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Good day, ladies and gentlemen, and welcome to the Baker Hughes Company Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Chase Mulvehill, Vice President of Investor Relations. Sir, you may begin.

Thank you. Good morning, everyone, and welcome to Baker Hughes Second quarter earnings conference call. Here with me are our Chairman and CEO, Lorenzo Simonelli; and our CFO, Ahmed Moghal. The earnings release we issued yesterday evening can be found on our website at bakerhughes.com. We will also be using a presentation with our prepared remarks during this webcast, which can be found on our investor website. As a reminder, we will provide forward-looking statements during this conference call. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for the factors that could cause actual results to differ materially. Reconciliation of adjusted EBITDA and certain GAAP to non-GAAP measures can be found in our earnings release. With that, I'll turn the call over to Lorenzo.

Thank you, Chase. Good morning, everyone, and thanks for joining us. First, I'd like to provide a quick outline for today's call. I will begin by discussing our strong second quarter results and recently announced transactions. I will then highlight key awards and technology developments announced during the quarter and provide some thoughts on the macro backdrop. After this, I will share an update on the exciting progress we are making in the distributed power space. We have a particular focus on data centers. Ahmed will then cover our financial performance, followed by an overview of our portfolio optimization strategy and our outlook. Finally, I'll provide a quick recap before opening the line for questions. Let's now turn to the key highlights on Slide 4. We delivered another strong set of results, maintaining the trend of meeting or exceeding the midpoint of our EBITDA guidance for the 10th consecutive quarter. Adjusted EBITDA rose to $1.21 billion reflecting a 170 basis point year-over-year improvement in margins. This was driven by the impact of structural cost actions and stronger operational execution. We continue to make clear progress in scaling our business system, a standardized platform that enables consistent strategy execution and delivers differentiated outcomes. These efforts are driving structural margin improvement, strengthening the resilience of our earnings and laying the foundation for long-term value creation. This performance reflects strong execution across both segments amid ongoing macro and industry-related headwinds. Oilfield Services & Equipment delivered 90 basis points of sequential margin improvement driven by stronger International and Subsea & Surface Pressure Systems revenue as well as meaningful progress on cost-out initiatives. In Industrial & Energy Technology, margins expanded by 190 basis points year-over-year, supported by the continued deployment of our business system, which is enhancing operational discipline and execution. IET orders continued to demonstrate strong momentum, totaling $3.5 billion in the quarter. Notably, this was achieved with no material LNG equipment orders, once again highlighting the strength and versatility of our technology portfolio as we further expand across energy and industrial end markets. This diversification is reflected in the growing demand for our data center solutions. During the quarter, we booked more than $550 million in power generation equipment orders for data centers. In addition, we experienced another strong quarter for gas tech services, upgrades and transactional bookings as customers focus on improving performance and extending the life of equipment. IET backlog grew 3% sequentially, reaching a new record of $31.3 billion, reinforcing the durability of our growth outlook. Following a strong first half and a positive outlook for the second half awards, we are confident in achieving IET's full year order guidance range of $12.5 billion to $14.5 billion. Looking beyond this year, we see continued momentum for power solutions, sustained growth in new energy and a robust pipeline of LNG and gas infrastructure opportunities, all of which support a constructive outlook for orders. During the quarter, we generated free cash flow of $239 million and returned a total of $423 million to shareholders, including $196 million in share repurchases. Turning to Slide 5. We also announced 3 strategic transactions in the quarter, to advance our portfolio optimization strategy, reinforcing efforts to enhance the durability of earnings and cash flow while creating long-term value for shareholders. First, regarding divestitures. We entered into an agreement to establish a joint venture with Cactus, contributing surface pressure control in exchange for approximately $345 million, while maintaining a minority ownership stake. Additionally, we announced the sale of Precision Sensors & Instrumentation to Crane Company for approximately $1.15 billion. These proceeds will provide the company with increased flexibility to reinvest in higher-growth, higher-return opportunities, supporting further margin expansion and enhancing overall returns. Next, from a strategic acquisition perspective, we signed an agreement to purchase Continental Disc Corporation, a leading provider of pressure management solutions for approximately $540 million. CDC represents a high-quality bolt-on acquisition within IET, adding a highly complementary offering to our existing valves portfolio that expands our presence in the pressure and flow control market and brings margin-accretive life cycle-based revenue. As we advance our portfolio optimization initiatives, we remain focused on executing a strategic and disciplined capital allocation approach to maximize long-term shareholder value. Overall, we made strong progress on multiple fronts during the quarter, and each of these actions support our commitment to profitable growth, continuous margin expansion and improving quality of earnings. Turning to Slide 6. We continue to build strong commercial momentum across new and existing markets with growing synergy opportunities across our portfolio that enhance how we deliver value to customers while expanding our market presence. During the quarter, IET secured 2 significant data center awards. First, we received our largest data center award to date for 30 NovaLT gas turbines. These units will deliver almost 500 megawatts of power to data centers in the United States and operate on a blend of natural gas and hydrogen, supporting both reliability and lower carbon operations. Second, we received an order for 16 NovaLT gas turbines representing up to 270 megawatts of power for deployment of Frontier's data centers in Wyoming and Texas. This award is the first phase of the previously announced enterprise-wide agreement with Frontier to advance power solutions and large-scale carbon capture and storage. These awards reflect