From Investing.com, January 28, skipping past the thumbnailed financials:
Earnings call transcript: GE Vernova’s Q4 2025 results beat expectations
....Outlook & Guidance
Looking ahead, GE Vernova has set ambitious targets for 2026, projecting revenue between $44 billion and $45 billion. The company anticipates adjusted EBITDA margins of 11-13% and free cash flow of $5-$5.5 billion. By 2028, GE Vernova aims to achieve at least $56 billion in total revenue with 20% adjusted EBITDA margins, supported by strategic investments in electrification and power generation.
Executive Commentary
Scott Strazik, CEO of GE Vernova, expressed confidence in the company’s growth trajectory, stating, "We are executing well in the early stages of our multi-year growth trajectory." He emphasized the company’s competitive advantage, noting, "Our ability to link power generation solutions with electrical equipment is positioning us to continue to grow this business on an outsized basis." Strazik also highlighted the company’s future prospects, saying, "We enter 2026 pumped up about the company we are creating, the opportunities to serve our customers and deliver returns for our owners."Risks and Challenges
- Supply chain disruptions: Potential delays in production and delivery.
- Market saturation: Increased competition in the power generation sector.
- Macroeconomic pressures: Global economic instability could impact demand.
- Regulatory changes: New policies affecting energy and environmental standards.
- Technological advancements: Need to keep pace with rapid innovation.
....Full transcript - GE Vernova LLC (GEV) Q4 2025:
Liz, Conference Coordinator: Good day, ladies and gentlemen, and welcome to GE Vernova’s fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. My name is Liz, and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I’d now like to turn the program over to your host for today’s conference, Michael Lapides, Vice President of Investor Relations. Please proceed.
Michael Lapides, Vice President of Investor Relations, GE Vernova: Welcome to GE Vernova’s fourth quarter 2025 earnings call. I’m joined today by our CEO, Scott Strazik, and CFO, Ken Parks. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today’s press release and presentation slides, both of which are available on our website. Please note that our year-over-year commentary or variances on orders, revenue, adjusted and segment EBITDA and margin discussed during our prepared remarks are on an organic basis unless otherwise specified. In addition, our 2026 guidance and our by 2028 outlook being presented today include the Prolec GE acquisition. We will make forward-looking statements about our performance. These statements are based on how we see things today. While we may elect to update these forward-looking statements at some point in the future, we do not undertake any obligation to do so.
As described in our SEC filings, actual results may differ materially due to risks and uncertainties. With that, I’ll hand it over to Scott.
Scott Strazik, CEO, GE Vernova: Thanks, Michael. Good morning, everyone, and welcome to our fourth quarter earnings call. We have been busy since our December 9 investor update, and I thought I’d start with progress since the event. First, on the positive, we continue to see very strong new gas contracts with an incremental 6 GW signed in the last three weeks of December for a total of 24 GW of new contracts in 4Q 2025 alone. We also ended the year with strong orders in both electrification and wind. Electrification had its largest order quarter in its history, and wind had its largest order quarter of 2025. On the negative, we have been impacted by the U.S. government’s halting of all offshore wind activity on December 22, which led to us booking an incremental accrual in 4Q for costs associated with the delay on the Vineyard Wind project.
Ken will talk more about this in his section. I’m pleased that our Prolec GE acquisition has received rapid approval from all required jurisdictions. This will allow us to close the acquisition on Monday, February 2. Taking all this into consideration, we are raising our full year 2026 financial guidance, which now includes GE Vernova’s full ownership and operation of Prolec for 11 months in 2026. Taken in totality, the last three weeks of December since our last update, were a reasonable proxy for our 2025 performance in total. Strong growth in our largest, most profitable businesses, with momentum continuing. Challenges and wins that we are continuing to combat with accretive capital allocation, with the approvals required to close our first sizable acquisition as a standalone public company. 2025 sets us up for substantially more profitable growth moving forward.
