Beta Finch - GE Vernova - GEV - EN

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ALEX: Hey everyone, welcome back to Beta Finch, your AI-powered earnings breakdown where we take the dense, jargon-filled earnings calls and turn them into something you can actually enjoy with your morning coffee. I'm Alex.

JORDAN: And I'm Jordan. And Alex, today's episode is a big one.

ALEX: Before we dive in, quick disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Got it. And yeah, today we're talking GE Vernova — ticker GEV — their Q3 2026 results, which dropped on October 28th. This is the power equipment and electrification spinoff from GE, and honestly, Alex, this quarter had a little bit of everything.

ALEX: Everything is right. Let's start with the headline numbers because they're pretty stunning. Orders came in at $29.3 billion for the quarter — that's up 96% year-over-year. Their book-to-bill ratio was more than 2-to-1, meaning they're booking way more business than they're actually billing out right now.

JORDAN: Which is the good kind of problem to have. That pushed their total backlog up to $197 billion — nearly $200 billion, up from $176 billion just last quarter.

ALEX: And revenue grew 18% year-over-year, with adjusted EBITDA more than doubling — up 123% to $1.9 billion. Margin expanded a whopping 690 basis points.

JORDAN: Let's put some color on where that's coming from, because it's not one segment carrying the whole load. Power segment margins hit 21.4% — and remember, Q3 is historically their weakest seasonal quarter for services. CEO Scott Strazik made a point of calling that out.

ALEX: Right, because this is the first quarter they're shipping gas turbine equipment at the new, higher prices they locked in — they hit that 5-gigawatt quarterly shipment target. Strazik basically said: this is the beginning, not the peak.

JORDAN: Electrification also impressed — 19.1% EBITDA margin, up 470 basis points, even while they're ramping R&D spend. And Wind — Wind actually turned profitable this quarter, Alex. That's the segment that's been a headache for years.

ALEX: A real milestone. They resolved that Vineyard Wind litigation dispute with only a modest P&L hit, and onshore services performance has been improving steadily. CFO Ken Parks noted they're even pulling forward some scheduled maintenance from 2027 into Q4 because the team's executing so well.

JORDAN: Okay, now let's get to the big strategic news, because this is what analysts spent most of the call asking about: the $9 billion acquisition of Trench Group.

ALEX: Trench makes high-voltage grid components — bushings, instrument transformers, coils. GE Vernova already buys from them, but this vertically integrates a critical piece of their supply chain right as demand for grid infrastructure is exploding, partly thanks to data centers and AI.

JORDAN: And the price tag — 13 times 2028 EBITDA before synergies — isn't cheap, but management framed it as immediately accretive. Trench is expected to hit roughly $2 billion in revenue by 2028 with margins around 36%.

ALEX: What stood out to me in the Q&A was when analyst Nigel Coe asked how much of Trench's business is actually tied to GEV today versus external customers. Strazik's answer: GEV is currently a small slice of Trench's $1.4 billion revenue — but bushings alone make up 5-8% of a transformer's bill of materials, and customers often specify the bushing supplier by name. So owning that technology could pull forward a lot more transformer business.

JORDAN: It's a classic "control your supply chain to meet surging demand" story — similar to what they did last year with the Prolec acquisition, which management says is already outperforming expectations.

ALEX: And in the same breath as announcing Trench, they doubled thei

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, where we take the numbers and the noise from corporate earnings calls and turn them into something you can actually digest. I'm Alex.

JORDAN: And I'm Jordan. Before we dive in, quick disclaimer:

ALEX: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: With that out of the way — Alex, today we're on GE Vernova, ticker GEV, Q2 2026. And this is one of those quarters where I read the numbers twice because they seemed almost too good.

ALEX: Right, let's just start with the headline: orders came in at $24.2 billion for the quarter, up 88% year-over-year. That's a book-to-bill ratio of over 2x, meaning they're booking twice as much business as they're actually shipping and billing right now.

JORDAN: Which tells you the backlog is just ballooning. And it did — total backlog hit $176 billion, up $13 billion sequentially. CEO Scott Strazik said they're on track for $200 billion by 2027.

ALEX: The engine behind all this is really Gas Power. They signed 20 gigawatts of new orders and slot reservations this quarter alone, pushing their total gigawatts under contract from 100 to 116. And they're now saying they expect to hit at least 125 gigawatts by year-end.