the accelerating long-term demand for distributed, lower carbon power in support of digital infrastructure. This trend is also unlocking greater commercial synergies across our power and decarbonization portfolios, reinforcing the potential for sustained data center and new energy growth. In total, IET booked 69 NovaLT units this quarter with more than 70% allocated to data center projects. Year-to-date, we have secured almost 1.2 gigawatts of NovaLT capacity for data center applications, highlighting our expanding role in enabling the growth of digital infrastructure through flexible, lower carbon power solutions. We are also expanding our pipeline of future digital infrastructure opportunities. At the recent Saudi-U.S. Investment Forum, we signed an MoU with DataVolt for data center projects globally, which includes plans to power data centers in the Kingdom with our NovaLT turbines using hydrogen from NEOM. Beyond data centers, we continue to see strong demand in gas infrastructure. In Saudi Arabia, we secured an award for 4 NovaLT turbines to support Aramco's Master Gas System III pipeline. Also, in Climate Technology Solutions, we signed a framework agreement with Energinet to supply 16 reciprocating compressor packages, supporting an increase in biogas production while driving emissions reduction for gas infrastructure in Denmark. In GTS, we secured more than $350 million in contractual service agreements during the quarter, strengthening our backlog of recurring revenue. Key awards included a new maintenance agreement with Petrobel to improve uptime and reliability of critical turbomachinery equipment and a renewal of a multiyear service contract with Oman LNG, featuring remote monitoring and diagnostic services delivered through our iCenter. In New Energy, we continue to build momentum internationally, where we have historically seen the greatest concentration of orders. During the quarter, CTS secured one of the largest CCS orders to date, providing compression technology for a large CCS hub in the Middle East. In geothermal, we successfully drilled Lower Saxony's first productive deep exploration well in Germany. This project highlights the strength of our integrated well construction and production solutions capabilities supported by advanced digital solutions that optimize performance. In OFSE, we maintained strong momentum in production and mature asset solutions, booking several meaningful awards. Notably, we signed a significant master services agreement with Aramco for installation and maintenance of electric submersible pumps across the Kingdom. We also received 2 large multiyear contracts to help optimize production, throughput and reliability for 2 major operators in offshore Angola and the U.S. Gulf Coast, leveraging our chemicals, artificial lift and digital solutions. In Norway, Equinor awarded us a contract to industrialize offshore plug and abandonment operations in the Oseberg East field, which followed the announcement of a new multiyear framework agreement for integrated well services. OFSE also secured a multiyear contract to provide drag-reducing chemicals to be deployed on 2 major offshore pipeline systems operated by Genesis Energy. To support this agreement, we will expand our chemicals manufacturing footprint and deploy Leucipa, our digitally automated fuel production solution. Also for Leucipa, we received an award from Repsol for next-generation AI capabilities and entered into a new agreement with ENI to deploy Leucipa for ESP optimization and AI-driven predictive analytics in the Middle East. Continuing on digital, Cordant Solutions secured a notable contract with a large NOC to deploy asset performance management for several compressor stations in the Middle East. Cordant Solutions was also awarded a contract with NOVA Chemicals to optimize maintenance and maximize production across multiple petrochemical facilities, leveraging APM's asset strategy and asset health digital offerings. Overall, it was another strong quarter, both from a commercial and technology engagement perspective. We are building strong order and technology pipelines that extend beyond our traditional oil and gas markets, creating additional life cycle growth opportunities that further enhance our earnings and cash flow durability. Turning to the macro on Slide 7. Amid continued macro uncertainty, I want to take a moment to reaffirm the strong long-term fundamentals underpinning our business. Global energy demand continues to grow, supported by durable secular macro trends that are shaping the future of the energy landscape. Population growth, particularly in emerging markets, is driving baseline demand for energy across residential, mobility and infrastructure. At the same time, continued economic development and industrialization are expanding energy needs across critical sectors such as manufacturing, transportation and technology. Urbanization and the global push for electrification are accelerating the build-out of modern energy systems. This includes both expanding access to reliable electricity and supporting new demand drivers like data centers and industrial decarbonization. Amid this backdrop, there is a global push for lower carbon solutions as countries advance their emission reduction goals. In response, we are seeing increased investment in clean power CCUS, emissions abatement, geothermal and hydrogen. These markets require scalable, flexible and efficient energy solutions. Capabilities that are core to Baker Hughes and essential to enabling a lower carbon economy. Consistent with this trend, we booked $1 billion in new energy orders during the quarter, bringing year-to-date bookings to $1.25 billion, already matching our total for last year. As a result, we now anticipate exceeding the high end of our $1.4 billion to $1.6 billion order range for this year. This performance reflects increasing global demand for lower carbon solutions and reinforces our confidence in achieving our $6 billion to $7 billion order target by 2030. Collectively, these macro trends support a strong long-term outlook for the global energy and industrial landscape as customers increasingly prioritize efficiency, reliability and sustainability. It is an environment aligned with our strengths and one that positions us to capitalize on the significant opportunities ahead. Now turning to natural gas. We continue to see growing divergence between oil and natural gas fundamentals. Its abundance, low-cost reliability and lower emissions set natural gas apart from other fossil fuels. This year is increasingly being validated across policy and market dynamics. While we expect significant growth from renewables, scaling these technologies at pace required to meet growing energy needs remains a challenge, particularly in light of supply chain constraints, permitting delays, cost inflation and less favorable policy support. These challenges further reinforce the positive long-term outlook