In 2025, we increased our total backlog by over 25% or $31 billion to $150 billion, with robust, profitable order growth in power and electrification, further underscoring our momentum as we kick off 2026. In power, we continue to see accelerating demand and favorable pricing trends for both equipment and services as customers invest in new units and existing assets. In 4Q, gas power equipment backlog and slot reservations increased from 62 GW to 83 GW sequentially, primarily due to strong U.S. demand, but also with agreements in the Middle East, Vietnam, and Taiwan, with backlog increasing from 33 GW to 40 GW and SRAs increasing from 29 GW to 43 GW. We expect to reach approximately 100 GW under contract in 2026, under the assumption we’ll ship high teens GW this year, with new contracts north of 30 GW.
In 4Q, we grew our power services backlog to $70 billion, up $5 billion sequentially and $9 billion year-over-year. This increase was mainly driven by strength in gas, with customers investing in fleets and signing new long-term service agreements at favorable pricing, which drove strong high-margin services backlog growth. In electrification, customers are working to keep pace with growing electricity demand, grid stability needs, and national security interests. In 4Q, we grew the segment’s total backlog to $35 billion, up $4 billion sequentially and $11 billion year-over-year, representing electrification’s largest growth quarter on a dollar basis in 25. Importantly, we are seeing demand across the segment for grid and data center equipment, both with traditional customers globally and hyperscalers, primarily in the US....
Of note, over $2 billion of electrification orders were signed directly for data centers in 2025, more than triple the 2024 total. We also signed large deals for providing grid resilience and reliability solutions in Saudi Arabia and Australia, an HVDC contract in Germany, and a large grid equipment contract in Iraq in the year. In wind, we received approximately $3 billion of orders in Q4, the largest of the year for the segment. In onshore, we continue to receive tech selects for repowering and new units as customers utilize Safe Harbor and initiate physical work for approximately 10 GW of repowering opportunities in the U.S. The team is focused on what we can control. Taken together, our pathway to substantially more profitable growth is right in front of us.
I’ll talk about this more on page five, with the growth of margin in our equipment backlog, including $8 billion of incremental margin added to our equipment backlog in 2025. I’m also pleased with the returns that our 2025 investments are yielding. On the CapEx side, we remain on track to see a substantial step-up in gas turbine output in 3Q 2026. We installed over 200 new machines in our factories, while adding nearly 1,000 new production workers in 2025. We plan on adding an incremental 200 machines and over 500 production workers in 2026. Electrification is on track with its growth, delivering more than 25% revenue growth in 2025, with a clear pathway to deliver $13.5 billion-$14 billion in revenue, representing 20% organic growth, plus approximately $3 billion from Prolec GE in 2026.
Our investments in automation and robotics are advancing at scale, and AI is starting to gain momentum in our engineering organizations and back-office functions. Our advanced research center is progressing future businesses for us. This includes Direct Air Capture, where we already have a facility up and running, real momentum in our Solid-State Transformer program, and a good technical progress on our fuel cell program in Malta, New York. We are making all of these investments from a position of financial strength, ending the year with almost $9 billion in cash. In 2025, we were able to return $3.6 billion to our shareholders while repurchasing more than 8 million of our shares. We continue to see substantial opportunity to create value, including through incremental investments with strong returns. A few more comments on our financial performance on page 4.
We booked $59 billion of orders, up 34% year-over-year. We also grew our revenue by 9% year-over-year to $38 billion, with growth in both equipment and services, while increasing our adjusted EBITDA margin by 210 basis points year-over-year. We generated $3.7 billion in free cash flow, more than double our prior year, while investing more than $2 billion in R&D and CapEx. We are increasing our 2026 guidance and by 2028 outlook, which now includes Prolec GE. Ken will speak to this more in a moment, and as announced, we are doubling our dividend in 2026 versus 2025 and have increased our stock buyback authorization to $10 billion from the previously approved $6 billion program.
One of the primary drivers of our conviction on our path forward is the significant growth and margin expansion in our equipment backlog again in 2025, which I will touch on in the next page. On page 5, we show the growth of margin in our equipment backlog, consistent with our practice from last January. We started 2025 with the expectation to increase our margin dollars and equipment backlog above our run rate in the prior two years. We achieved that expectation, adding $8 billion in equipment backlog margin dollars in 2025, more than the prior two years combined. We ended 2025 with $64 billion in equipment backlog, an increase of approximately 50% year-over-year, with an incremental 6 points in equipment margin expansion. This included 11 points of growth in power, mainly driven by our gas power business.
