GE Vernova (GEV) Q1 2026 Earnings Transcript

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DATE

Wednesday, April 22, 2026 at 7:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Scott L. Strazik
• Chief Financial Officer — Kenneth S. Parks
• Vice President, Investor Relations — Michael Jay Lapides

TAKEAWAYS

• Total orders -- $18.3 billion, up 71% year over year with a book-to-bill ratio of approximately 2.
• Backlog -- $163 billion, including a sequential increase of $13 billion and 80% growth in equipment backlog since the spin.
• Adjusted EBITDA -- $896 million, an 87% increase year over year, driven by Electrification and Power segments.
• Adjusted EBITDA margin -- Increased 390 basis points year over year with higher price, volume, and productivity outweighing inflation and tariffs.
• Free cash flow -- $4.8 billion for the quarter, exceeding prior full-year free cash flow of $3.7 billion.
• Revenue -- Grew 7% year over year as both equipment and services contributed; equipment revenue up 10%, services up 4%.
• Power segment EBITDA margin -- 16.3%, expanding 500 basis points due to favorable price and volume, despite higher expenses and R&D at Nuclear.
• Power segment orders -- Grew 59% with Gas Power equipment orders more than doubling year over year and services up 29%.
• Gas turbine activity -- 21 gigawatts of new agreements signed, raising total gigawatts under contract from 83 to 100 sequentially.
• Electrification orders -- Reached $7.1 billion, up 86% year over year; equipment orders nearly tripled in North America and Asia.
• Electrification revenue -- Increased 61% on a U.S. GAAP basis, 29% organically, with expansion across all regions.
• Electrification segment EBITDA margin -- 17.8%, up 590 basis points, with Prolec contributing $500 million in revenue and just over 20% EBITDA margin since acquisition.
• Electrification data center orders -- $2.4 billion in Q1, exceeding full-year 2025 orders for this vertical.
• HVDC backlog -- Approximately $10 billion, primarily in Europe, with new large orders booked in Asia.
• Prolec backlog -- $5 billion, rising $1 billion since Q3 2025 announcement of acquisition, a 25% increase.
• Wind segment orders -- Increased 85%, driven by improved Onshore equipment orders in North America after a low prior-year comparison.
• Wind segment revenue -- Decreased 25% due to lower Onshore equipment deliveries from 2025 softness, partially offset by services and Offshore revenue.
• Wind segment EBITDA loss -- $(382) million for the quarter, attributed to lower equipment deliveries, tariffs, and higher Offshore contract losses.
• 2026 guidance raised -- Revenue now projected at $44.5 billion-$45.5 billion (increase of $500 million); adjusted EBITDA margin raised to 12%-14%; free cash flow guidance lifted to $6.5 billion-$7.5 billion.
• Power 2026 outlook -- Organic revenue growth expected at 16%-18%, EBITDA margin now 17%-19% (from 16%-18%).
• Electrification 2026 outlook -- Revenue revised to $14.0 billion-$14.5 billion; EBITDA margin increased to 18%-20% (from 17%-19%); Prolec forecast to contribute $3 billion in revenue.
• Wind 2026 outlook -- Organic revenue expected to decline low double digits; EBIT losses projected around $400 million for the year.
• Working capital benefit -- Delivered $5.3 billion cash benefit, mainly from higher down payments on increased Power orders and slot reservations, plus higher Electrification orders.
• Cash returned to shareholders -- $1.4 billion in Q1 via dividends and $1.3 billion in share repurchases.
• Debt issuance -- $2.6 billion in new debt during the quarter, maintaining gross debt to adjusted EBITDA below 1x.
• R&D and CapEx -- Combined investment of $700 million in Q1; R&D grew roughly 25% year over year, focused mainly on Electrification.
• Portfolio activity -- Completed Prolec acquisition for $5.3 billion and divested the manufacturing software business for $600 million in pretax proceeds.
• Data platform simplification -- Retired 15 legacy platforms via company-wide data lake, expected to reduce annual costs by $15 million.
• AI/Lean initiatives -- 13 AI-based process transformations doubled to 26; tens of millions in annual expected savings and over 10,000 hours of manual work eliminated.
• Kaizen Week -- 2,000 employees completed 200 Kaizens, identifying $100 million in potential EBITDA improvement from cost reduction and quality gains.

RISKS

• Wind EBITDA losses increased year over year, primarily due to lower Onshore equipment deliveries, tariff impact, and higher contract losses at Offshore Wind; expected EBIT losses for 2026 remain at approximately $400 million.
• CFO Kenneth S. Parks said, "The anticipated year-over-year increase in losses was primarily a result of lower equipment deliveries and the impact of tariffs at Onshore Wind, as well as higher contract losses at Offshore Wind."
• Uncertainty remains around U.S. Onshore Wind market demand due to permitting delays and tariff issues; management cannot identify an inflection point in orders.
• Guided net tariff impact for 2026 is $250 million-$350 million, fully factored into outlook but dependent on evolving global tariff structures and mitigation success.

