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LINDE PLC (LIN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered resilient execution: adjusted EPS of $4.21 (+7% YoY) on sales of $8.62B (+3% YoY), with adjusted operating margin at 29.7% (+10 bps YoY). Operating cash flow rose 8% to $2.95B; free cash flow was $1.67B .
  • Versus consensus, LIN posted a modest EPS beat and essentially in-line revenue/EBITDA; Q4 EPS guidance ($4.10–$4.20) implies a midpoint slightly below Street, reflecting macro caution and tax rate timing headwind; full-year adjusted EPS guidance narrowed to $16.35–$16.45 (raised low end) (estimates marked with asterisks; Values retrieved from S&P Global).
  • Segment mix: Americas growth with strong pricing; EMEA margins elevated despite volume softness; APAC pricing dragged by helium; Engineering faced timing-related declines. Management highlighted robust electronics demand and a healthy projects pipeline in electronics, steel, and decarbonization .
  • Narrative and catalysts: Continued margin discipline and free cash generation, plus electronics-led backlog support near/medium-term EPS growth; caution on Europe/chemicals and helium price/volume drag temper sentiment. Backlog clarity: ~$7.1B sale-of-gas plus $2.9B equipment ($10B total under execution), supporting visibility .

What Went Well and What Went Wrong

What Went Well

  • Record adjusted EPS and strong cash generation: adjusted EPS $4.21 (+7% YoY); operating cash flow $2.95B (+8% YoY) with $1.67B FCF, while returning $1.69B to shareholders in Q3 .
  • EMEA margin strength despite soft volumes: EMEA operating profit margin at 35.9%, +260 bps YoY (or +220 bps ex pass-through), showcasing pricing and productivity discipline .
  • Electronics as fastest-growing end market with multi-year runway: robust merchant/packaged gases and onsite startups; management sees gas intensity rising with advanced nodes, supporting sustained growth .

Quote: “Despite stagnant industrial activity, Linde employees once again demonstrated resilient results by growing operating cash flow 8% and EPS to an all-time high of $4.21, all while maintaining industry leading margins and return on capital.” – CEO Sanjiv Lamba .

What Went Wrong

  • APAC pricing drag from helium and rare gases; management quantified full-year helium/rare gases impact at ~1–2% EPS headwind, mostly in APAC .
  • Engineering sales down 15% YoY and OP margin 19.5%; order intake $269M, reflecting project timing effects .
  • Persistent European industrial weakness and negative base volumes; management sees limited near-term catalysts, with potential infrastructure-led uplift not before mid to late 2026 .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$8.112 $8.495 $8.615
GAAP Diluted EPS ($)$3.51 $3.73 $4.09
Adjusted EPS ($)$3.95 $4.09 $4.21
Operating Profit ($USD Billions)$2.184 $2.354 $2.367
Adjusted Operating Profit ($USD Billions)$2.438 $2.556 $2.558
Operating Margin (%)26.9% 27.7% 27.5%
Adjusted Operating Margin (%)30.1% 30.1% 29.7%
Operating Cash Flow ($USD Billions)$2.161 $2.211 $2.948
Free Cash Flow ($USD Billions)$0.891 $0.954 $1.672
Capital Expenditures ($USD Billions)$1.270 $1.257 $1.276
Segment Sales ($USD Billions)Q1 2025Q2 2025Q3 2025
Americas$3.666 $3.812 $3.846
APAC$1.539 $1.655 $1.741
EMEA$2.031 $2.162 $2.178
Linde Engineering$0.565 $0.551 $0.519
Segment Operating Margin (%)Q1 2025Q2 2025Q3 2025
Americas31.0% 31.7% 31.2%
APAC29.3% 29.6% 28.1%
EMEA35.5% 36.1% 35.9%
Linde Engineering20.2% 16.3% 19.5%
Estimates vs Actuals (Q3 2025)Consensus*Actual
EPS ($)4.1788*4.21
Revenue ($USD Billions)8.616*8.615
EBITDA ($USD Billions)3.368*3.368

Note: *Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPS ($)FY 2025$16.30–$16.50 (Q2) $16.35–$16.45 (Q3) Narrowed; low end raised
Adjusted EPS ($)Q4 2025N/A$4.10–$4.20 (assumes ~2% FX tailwind; ~2% tax headwind) New quarterly guide
Capex ($)FY 2025$5.0–$5.5B (Q1/Q2) $5.0–$5.5B (Q3) Maintained
Effective Tax Rate (%)FY 2025Similar to 2024 ETR (mid-high 23%) commentaryMid-high 23% expected; Q3 lower than run-rate; Q4 higher on timing Clarified timing impact
Backlog (Sale-of-Gas) ($)FY 2025 Year-End~$7.1B (Q1/Q2) ~$7.1B; plus $2.9B equipment backlog (total ≈$10B under execution); “seven handle” targeted year-end Maintained; clarified total backlog context
Shareholder Returns ($)Q3 2025N/A$1.685B returned via dividends and buybacks Disclosure