We expect significant growth again in power and electrification’s backlog in 2026 at better margins as we convert higher-priced gas slot reservation agreements into orders and benefit from strong demand and pricing for grid equipment. These businesses’ longer equipment cycles mean that we will not begin delivering on the majority of the higher-margin orders placed in 2024 and 2025 until 2027 and beyond. In wind, we expect relatively stable margins this year and for backlog to decrease as we execute on the remaining unprofitable offshore wind backlog and project a smaller onshore wind backlog, given the recent softness in U.S. orders. As we noted in December, we see incremental opportunity for the teams to expand margins that are not projected in our backlog today. This includes our operating teams delivering our backlog with variable cost productivity versus known cost today...
Accelerating capacity additions, leveraging lean to sell incremental slots, and a recovery in U.S. onshore wind orders. In summary, good progress in 2025, and we are excited about what’s ahead. With continued strong demand and pricing in gas, the strong demand environment across multiple products and electrification, and my expectation for the team to drive variable cost productivity not embedded in our backlog margins today, we expect to add at least as much equipment margin dollars in backlog in 2026 as in 2025, setting us up for even more profitable growth over the long term. Said differently, in totality, the equipment margin and backlog from 2023 to 2026, those four years will add at least $22 billion in equipment margin, driving future profitable growth.
With that, I will turn the call over to Ken for more details on our full year and fourth quarter performance, as well as our financial outlook.
Ken Parks, CFO, GE Vernova: Thanks, Scott. Turning to Slide 6, we finished 2025 strong, with robust orders, growing backlog and revenues, margin expansion, and significant free cash flow generation. In the fourth quarter, we booked orders of $22.2 billion, a 65% increase year-over-year, and a book-to-bill ratio of approximately 2x. Equipment orders increased 91%, while service orders increased 22%. All three segments delivered significant orders growth across equipment and services. As Scott mentioned, our backlog expanded to $150 billion, a year-over-year and sequential increase, with equipment backlog increasing to $64 billion, up approximately $21 billion and 50% year-over-year, while our services backlog grew $10 billion or 13% year-over-year to $86 billion, led by power. Revenue increased 2%, with services growth in all three segments.
Equipment revenue was flat year-over-year as 41% growth at Electrification and 8% growth at Power was offset by anticipated lower Wind revenues. Price was positive in all segments. Adjusted EBITDA grew 6% year-over-year to $1.2 billion, led by Electrification and Power. Adjusted EBITDA margin expanded 30 basis points, with higher price and productivity more than offsetting higher contract losses at offshore wind, as well as inflation and investments in growth and innovation. The strong adjusted EBITDA and working capital management drove positive free cash flow of $1.8 billion in the fourth quarter. Working capital was a $2.3 billion cash benefit, driven primarily by down payments on higher orders and slot reservations at Power, as well as higher orders at Electrification.
Year-over-year, free cash flow increased more than $1 billion, driven by higher positive benefits from working capital and stronger adjusted EBITDA, partially offset by higher CapEx investments supporting capacity expansion. We ended Q4 with a healthy cash balance of nearly $9 billion, up approximately $1 billion compared to the third quarter. During the fourth quarter, we returned $1.1 billion of cash to shareholders through share repurchases and dividends. Also, both S&P and Fitch upgraded our investment-grade credit ratings and maintained positive outlooks on these upgraded ratings. In early February, we expect to issue roughly $2.6 billion of debt as we complete the previously announced acquisition of the remaining 50% ownership stake of Prolec GE, will remain below 1x gross debt to adjusted EBITDA after this debt issuance. We’re encouraged by our strong financial performance in 2025.
During the year, we secured $59 billion of orders, led by power equipment orders more than doubling and electrification equipment orders growing more than 20%. Service orders increased 12%, with growth in each segment. We delivered approximately $38 billion in revenue, with 26% growth in electrification and 10% growth in power. We increased adjusted EBITDA by 46% and expanded margins 210 basis points, driven by price, volume, and productivity, more than offsetting the impact of growth and innovation investments and the impact of tariffs. Finally, we generated $3.7 billion of free cash flow, a year-over-year increase of $2 billion. As discussed in prior quarters, we continue to utilize Lean to improve our billings and collection processes and drive better cash management and linearity.