for natural gas. By 2040, we expect natural gas demand to grow by over 20% with global LNG increasing by at least 75%. This growth outlook creates a favorable environment for Baker Hughes. We are already seeing strong momentum, booking $2.9 billion in gas infrastructure equipment orders over the past 6 quarters, a trend we expect to continue as countries turn to natural gas to support power generation and industrial development. In LNG, approximately 60 MTPA of additional FIDs are needed over the next 18 months to reach our 3-year target of 100 MTPA, which would bring the global installed base to our long-held target of 800 MTPA by 2030. Beyond this, we see continued growth in the installed base as energy demand and emission reduction efforts converge. This year, LNG demand continues to grow rapidly, up 5% year-over-year as softness in China is more than offset by strength in Europe. This increase in demand is driving sustained momentum in LNG contracting activity. For example, with Mackenzie reports 49 MTPA of long-term LNG offtake contracts have been signed in the first half of the year, positioning 2025 to exceed the record 81 MTPA signed last year. Now turning to our markets. This year has been marked by heightened volatility, with Brent prices ranging from a lower $60 per barrel in early May to a high of $77 per barrel in June, with continued volatility into July. The market continues to navigate cross currents, balancing weakening demand and rising OPEC+ production against persistent geopolitical risk in both the Middle East and Russia. As we look into the second half of the year, we expect continued volatility as OPEC+ accelerates the return of its 2.2 million barrels per day of idle production into what we anticipate will be a soft market. Ultimately, until all excess OPEC+ barrels are absorbed by the market, we anticipate oil-related upstream spending will remain subdued. On global upstream spending, we maintain our outlook for a high single-digit decline this year. In International, we now expect spending to decline toward the high end of our mid- to high single-digit range, given downward pressure in key countries such as Saudi Arabia and Mexico. In North America, we still project spending to decline in the low double digits. These forecasts assume current oil prices hold and no further trade policy escalation. Any meaningful deterioration in EVA could present incremental downside. Longer term, we expect oil demand to grow beyond 2030. To meet that demand, significant investments will be required. In addition, we anticipate growing customer focus on mitigating reservoir decline and optimizing production efficiency. This underscores our strategic focus on mature asset solutions in OFSE. These technologies will improve production reliability, boost field performance and expand our presence in more durable OpEx-led production market, increasing the resilience of our revenue base. Turning to Slide 8. I wanted to take a few minutes to discuss the opportunity we see in distributed power solutions for data center market and beyond. Distributed power represents a compelling growth vector for Baker Hughes, drawing on multiple parts of our enterprise, from industrial gas turbines and electric motors to geothermal and CCS technologies. This opportunity broadens our market exposure to digital infrastructure and reinforces the stability of our earnings and cash flow through life cycle-driven equipment and service revenue. According to IEA, global energy consumption from data centers is expected to more than double, reaching 945 terawatt hours by 2030. In the U.S., electricity demand for data processing alone is projected to surpass the combined power needs of all energy- intensive manufacturing sectors, including aluminum, steel, cement and chemicals. To support this surge in power requirements, gas turbine manufacturers are experiencing robust order activity across both utility scale and sub-utility-scale power applications. Our portfolio is well suited for the sub-utility scale behind-the-meter solutions, providing advanced technology and shorter deployment time lines with our hydrogen-ready NovaLT 12 and 16-megawatt turbines as well as brush electric generators. To meet rising demand, we continue to make targeted organic investments to enhance our NovaLT capabilities, including initiatives to increase power range and reduce start-up times. In addition, activities are underway to significantly increase our manufacturing capacity by 2027, capitalizing on strong order visibility. In the utility scale space, our geothermal solutions offer customers reliable and scalable baseload power, supported by IET's Organic Rankine Cycle, steam turbine technologies, and OFE's subsurface expertise. More broadly, we are seeing expanded market opportunities to deploy advanced and enhanced geothermal technologies to deliver dispatchable, low carbon power to data centers. Additionally, we are collaborating on the development of the utility and industrial scale net power solutions, further expanding our power range in enabling near 0 emissions power generation. The growing frequency of grid disruptions is prompting industries with critical operations to seek more reliable on-site power solutions. This shift is especially evident in sectors like energy, health care, data centers, airports and other mission-critical infrastructure, where our distributed power offerings are well positioned to meet this emerging need for behind-the-meter power. Building on the momentum from our recent data center-related awards totaling more than $650 million year-to-date, we are making strong progress towards our 3-year target of $1.5 billion. The pace of recent awards positions us to meet or exceed this target earlier than planned. Importantly, this excludes the substantial recurring revenue opportunity tied to aftermarket services, which typically generate 1 to 2x the original equipment value over a 20-year period. In summary, the surging momentum in data center development is reinforcing IET's fundamental demand drivers, while also increasing the pipeline of enterprise-wide opportunities. We are expanding into attractive high-growth markets beyond our traditional oil and gas space, creating new avenues for growth while further strengthening the durability of our earnings and cash flow. To conclude, it was another strong quarter for the company with significant progress on several fronts despite the challenges presented by the external environment. Our focus remains on the areas within our control, most notably, the continued deployment of our business system across the enterprise, which is driving productivity and accelerating our efforts to be a leaner, more efficient company. Baker Hughes is well positioned to deliver sustainable growth and create long-term shareholder value. We are excited about the future as we advance into the next phase of our journey. With that, I'll turn the call over to Ahmed.

