GE Vernova Inc. Q2 FY26 Earnings Analysis

- Full-year 2026 revenue guidance raised to $44.5 billion - $45.5 billion, up $500 million due to Electrification growth (Page 6). - Power segment organic revenue growth expected at 16% to 18% in 2026, driven by Gas Power (Page 6). - Electrification revenue raised from $13.5-$14B to $14-$14.5B, backlog up 75% to $39B (Page 6 and 3). - Wind revenue expected to decline low double digits in 2026 but with improved second half profitability (Page 6). - Gas Power annualized output capacity targeted at 20 GW by mid-2026, driving higher shipments and backlog deliveries in second half of the year (Page 2 & 6). - Electrification backlog driven by growing demand in data centers, substations, HVDC, switchgear, transformers, especially in North America and Asia (Page 3 & 8). - Order intake: 21 GW signed in Q1, total under contract expected to exceed 110 GW by end of 2026 (Page 2). - Pricing expected to improve 10-20% on dollar per kW basis through first half of 2026 (Page 10 & 9).

- GE Vernova raised 2026 revenue guidance to $44.5B-$45.5B, up $500M from prior due to Electrification growth. - Adjusted EBITDA margin guidance increased by 1 point to 12%-14%, driven by Power and Electrification segments. - Free cash flow guidance raised to $6.5B-$7.5B from $5B-$5.5B, reflecting accelerating orders, down payments, and margin expansion. - Power segment expects 16%-18% organic revenue growth, EBITDA margin improved to 17%-19%. - Electrification revenue guidance raised to $14B-$14.5B with EBITDA margin forecast 18%-20%. - Wind segment expected organic revenue decline low double digits with approx. $400M EBIT losses, improving second half. - Strong margin expansion driven by price, volume, productivity offsetting inflation and capacity investments. - Productivity gains and AI/automation investments anticipated to boost profitability over time. - Continued growth in backlog and orders supports positive outlook for earnings and operating performance through 2026.

- Investing in capacity expansion with $5.3 billion spent on adding 3 new factories in the U.S. (Shreveport, North Carolina, Wisconsin) plus existing capacity in Mexico and Brazil (Prolec). - Ongoing investments in AI, robotics, and automation to drive productivity and efficiency, particularly in gas power factories. - Continued investment in R&D, especially in electrification, with 25% R&D growth driven by projects like EMS solutions, stability blocks (MV UPS), and solid-state transformers (SST). - Committed $4.5 million to the Engineering of Change program for STEM education over the next 4 years. - Focus on lean manufacturing initiatives to add capacity cost-effectively and improve productivity. - Supporting nuclear SMR project construction and development, including regulatory progress and collaboration with U.S. and Japanese governments. - Maintaining strong financial position with approximately $10.2 billion cash balance and under 1x gross debt to adjusted EBITDA.

- In Q1 2026, the company issued $2.6 billion of debt. - The company remains below 1x gross debt to adjusted EBITDA, maintaining a strong investment-grade balance sheet. - There is no mention of current or planned new equity fundraising. - Focus is on managing corporate costs between $450 million and $500 million, investing in AI, robotics, and automation. - The company returned $1.4 billion of cash to shareholders through share repurchases and dividends in Q1 2026. - No explicit announcements about future fundraising plans via debt or equity beyond Q1 2026.

- Total gigawatts under contract grew from 83 to 100 GW sequentially in Q1 2026. - Backlog increased from 40 to 44 GW, and slot reservation agreements rose from 43 to 56 GW. - Approximately 80% of gigawatts under contract are with traditional customers; 20% support data centers. - Book-to-bill ratio of approximately 2, with orders of $18.3 billion in Q1, a 71% year-over-year increase. - Equipment backlog expanded to $76 billion, up 67% year-over-year. - Slot reservation agreements and framework discussions ongoing, but no closed long-term framework agreements yet. - April 2026 orders alone exceeded all of Q1 2026 in value. - Expected to book 10 to 15 GW of contracts in Q2 2026. - Targeting at least 110 GW under contract by end of 2026.