In 2025, we reduced days sales outstanding by 2 days compared to year-end 2024, resulting in over $200 million of additional free cash flow in 2025. Our growing backlog and healthy margin provides an excellent foundation for continued improvement in our financial performance moving forward. Turning to Slide 7, Power delivered another strong year, led by gas power. Power orders in 2025 grew more than 50%, given robust demand for gas equipment and growth in services, which combined increased backlog by more than $20 billion... Power grew revenue 10% for the year and expanded EBITDA margins by 100 basis points to 14.7%, driven by higher price and productivity, primarily at gas power and steam power. In the fourth quarter, power orders grew 77%, led by gas power equipment tripling year-over-year on higher volume and pricing.
We booked 41 heavy-duty gas turbines, our largest orders quarter of the year, and an increase of more than 70% year over year, including 15 HA units. We also secured orders for 18 aeroderivative units. That’s eight more than the fourth quarter of 2024. Power services orders increased 15% as customers continue to invest in their existing fleets. Revenue increased 5%. Services revenue increased due to higher gas transactional services and nuclear. Equipment revenue increased, driven by nuclear as we progress in building our first SMR at the Darlington site with OPG, as well as aeroderivative growth at gas power. This growth was partially offset by fewer heavy-duty gas turbine shipments, primarily due to the improved linearity of deliveries through 2025 compared to 2024.
EBITDA margins expanded 100 basis points to 16.9%, mainly driven by price and productivity, more than offsetting additional expenses to support capacity investments at gas and R&D at nuclear, along with inflation. Looking to the first quarter of 2026 at Power, we expect continued year-over-year growth in gas equipment orders. We also anticipate high single-digit revenue growth, driven by both higher equipment and services. We expect EBITDA margin of approximately 14%-15%, as volume, price, and productivity should more than offset additional expenses to support capacity and R&D investments, as well as inflation. Given the typical seasonality of services outage, power revenue and EBITDA margin should be lower sequentially in the first quarter. Turning to Slide 8.
The Wind team delivered similar EBITDA losses in 2025, despite the impact of tariffs driven by improved pricing and higher turbine deliveries at onshore wind, offset by offshore due to the absence of contract cancellation settlement gain recorded in the third quarter of 2024, net of lower year-over-year contract losses. In the fourth quarter, wind orders increased 53% year-over-year, mainly due to improved onshore equipment orders, primarily outside of North America. However, it’s still difficult to call an inflection point in U.S. orders as customers still face permitting delays and tariff uncertainty. At offshore, we remain focused on executing our challenged backlog. Wind revenue decreased 25% in the quarter, given lower onshore equipment deliveries as a result of softening orders over the last year.
Wind EBITDA losses were $225 million in the quarter, below the fourth quarter of 2024 levels, due to higher offshore contract losses, including the impact of the recently issued US order to halt construction of all offshore projects and lower onshore equipment volume, partially offset by improved onshore services. For the year, wind losses came in at approximately $600 million, higher than our expectations of approximately $400 million outlined during our December investor event, driven by the US government’s December 22 stop work order for offshore wind projects. Until that point, the team was on a path to achieve these expectations as they worked to complete the Vineyard Wind project in early January. The order created a potential delay of at least 90 days, and we accrued and forecast the estimated incremental contract losses for the extension of installation work.
As a reminder, the project has 62 turbines in total, and we’ve made significant progress with only 10 turbines needing blades and 1 turbine left to be installed at the time of the stop work order. At any time the order is in place, we are unable to execute the project. This and the resulting incremental costs are excused under a declaration of force majeure prompted by the government action. We understand that Vineyard Wind received an injunction of the stop work order yesterday. If given permission to resume work soon, we would work to complete installation of the remaining turbines by the end of March. At the end of March, we’ll lose access to the vessel required to complete installation of the remaining turbines.