SUMMARY

GE Vernova (NYSE:GEV) delivered substantial first-quarter order and backlog growth, highlighted by a rapid year-over-year increase in Electrification orders and major contract wins in Gas Power. New pricing for 2026 Power equipment orders is expected to be 10%-20% above Q4 2025 levels, with immediate margin expansion across both Power and Electrification. Management confirmed a $13 billion sequential backlog increase—now targeting $200 billion in 2027, a year earlier than previously expected—and nearly tripled Electrification equipment orders in North America and Asia. Free cash flow nearly doubled previous annual results in just one quarter, prompting an upward revision to full-year 2026 guidance for revenue, adjusted EBITDA margin, and free cash flow, all attributed explicitly to segment-level performance and new contract quality. Prolec's backlog and integration have accelerated expected benefits in Electrification, while robust multi-year orders from both traditional and data center customers reinforce GE Vernova's strategic positioning and service opportunity for the long term.

• Management stated, "we have booked more Power equipment orders in terms of value than we did in all of Q1 2026," indicating ongoing acceleration in Power demand.
• Electrification's backlog rose from $9 billion at year-end 2022 to $42 billion, with significant data center order growth outpacing prior full-year performance in a single quarter.
• SMR and EMS projects advanced, including regulatory progress on OPG Darlington Unit 1 and new North American and European pipeline developments; SMR-related government support now totals up to $40 billion for projects in the U.S. and Japan.
• 21 gigawatts of new Gas Power agreements in Q1 raised total gigawatts under contract to 100, now spanning 90 customers in 24 countries, with 20% tied directly to data centers.
• Company raised its 2026 adjusted EBITDA margin outlook to 12%-14%, and guided Power EBITDA margin to 17%-19% and Electrification EBITDA margin to 18%-20%, all reflecting pricing and productivity improvements.
• Prolec contributed $500 million in revenue at over 20% EBITDA margin since the acquisition closing in February, and its backlog increased 25% to $5 billion since Q3 2025.
• Segment realignment and divestitures yielded $900 million in pretax cash; manufacturing software and China XD Grid/merchant transmission stakes were sold, supporting ongoing portfolio simplification.
• Kaizen and AI productivity initiatives delivered tangible cost and quality improvements, including a 70% subassembly rework hour reduction and 40% output gain at Prolec, with company-wide EBITDA improvement potential identified at over $100 million for future years.
• Wind segment performance remains challenged; "EBITDA losses in the first half to be partially offset by profitability in the second half," but ongoing tariff and order softness present continuing risk.

INDUSTRY GLOSSARY

• HVDC: High Voltage Direct Current, a technology for long-distance, efficient power transmission using direct current rather than alternating current.
• SMR: Small Modular Reactor, a nuclear reactor design that is smaller in size and capacity than conventional reactors, intended for scalable deployment.
• SRA: Slot Reservation Agreement, contractual mechanism reserving future production or delivery capacity for specific projects or customers.
• EMS: Energy Management System, software and hardware integrating electrical equipment and automation to optimize power usage in complex facilities like data centers.
• Kaizen: Continuous improvement process involving incremental, employee-driven operational enhancements, commonly used in manufacturing environments.
• PCS: Power Conversion and Storage segment, which focuses on grid stability solutions such as rotating machines, power electronics, and battery systems.
• MV UPS: Medium-Voltage Uninterruptible Power Supply, equipment providing backup power and grid stability at the medium voltage level, commonly used in data center and industrial applications.
• SST: Solid-State Transformer, an advanced transformer with enhanced efficiency, protection, and integration capabilities for grid and data center applications.

Full Conference Call Transcript

Michael Jay Lapides: Thank you. Welcome to GE Vernova Inc.'s first quarter 2026 earnings call. I am joined today by our CEO, Scott L. Strazik, and CFO, Kenneth S. 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 Form 10-Q, press release, and presentation slides, all of which are available on our website. Please note that unless otherwise specified, 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, which includes the removal of the impact of our Prolec GE acquisition.

In addition, we realigned the reporting of certain business units to reflect how we are managing the company. Notably in Power, we integrated the Steam business primarily into our Nuclear business. In Electrification, we realigned the segment into four distinct business units to provide investors with greater visibility. This included revising our former Grid Solutions and Electrification Software business units into three separate business units: Power Transmission, Grid Systems Integration, and Grid Automation and Software. A portion of our Electrification Software was also moved to Gas Power. Finally, in Wind, we simplified our reporting by integrating LM Wind into Onshore Wind. These changes are reflected in our first quarter 2026 10-Q and throughout our slide deck.

We have posted a financial supplement on our IR website reflecting our realigned 2025 segment results, and please note, there were no changes to our 2025 total company results. 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 will hand the call over to Scott.

Scott L. Strazik: Thank you, Michael. Good morning, and welcome to GE Vernova Inc.'s Q1 2026 earnings call. We have had a solid start to 2026. As global electrification accelerates, the structural drivers underpinning demand for our solutions continue to strengthen. The growth is just starting, and there is no company better positioned to serve and transform the global electricity system than GE Vernova Inc. Since our spin, we launched with a $116 billion backlog. We have grown this backlog to $163 billion with an 80% increase in our equipment backlog at considerably better margins.