Thanks, Lorenzo. I'll begin with a review of our consolidated results and segment performance. I will then outline our portfolio optimization strategy and conclude with a summary of our outlook before turning it back to Lorenzo for final remarks. Starting on Slide 10. As Lorenzo highlighted, we delivered another strong quarter of orders with total company bookings of $7 billion, including $3.5 billion from IET. This performance demonstrates continued customer confidence in our diversified portfolio and underscores the strength and breadth of our market-leading technologies and solutions. Adjusted EBITDA increased by 7% year-over-year to $1.21 billion despite lower revenue, driven by strong margin expansion across both segments. This performance reflects the benefits of structural cost improvements and continued deployment of our business system, which is driving greater productivity, stronger operating leverage and more durable earnings. GAAP diluted earnings per share were $0.71. Excluding adjusting items, earnings per share were $0.63, up 11% year-over-year. We generated free cash flow of $239 million. For the full year, we maintained our free cash flow conversion target of 45% to 50%, with a typical stronger performance expected in the second half of the year. Turning to capital allocation on Slide 11. Our balance sheet remains in a very strong position. We ended the quarter with cash of $3.1 billion and net debt-to-EBITDA ratio of 0.6x and liquidity of $6.1 billion. We also returned $423 million to shareholders. This included $227 million of dividends and $196 million in share repurchases. We remain committed to returning 60% to 80% of free cash flow to shareholders. The portfolio optimization actions announced in the second quarter are expected to generate about $1 billion in net proceeds upon closure of these transactions, further strengthening our balance sheet and increasing flexibility for organic investments, shareholder returns and value accretive acquisitions. I will now highlight the results for both segments, starting with IET on Slide 12. During the quarter, we secured IET orders totaling $3.5 billion, including record bookings for both CTS and Cordant Solutions as well as a 28% year-over-year increase in GTS, driven by another strong quarter of upgrades and transactional orders. This brings our year-to-date total to $6.7 billion, which includes $1.9 billion in GTS, $1.4 billion for LNG and gas infrastructure and more than $650 million for data center power solutions. These commercial achievements further underscore the versatility of our technology portfolio and our strategic positioning to benefit from multiple secular growth trends across the energy and industrial sectors. With a book-to-bill of 1.1x for the quarter, IET achieved another record RPO of $31.3 billion. This RPO level and a structurally expanding installed base provides strong revenue visibility in the years ahead. IET revenue increased by 5% year-over-year to $3.3 billion, led by a 9% increase in GTS and 22% increase in CTS, partially offset by the expected softness in Industrial Tech. Segment EBITDA growth significantly outpaced segment revenue, increasing 18% year-over-year as margins expanded by 190 basis points to 17.8% despite some tariff-related headwinds. This performance was driven by record Gas Tech equipment margins and strong execution in Cordant Solutions partially offset by CTS. These results clearly highlight the benefit of our business system implementation. Now in its third year, this disciplined operating model is focused on performance management, strategy deployment and continuous improvement. Rooted in Lean and Kaizen principles, it is equipping teams across the enterprise with tools to simplify workflows, eliminate waste and improve execution, ultimately supporting progress towards our 20% EBITDA margin target. Turning to OFSE on Slide 13. OFSE revenue in the quarter was $3.6 billion, up 3% sequentially. In international markets, revenue increased 4% sequentially, led by Europe and Middle East, excluding Saudi Arabia, where activity continued to trend lower. We also saw solid growth in Latin America, driven by Mexico. While upstream activity in Mexico remains subdued, we experienced strong growth in chemicals as refiners work to address rising crude quality challenges. In North America, revenue was up 1% sequentially. North America land revenues remained stable compared to the first quarter, outperforming the 3% decline in U.S. onshore rig activity due to our strong weighting towards production-related work. Driven by disciplined execution and a continued focus on cost efficiencies, OFSE delivered EBITDA of $677 million, exceeding the midpoint of our guidance range despite a challenging market. Importantly, EBITDA margins expanded 90 basis points sequentially to 18.7%. Turning to Slide 14. I'd like to take a few minutes to highlight the progress we've made on portfolio optimization and how we are advancing the strategic priority as we transition from Horizon One, a period defined by significant operational improvement, into Horizon Two, which will be characterized by continued execution discipline and an increased focus on strategic growth particularly in industrial, new energy markets and mature asset solutions. We have remained focused on reshaping the portfolio to drive higher profitability and position Baker Hughes for more durable long- term growth. Including the $1.5 billion of expected proceeds from the PSI and SPC transactions, we will have generated over $2.5 billion in cash from a series of strategic actions since the merger in 2017. Our divested businesses will now be with owners where they are a stronger strategic fit, while enabling Baker Hughes to further streamline its portfolio and concentrate on higher-margin recurring revenue opportunities. These transactions have unlocked significant value, strengthened our balance sheet and enhanced our strategic focus and flexibility. We have also been disciplined in how we've redeployed this capital. Including the acquisition of CDC, we have reinvested approximately $1.8 billion to expand our industrial presence and align with long-term growth trends. Other notable investments include BRUSH electric motors, which expanded IET's driver and power generation offerings and Altus Intervention, which strengthened our capabilities within mature asset solutions. We have also made early stage investments in decarbonization technologies that, once commercialized, could drive meaningful long-term growth. The combination of the PSI divestiture and CDC acquisition is a clear example of our portfolio strategy in action. We are monetizing noncore assets and unlocking significant value while reinvesting into higher-margin, recurring revenue businesses at attractive multiples that enhance returns. Collectively, these actions advance our strategy to reshape the portfolio for more resilient earnings and cash flows. They demonstrate our disciplined approach, prioritizing strategic fit, exposure to growth markets, accretive margins and returns and life cycle-based business models. Looking ahead, we will continue to invest in opportunities that strengthen our industrial footprint and unlock meaningful synergies. Our ability to integrate acquisitions effectively is enabled by the strength of our business system. It provides the structure, discipline and repeatability to execute with speed and consistency, accelerating synergy capture and driving faster value creation. With a net leverage ratio of 0.6x EBITDA, we have ample capacity to pursue value-accretive opportunities, including high-return organic investments, disciplined M&A and continued capital return to shareholders. This financial flexibility enables us to allocate capital with precision and purpose with a clear focus on actions to accelerate revenue growth, enhance margins, improve returns and strengthen our long-term position. Our ultimate objective remains the same, to maximize long-term shareholder value and position Baker Hughes for sustainable differentiated growth. Turning to Slide 15. I want to provide an update on the dynamic trade policy environment and our outlook. In the second quarter, we estimate that the increase in tariff rates negatively impacted our EBITDA by approximately $15 million. We executed a series of mitigation initiatives that help limit the financial impact and these actions will continue to play a critical role in managing ongoing exposure. Since our trade policy update on our previous earnings call, there have been several changes, both implemented and proposed relative to the tariff rates assumed in our original analysis. At a high level, our updated analysis suggests that these developments largely offset each other. As a result, we are maintaining the previously communicated estimate of $100 million to $200 million net EBITDA impact for the year. Note that this assumes recently announced tariffs are implemented as planned, no further trade policy escalation, including retaliatory tariffs and continued success of our mitigation actions across both segments. We are tracking the risk for retaliatory tariffs in key regions. While not currently reflected in our net tariff impact estimate, we remain prepared to implement additional mitigation initiatives to limit, where possible, any further impact on our global operations and financial performance. Beyond the direct impact of ongoing trade policy shifts, we continue to monitor potential secondary effects such as more cautious customer behavior and signs of broader economic weakness. Next, I would like to update you on our outlook. The details of our third quarter and full year 2025 guidance are also found on Slide 15. The ranges for revenue, EBITDA and depreciation and amortization are shown on this slide, and I will focus on the midpoint of our guidance. While there's still volatility around trade policy developments, we have been successfully executing our mitigation plans and our underlying business continues to perform well. In light of these factors and consistent with our commitment to transparency, we are reestablishing full year guidance for both segments and the company overall. For the third quarter, we expect total company EBITDA of approximately $1.185 billion at the midpoint of our guidance range, led by continued strong growth in IET and resilient margins in OFSE. For IET, we expect third quarter results to benefit from continued productivity gains supported by the enhanced implementation of our business system as well as strong revenue conversion from the segment's record backlog. Overall, we anticipate IET EBITDA of $600 million at the midpoint of our guidance range. For OFSE, we expect third quarter EBITDA of $665 million at the midpoint of our guidance range which represents flat sequential margins on a slight revenue decline. Now turning to our full year guidance. We see continued strength in IET fundamentals, while OFSE remains challenged by subdued market conditions. Taking this into account, we expect total company EBITDA of $4.675 billion at the midpoint of our guidance range. In IET, we maintained the midpoint of our orders guidance range of $13.5 billion given our solid first half orders performance and positive outlook for the second half, particularly in LNG. Also, we are raising the guidance range for both revenue and EBITDA, increasing the midpoint for revenue to $12.9 billion from $12.75 billion and EBITDA to $2.35 billion from $2.3 billion. The major factors driving our third quarter and full year guidance ranges for IET will be the pace of backlog conversion in GTE. The impact of any aeroderivative supply chain tightness in Gas Tech, foreign exchange rates, trade policy and operational execution in Industrial Tech and CTS. For OFSE, we are reestablishing full year guidance with midpoints of $14.2 billion for revenue and $2.625 billion for EBITDA, implying margin improvement despite lower revenue, driven by strong execution of our structural cost-out program and reinforcing the durability of our margins. Factors driving our third quarter and full year guidance range for OFSE include execution of our SSPS backlog, the impact on near-term activity levels in North America and international markets, trade policy and pricing across more transactional markets. We remain confident in our ability to deliver solid performance in 2025 with continued growth in IET helping to offset softness in more market sensitive areas of OFSE, underscoring the strength of our portfolio and the benefits of our strategic diversification. In summary, we are pleased with the company's operational performance during the second quarter. OFSE delivered strong margin performance despite softness in the upstream market, while IET margins continued to progress towards our 20% target. We remain focused on elements within our control, streamlining operations and driving efficiencies that will benefit us well beyond the cycle. With that, I'll turn the call back over to Lorenzo.