If we’re unable to complete the installation of the remaining 11 turbines, 2026 wind revenue could be negatively impacted by approximately $250 million due to our inability to bill the customer for those turbines. Because of our contract loss accruals and protection from incremental costs resulting from the stop work order, we do not anticipate significant additional negative EBITDA impacts for the Vineyard Wind project beyond the amounts already recorded. For first quarter 2026, we anticipate wind revenue to decline at high teens rate year-over-year due to lower onshore equipment deliveries. We expect EBITDA losses to be between $300 million and $400 million, down year-over-year, primarily as a result of lower onshore equipment volume, as well as the approximately $70 million impact of tariffs that started in 2Q of last year....
Looking at 2026, we expect significant improvement in wind revenue in the second half of the year, given only 30% of our expected onshore turbine shipments are in the first half, as almost 70% of our 2025 equipment orders came later in the year. Also, the volume we’re shipping in the first half has fewer contractual protections for tariffs since we signed these orders before their implementation. As a result, we expect EBITDA losses in the first half to be partially offset by profitability in the second half. Now, turning to electrification on Slide 9, strong demand and price resulted in 21% orders growth and 26% revenue growth in 2025. Electrification equipment orders continued outpacing revenue, further increasing the equipment backlog to $31 billion, up more than $10 billion compared to the fourth quarter of 2024.
EBITDA margins expanded 560 basis points to 14.9%, driven by volume, favorable price, and productivity. In the fourth quarter, orders remained strong at roughly 2.5 times revenue and increased 50% year-over-year to approximately $7.4 billion due to growing grid equipment demand, particularly for synchronous condensers, substations, partially to support data center growth and switchgear. We saw strong equipment orders growth in the Middle East, which increased over $1 billion, and in North America, which more than doubled year-over-year. Revenue increased 32% with growth across all regions. We saw strong volume and higher price, driven by switchgear and HVDC equipment. EBITDA increased 63% in the quarter, with margin expansion of 320 basis points to 17.1%.
Margin expansion was led by more profitable volume, productivity, and favorable pricing. Looking to the first quarter of 2026, we anticipate continued solid equipment orders with healthy margins. First quarter electrification revenues should be similar to the fourth quarter of 2025, as we include Prolec GE, resulting in a significant year-over-year increase. We expect continued strong EBITDA margin expansion to 16%-17% from volume, price, and productivity. Moving to Slide 10 to discuss GE Vernova guidance. For the first quarter of 2026, based on our expectations for the segments as already outlined, we expect continued year-over-year revenue growth and adjusted EBITDA margin expansion. We also expect to deliver positive free cash flow in the first quarter of 2026, given our ongoing focus on aligning the timing of inflows and outflows, along with the impact of down payments, which correlate with the timing of orders.
For the full year, we’re increasing our 2026 guidance provided in December to now include the Prolec GE acquisition. We now expect full year 2026 revenue to be in the range of $44 billion-$45 billion, up from $41 billion-$42 billion, with growth in both services and equipment. We continue to expect adjusted EBITDA margins of 11%-13% as we deliver our growing backlog with favorable pricing plus improved operational execution. We’re also increasing our free cash flow guidance to between $5 billion and $5.5 billion, up from $4.5 billion-$5 billion. By segment, we continue to expect 16%-18% of organic revenue growth in power, driven by gas power.
We anticipate power EBITDA margins to be between 16% and 18%, as positive price, increased volume leverage, and productivity more than offset inflationary impacts and the additional expenses for AI, automation, and increased production. In electrification, we now anticipate revenue to be between $13.5 billion and $14 billion, which represents 20% organic growth, plus approximately $3 billion of revenue from Prolec GE. We continue to expect EBITDA margin to expand to 17%-19% as we deliver our more profitable backlog. In wind, organic revenue is expected to be down low double digits due to decreased onshore equipment revenues, given the softness in orders. But we expect EBITDA losses to be approximately $400 million in 2026, which is consistent with our expectations discussed in December, as improvement in onshore wind services and offshore wind offset the lower onshore equipment volume.