In the last 90 days, we have added $13 billion to our total backlog and now expect to reach $200 billion in backlog in 2027, versus our previous expectation of 2028. In Power, we delivered strong results and further margin expansion in Q1, even with the continuing investments in capacity expansion and SMR. In Gas Power, we continue to see significant demand and favorable pricing trends for both equipment and services. This demand is global and spans a diverse set of customers. We saw continued strength in new gas turbine agreements in Q1, signing 21 gigawatts in countries like the U.S., Vietnam, Mexico, Brazil, and Canada to grow our total gigawatts under contract from 83 to 100 gigawatts sequentially.

Backlog grew from 40 to 44 gigawatts, and slot reservation agreements increased from 43 to 56 gigawatts. Approximately 80% of our total gigawatts under contract are with traditional customers with the remaining 20% explicitly supporting data centers. Our momentum has continued into April. Quarter-to-date, we have booked more Power equipment orders in terms of value than we did in all of Q1 2026. On pricing, we expect our orders in 2026 to be priced 10 to 20 points higher than our Q4 2025 orders on a dollar per kW basis. We now expect to book 10 to 15 gigawatts of contracts in Q2 and to end 2026 with at least 110 gigawatts under contract.

On production capacity, we now have installed over 280 new machines in our Gas Power factories and remain on track to reach 20 gigawatts of annualized output by March. Delivering on our growing backlog in the second half of this decade will lead to a larger, and even more profitable, service book that will benefit us in the 2030s and beyond. On the nuclear front, let us start with our operational progress in Canada on Unit 1 of the SMR project at OPG’s Darlington site. With the recent regulatory approvals received by our customer, installation will soon begin on the 2 million-pound basemat, a pedestal that will serve as the reactor’s foundation.

This is a critical milestone and serves as a great illustration of the progress we are making on the first SMR in construction in North America. We also continue to make progress on our commercial pipeline in North America as well as Europe. We are inspired and appreciative of the U.S. and Japanese governments’ announcement of up to $40 billion for GE Vernova Hitachi to build SMRs in the U.S. This represents the best of government leadership to reindustrialize an industry that matters to the world’s future, and we continue to work hard to advance next steps with both governments.

In parallel, we continue to work with TVA and the Nuclear Regulatory Commission, and we expect the NRC to issue the license to construct for Clinch River in Tennessee as soon as 2026. In Electrification, we achieved significant growth and margin expansion in Q1 as customers work to keep pace with increasing electricity demand, grid stability needs, and national security interests. This is a large and growing market where we continue to see strong demand for our portfolio of solutions. We will approach $14.5 billion in revenue this year and project an annual addressable market by the end of the decade of approximately $300 billion based on what we offer today.

Point being, there remains substantial opportunity for us to grow. The first two months of running the Prolec business since closing the acquisition have only reinforced the substantial opportunity ahead. I will talk more about Electrification shortly. In Wind, the team is executing with discipline and is focused on the factors within our control. After successfully completing installation of the remaining wind turbines at Dogger Bank A and Vineyard Wind in Q1, we have now moved to the remaining commissioning activities for both projects. We are off to a very strong start on the installation of Dogger Bank B and continue to expect Dogger Bank B and C to take us through the better part of 2027 to complete.

In Onshore, we continue to drive a more profitable service business with double-digit margin expansion versus the prior year for the second quarter in a row. While the U.S. market for new Onshore equipment remains soft, we are monitoring the outcome of Section 232 wind and solar tariffs, which could lead to more orders clarity in the second half of the year. As our total company backlog builds, we remain focused on driving even stronger execution. In Q1, we held a CEO Kaizen Week with almost 2,000 team members doing roughly 200 Kaizens with a focus on improving safety, quality, delivery, and cost.

Coming out of the Kaizen Week, we see the opportunity for over $100 million in EBITDA improvement in future years driven from lower costs and better quality performance. For example, we held our first series of Kaizens at Prolec post-acquisition. In one Kaizen, we focused on improving our subassembly process for transformer tanks, decreasing our rework hours by nearly 70% and delivering a nearly 40% output improvement. In another, we used lean manufacturing methods to reduce cycle times in the winding process for transformer production. These advances are helping us meet the growing demand for transformers as we accelerate the ramp in capacity to grow this business.

We are also deploying AI to enable our employees to improve how we run our businesses and accelerate innovation. We entered the year with 13 AI-based process transformations we were focused on executing, and the team is now working to double the transformations to 26 across GE Vernova Inc. Let me make this real with two examples. In our Gas Power business, where we have the largest installed base of gas turbines, steam turbines, and generators of any OEM in the world, one of our real challenges is to project demand and timing of needed investments in our customer fleets and ensure we have the right parts and resources available when a customer needs us.

We utilize our decades’ worth of data and are building AI tools to automate our ability to match installed base demand with our planning to deliver better performance for customers as well as a higher scope per outage for GE Vernova Inc. We also see substantial opportunity with Sourcing, as we leverage AI to drive parts rationalization and more intelligent bidding while further automating manual processes like invoice matching. We expect to save tens of millions of dollars every year going forward with these new tools, while freeing up tens of thousands of hours of manual work.

