Linde (LIN 0.44%), a global leader in industrial gases and engineering, reported second-quarter 2025 earnings on August 1, 2025. The company delivered results ahead of market expectations, with non-GAAP earnings per share of $4.09 in Q2 2025, surpassing the analyst consensus of $4.03. Operating profit margins increased in Q2 2025. Despite ongoing softness in key industrial end markets, especially manufacturing volumes in Europe and Asia-Pacific, Linde showed strong execution in pricing and cost management. For the quarter, the company expanded profit margins, generated robust cash flow, and maintained a healthy project backlog, but management remains cautious due to persistent industrial weakness in multiple regions and a guarded economic outlook.
Business Overview and Key Success Factors
Linde provides industrial gases such as oxygen, nitrogen, hydrogen, and specialty gases. Its customers span diverse industries including manufacturing, chemicals, healthcare, food and beverage, and electronics. It also designs and builds turnkey plants for gas production and processing through its engineering arm.
Over the past several years, Linde’s strategy has centered on strengthening technological leadership, managing energy costs, expanding its global footprint, and building a resilient contract-based revenue stream. Its competitive strengths include a broad product portfolio, significant investment in clean energy (notably hydrogen and carbon capture), and a dense, integrated distribution network. Stable long-term contracts, especially for on-site gas supply, anchor cash flow and minimize exposure to short-term volume swings.
Quarter in Detail: Financial and Strategic Progress
Linde’s Q2 2025 featured both top- and bottom-line outperformance, with GAAP revenue and non-GAAP EPS exceeding analyst estimates. Adjusted non-GAAP earnings per share rose 6.0% to $4.09 in Q2 2025, beating consensus forecasts. GAAP revenue increased 3.0% year over year to $8.49 billion in Q2 2025, also ahead of expectations. The adjusted operating profit margin climbed to 30.1%, up 0.8 percentage points from the prior year in Q2 2025, reflecting continued success in pricing and productivity efforts.
Segment results were mixed. The Americas region posted sales of $3.81 billion, up 4% year over year, with underlying sales supported by a 3% price increase and slight volume growth. EMEA (Europe, Middle East, and Africa) delivered $2.16 billion in revenue, up 3%, though volumes declined 4%, offset by 3% higher pricing. Notably, EMEA operating profit reached $780 million, or 36.1% of sales, a 2.4 percentage-point increase from last year, aided by robust pricing. The Asia-Pacific region brought in $1.66 billion in sales, flat from the previous year, as weakness in manufacturing volumes was only partly balanced by steady pricing.
One of Linde's key performance drivers this quarter was its approach to pricing and spread management. Global price increases averaged 2% in Q2 2025 compared to the prior year, and Operating margins improved across every region in Q2 2025, demonstrating that contractual price mechanisms and cost control can shield earnings even when volumes soften. The sale-of-gas backlog increased slightly to $7.1 billion as of Q2 2025, with a new long-term agreement to supply gases to a large U.S. Gulf Coast low-carbon ammonia facility added to the pipeline. The engineering division, which produces custom plants and systems for customers and third parties, delivered $551 million in revenue in Q2 2025 and maintained a $3.2 billion equipment backlog as of Q2 2025.
Technological innovation continued, with Linde deploying more than 100 artificial intelligence (AI) use cases to drive productivity, from optimizing plant power consumption to automating logistics. Management noted that about 30% of all productivity gains now come from digital and AI solutions. Meanwhile, its leadership in hydrogen and clean energy was reinforced by progress on major blue hydrogen projects, including those benefiting from U.S. tax credits for carbon capture. The company estimates it is halfway through the $8–10 billion clean energy project pool it expects to address over the next few years.
The company also highlighted the resilience of its core business model. Roughly two-thirds of gas sales come from segments protected by long-term, fixed-fee contracts or recurring rental payments, insulating results when manufacturing demand is weak. Operating cash flow was up 15% year over year to $2.21 billion in Q2 2025. Free cash flow was $954 million after capital expenditures of $1,257 million in Q2 2025. Importantly, $1.81 billion was returned to shareholders through dividends and buybacks in Q2 2025. The quarterly dividend was raised 8%, marking 32 consecutive years of increases.
Looking Ahead: Guidance and Investor Watch Points
Linde provided adjusted EPS guidance for Q3 2025 of $4.10 to $4.20, reflecting 4% to 7% year-over-year growth. For FY2025, it expects adjusted EPS of $16.30 to $16.50, representing 5% to 6% annual growth, or 4% to 5% excluding foreign exchange effects. Capital expenditures for the year are planned at $5.0–$5.5 billion for full-year 2025 to support the robust project backlog.
Management reiterated a cautious macro outlook, explicitly baking recessionary and weak industrial conditions into its guidance, particularly for the manufacturing, metals, and chemicals sectors. It signaled no expectation of near-term recovery in China or Europe but notes that electronics, healthcare, and food and beverage end markets remain resilient. Key risks include continued volume pressure in EMEA and Asia-Pacific, currency and geopolitical shifts, and the pace of new project starts.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