We expect 2026 GEV adjusted EBITDA to be more second-half weighted than 2025, with the highest revenue and EBITDA in the fourth quarter of 2026. We expect higher second-half gas power revenue as we ship more gas turbines in the second half of the year, as we increase annual production capacity to approximately 20 GW starting in mid-year 2026. We also anticipate typical gas services seasonality, with the highest outage volume in the fourth quarter. We continue to expect electrification EBITDA to increase sequentially through the year, following the completion of the Prolec GE acquisition. And as mentioned earlier in wind, we expect higher second-half onshore turbine shipments, given our recent orders profile and better services profitability. At corporate, costs are typically uneven across quarters due to compensation timing and portfolio activity at our financial services business.
We expect full year 2026 corporate cost to be between $450 million and $500 million as we continue investing in AI, robotics, and automation to drive productivity over the medium and long term. Turning to slide 11, we’re also increasing our by 2028 outlook to include Prolec GE. We now project at least $56 billion of total revenue by 2028, up from $52 billion, implying a low teens growth CAGR through 2028, and we still expect to achieve adjusted EBITDA margins of 20%. We’re increasing our cumulative GE Vernova free cash flow generation from 2025 to 2028 by approximately $2 billion to at least $24 billion, which incorporates nearly $1 billion of incremental CapEx from Prolec GE to support increased transformer production.
This brings our expected cumulative CapEx and R&D investments through this period to approximately $11 billion. At Electrification, by incorporating Prolec GE into our 28 by 2028 outlook, we now expect approximately $4 billion of incremental revenue on top of high teens organic growth, and we maintain expectations for 22% EBITDA margins. We’re not including any synergies from the Prolec acquisition into our updated outlook, but we see real opportunities in both revenues as well as costs. Overall, the combination of rising demand, combined with the consistently stronger execution, investments into our business, and the acquisition of Prolec GE, sets us up nicely going forward. With that, I’ll turn it back to Scott.
Scott Strazik, CEO, GE Vernova: Thanks, Ken. It’s a wrap. Few themes. We are executing well in the early stages of our multi-year growth trajectory. This is evidenced in the $150 billion backlog we enter 2026 with, versus roughly $100 billion in backlog that we entered 2022 with after the announcement of our spin from GE in November of 2021. Just think about that for a moment. Just over 4 years ago, we announced our separation from GE, and today, our backlog is 50% larger than it was upon the time of the spin announcement. The steepness of our growth trajectory is probably best evidenced in our Electrification segment, which I often say has been the largest beneficiary of GEV working as one purpose-built, focused company, now better linking the commercial muscle and customer relationships of our power and wind businesses with the electrification solutions we provide.
Electrification generated about $5 billion in revenue in 2022, and we now expect that number to be $13.5 billion-$14 billion in 2026, and we are just getting started. But this isn’t about growth for growth’s sake. In the last three years alone, we’ve more than doubled our GEV equipment backlog, adding over $14 billion in future margin dollars in this backlog, while adding $13 billion in high-margin services backlog over the same period. On the operations front, we are improving, but culturally hunting every day for waste and opportunities to serve our customers in a more efficient manner. Take our transformer product line inside Electrification.
Our labor hours were up 39% in Q4, with output increasing more than 50% year-over-year as we drive significant productivity at these sites, and we now see real opportunity to apply a similar playbook to the five large factories we are acquiring with Prolec GE. In onshore wind, our critical customer-facing events are down over 50% in 2025 versus 2024, and the business is well-positioned to deliver a much more profitable services business in 2026. But we also are running the business with the humility to acknowledge we continue to have real opportunity to improve on our execution in areas like offshore wind as we complete our only two projects. We are doing all of this while investing across the near, mid-, and long-term horizons....
*****
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Liz, Conference Coordinator: Ladies and gentlemen, if you wish to ask a question, please press star one one on your telephone. If you wish to withdraw your question or your question has already been answered, please press star one one. Our first question comes from Joe Ritchie with Goldman Sachs.
Scott Strazik, CEO, GE Vernova: Good morning, Joe.
Speaker 4: Hey, guys. Good morning.
Scott Strazik, CEO, GE Vernova: Good morning.