I give these two examples to reinforce that when you think about AI and GE Vernova Inc., do not just think about AI as a demand driver for our equipment and solutions. We are running this company with a very determined focus on meeting the demand for growing electricity for AI, while simultaneously incorporating the technology into how we work to transform our company. GE Vernova Inc. is operating from a position of financial strength and executing our capital allocation strategy with discipline. In Q1, we invested approximately $700 million in R&D and CapEx combined, with R&D growing by roughly 25%, including work to commercialize new technologies.

We also further simplified the organization with business dispositions that generated approximately $900 million in pretax cash. We also returned approximately $1.4 billion to shareholders, including the dividend and $1.3 billion in share repurchases. Turning to first quarter financial results, we are executing well in the growing long-cycle electric power industry. We booked $18 billion of orders in Q1, up 71% year over year and a book-to-bill ratio of approximately 2. We also grew revenue by 7% year over year with growth in both equipment and services, while increasing our adjusted EBITDA margin by 390 basis points. We generated $4.8 billion in free cash flow in the first quarter, meaningfully above our full-year 2025 free cash flow of $3.7 billion.

This robust performance was driven by strong orders and slot reservations at Power and Electrification as demand continues to accelerate. Regarding recent conflicts in the Middle East, the safety and well-being of our employees and partners in the region remains our top priority, and we continue operations in the region where it is safe to do so. We are monitoring the situation closely and have seen minimal impact to our business and financial performance to date.

Given the strength of our first quarter performance and confidence in our full-year trajectory, we are raising our revenue, adjusted EBITDA, and free cash flow guidance for the full year of 2026, reflecting higher revenue growth in Electrification as well as further margin expansion at Power and Electrification. I want to spend some time on Electrification. This segment is the biggest beneficiary of how we are operating GE Vernova Inc. today as one focused and integrated company. Electrification’s growth trajectory has been significant. Since year-end 2022, its backlog has grown from $9 billion to $42 billion, and we expect substantially more growth moving forward.

This is being driven not just by traditional customers, but also data centers, which accounted for approximately $2.4 billion in orders in Q1—more than the full year of 2025. Just to repeat that, our Q1 Electrification orders to data centers were more than full-year 2025 results. Additionally, Electrification’s backlog in North America is now nearly as large as its backlog in Europe, following a strong Q1 and the addition of Prolec. This growth is underpinned by our integrated, diverse product offerings and productivity-driven capacity expansions to fulfill rising demand for grid infrastructure. Let me expand on these business units for those less familiar with our Electrification segment.

Grid Systems Integration, the largest part of Electrification’s backlog, delivers integrated solutions for large-scale electrification. This business sells HVDC systems and substations, including key data center solutions—all areas which have driven significant backlog and revenue growth as well as margin accretion. Today, our HVDC backlog represents approximately $10 billion to be delivered over the coming years and is located primarily in Europe, but we are seeing increasing momentum in other regions, including Asia, where we booked another large HVDC order this quarter. We expect to continue growing this portion of our backlog as we benefit from accelerating demand and investment in new products to expand our offerings for data centers.

Power Transmission produces high- and medium-voltage transformers as well as switchgear and capacitors to modernize the grid and expand global electrification. We continue to drive productivity to increase volumes into this attractive market with healthy margins. With our acquisition of Prolec, this business now has increased offerings, scale, and strategic flexibility in transformers, a product category seeing robust demand and a backlog that is approaching the size of GSI. This includes $5 billion of backlog from Prolec, up $1 billion since we announced the transaction at Q3 2025 earnings. This 25% growth in the Prolec backlog since announcing the acquisition well illustrates the customer enthusiasm for this acquisition and the opportunity ahead.

Power Conversion and Storage helps customers to improve grid resiliency and industrial power stability through advanced electrical solutions, including rotating machines, power electronics, and battery systems. Within PCS, synchronous condensers are a critical product needed for markets experiencing increased intermittency, representing a $5 billion-plus annual market opportunity. Overall, we see industry demand for grid resiliency products as growing low double digits through the end of the decade. Finally, we have combined our businesses to provide asset intelligence, monitoring, and grid software into Grid Automation and Software. Real synergies exist between our GridOS software and GridBeats that can help improve how the grid thinks, learns, and acts to enable utilities to move from reactive operations to predictive, autonomous grid management.

We are also making investments in technologies that will define the next chapter of this segment’s growth. For example, our historical business with data centers has been the substation electrical equipment outside the data center, which remains the majority of our Q1 orders for this customer type. However, we also closed our first Energy Management System, or EMS, order in Q1. EMS incorporates solutions from Power Conversion and Storage with substation equipment and Grid Automation and Software to seamlessly integrate GE Vernova Inc. assets with load requirements in the data center. This first order is part of a larger project that also includes our Gas Power equipment and substation electrical equipment.

In dollars, EMS is a small part of this large order, but it illustrates well the unique opportunity we have as GE Vernova Inc. to provide integrated solutions that span power generation, electrical equipment, and automation and software solutions. With that, I will turn the call over to Ken for more details on our Q1 performance as well as our financial outlook.

