GE Vernova Earnings Call: Growth Surges, Wind Lags

GE Vernova Inc. ((GEV)) has held its Q4 earnings call. Read on for the main highlights of the call.

GE Vernova’s Earnings Call Signals Powerful Momentum Despite Wind Headwinds

GE Vernova’s latest earnings call painted a picture of a company with strong, accelerating momentum across most of its portfolio, underpinned by record orders, a rapidly expanding and higher-margin backlog, rising revenues, widening margins and robust cash generation. Management emphasized a markedly stronger balance sheet and upgraded medium-term guidance, boosted further by the planned Prolec GE acquisition. While substantial challenges persist in the Wind segment—particularly around offshore contract losses, tariffs and policy-driven disruptions—executives framed these as concentrated, manageable issues that are more than offset by strength in Power and Electrification and by sharply improved profitability and cash flow.

Record and Accelerating Orders Fuel Growth Runway

GE Vernova underscored a year of exceptional commercial activity, booking $59 billion of orders in 2025, up 34% year-on-year, with a particularly strong fourth quarter at $22.2 billion—65% higher than the prior year and yielding a book-to-bill ratio of roughly 2x. Q4 equipment orders surged 91%, while service orders climbed 22%, highlighting both strong new project demand and a deepening installed-base franchise. This order strength lays a substantial foundation for future revenue and earnings growth, especially as higher-quality, higher-margin orders increasingly dominate the mix.

Backlog Swells to $150 Billion, With Better Economics

The company’s total backlog expanded more than 25% to $150 billion, adding roughly $31 billion over the year and underscoring the durability of its growth prospects. Equipment backlog reached $64 billion—up about 50% year-on-year and $21 billion in absolute terms—while services backlog climbed to $86 billion, a 13% increase and an additional $10 billion. Importantly, this is not just more backlog but better backlog: GE Vernova added $8 billion of incremental equipment backlog margin dollars in 2025, more than in the prior two years combined, alongside about six points of year-on-year equipment margin expansion and an 11‑point gain in Power equipment margin, signaling future profitability improvements are already “locked in.”

Revenues Rise and Margins Expand Sharply

On the income statement, GE Vernova delivered around $38 billion of revenue in 2025, representing about 9% year-over-year growth, with profitability improving at an even faster clip. Adjusted EBITDA grew materially—management cited a roughly 46% increase for the year—while adjusted EBITDA margins expanded by about 210 basis points. This combination of mid‑single to high‑single digit revenue growth and strong double‑digit EBITDA growth illustrates operating leverage across the portfolio, driven by richer backlog economics, improved execution and a growing mix of higher-margin service and Electrification business.

Free Cash Flow Surges and Balance Sheet Stays Conservative

Cash generation was another standout theme. GE Vernova produced $3.7 billion of free cash flow in 2025—more than double the prior year—with $1.8 billion coming in the fourth quarter alone. The company ended the year holding nearly $9 billion in cash, giving management substantial flexibility to invest and return capital while absorbing volatility in challenged segments like Wind. Even after planning a $2.6 billion debt issuance to fund the Prolec GE acquisition, the company expects to remain below 1x gross debt to adjusted EBITDA, signaling a conservatively financed balance sheet despite elevated capital deployment.

Gas-Led Power Segment Demonstrates Strong, Profitable Growth

The Power segment, led by gas, delivered robust commercial and financial performance. Power orders grew more than 50% for the year, with Q4 orders up 77% on strong gas equipment demand. Gas slot reservations and equipment under contract climbed from 62 GW to 83 GW, while backlog rose from 33 to 40 GW and slot reservation agreements from 29 to 43 GW, pointing to multi-year visibility. Power revenue grew roughly 10% in 2025, and adjusted EBITDA margins expanded by about 100 basis points to 14.7%, with Q4 margins reaching a healthy 16.9%. While nuclear investments weighed on segment margins, management framed these as deliberate, near-term drags that support longer-term growth in advanced nuclear technologies.

Electrification Segment in Rapid Scale-Up Mode

Electrification emerged as one of GE Vernova’s fastest-growing and most profitable platforms. Segment revenue grew about 26% in 2025 and 32% in Q4 alone, powered by grid, transmission and related electrification solutions. Orders rose approximately 21% for the year, and Q4 orders were roughly 2.5x segment revenue, up around 50% year-over-year to roughly $7.4 billion. Backlog reached $35 billion, increasing by $11 billion in a year. Profitability improved even faster, with EBITDA margins expanding about 560 basis points to 14.9% for 2025 and hitting 17.1% in Q4. For 2026, management is guiding Electrification revenue to $13.5–14.0 billion on 20% organic growth, plus approximately $3 billion from Prolec GE, setting the stage for continued high-margin expansion.

Operational Investments Expand Capacity and Productivity

To support its robust order book and growth trajectory, GE Vernova has been investing aggressively in manufacturing capacity and productivity-enhancing technologies. In 2025, the company installed more than 200 new machines and added nearly 1,000 production workers, with plans to add about 200 more machines and over 500 additional production workers in 2026. Investments in automation, robotics and AI are scaling across operations, aimed at improving throughput, cost efficiency and quality. Meanwhile, advanced research initiatives—including work on direct air capture, solid-state transformers and fuel cells—signal a pipeline of longer-term innovation that could open new markets and high-value applications aligned with the energy transition.

