG Phase 1 booked; Phase 2 expected 2025; revenue starts ~6–8 months post‑order; HTS margins benefit from IPSMR® mix .	Strengthening
Data Centers / AI	Q2: ~$40M ACHX award; ~$500M annual TAM at 3GW add, plus heavy industrial cooling . Q3: Additional ACHX order .	Consistent demand; hiring dedicated data center commercial lead; broad heat rejection needs .	Building
Aftermarket (RSL)	Q2: Record RSL sales/margins; assets under management +27% YTD . Q3: RSL orders +16.5%; book‑to‑bill 1.05 .	Targeting high‑single‑digit to 10% growth via LTSAs, framework agreements, digital uptime; strong Q1 start .	Stable/positive
CTS / Industrial Gas	Q2: CTS orders +4.5%, sales +12.4% . Q3: China slowdown; CTS orders down YoY .	Q4 CTS YoY down; early 2025 improving; supply chain diversified; not dependent on China .	Stabilizing
NRUs (Nitrogen Rejection Units)	Limited prior mention.	Rising inbounds; size $20–$75M per NRU; expect meaningful step‑up activity .	Emerging growth
Tariffs / Supply Chain	Q2/Q3: Localization and multi‑sourcing progressed; leverage U.S. footprint .	Potential tariff impacts within EBITDA range; flexible manufacturing, diversified supply base .	Managed risk
Hydrogen	Q2: Record SPC hydrogen orders; Europe strong . Q3: Multiple hydrogen agreements (EU, Egypt) .	Europe strong; 45V clarity seen as positive catalyst; market CAGR high‑single‑digit to 10% to 2030 .	Positive

Management Commentary

“Increasing demand for energy globally and a renewed focus on U.S. LNG contributed to record orders in the fourth quarter 2024 of $1.55 billion, setting up 2025 with strong backlog to achieve our reiterated full year 2025 outlook.” — CEO Jill Evanko .
“Adjusted diluted EPS faced headwinds from foreign exchange, the delta in the tax rate compared to our forecast, the change in share count due to market price movement, and interest expense which combined were approximately a $0.33 headwind.” — CEO .
“We reiterate our financial policy and until we are in our target net leverage ratio range of 2 to 2.5, we do not do any share repurchases or material cash acquisitions.” — CFO Joe Brinkman .
“When you see a big LNG project… revenue meaningfully starts approximately 6–8 months after the order comes in… LNG projects are nice contributors to our HTS segment margin, in particular when they utilize IPSMR®.” — CEO .
“Potential gross impacts from tariffs as we understand them today would fall within our EBITDA range… we have flexible manufacturing and flexible supply chain.” — CEO .

Q&A Highlights

Segment growth setup: Expect growth across all four segments in 2025; HTS led by LNG/traditional energy; RSL high‑single‑digit to 10%; CTS mid‑single‑digit with improving pipeline; Specialty driven by backlog conversion (carbon capture, space) .
LNG timing and margins: Woodside Phase 1 timing implies stronger 2H25; IPSMR® adoption lifts HTS margins; Phase 2 anticipated in 2025 .
CTS and China: H2’24 China slowdown impacted CTS, but early 2025 orders steady; supply chain not dependent on China; footprint diversified .
NRU opportunity: NRU content per project ~$20–$75M; growing inbounds; currently small but poised to scale .
RSL growth levers: Visibility via LTSAs/frameworks; digital uptime roll‑out (including heat exchangers); aim to avoid back‑half catch‑ups .
Estimates to high end: Path to top‑end free cash flow and EBITDA driven by backlog conversion, lower tax rate, lower deal costs, and early large orders that can convert in 2H25 .
Backlog conversion: Expect ~60% of 12/31/24 backlog to convert in 2025, aided by throughput improvements in compressor and cold box shops .
Book‑to‑bill outlook: Expect ≥1.0 in 2025; Q1 likely at or above 1.0 .

Estimates Context

S&P Global consensus estimates were unavailable due to API daily request limits at the time of this analysis; therefore, direct comparisons vs consensus for Q4 2024 revenue, EPS, or EBITDA could not be provided. Where estimates are not shown, consider this a data unavailability, not a beat/miss determination.

Key Takeaways for Investors

Backlog quality/mix improved with LNG Phase 1 and broad end‑market participation (hydrogen, data centers, carbon capture, space), supporting sustained book‑to‑bill ≥1.0 and revenue visibility into 2H25 .
Margin trajectory remains favorable: HTS mix (IPSMR®), growing aftermarket scale (RSL), and CBE execution underpin mid‑30s gross margin medium‑term target and ongoing operating leverage .
Cash generation inflecting: FCF ramp ($261M in Q4) accelerates deleveraging toward 2.0–2.5x target in 2025, creating optionality for buybacks (authorized $250M) once leverage threshold is met .
Near‑term watch items: FX (~2% potential sales headwind if current rates persist), Specialty Products’ Teddy2 normalization, and CTS momentum improvement in EMEA/China industrial gas .
LNG revenue cadence: Expect 6–8 month lag from order to revenue; Woodside timing favors 2H25; Phase 2 and other pipeline projects could extend multi‑year growth .
Emerging growth vectors: NRUs ($20–$75M per project) and data centers (thermal rejection, compressors/blowers) provide incremental optionality beyond LNG/hydrogen .
Risk‑managed footprint: Diversified global manufacturing/sourcing and strong U.S. footprint mitigate tariff/supply chain risks; management expects any tariff impacts within EBITDA guidance .

Sources: Q4 2024 8‑K and press release (financials, segments, guidance) ; Q4 2024 earnings call transcript (themes, quotes, Q&A) and duplicate transcript ; Q3 2024 press release/8‑K (trend context) ; Q2 2024 press release (trend context) ; Dec 11, 2024 buyback authorization ; Dec 31, 2024 Woodside Phase 1 order .

CHART INDUSTRIES INC (GTLS)·Q4 2024 Earnings Summary