GE Vernova Inc.

What they do

GE Vernova designs, manufactures, and services equipment that generate, transfer, orchestrate, convert, and store electricity, with an installed base generating about 25% of the world's electricity. Its operations are organized into Power (gas, steam, nuclear, hydro), Electrification (grid equipment and software), and Wind (onshore and offshore turbines).

Revenue drivers

• Power (Gas Power) — Largest revenue segment; driven by gas turbine equipment sales and services, with 20 GW of new gas equipment contracts signed in Q2 2026, including 18 GW of slot reservations.
• Electrification (Grid Solutions) — Sells transformers, switchgear, and grid automation; Q2 2026 revenues of $3.6B, up 29% organically, with equipment backlog up 69% to $40.6B, including $5B from Prolec GE.
• Wind (Onshore/Offshore) — Revenues of $2.0B in Q2 2026, down 10% organically, pressured by lower onshore wind equipment volume and higher offshore wind project costs.
• Services — Aftermarket services across all segments grew in Q2 2026, contributing to margin expansion and recurring revenue.

Recent performance

In Q2 2026, orders were $24.2B, up 88% organically; revenue was $11.1B, up 22% (12% organic); net income was $0.6B; adjusted EBITDA margin was 11.3%, up 340 bps organically. Free cash flow was $5.1B, exceeding all of 2025, and backlog grew to $176B. Full-year 2025 tariff costs were ~$250M; 2026 estimate is $100-$200M.

Strategy

GE Vernova focuses on electrification and decarbonization, investing in gas turbine capacity (20 GW annual output by Q3 2026, 24 GW by 2028, 30 GW by 2030) and grid modernization. It completed the $5.3B acquisition of Prolec GE in February 2026 to expand transformer capacity. It aims to return at least one-third of cash generation to shareholders and improve margins via lean and product portfolio streamlining.

Risks

• Execution/quality risk on sophisticated products — Failures in gas turbines, wind turbines, or grid equipment could cause warranty claims, project delays, and regulatory actions, as exemplified by ongoing Offshore Wind project cost pressures.
• Tariff exposure — Global tariffs imposed in 2025-2026 have added costs (~$250M in 2025; $100-200M estimated for 2026), and future tariffs could materially increase costs.
• Project execution and claims at Offshore Wind — The Vineyard Wind project has faced timeline delays and outstanding claims/counterclaims with the customer, adding cost pressure.
• Supply chain disruptions — Volatility in cost or availability of critical components could disrupt production and raise costs across all segments.

Outlook

Management raised 2026 guidance, citing strong demand and backlog. It expects at least 125 GW of gas equipment under contract by year-end 2026, up from 116 GW, and is on track to deliver 20 GW annual gas turbine output by Q3 2026, with 24 GW in 2028 and 30 GW in 2030. Data center orders in Electrification exceeded $5B year-to-date, more than double 2025 total.