Capital Returns Accelerate With Dividend Hike and Buybacks

Shareholders are seeing increasing direct benefits from GE Vernova’s improving financial profile. In 2025, the company returned $3.6 billion to shareholders, including the repurchase of more than 8 million shares. Management also announced a doubling of the dividend for 2026, reflecting confidence in sustainable cash generation, and expanded its share buyback authorization to $10 billion from $6 billion. These capital return plans run in parallel with sizable growth investments and the Prolec GE acquisition, suggesting room for both shareholder payouts and strategic reinvestment within the current balance sheet framework.

Wind Segment Hit by Offshore Disruptions and Tariffs

The Wind segment remains GE Vernova’s primary pain point, with a concentrated set of operational and policy headwinds. Wind revenue fell 25% in the fourth quarter and the segment recorded a Q4 EBITDA loss of $225 million. For the full year, Wind losses reached about $600 million, significantly worse than the earlier expectation of roughly $400 million, largely due to the U.S. government’s December 22, 2025 stop‑work order affecting offshore wind activity, including the Vineyard Wind project. The company accrued incremental contract losses tied to Vineyard delays and invoked force majeure protections, but these disruptions have driven higher project risk and execution complexity. Tariffs have also weighed on profitability, with a roughly $70 million negative impact since mid‑2024 and continued pressure on the U.S. onshore market.

Vineyard Wind Uncertainty Poses Additional Revenue Risk

Management highlighted Vineyard Wind as a specific near-term risk factor. If work cannot resume, GE Vernova may be unable to install the remaining 11 turbines, which would prevent billing the customer once vessel access is lost. This scenario could reduce 2026 Wind revenue by about $250 million. While the company has recorded estimated incremental contract losses and invoked contractual protections, investors will need to watch how quickly regulatory and permitting issues are resolved. The episode underscores the sensitivity of offshore wind economics to policy and permitting timelines and reinforces management’s cautious tone around incremental offshore commitments.

Onshore Weakness and Offshore Execution Challenges Persist

Beyond Vineyard, the broader Wind portfolio continues to face structural challenges. U.S. onshore orders remain soft, with permitting delays and tariff uncertainty limiting near-term demand visibility. The company expects Wind organic revenue to decline by low double digits in 2026, with Q1 2026 revenue down in the high teens year-on-year. Offshore projects continue to generate contract losses and drag on margins, as legacy contracts and execution challenges weigh on profitability. Management flagged offshore execution and legacy backlog remediation as ongoing workstreams, positioning Wind as a deliberate multi-year turnaround rather than a near-term earnings driver.

Nuclear Investments Depress Near-Term Margins but Target Long-Term Upside

Within the otherwise strong Power segment, nuclear activities—particularly small modular reactor (SMR) and advanced nuclear investments—were cited as a meaningful drag on 2025 margins and are expected to have a similar effect in 2026. These initiatives are currently consuming capital and operating expense without near-term revenue to match, depressing segment profitability. However, management framed nuclear as a strategic long-term growth pillar that complements gas and grid, suggesting that today’s margin pressure is the price of positioning for future demand in next‑generation low‑carbon baseload solutions.

Upgraded 2026 and 2028 Guidance Underlines Confidence

GE Vernova’s guidance revisions reinforced the bullish tone of the call. For 2026, the company raised revenue guidance to $44–45 billion from $41–42 billion, with adjusted EBITDA margins targeted at 11–13% and free cash flow of $5.0–5.5 billion, up from $4.5–5.0 billion previously. Q1 2026 is expected to show year-on-year revenue growth, margin expansion and positive free cash flow. By segment, Power is projected to deliver 16–18% organic revenue growth and 16–18% EBITDA margins in 2026, while targeting about 20 GW of annual gas turbine capacity from mid-year. Electrification is expected to generate $13.5–14.0 billion in revenue plus roughly $3 billion from Prolec GE, with 17–19% EBITDA margins and a path toward about 22% margins by 2028 as Prolec adds around $4 billion in incremental revenue. Wind is forecast to remain a drag with low double-digit organic revenue decline and about $400 million in EBITDA losses in 2026, albeit with a more second-half-weighted recovery and the strongest quarter expected in Q4. At the corporate level, GE Vernova plans roughly $2.6 billion of debt issuance to acquire Prolec while still remaining below 1x gross debt to EBITDA, and it now sees at least $56 billion of revenue by 2028 (up from $52 billion prior), a 20% EBITDA margin target, cumulative free cash flow of at least $24 billion from 2025–2028—about $2 billion higher than before—and roughly $11 billion of combined capex and R&D investment over that period.

In closing, GE Vernova’s earnings call depicted a company in the midst of a robust, broad-based upturn anchored by record orders, a larger and richer backlog, expanding margins and surging free cash flow. Power and Electrification are establishing themselves as strong, profitable growth engines, even as management continues to invest in nuclear and advanced technologies and returns more capital to shareholders. The Wind segment remains a notable weak spot, with offshore and tariff-related challenges still unresolved and likely to weigh on results in 2026. Nonetheless, upgraded guidance through 2026 and a more ambitious 2028 outlook indicate that management sees these issues as contained within a fundamentally strengthening story—one that investors focused on energy transition, cash generation and improving returns will be watching closely.