Thank you, Ahmed. Our strong second quarter results clearly demonstrate the continued progress we are making in transforming our operations and streamlining the organization, even in a challenging and uncertain market environment. As you can see illustrated on Slide 17, we have evolved into a much more profitable energy and industrial technology company. At the midpoint of our 2025 guidance, Baker Hughes EBITDA margin will have increased by almost 600 basis points over the past 5 years. Additionally, EBITDA has more than doubled over the same period. The magnitude of this improvement speaks to the substantial progress we've made and reinforces our confidence in the strategic vision we set out when we formed the company. We are entering Horizon Two from a position of strength, with a clear path to drive further growth and enhanced margins, underscoring our commitment to delivering long-term value for our shareholders. Our business system is a critical enabler for continued success, driving operational discipline, improving productivity and accelerating the consistency of execution. We are now complementing our operational efforts with additional portfolio optimization actions. These transactions announced in the second quarter serve as a clear blueprint for our strategy, unlocking value from noncore businesses and recycling that capital into higher-margin opportunities aligned with our financial and strategic frameworks. In addition to our operational and portfolio progress, our complementary and versatile technology portfolio supports our strong position in key growth markets, including natural gas, new energy and mature basins. This enables us to capitalize on emerging secular trends, driving sustained order momentum into Horizon Two and beyond. The opportunities emerging within these growth markets are fostering enhanced commercial integration throughout the company. By leveraging our enterprise-wide customer relationships, cross-segment sales channels and integrated offerings, we will be able to drive incremental growth and capture a greater share of our addressable market. To conclude, thank you to the entire Baker Hughes team for yet again delivering outstanding results. As we continue our journey to take Baker Hughes and energy forward, we remain committed to our customers, shareholders and employees. With that, I'll turn the call back over to Chase.