Kenneth S. Parks: Thanks, Scott. Turning to slide six, we delivered a strong start to 2026 with robust orders, growing backlog and revenues, margin expansion, and significant free cash flow generation. In the first quarter, we booked orders of $18.3 billion, a 71% increase year over year and a book-to-bill ratio of approximately 2. Equipment orders more than doubled, while services orders increased 25%. All three segments delivered significant orders growth. As Scott mentioned, our backlog expanded to $163 billion, a significant year-over-year and sequential increase. Equipment backlog increased to $76 billion, up approximately $12 billion sequentially and 67% year over year, driven by both Electrification—which now incorporates Prolec backlog—and Power.

Equipment backlog margin remains healthy, reflecting favorable price and our continued focus on disciplined underwriting. Our services backlog grew $9 billion, or 12% year over year, to $87 billion led by Power. Revenue increased 7%. Equipment revenue rose 10% year over year as 39% growth at Electrification and 25% growth at Power more than offset anticipated lower Wind revenues. Services revenue increased 4% year over year, led by Power and Onshore Wind. Price remained positive. Adjusted EBITDA grew 87% year over year to $896 million, led by Electrification and Power. Adjusted EBITDA margin expanded 390 basis points, with higher price, more profitable volume, and further productivity more than offsetting inflation, including the impact of tariffs which started in 2025.

We remain on track to achieve our $600 million G&A reduction target by 2028. We are executing on our roadmap to drive simplification and reduction of data platforms through numerous Kaizens. For example, in Q1 2026, we launched a comprehensive company-wide data lake that enables us to retire 15 legacy data platforms, which we expect will reduce costs by approximately $15 million annually and significantly upgrade our technology to position us well for AI-enabled solutions. The strong adjusted EBITDA and working capital management drove $4.8 billion of free cash flow in the first quarter.

Working capital was a $5.3 billion cash benefit driven primarily by higher down payments on increased orders and slot reservations at Power as well as higher orders at Electrification. Year-over-year free cash flow increased $3.8 billion driven by higher positive benefits from working capital and stronger adjusted EBITDA, partially offset by higher taxes and CapEx investments supporting capacity expansion. As Scott mentioned, we completed the acquisition of the remaining 50% ownership stake of Prolec for $5.3 billion. We also made further progress in simplifying our portfolio. We completed the sale of our manufacturing software business for approximately $600 million of pretax proceeds.

We also sold an additional ownership stake in our China XD Grid business and our interest in a merchant transmission facility, which together resulted in approximately $300 million of pretax proceeds. Collectively, we recognized $4.5 billion of gains from M&A transactions, primarily resulting from the acquisition of Prolec, which were excluded from adjusted EBITDA. In addition, we issued $2.6 billion of debt in Q1 and remained below 1x gross debt to adjusted EBITDA. Importantly, we are committed to maintaining a strong investment-grade balance sheet. We ended Q1 with a healthy cash balance of approximately $10.2 billion after returning $1.4 billion of cash to shareholders through share repurchases and dividends in the quarter.

We are encouraged by our strong financial performance to start off the year. Our growing backlog with healthy margin provides an excellent foundation for continued improvement in our financial performance moving forward. Turning to Power on slide seven, the segment delivered another strong quarter with robust demand, continued revenue growth, and significant EBITDA margin expansion. Power orders grew 59%, led by Gas Power equipment more than doubling year over year on higher pricing and units ordered. Power Services orders increased 29%, driven by Nuclear Power given orders for upgrades as well as continued growth at Gas Power. Revenue increased 10%.

Equipment revenue increased from higher volume and price, driven by both heavy duty gas turbine and aeroderivative growth at Gas Power. We shipped a total of 25 gas turbines in the quarter, a 32% increase year over year. Services revenue also increased due to growth at Nuclear Power. EBITDA margins expanded 500 basis points to 16.3%, mainly driven by favorable price and higher volume more than offsetting inflation as well as additional expenses to support capacity investments at Gas and R&D at Nuclear. Looking to 2026 at Power, as Scott mentioned, we expect continued strong growth in Gas equipment orders.

We also anticipate 15% to 17% revenue growth driven by both higher equipment and services, and EBITDA margin of approximately 17% to 18% as volume, price, and productivity should more than offset inflation as well as additional expenses to support capacity and R&D investments. Year-over-year EBITDA margin expansion should be less than Q1 2026 largely given the timing of planned outages relative to last year. Turning to Electrification on slide eight, we had another quarter of significant orders and revenue growth and EBITDA margin expansion. Orders remain strong at roughly 2.5 times revenue and increased 86% year over year to approximately $7.1 billion due to growing grid equipment demand, partially to support data center development.