JORDAN: What stood out to me is the mix — more than half of that contracted capacity is for their big HA turbines, the ones expected to run baseload for decades. That's not speculative demand, that's utilities and data centers locking in power for the long haul. And notably, about 80% of that demand is still traditional customers, only 20% data centers — so despite all the AI hype, this isn't just a data center story.

ALEX: Though the data center piece is growing fast too. Electrification booked $2.7 billion in data center orders this quarter, bringing the first-half total north of $5 billion — more than double all of 2025.

JORDAN: Let's talk margins, because that's really the story underneath the story. Adjusted EBITDA grew 61% year-over-year to $1.2 billion, and margin expanded 340 basis points. First-half margins are up 360 basis points versus last year, even as lower-margin-mix equipment revenue grows faster than services.

ALEX: And free cash flow — this is the number that jumped out at me — $5.1 billion generated in the quarter alone. Year to date they're at roughly $10 billion, which is already two and a half times what they did in all of 2025.

JORDAN: A lot of that is working capital benefit from customer down payments on all those gas turbine slot reservations. It's real cash, but investors should understand some of that first-half strength is front-loaded — CFO Ken Parks was upfront that second-half free cash flow will be notably lower than the first half.

ALEX: Which is why the full-year guidance raise is still notable in context. Revenue guidance moved up to $45.5 to $46.5 billion, and free cash flow guidance jumped from $6.5-$7.5 billion to $11.5-$12.5 billion.

JORDAN: That's almost double the original free cash flow guide. EBITDA margin guidance held steady at 12-14% for the year.

ALEX: Let's hit segment performance quickly. Power segment orders more than doubled, revenue up 14%, EBITDA margin expanded 320 basis points to 18.8%. Electrification was even more dramatic — orders up 66% to $6.3 billion, revenue up 68% on a reported basis, margin up 700 basis points to 18.4%.

JORDAN: Wind is the laggard, as expected. Orders down 40%, mostly onshore weakness in North America tied to permitting delays and tariff uncertainty. EBITDA losses of $275 million this quarter, and they're still guiding to roughly $400 million in losses for the full year. Management's basically saying: we're managing what we can control there and waiting for pol

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**BETA FINCH PODCAST SCRIPT**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we dive deep into quarterly results to help you understand what's really driving the markets. I'm Alex, and joining me as always is Jordan.

**JORDAN:** Hey everyone! Today we're breaking down GE Vernova's absolutely explosive Q1 2026 results. And Alex, before we jump in, I know we need to mention—

**ALEX:** Absolutely. This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions. Now Jordan, let's talk about these numbers because wow—GE Vernova just delivered what might be one of the most impressive quarters we've seen in the industrial space.

**JORDAN:** Alex, where do I even start? Orders up 71% year-over-year to $18.3 billion, with a book-to-bill ratio of 2.0. That means for every dollar of revenue they recognized, they booked two dollars in new orders. Their backlog is now sitting at $163 billion—that's billion with a 'B'—and they're saying they'll hit $200 billion in backlog by 2027, a full year ahead of schedule.

**ALEX:** The cash generation story here is just phenomenal. They generated $4.8 billion in free cash flow in just one quarter—that's more than their entire 2025 full-year free cash flow of $3.7 billion. What's driving this massive cash generation?

**JORDAN:** It's really the working capital dynamics. When you're booking orders this aggressively, especially in long-cycle businesses like power generation, you're getting significant down payments upfront. They had $5.3 billion in working capital benefits, primarily from higher down payments on those Power and Electrification orders. It's like getting paid before you do most of the work—a beautiful business model when demand is this strong.

**ALEX:** Let's break down the segments because each one tells a different story. Starting with Power—their bread and butter—revenue up 10%, but EBITDA margins expanded a massive 500 basis points to 16.3%.

**JORDAN:** The Power segment is firing on all cylinders. They shipped 25 gas turbines in the quarter, up 32% year-over-year, and their pricing is getting significantly better. CEO Scott Strazik said their 2026 orders are priced 10-20% higher than Q4 2025 levels on a dollar-per-kilowatt basis. When you have three-year lead times and customers desperate for power generation capacity, you can command premium pricing.

