GEV — GE Vernova Inc.

Summary of GE Vernova Q2 2026 Earnings Call

1. Key Financial Results and Metrics:

• Orders: Total orders reached $24.2 billion, an 88% year-over-year increase, with a book-to-bill ratio exceeding 2x.
• Backlog: Total backlog grew to $176 billion, up $13 billion from the previous quarter, with equipment backlog at $88 billion (77% year-over-year increase).
• Revenue: Revenue increased by 12% year-over-year, with equipment revenue rising 14% and services revenue up 10%.
• Adjusted EBITDA: Grew 61% year-over-year to $1.2 billion, with an adjusted EBITDA margin of 12.5%, reflecting a 340 basis point expansion.
• Free Cash Flow: Generated $5.1 billion in free cash flow for the quarter, significantly up from the previous year.
• Cash Position: Ended the quarter with a cash balance of approximately $13 billion, after returning $2.5 billion to shareholders.

2. Strategic Updates and Business Highlights:

• Power Segment: Strong demand, particularly in Gas Power, with a significant increase in both equipment and service orders. The segment's backlog grew significantly, supported by a diverse customer base.
• Electrification: Robust growth in equipment backlog, particularly driven by data center orders, which totaled over $5 billion in the first half of 2026.
• Wind Segment: Continued focus on improving service profitability, but faced challenges with declining orders and revenue due to market softness in onshore equipment.
• Acquisitions: Completed the acquisition of Robotech Automation to enhance productivity and service delivery.
• Capacity Expansion: Plans to increase production capacity to 30 gigawatts by 2030, leveraging existing infrastructure and automation.

3. Forward Guidance and Outlook:

• 2026 Revenue Guidance: Raised to $45.5 billion - $46.5 billion, reflecting strong performance and growth expectations in Power and Electrification.
• Free Cash Flow Guidance: Increased to $11.5 billion - $12.5 billion, up from previous estimates due to strong order growth and working capital management.
• Segment Expectations:
  • Power: Anticipated organic revenue growth of 18%-20%.
  • Electrification: Revenue expected to be in the range of $14.5 billion - $15 billion.
  • Wind: Expected organic revenue decline in low double digits with EBITDA losses around $400 million.

4. Bad News, Challenges, or Points of Concern:

• Wind Segment Challenges: Orders declined by 40%, primarily due to lower onshore equipment orders and permitting delays, leading to a revenue decrease of 11%.
• Market Uncertainty: Concerns regarding the impact of tariffs on wind development and the overall softness in the U.S. market for new onshore equipment.
• Capacity Constraints: While there is a strong backlog, the ability to convert slot reservation agreements to orders may be impacted by customer readiness and EPC scheduling.

5. Notable Q&A Insights:

• Capacity Expansion: Management confirmed plans to ramp up production to 20 gigawatts annualized in the second half of 2026, with further expansions planned for 2030.
• International Demand: Strong demand is noted outside of North America, particularly in Taiwan, Saudi Arabia, and Southeast Asia.
• Data Center Growth: Significant orders from data centers indicate a growing market, with expectations for future growth driven by integrated solutions.
• Solid-State Transformers (SST): Progress on SSTs is ongoing, with commercial discussions expected to advance in 2027, while medium voltage uninterruptible power supplies are anticipated to contribute to orders sooner.

This summary encapsulates the key points from GE Vernova's Q2 2026 earnings call, highlighting both the positive momentum in financial performance and strategic initiatives, as well as the challenges faced in specific segments.