Chart’s first quarter results were greeted with a significant positive market reaction, reflecting confidence in both operational execution and the company’s strategic positioning. Management attributed performance to robust demand across multiple end markets, with particular strength in LNG, space exploration, and nuclear. CEO Jillian Evanko highlighted the company’s ability to leverage its diversified backlog and a growing aftermarket service business as key drivers, noting, “Our strong backlog and expanding service repair segment provide increased visibility and stability.” Gross margin expansion and improved operating efficiencies, especially in the Specialty Products segment, were also cited as contributors to the quarter’s improved profitability.
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Chart (GTLS) Q1 CY2025 Highlights:
- Revenue: $1 billion vs analyst estimates of $1 billion (5.3% year-on-year growth, in line)
- Adjusted EPS: $1.86 vs analyst estimates of $1.83 (1.8% beat)
- Adjusted EBITDA: $231.1 million vs analyst estimates of $226.3 million (23.1% margin, 2.1% beat)
- The company reconfirmed its revenue guidance for the full year of $4.75 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $12.50 at the midpoint
- EBITDA guidance for the full year is $1.2 billion at the midpoint, above analyst estimates of $1.16 billion
- Operating Margin: 15.2%, up from 11.9% in the same quarter last year
- Backlog: $5.14 billion at quarter end, up 18.8% year on year
- Market Capitalization: $6.8 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Chart’s Q1 Earnings Call
- Scott Gruber (Citigroup) asked about Chart’s China exposure and ability to shift manufacturing, to which CEO Jillian Evanko explained that production for the Chinese market is largely localized and recent exemptions have reduced tariff exposure by about 40%.
- Saurabh Pant (Bank of America) questioned the risks posed by macroeconomic uncertainty; Evanko reiterated the importance of the company’s diversified end markets and robust backlog, while flagging industrial gas and hydrogen in the Americas as areas to monitor.
- Marc Bianchi (TD Cowen) inquired about the potential impact of tariffs on guidance; Evanko stated that the guidance does not reflect mitigation efforts, but ongoing actions and contract structures provide confidence in maintaining the current outlook.
- Eric Stine (Craig-Hallum) sought clarity on the sustainability of growth in new end markets; Evanko described the evolution from lumpy, project-dependent revenue to more stable, diversified segments, particularly in space exploration and aftermarket services.
- Arun Jayaram (JPMorgan Chase) asked about the outlook for larger Heat Transfer Systems (HTS) orders; Evanko confirmed a strong pipeline of sizable HTS projects, with timing and project mix expected to drive future margin performance.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace and quality of backlog conversion, especially in LNG and data center projects, (2) progress in scaling aftermarket and digital service revenues to offset potential equipment order volatility, and (3) effectiveness of tariff mitigation strategies and any margin impact from changing input costs. Developments in the data center and energy transition markets will also be key signposts.
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