Speaker 4: Hey, good morning, guys. So let’s just... I’m just gonna focus my one question on gas power equipment orders. Clearly incredible momentum in 2025. I think your original expectation was for backlog and for SRAs to be roughly around 60 gigawatts, and you ended at 83. Now you have an expectation of 100 gigawatts by the end of 2026. Scott, maybe just talk about, you know, just the nature of your discussions. Have they changed at all, the types of customers? And then also, you did mention that you expected the margin in your backlog to be better as well, so it sounds like the pricing discussions have also been positive. Thank you.
Scott Strazik, CEO, GE Vernova: Yeah, Joe. I mean, on the end of that, I’d say yes, pricing does continue to strengthen. When we look at where we’re trending with our slot reservation agreements today versus our existing backlog, there’s another 10-20 points of pricing strength in the SRAs today. We are pleased. You’re right, we were talking in the middle of last year at 60 GW and landed at 83 GW because the intensity of the discussions, really late summer, fall, right through the holidays, have continued to be very intense. When you think about this year getting to 100 GW by the end of the year, what I would tell you is it’s likely gonna be a larger proportion of orders. You know, today, with the 83 GW, it’s 40 GW of orders, 43 GW of SRAs.
That probably shifts towards more of a 60/40 split, with 60% on order over the course of 2026. And then, really, the question that we’ll have to evaluate and share with you as we go is how many customers are ready to commit to slots today for really 2031 to 2035. And our 100-gigawatt assumption that we talked about today doesn’t really assume a lot of those, let’s call it, framework agreements get closed in 2026, but they’re active discussions right now. And active discussions we’re gonna keep working, that could take that 60/40 split of, 60 gigawatts of orders directionally and 40 gigawatts of S-SRAs to see the SRA number grow even higher over the course of this year. But it’s January, and, and we wanna see how those discussions progress. Thanks, Joe.
Liz, Conference Coordinator: The next question comes from Julian Mitchell with Barclays.
Speaker 5: Hi, good morning. Just wanted to circle back to the gas power equipment market, because I suppose we get a lot of questions from investors around smaller turbine makers looking to grab share, looking to take advantage of the fact that you’re trying to be measured on capacity increases, and there are very long lead times. And obviously there was an announcement of someone looking to repurpose ancient narrow body engines for a power gen supply. So I just wondered, I suppose, two things. One was: how serious do you think the threat of market share gains from that plethora of smaller players is? And do you think that they could have some negative effects on pricing in the equipment market as their capacity and share gain efforts ramp up in the years ahead? Thank you.
Scott Strazik, CEO, GE Vernova: Thanks, Julian. I would just reinforce the comment I made before, which is we do see our slot reservation agreements 10-20 points higher in price than where we are with their backlogs. So we’re continuing to gain price as we continue to play this game in gas. Frankly, a lot of the smaller applications are simply enabling more projects to get started, because what it’s enabling is earlier power that truthfully we can’t provide. But then on the back end, as the heavy-duty gas turbines are available, those smaller applications will become the reliability solution on the back of the heavy-duty gas turbines. So what we talk about every day is this is about economics, and when you’re underwriting 20-year business cases, efficiency matters a lot when you’re running these units at base load.
So now with humility, we don’t really view those smaller units to be competition, but that doesn’t mean that’s not a good business in the near term. I think those smaller applications could do very good business the next few years, but we also have just as much conviction in, the competitiveness and the value proposition our Heavy-Duty Gas Turbines are providing, and will continue to provide, and we expect to continue to have the attractive share in the market that we have had and will continue to have.
Ken Parks, CFO, GE Vernova: Julian, I know you know this, but we obviously play in a piece of that as well, right? So we have aero-derivative units, and I think last year we booked orders for about 63 of those, which was up significantly year-over-year. Because of us playing in that market, it informs those comments that Scott just made, which is we know how the customers are thinking about utilizing that equipment in the midterm.....
....MUCH MORE
So far today:
"GE Vernova Stock Jumps After Earnings. It Raises Guidance Again" (GEV)
GE Vernova Reverses Its Early Gains, Now Down 2% Pre-Market (GEV)
GE Vernova Blames Trump, Reverses Earlier Reversal, Now Up $8.00, Oops, Now Down $16.00 (GEV)
The stock is now up $28.56 (+4.12%) at $721.26.
The company also doubled the dividend to $0.50 per share per quarter and lifted the share repurchase from $6billion to $10billion.