**ALEX:** And this isn't just traditional utility demand. About 20% of their 100 gigawatts under contract are directly supporting data centers. The AI boom is creating this massive secondary demand for power infrastructure that I don't think many investors fully appreciate yet.

**JORDAN:** Exactly! And speaking of underappreciated, let's talk Electrification—this segment is becoming a monster. Orders up 86% year-over-year, and here's the kicker: their Q1 data center orders alone were $2.4 billion, which is more than their entire full-year 2025 data center business.

**ALEX:** The Prolec acquisition is paying off big time. They bought the remaining 50% stake for $5.3 billion in February, and Prolec's backlog has grown 25% just since they announced the deal at Q3 earnings. That's incredible customer enthusiasm for the combined entity.

**JORDAN:** What I love about the Electrification story is the portfolio breadth. They're not just selling transformers—they've got HVDC systems, substations, grid automation software. CFO Ken Parks mentioned they closed their first Energy Management System order, which combines power conversion, substation equipment, and grid software into an integrated solution for data centers.

**ALEX:** The company is really positioning itself as the one-stop shop for electrification. Strazik gave this great example of a project where they're providing the gas turbine for power generation,

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# Beta Finch Podcast Script - GE Vernova Q4 2025 Earnings

**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we decode the latest corporate results so you don't have to. I'm Alex, and joining me as always is Jordan. Today we're diving into GE Vernova's fourth quarter 2025 earnings - and wow, what a quarter this was.

**JORDAN:** Absolutely, Alex. But before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**ALEX:** Thanks Jordan. So GE Vernova - this is the power generation and electrical equipment spinoff from GE that's been really making waves since going public. Jordan, what jumped out at you first from these numbers?

**JORDAN:** The scale is just incredible, Alex. We're talking about a $150 billion backlog - that's up 25% or $31 billion year-over-year. And they booked $59 billion in orders for the full year, up 34%. For context, their revenue was $38 billion, so they're booking orders at about 1.5 times their current revenue run rate.

**ALEX:** That's a massive order book. And CEO Scott Strazik seemed particularly excited about their gas power business. Can you break down what's happening there?

**JORDAN:** Gas power is absolutely on fire - no pun intended. They went from having 46 gigawatts under contract at the start of 2025 to 83 gigawatts by year-end. That's almost doubling their contracted capacity in a single year. And here's the kicker - they expect to hit 100 gigawatts by the end of 2026.

**ALEX:** What's driving this demand surge?

**JORDAN:** It's really the perfect storm of factors. You've got data centers consuming massive amounts of power, aging grid infrastructure, and the need for reliable baseload power as renewable intermittency creates challenges. Strazik mentioned they signed 6 gigawatts of new gas contracts just in the last three weeks of December alone.

**ALEX:** And they're not just winning on volume - they're getting better pricing too, right?

**JORDAN:** Exactly. This was one of the most interesting parts of the call. They added $8 billion in equipment backlog margin dollars in 2025 - that's more than the previous two years combined. In their Power segment specifically, they saw 11 percentage points of margin improvement in their equipment backlog. Strazik mentioned their current slot reservation agreements are pricing 10 to 20 points higher than their existing backlog.

**ALEX:** That pricing power is impressive. Now, it wasn't all good news though. Their Wind segment continues to struggle, particularly with offshore projects.

**JORDAN:** Yeah, the Wind segment is definitely the problem child. They had $600 million in losses for the year, which was worse than their $400 million expectation. The big issue was a U.S. government stop-work order on December 22nd that halted all offshore wind construction, including their Vineyard Wind project that was nearly complete.

**ALEX:** That's got to be frustrating - being so close to finishing a project and then getting shut down by regulatory action.

**JORDAN:** Absolutely. CFO Ken Parks said they only had 10 turbines left needing blades and 1 turbine left to install when the order came down. The good news is they got an injunction yesterday, so they might be able to resume work. But if they can't complete those remaining 11 turbines, it could impact 2026 revenue by about $250 million.

**ALEX:** Let's talk about their Electrification business - that seems to be a real growth driver.

**JORDAN:** This is probably the most exciting part of the story long-term. Electrification revenue grew 26% in 2025, and they're expecting it to hit $13.5 to $14 billion in 2026. To put that in perspective, this business was doing about $5 billion in revenue back in 2022. So we're talking about nearly tripli

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