Operator, we can now open up for questions.

[Operator Instructions] First question coming from the line of Scott Gruber with Citi Group.

So the margin performance across both segments was impressive and the outlook in OFS was better than we expected given the backdrop. Can you just unpack the drivers of the margin performance a bit more? And as we start to think about '26, your confidence level in hitting the 20% mark in IET? And then thinking about OFS, given your internal drivers, do you think you can grind those margins a bit higher in the soft market? Or is kind of flat assumption a good starting point for us?

Yes, Scott. Look, obviously, we're pleased with the way the teams have executed in the first half and also in the second quarter, with that progress and continuous improvement despite the external headwinds. So I think it's helpful as we think about it by segment. So in OFSE, the EBITDA margins, as we pointed out, expanded by around 90 basis points sequentially to 18.7%, and that was on the back of sequential stronger revenue, as well as the progress we've made on cost efficiency. So by cost efficiency, really, we're looking at a few things. We continue to streamline our cost structure, so rightsizing and making sure we understand the current activity levels. And simple things like removing duplication across the segment, which we've been doing for over a year. So I think that's one piece on cost. But then also on price, we remain disciplined. So... [Technical Difficulty]

Ladies and gentlemen, please standby. Our speaker lines are having technical difficulties. Again, please standby.

So that's -- sorry, we may have lost you for a second. But I was on IET EBITDA margin. So we -- the margins expanded by 190 basis points, close to 18% despite some tariff-related headwinds. And that impacted margins to be clear by around 40 basis points in IET. So the drivers of the performance are record margins in GTE. Cordant Solutions also contributed to solid performance, and that's underpinned by our business system, which we've had in place for coming into its third year. And I'd point out also OFSE and IET continue to work together to implement the best practices on business system across the company. So lastly, I'd say going forward, as we look at additional efficiency opportunities we see it there in IET, we're confident on the 20% margin target. In OFSE, similarly, we are closing the margin gap to our peers. And we're focused on margins and not market share. So overall, pretty strong setup and the way the teams have been executing to make sure we have continuous improvement.