We saw significant growth in substations, HVDC, switchgear, and transformers. Equipment orders growth was particularly strong in North America and Asia, both roughly tripling year over year. Electrification equipment orders continued outpacing revenue, which, combined with Prolec, further increased our equipment backlog to $39 billion, up 75% or roughly $17 billion compared to 2025. Revenue increased 61% on a U.S. GAAP basis, inclusive of Prolec, and 29% organically with growth across all regions. We saw increased volume at Power Transmission, primarily from switchgear and transformers. Prolec also delivered solid performance with nearly $500 million of revenue at just over 20% EBITDA margin since the acquisition that was completed in early February.

Grid Systems Integration revenue increased due to higher substation and HVDC equipment volumes. Electrification segment EBITDA more than doubled in the quarter, with margin expansion of 590 basis points to 17.8%. Margin expansion was led by strong volume, productivity, and favorable pricing. Looking to 2026, we anticipate continued solid equipment orders with healthy margins. Second-quarter Electrification revenues should be between $3.3 billion and $3.5 billion, a significant year-over-year increase. We also expect strong year-over-year EBITDA margin expansion from higher volume, productivity, and favorable price, with a margin rate modestly above Q1 2026 levels. Turning to slide nine on Wind, we continue to focus on what we can control.

In the first quarter, the team delivered stronger performance in Onshore Wind services and successfully completed installation of both the Dogger Bank A and Vineyard Wind offshore projects. Wind orders increased 85%, mainly due to improved Onshore equipment orders, primarily in North America, off of a low year-over-year comparison. However, for now, it is still difficult to call an inflection point in U.S. orders as customers still face permitting delays and tariff uncertainty. Wind revenue decreased 25% in the quarter given lower Onshore equipment deliveries as a result of soft orders in 2025, partially offset by higher Onshore services and Offshore revenues. Wind EBITDA losses were $382 million in the quarter, in line with our expectations.

The anticipated year-over-year increase in losses was primarily a result of lower equipment deliveries and the impact of tariffs at Onshore Wind, as well as higher contract losses at Offshore Wind, partially offset by improved Onshore services. For Q2 2026, we anticipate Wind revenue to decline at a mid-teens rate year over year due to lower Onshore equipment deliveries. We expect EBITDA losses to be between $200 million and $300 million. The year-over-year increase in losses is primarily the result of the lower Onshore equipment volume, partially offset by higher services profitability.

We continue to 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 are 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. Moving now to slide 10 to discuss GE Vernova Inc. guidance.

For 2026, based on our expectations for the segments as outlined, we expect continued year-over-year revenue growth and adjusted EBITDA margin expansion. We also expect to deliver positive free cash flow in Q2 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 are raising our guidance based on the strong Q1 results and the continued momentum we see in our business. For revenue, we now expect to be in the range of $44.5 billion to $45.5 billion, up $500 million compared to our previous expectation due to additional growth at Electrification.

We are raising adjusted EBITDA margin by one point at both ends of the range to 12% to 14% driven by Power and Electrification. Given the accelerating strength in orders and down payments, in addition to the higher adjusted EBITDA, we are increasing our 2026 free cash flow guidance to between $6.5 billion and $7.5 billion, up from $5.0 billion to $5.5 billion. We are generating significant margin expansion and cash flow this year while still investing in the business. Our 2026 guidance includes an approximately 30% year-over-year combined increase in R&D and CapEx to support innovation and growth. By segment for 2026, we continue to expect 16% to 18% organic revenue growth in Power driven by Gas Power.

We now anticipate Power EBITDA margins to be between 17% and 19%, up from our previous range of 16% to 18%, as we continue to see the benefits of our productivity efforts. In Electrification, we are raising our revenue expectations from $13.5 billion to $14.0 billion to $14.0 billion to $14.5 billion as the team continues to deliver its growing, more profitable backlog. We continue to expect Prolec to contribute approximately $3.0 billion of revenue this year. Given higher top-line expectations, we are increasing Electrification EBITDA margin to 18% to 20%, up from 17% to 19%.

In Wind, we continue to anticipate organic revenue to be down low double digits due to decreased Onshore equipment revenues given the softness in orders. We still expect EBIT losses to be approximately $400 million in 2026 as improvement in Onshore Wind services and Offshore Wind offset the lower Onshore equipment volume. We continue to expect 2026 GE Vernova Inc. adjusted EBITDA to be more second-half weighted than 2025, with the highest revenue and EBITDA in Q4 2026. We expect higher second-half Gas Power revenue as we ship more gas turbines in the second half of the year and as we increase annual production capacity to approximately 20 gigawatts starting in midyear 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, even while we invest in our ongoing capacity expansions and new potential products. 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 continue to expect full-year 2026 Corporate costs 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.

Overall, the combination of rising demand, consistently stronger execution, investments into our business, and the completed acquisition of Prolec sets us up nicely going forward. With that, I will turn it back to Scott.

Scott L. Strazik: Thanks, Ken. We have had a solid start to 2026. But it is just that—a start. We see significant opportunity to continue to improve how we serve our customers and expand our margins. I shared just a few examples of this earlier in the discussion with Lean and AI. With over $10 billion in cash and our updated 2026 guide, and a team just starting to get their feet under them with the significant opportunity ahead of us, we continue to make investments for the short, medium, and long term. We talked earlier about nuclear SMR and our Electrification EMS solutions for data centers as two examples with tangible Q1 progress. But there are many more.

