GE Vernova

GE Vernova FY2026 Q1 — revenue, orders, and guidance all raised

Revenue $9.34B (+16% YoY, +7% organic) — above $9.26B consensus Orders $18.3B (+71% organic) — growth in every segment, the real Q1 highlight Adj. EBITDA $896M (margin 9.6%, +390 bps YoY, nearly doubled) FCF $4.79B — exceeded full-year 2025 FCF in a single quarter, 4×+ surge GAAP diluted EPS $17.44 (inflated by $4.5B Prolec GE pre-tax gain, one-time) Total backlog $163B (including Prolec GE); cash balance $10.2B

### Segment detail

| Segment | Orders | Revenue | Organic Rev | EBITDA Margin | |---|---|---|---|---| | Power | $10.0B (+59% organic) | $5.0B | +10% | 16.3% (+470 bps) | | Electrification | $7.1B (+86% organic) | $3.0B | +29% | 17.8% (+670 bps) | | Wind | $1.2B (+85% organic) | $1.4B | -25% | -26.7% |

Power + Electrification dual engine drove organic growth. Wind is still in a weakness phase, but single-quarter orders +85% organic is a tentative bottom-confirmation signal.

The single most notable metric: $2.4B of data-center equipment orders booked by Electrification in Q1 alone. CEO Strazik explicitly noted this is more than all of 2025's DC-related orders combined. Confirms AI DC power infrastructure demand is structurally accelerating across transformers, switchgear, and HVDC.

Gas Power secured ==21 GW of new contracts== (19 GW slot reservations + 2 GW orders), converted 6 GW of slot reservations to orders, and shipped 4 GW. Gas turbine backlog expanded 40 → 44 GW, slot reservations 43 → 56 GW. Management targets 110+ GW combined by year-end 2026.

:::callout{type="signal" title="Three Signals from This Quarter"} (1) AI DC demand = earnings confirmed. A single quarter's Electrification DC orders exceeded all of last year — ==hyperscaler capex cycle has not peaked==.

(2) Gas Power slot reservations = multi-year revenue visibility. Backlog jumped 83 GW → 100 GW in three months; year-end ==110+ GW== target. Slot reservations translate to multi-year revenue, and in the Mitsubishi / Siemens / GEV three-way race, GEV retains the tightest supply position.

(3) This bottleneck structuralizes demand for bridge-power alternatives. HD Hyundai Heavy's AEG 684MW order on 2026.4.22 is a direct beneficiary example. :::

On 2026.2.2, GEV closed the Prolec GE remaining 50% acquisition for $5.3B cash. Beyond simple incremental revenue, this is a ==structural reshaping of the North America transformer supply chain==.

Prolec GE owns a Monterrey (Mexico) production base, one of North America's largest transformer manufacturers. Combining its capacity with GEV's global sales network and AI DC order pipeline internalizes a previously external supply bottleneck.

A new variable for Korea's transformer trio (HD Hyundai Electric, Hyosung Heavy, LS ELECTRIC). The 3–5 year lead-time expansion for North American EHV transformers over 2024–2025 created a structural tailwind for the Korean 3. Prolec's capacity being re-deployed under the GEV brand creates ==some overlap in North American order competition==. However, Prolec's strength is mainly MV / distribution, while the Korean 3's edge is EHV/UHV — so it's not an immediate substitute. Whether Prolec expands into HV lines in future is the risk indicator for the Korean 3.

Electrification equipment backlog at $38.6B (+75% YoY, incl. $5B Prolec) suggests this reshaping is already materializing in orders.

Q1 FCF at $4.79B exceeded all of FY2025 FCF in a single quarter. Company raised FCF guidance from $5.0–5.5B to $6.5–7.5B.

The structural meaning of this FCF jump: ==the working-capital cycle has entered the 'order → revenue → cash' normalization phase==. 2024–2025 was a period where large-project orders sat in working capital before converting to cash; from 2026, that trapped cash is being released, steepening FCF expansion. This is the core justification for the guidance raise — not short-term noise, but a structural normalization.

Cash balance $10.2B + Q1 buyback $1.3B + $0.50/share quarterly dividend = ==shareholder-return capacity expanding in parallel==. Investment-grade BS maintained (S&P BBB, Fitch BBB+).

On the back of Q1 strength and order momentum, GEV raised FY2026 guidance across all three key metrics.

| Item | New guidance | Prior guidance | |---|---|---| | Revenue | $44.5–45.5B | $44–45B | | Adj. EBITDA margin | 12–14% | 11–13% | | FCF | $6.5–7.5B | $5.0–5.5B | | Power organic revenue | +16–18% | (held) | | Power EBITDA margin | 17–19% | 16–18% | | Electrification revenue | $14.0–14.5B | $13.5–14.0B | | Electrification EBITDA margin | 18–20% | 17–19% | | Wind organic revenue | low-double-digit ↓ | (similar) | | Wind EBITDA loss | ~$400M | (similar) |

The $1.5–2.0B FCF guidance raise is the most impactful adjustment. Credibility supported by Q1 FCF ($4.79B) already exceeding full-year 2025.

Narrative reinforced — ==AI power demand + Gas turbine supercycle + Grid Capex== are all firing simultaneously. The stock set a ==52-week high of $1,009.89== around earnings, extending +23% (30 days) and +208% (12 months). Post-beat ==analyst PT raises== (Susquehanna $820→$1,080, Morgan Stanley $817→$960, Rothschild upgrade to Buy) formalize the multiple re-rating. 56x PER remains demanding, but orders $18.3B, FCF $4.79B, backlog $163B keep re-validating the multiple every quarter.

Watch Points:

• Gas Power 110 GW target progress — actual attainment by year-end. The pace of slot-reservation → order conversion is the key KPI.
• Market share vs Mitsubishi Power / Siemens Energy — GEV currently holds the tightest supply position in the 3-way race. Rival capacity additions and pricing are the risk factor.
• Electrification book-to-bill — Q1 ~2.5 sustaining requires continued hyperscaler capex. DeepSeek-style AI monetization volatility is a headwind.
• Wind bottom confirmation — Q1 orders +85% organic is a positive tentative signal. However, FY guidance still carries ~$400M EBITDA loss. Return to profitability in 2027 is the medium-term variable.
• Korea transformer trio competitive landscape — if Prolec integration synergy expands GEV share in North American MV segment, some overlap emerges. EHV retains Korean-3 advantage.
• Tariff monitoring — tariff impact noted in Wind loss. Additional tariff expansion risk is already embedded in the raised guidance.