Yes, Scott, I'm not sure how much cut out there. But really, as you look at it from a trajectory of going forward, again, as Ahmed said, margin accretion is the name of the game. It's what we've stated with regards to the progression going forward. Great progress across both segments, even with some of the headwinds we see in the marketplace, in particular, OFSE and the performance that they've been able to demonstrate. And as we go forward, we aim to continue that margin progression into '26.

And our next question coming from the line of David Anderson with Barclays.

I was wondering if you could just expand a little bit more on the IET order performance this quarter. Gas Tech Equipment was a bit light, but Services was surprisingly strong. I was just wondering how you think these components should trend the rest of the year? And maybe what gets you to the high end of that order guide that you had reiterated? And also while we're here, if you could provide some insight to how these orders are starting to shape up for 2026, particularly with the data center orders on [ pace to ] what looks to be far exceeding your prior targets there?

Dave, I'm very pleased with the order progress made in IET and you saw bookings of $3.5 billion of orders in the quarter, taking the year-to-date to $6.7 billion. So we're trending towards our midpoint of the full year guidance, as again, stated is $13.5 billion. And this is as a result of strength and the strong visibility on orders in the back half of the year. We're confident in achieving that and continue to see strength in the overall market. As you look at orders to date, it's been driven by non-LNG markets, gas infrastructure, data centers, GTS upgrades and Cordant Solutions. So if you look into the second half, we do anticipate strengthening LNG orders and a number of the projects that we've mentioned in the past coming through and that we've been working on. So as we look at the strength of our orders in the first half, touching on data centers, it's quickly emerging as a strong growth area. We've received several awards for our NovaLT turbines. Year-to-date, we booked over 70 LT -- NovaLT turbines for the data center market, providing 1.2 gigawatts of power. Notably, the award includes our largest single order to date of 30 NovaLTs for a customer in the U.S. data center projects and 16 NovaLTs for Frontier Infrastructure projects. So both great examples of the increasing connectivity between the surging digital infrastructure demand and also the increasing need for lower carbon solutions. As we look forward, we continue to see opportunities to leverage our hydrogen-ready capabilities on the NovaLT turbines as well as providing CCS solutions such as the Frontier projects. And as we look at New Energy, again, these orders, as you look at our second quarter New Energy orders over $1 billion, which was a new record, and we're positioned to meet or exceed the target as we go forward for the year. So as you think about data centers, in particular, we stated free order target of $1.5 billion. We do anticipate being able to meet that earlier than planned on the back strength that we see within the marketplace. Outside of some of the equipment side, as you mentioned, Gas Tech Services, we booked several CSA agreements totaling more than $350 million. Also experienced a strong quarter for both transactional and upgrade orders, extending the life of the equipment that we have out there installed. And year-to-date, we booked $1.9 billion of GTS orders, which is up 28% versus last year. And also upgrades very strong with orders up 165% for the same period, and transactional orders increased by 20%. So very strong performance by the services side on the Gas Technology. And also on the digital, Cordant Solutions achieving record orders. As you look at Cordant orders, up 16% year-over-year. Record software orders, which rose by 56%, and we see a long runway for continuous growth within Cordant as customers continue to increase the adoption. And our large installed base that we've got as an opportunity as well as balance of plant to go after from third-party equipment and we keep on gaining traction on our iCenter. Major milestone in the quarter is over 2,000 critical turbomachinery assets now connected. So looking at the second half, again, feel good about that midpoint of the range. We expect LNG orders to strengthen. The projects are there. We see further strength in GTS orders. And also, as we look to the second half opportunities in the FPSO market that will start to materialize. And for 2026, we see secular tailwinds across many of the end markets continue to strengthen. So we expect solid momentum across LNG and we expect '26 IET orders to be consistent with 2025 levels. So in summary, feeling good about the start to the year, feeling good about the second half and also the visibility we have into 2026 and beyond.

Our next question coming from the line of Arun Jayaram with JPMorgan.

You guys have had called a more muscular approach to the portfolio more recently with the 3 transactions announced in June. I was wondering, perhaps for Ahmed, if you could discuss perhaps the net impact from these 3 transactions as we think about sharpening our pencil on 2026, perhaps top line or EBITDA thoughts. And maybe thoughts, Lorenzo, on further portfolio moves. And do you expect some of these moves to be focused in IET, OFSE or both?

Yes. Arun, it's Ahmed. Look, I think on the impact, the first thing I'd highlight is that these transactions, we've never intended them to drive progress towards OFSE and IET, 20% margin target. So that's an important point. And so when you take the 3 transactions in aggregate that we announced in the second quarter, there is going to be a very modest benefit to both segment margins. And then when you roll that forward in terms of when we expect things to close and so forth and you look at the net EBITDA impact from these 3 transactions in 2026, we expect that to be just over $100 million.