Earnings Call Themes & Trends

TopicQ1 2025 (Prev)Q2 2025 (Prev)Q3 2025 (Current)Trend
Macro/Industrial ActivityCautious outlook; base volumes down in manufacturing/metals; pricing and productivity drive margins Muted industrial economy; underlying sales +1%; margin expansion; backlog wins in clean energy “Industrial recession” persists; Europe weak; U.S. stable to improving; base volumes under pressure Continued caution; U.S. resilient, Europe weak
ElectronicsGrowth contributor; onsite startups and advanced materials support Backlog additions; clean energy and electronics wins Fastest-growing end market; 9–11% industry growth path; rising gas intensity at advanced nodes Strengthening; multi-year runway
Helium/Rare GasesNot highlightedPricing pressure emergingPricing drag, APAC most impacted; ~1–2% full-year EPS headwind Headwind stabilizing for rare gases; helium uncertain
EMEA Margins+260 bps YoY to 35.5% +240 bps YoY to 36.1% 35.9%; management expects limited expansion upon volume recovery due to pass-through Elevated; mix/timing sensitive
Engineering+5% sales; $3.3B equipment backlog +1% sales; $3.2B equipment backlog -15% sales; $2.9B equipment backlog; OP 19.5% Timing-related softness
AI/Technology InitiativesNot highlightedNot highlighted~300 AI/ML use cases across operations; scaling benefits in 2–3 years Expanding deployment

Management Commentary

  • “While we remain guarded on any near-term industrial recovery, our time-tested capital allocation policy and disciplined investment approach will continue to generate long-term shareholder value.” – CEO Sanjiv Lamba .
  • “Over the last two years, the global economy experienced recessionary industrial conditions… yet Linde has grown operating cash and EPS mid to high single digits while contractually securing a record high-quality project backlog.” – CFO Matt White .
  • “We’ve been in an industrial recession for more than two years… our operating model is designed to plan for the worst and be ready to capitalize on opportunities as they come.” – CEO Sanjiv Lamba .
  • “APAC pricing excluding helium and rare gases is positive… helium and rare gases are a drag… low single-digit % of global sales, but ~1–2% EPS impact YoY.” – CFO Matt White .
  • “The more advanced nodes we see, the intensity of gases goes up and has continued to go up… we expect semiconductor industry growth of 9–11% to a trillion over ~5 years.” – CEO Sanjiv Lamba .

Q&A Highlights

  • Backlog trajectory: Management targets maintaining a “seven handle” sale-of-gas backlog by year-end despite startups; broader opportunity pipeline in U.S. steel, India, and decarbonization projects .
  • 2026 setup: Capital allocation and management actions can deliver mid-single digit contributions each; macro/base volumes and FX remain the swing factor; formal FY 2026 guide expected in February .
  • Pricing dynamics: Year-over-year price +2% aligns with weighted inflation; sequential timing and helium drag explain muted sequential pricing .
  • Helium impact: Full-year helium/rare gas effect estimated at ~1–2% EPS headwind, concentrated in APAC; pricing stabilization seen in rare gases; helium outlook depends on supply dynamics (e.g., Russia) .
  • EMEA margins: Elevated margins driven by negative volumes with fixed payments; recovery could modestly dilute margins due to power costs; merchant/package volume recovery would be accretive .
  • Packaged gases and consolidation: U.S. packaged business grew mid-single digits organically; continued tuck-in acquisition opportunities; cylinder rentals show durability without pricing fatigue .

Estimates Context

  • Q3 2025 results vs consensus: modest EPS beat; revenue and EBITDA essentially in-line (see table above). Q4 EPS guidance ($4.10–$4.20) sits slightly below the $4.175 consensus midpoint*, reflecting tax timing headwind and cautious base volume assumptions .
  • Full-year 2025 adjusted EPS guidance narrowed to $16.35–$16.45 from $16.30–$16.50 (low end raised), implying 5–6% growth YoY on flat FX for the year .

Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Execution quality remains high: disciplined pricing/productivity offset weak industrial volumes, sustaining ~30% adjusted OP margins and growing EPS and FCF through the cycle .
  • Electronics is the structural growth engine: multi-year fab buildout and rising gas intensity should support backlog additions and merchant/package demand, underpinning EPS visibility .
  • Watch Europe and chemicals: management sees limited near-term catalysts; infrastructure and rationalization may aid recovery beyond mid-2026; base volumes likely remain a headwind near term .
  • Helium/rare gas drag persists, mostly in APAC: expect continued pressure on pricing/volumes; stabilization underway in rare gases; monitor supply developments .
  • Q4 setup is prudent: guide midpoint slightly below Street due to FX/tax timing; underlying growth mid-single digits ex these effects; full-year range tightened (low end raised) .
  • Backlog clarity: ~$7.1B sale-of-gas plus $2.9B equipment backlog ($10B total under execution) supports network density and long-term EPS growth trajectory .
  • Capital returns remain robust with under-levered balance sheet: $1.69B returned in Q3; flexibility for buybacks and tuck-in M&A, especially in packaged gases .

Additional Context: Q3 Press Releases

  • Operations expansion: Startup of a new ASU near Charleston, TN to serve eastern Tennessee/northern Alabama/Georgia, strengthening regional supply and supporting growth along the I‑75 corridor .
  • Corporate updates: Announced Q3 earnings schedule; Board appointed CEO Sanjiv Lamba to additional role of Chairman effective Jan 31, 2026, with Sean Durbin named COO effective Oct 1, 2025 .

Non-GAAP Notes and Reconciliations

  • Adjusted EPS excludes Linde AG purchase accounting impacts, cost reduction programs, and other items; reconciliations provided in attachments to the earnings release .
  • Management’s guidance is provided on an adjusted (non-GAAP) basis; reconciliation to GAAP not practicable due to timing/magnitude uncertainties .