As the opportunity for us to serve this growing market expands, our humility and hunger to meet this moment only becomes a larger and more important part of who we are. This is just the beginning, and I look forward to our Q&A discussion. With that, I will hand it over to Michael.

Michael Jay Lapides: Before we open the line, I would ask everyone in the queue to consider your fellow analysts and ask just one question, so we can get to as many people as possible. Please return to the queue if you have follow-ups. With that, operator, please open the line.

Operator: Please press 11 on your telephone. If you wish to withdraw your question or your question has already been answered, please press 11. Our first question comes from Mark Wesley Strouse with JPMorgan. Please proceed.

Mark Wesley Strouse: Yes, good morning, everybody. Scott, I wanted to start maybe with your latest thoughts on Gas Power capacity. You are talking more and more about AI, about automation. Just curious how we should think about that compared to the 24 gigawatts you are targeting over the next several years. Is AI and automation something we should think about measured maybe in hundreds of megawatts, or is that potentially in gigawatts? And then your latest thoughts on the lead times that you think might be needed before you would consider adding further physical capacity? Thank you.

Scott L. Strazik: Sure, Mark. I think if I work backwards from the question on lead times, we are directionally at about three years’ lead time today. We are sitting in 2026, and we do still have capacity in both 2029 and 2030. If I compare where we were in our January earnings call in the fourth quarter, we talked then about having about 10 gigawatts of capacity remaining in 2029. What has happened in the first quarter is we sold a lot of 2030 slots, because the reality is we had a lot of customers that, looking at planning with EPC schedules and other dynamics, needed the 2030 slot more than 2029.

So what has changed is we still have about 10 gigawatts remaining cumulatively in 2029 and 2030 together, whereas in January we had 10 gigawatts in total for 2029. We need to keep seeing where this market takes us. At the end of the day, in many of the cases with these projects, the gas turbines are really not the gating item when you are talking about a three-year cycle from when a project starts—the EPC buildout, the permitting, the fuel availability. We will keep working with our customers, and we are also going to learn a lot more on the first part of your question.

We have installed 280 new machines in our gas factories over the last roughly 15 months. We will have added about 1,800 production workers in the U.S. between 2025 and 2026, with the largest portion of them being in our Gas Power factories. I do expect that we will drive more productivity as we start to execute with those new machines and those new production workers that we will start to see in the third quarter of this year. So quantifying that productivity opportunity—we need time.

But as we continue to learn how much more we can get out of the investments we have already made, we will also learn more about where this market takes us as we sell out of 2029–2030 and the timing of when the incremental equipment gas turbines are really needed.

Operator: Our next question comes from Julian C.H. Mitchell with Barclays.

Julian C.H. Mitchell: Hi, good morning. My question is on the Electrification segment where you provided some additional, welcome color this morning. A couple of follow-ups. In the Power Transmission part that you call out on slide five, it does seem like you are very well placed and are taking a lot of market share. We met with a number of your competitors there at Data Center World yesterday, so maybe help us understand why you think you are so well placed to continue to take more share in that Power Transmission sleeve of the segment. Also wondered across the segment if you could flesh out the capacity expansion plans in any detail.

And lastly, on Prolec, any issues or major tariff mitigation needed in light of the Section 232 changes? Thank you.

Scott L. Strazik: Thanks, Julian. I would say at the start, we do not really internally talk a lot about taking share per se when we are thinking about where we are with the Power Transmission business. This is really about continuing to do good business. What is very clearly playing out is that where we are doing really good business is where we are attaching that equipment to the power generation solutions, and that integrated solution—this is why in the prepared remarks we talked about a project where we are getting the power generation, the electrical substation, and the EMS solution. We are clearly gaining momentum with integration of our products, and in that regard I expect a lot more to follow.

On capacity, we are investing in our existing factories. We have the $5.3 billion we just spent to add three more factories in the U.S.—in Shreveport, North Carolina, and Wisconsin—through Prolec, in addition to factory capacity in Mexico and Brazil. That allows us to serve this market more effectively. A few months into the acquisition, we continue to see more operational opportunity to get more out of those factories just applying lean, and that is why I included in my prepared remarks a few of those examples that will bear fruit for us. On the tariffs, I am going to hand it to Ken to give a little bit of incremental context.

Kenneth S. Parks: A great question. The tariff landscape has continued to move both with the changes in country tariffs as well as those in February. Our total number of tariffs last year, we said, was about a net $250 million impact on the company. We guided to $250 million to $350 million net impact on the company in 2026. The structure of those tariffs has moved around, but the absolute number is about exactly where we thought it would be. To your specific question on Prolec, certainly, how the Section 232s have been defined, there is a little bit more impact on the Prolec numbers, whereas we have seen lesser impact on some of the other businesses.

But where we sit today, that outlook for $250 million to $350 million is fully built into our outlook. We will continue to work on mitigating plans through alternate sourcing and through contractual provisions where we have the ability to work with our customers to pass a piece of this along. We are managing through the landscape just like we did last year.

Operator: Our next question comes from Nicole Sheree DeBlase with Deutsche Bank.