And Arun, adding to the aspect of going forward, first of all, we're very pleased with the transactions we announced. Excited about the prospect of welcoming CDC into the family. And also, we exited businesses that are no longer aligned with the strategic priorities or return expectations, and they're going to better owners and better strategic fit for the future. So what we've been able to do is unlock significant value and get some good valuations and redeploy that into accretive assets that come into the portfolio. And as you look at it, that's really what we've highlighted within the prepared remarks about portfolio optimization, continuing to be a key part of our strategy. And we've been doing that since we came together in 2017, and it's fair to assume that we're going to continue doing that as we strengthen the portfolio through additional acquisitions and continue to look at the right divestitures. If you think about the 2 segments, we have over 30 businesses that are competing for capital. And so we're really concentrating on looking at where the stronger margin profiles are, the recurring revenue potential and the long-term growth opportunities across all of the 30 and across the 2 segments, and we do a rigorous assessment of each of the businesses. And it's natural to think that over time, there will be evolution that takes place and certain businesses may no longer align with our strategic priorities. On the further acquisitions, we'll continue to target opportunities that strengthen our industrial footprint and unlock meaningful synergies. We like businesses that offer margin-accretive life cycle-driven revenue, and are poised to drive IET towards leading margins. In OFSE, we'll continue to focus on strengthening our leading franchise in production solutions and mature asset solutions, and creating our exposure to the more resilient [ OpEx-focused ] end markets. So with a leverage ratio of 0.6x and an additional $1 billion of net proceeds from the transactions that are yet to close, we have ample capacity to pursue value-accretive opportunities to strengthen the portfolio. So overall, the ultimate objective remains maximize shareholder value, maintaining strategic and financial discipline, strengthening the earnings durability and really continuing to position Baker Hughes for sustainable differentiated growth.

Our next question coming from the line of Saurabh Pant with Bank of America.

I have a question on the tariff side of things. I don't know if, Lorenzo, you want to take it or Ahmed, you want to take it. But on the tariff side, your guidance, your outlook of $100 million to $200 million potential impact is the same as it was from 3 months back, right? And we have probably seen 1,000 headlines come out in the last 3 months. So maybe if you can just walk us through the puts and takes of what has happened over the past 3 months? And what businesses are impacted? And maybe as a follow-up, I think if I heard you correctly, Ahmed, you said $15 million impact in the second quarter, right? So it sounds like you're baking in higher impact in the back half of the year. But if you can just walk us through that, the implied second half expectations, that would be helpful.

Yes. I'll let Ahmed take that one.

Yes, sure. So look, I think -- I'll break it out between obviously what we saw in the second quarter and then how we've underwritten our second half outlook. So maybe starting with the second quarter. The net tariff impact was approximately about $15 million to EBITDA, and that was primarily U.S., China and Europe. And the split between the 2 segments was predominantly IET. But as you sort of stated, when we look into the second half, we expect that the total net EBITDA impact to, at this stage, likely exceed $100 million in the second half with sequential increases in the third quarter and then again in the fourth quarter. And that linearity really is driven by the way the actual inventory rolls through our balance sheet. And also any surcharges that come by through our supply chain partners that actually comes through in the second half. So -- but to be clear, those type of impacts are clearly reflected in our guidance. But what -- it does not include any potential escalation of trade policies and also assumes that U.S.-China tariffs remain at today's level. So as we look at the actual mitigation actions and going forward, in the second quarter, we made significant progress. And then on some of the dynamics that we've seen in the overall environment, we saw positive developments in May with the temporary easing of the tariffs between U.S. and China. But then those developments were, I'd say, largely offset by several recent negative tariff-related announcements. So as an example, in early June, the U.S. announced and implemented an increase on steel and aluminum tariffs to 50%. Then in July, the U.S. announced a 50% tariff on copper imports, scheduled to take effect sometime August 1. And then also in July, the U.S. announced increased tariffs on U.S. imports from various countries, including Brazil, Canada, Mexico and the EU and also those were -- are set to take effect on August 1, unless there's a trade deal that's reached beforehand. So as we take all of these different variables and recognizing their dynamic, we have confidence in our mitigation actions that we put in place immediately. And we have, as you know, a flexible global supply chain. And so we maintain our previously communicated estimate of the $100 million to $200 million net EBITDA impact for the year. But just as a reminder, this does not -- this assumes the recently announced tariffs are implemented as scheduled, but it does not assume any further trade policy escalation, including retaliatory tariffs. So hopefully, it gives you a good framework of how we're underwriting the balance of the year.

And ladies and gentlemen, that was our last question. I will now hand you back to Mr. Lorenzo Simonelli, Chairman and Chief Executive Officer, to conclude the call.

Yes. Thanks to everyone for taking the time to join our earnings call today, and I look forward to speaking with you all again soon. Operator, you may now close out the call.