Linde (NASDAQ:LIN) executives highlighted resilient execution and a record project backlog during the company’s fourth-quarter 2025 earnings call, while acknowledging a still-uneven industrial macro backdrop across regions. Management also introduced 2026 earnings guidance that assumes flat underlying volumes at the midpoint, alongside additional restructuring actions intended to improve the company’s cost position as the year progresses.
Management frames 2025 as “a study in contrast”
Chief Executive Officer Sanjiv Lamba described 2025’s economic environment as split between “exuberant investment in AI and digital infrastructure” and continued retrenchment in traditional industrial markets such as manufacturing, metals, chemicals, and energy. He said that divergence created headwinds for many customers, but argued Linde delivered “industry-leading results in areas that matter most to our owners.”
- Best-in-class safety performance in 2025, along with continued efforts to build an inclusive culture; female representation reached nearly 30%.
- Nearly 900 community projects globally supporting health, education, and well-being.
- Progress on environmental goals, including a 23% increase in active low-carbon power sourcing, bringing low-carbon power to 50% of Linde’s annual power consumption and supporting an almost two million metric ton reduction in absolute CO2 emissions.
Lamba also said roughly two-thirds of the company’s backlog supports contracted clean energy projects. In addition, he noted Linde signed “more than 90 new gas application wins,” many aimed at helping customers decarbonize operations.
Fourth-quarter results: sales up 6%, margin near 30%
Chief Financial Officer Matt White reported fourth-quarter sales of $8.8 billion, up 6% year over year and up 2% sequentially. Foreign exchange translation contributed a 3% tailwind due to a weaker U.S. dollar, particularly versus the euro. Excluding FX, underlying sales increased 3%, driven by 2% pricing and 1% volume growth.
White said pricing performance broadly aligned with “globally weighted inflation,” though he pointed to challenges in APAC tied to helium and deflationary conditions in China. Volumes benefited from project startups in the Americas and APAC, while “continued industrial softness in EMEA” weighed on results. Sequentially, volumes were flat, as seasonal declines were offset by project startups.
Operating profit totaled $2.6 billion, up 4% from the prior year, with a 29.5% operating margin. White attributed “quarter margin dilution” to the timing of other income, which declined by more than $30 million. He added that full-year operating margin increased 30 basis points, within the company’s long-term 30 to 50 basis point annual expansion expectation.
Earnings per share were $4.20, up 6%. White said a lower share count more than offset the impact of a higher effective tax rate. Linde increased share repurchases in the quarter to $1.4 billion, which White described as taking advantage of an “attractive buying opportunity” following a stock decline.
White also noted a 17% increase in capital expenditures, driven by spending to support the record project backlog. He said the combination of higher capex and increased acquisitions has made growth more capital-intensive, which has pressured return on capital. While this was anticipated, White said he expects return on capital to remain in the low-to-mid 20% range for the next few years.
Cash flow and capital allocation
Linde’s operating cash flow exceeded $3 billion in the fourth quarter, which White attributed to stronger collections and inventory management. He reiterated that operating cash flow is typically stronger in the second half due to the timing of tax, incentive, and interest cash payments.
For the full year, White said about $6 billion was invested for growth, including roughly half toward secured growth via acquisitions and project backlog contracts. Another $7.4 billion was returned to shareholders through dividends and repurchases. White emphasized that sustainable repurchases are “anchored by consistent excess free cash flow after dividend payments,” something he said Linde has demonstrated for decades.
2026 outlook: EPS growth guided at 6% to 9%
White guided to full-year 2026 EPS of $17.40 to $17.90, representing 6% to 9% growth over 2025. The midpoint assumes a 1% foreign exchange tailwind and 0% base volume change. White said the company is not making a macroeconomic prediction; instead, it is anchoring the midpoint at flat base volumes and allowing investors to apply their own economic assumptions. He added there could be FX upside if spot rates hold, since the U.S. dollar weakened in the past month.
For the first quarter, White said Linde uses the same baseline volume assumption but assumes a 3% FX tailwind given the strong U.S. dollar in the first quarter of 2025. He added the company does not expect as much FX benefit in the second half, consistent with the 1% full-year assumption.
Lamba said geographically uneven growth remains an issue, prompting Linde to initiate additional restructuring actions in the fourth quarter to better position the company for 2026. He said the program’s cash payback and timing are consistent with prior actions, with the “bulk of the benefits” expected in the second half of the year. In Q&A, management characterized the restructuring as structural, with most actions related to headcount, and White said the majority was in the engineering segment.
Regional demand, backlog expectations, and “secular” space growth
In Q&A, Lamba said Europe continues to show “broad-based weakness,” though he cited Scandinavia as a bright spot and noted modestly improved manufacturing numbers in Germany, which he said he would watch cautiously. On pricing, he said he expects the region to continue to price in line with weighted CPI.
Across the Americas, Lamba described the U.S. as resilient, with sales up across almost every end market and electronics and commercial space standing out. He said U.S. packaged gas hard goods automation equipment sales picked up in the fourth quarter, but consumables and gas demand remained flat to slightly down, suggesting customers may be preparing for improvement without yet increasing consumption.
In APAC, Lamba said the China markets Linde serves appear to be “bottoming out,” with improved growth in the most recent quarter, though he said he is watching whether momentum carries into the first quarter given Chinese New Year disruption. He also cited continued strong growth in India and said ASEAN has been “stable but flattish at best,” with recovery potentially tied to China’s trajectory.
On backlog, Lamba reiterated a target to rebuild toward $7 billion in “sale of gas backlog.” He said 2026 will be a heavy startup year, with an expectation that $2.5 billion to $3 billion of projects will come off backlog and begin contributing to revenue and earnings, including phased startups such as OCI and Woodside. He added he is “highly confident” Linde will announce new signature electronics fab wins in the coming months.
The company also discussed its commercial space opportunity. Lamba said Linde’s $10 billion record project backlog does not include more than $500 million invested for rocket propellants to contracted space launch customers. He described space as a secular growth opportunity with key network investment hubs in Texas and Florida, and said the business is included in guidance but “isn’t big enough to move the needle” for the company overall. Lamba said Linde directly supplies roughly 65% to 75% of launches by its measurement and noted 189 launches last year, while also stating the company expects double-digit growth in this area and hopes it can become large enough to break out as a separate end market in the next few years.
Management also addressed helium and rare gases. White said helium and rare gas combined were about a 1% to 2% EPS headwind in 2025, toward the upper end of that range. Lamba said helium has been high single-digit negative on pricing for several quarters and he does not see a dramatic near-term change, describing helium as “long in the medium term,” with regional differences including Russian helium affecting China.
About Linde (NASDAQ:LIN)
Linde (NASDAQ: LIN) is a multinational industrial gases and engineering company that supplies gases, related technologies and services to a wide range of industries. The company traces its current form to the 2018 combination of Germany’s Linde AG and U.S.-based Praxair, creating one of the largest global providers of industrial, specialty and medical gases. Linde’s business model centers on production, processing and distribution of gases as well as the design and construction of the plants and equipment needed to produce them.
Core products and services include atmospheric and process gases such as oxygen, nitrogen and argon; hydrogen and helium; carbon dioxide; and a portfolio of higher‑value specialty and electronic gases.