Nicole Sheree DeBlase: Good morning. I would like to go back to Gas Power. Could we get a little bit more color on what you are hearing through customer conversations and pipeline growth—if the demand outlook remains as robust as ever? And then just an update on the pricing environment as well. It was really helpful, the pricing data point of 10 to 20 percentage points that you provided about 2026. What are the expectations for pricing to continue to move higher beyond that? Thank you.

Scott L. Strazik: Nicole, I would say through the first four months of this year now on new bidding activity, which is probably a forward-looking indicator, we continue to be in that 10% to 20% growth in price on new bidding and winning activity today relative to where we were in the backlog in the fourth quarter of last year. You are going to start to see that cutting through in orders in the second quarter, and that is why we included that context on the 10% to 20% improvement in dollars per kilowatt through 2026 inclusive of Q1 and Q2, which is really telling you that the dollar-per-kilowatt growth is going to be very healthy in the second quarter of this year.

From a pipeline perspective, we continue to be very actively iterating with a very diverse set of customers to meet this moment. It is important to contextualize that the 100 gigawatts we have under contract today is with almost 90 distinct customers in 24 different countries. There is a need for incremental electrons for many different applications and many different countries, which has us continuing to work hard to figure out how, in a very capital-efficient way, we meet this moment and serve this market.

Kenneth S. Parks: Maybe I will just add one data point, because I know I did this last quarter to help you size the pricing on the Power orders. We disclose Power orders; we do not specifically disclose Gas Power orders. We show you the Power orders and we also give you gigawatts. The gigawatts obviously relate to Gas Power orders. It is important, as you are doing the math based upon the information we provide in the earnings release, to know how much there is to back out of those Power orders that are not Gas Power. Last quarter, it was about $500 million related to Hydro and Nuclear.

This quarter, it is a couple of hundred million dollars to back out there. If you take those pieces of data, you will see exactly what Scott outlined, which is that our orders now—pricing in our orders—look relatively consistent to what we had in the fourth quarter, maybe up just a little bit. But we have the opportunity, as these SRAs continue to convert that are 10 to 20 full points above what we have in the orders book already, to see incremental pricing start to flow to our backlog.

Operator: Our next question comes from Andrew Kaplowitz with Citigroup.

Andrew Kaplowitz: Good morning, everyone. Scott, focusing on your comments that Electrification-focused orders on data centers in Q1 were larger than all of 2025, I know you said in the past you have a $200 million to $300 million per gigawatt entitlement in Electrification per data center. I think you are probably already higher than that now, but maybe you can talk about your progress on entitlement and what you see going forward.

Scott L. Strazik: You bet. Philippe Perron, the business leader, and his management team are doing an excellent job systematically building a string of pearls here of incremental products from power generation right through to the data center. That is where the EMS solution is an example that we were able to cut in orders in the first quarter. We have already secured a second order with that product in April and expect more there, which is taking our entitlement per gigawatt up. But we are not stopping there.

We are making progress with a stability block solution that complements what we are doing—that is an MV UPS solution, a combination of medium-voltage electrical equipment with storage and software that we are gaining real traction on within customers. We have talked in the past about the solid-state transformer investment that remains on track. We will deliver the first product to a hyperscaler in the fall of this year, after which they will have six months of testing of that product before it can play into a potential order really in 2027. Operationally, we are making progress there, and the SST would be the first example inside the data center of scope for us.

When you take a step back—and it is why we have invested real money into the EMS solution—when you are doing the power generation, the substation equipment, and you are providing a lot of the software solutions to help the hyperscaler manage the load requirements they want with our equipment, it is giving you the enablement to then attach more Lego blocks, or that string of pearls I am referencing, to give them a more integrated solution. It does not come at once. EMS good wins are in the year. The stability block with MV UPS is something we could see incremental orders on in the second half of this year if things go our way.

SST would be next year, and there is more stuff we are working on. When you see that 25% R&D growth in the company, the largest proportion of that R&D is in Electrification, because we see real opportunities to organically invest in this business and serve this customer need, and we are very determined to do that. There is a lot more to come in this business, but I continue to have more conviction—with humility—that we have a very unique shot to deliver integrated solutions over time that few companies in the world could do.

Operator: Our next question comes from David Arcaro with Morgan Stanley.

David Arcaro: Hi, thanks so much. Good morning. I was wondering if you could comment on your progress and the customer appetite for framework agreements around turbine orders, especially as you are getting booked farther and farther out. And is there any pricing trade-off that might come in those conversations?

Scott L. Strazik: Thank you, David. Conversations have generally centered on securing long-term commitments at today’s pricing through generally a five-year period of time during the first half of the decade that would give us volume clarity in that period of time to continue to sustain our investments to meet this moment. We have not closed one of those transactions to date. Admittedly, we have been having these conversations for a period of time, and what continues to happen is incremental orders—let us call it by the drink—and that was the reference to a lot of 2030 contracts that were signed in the course of the first quarter, including with the hyperscalers.

About 20% of our 100 gigawatts are direct to the data centers. The conversations continue on roughly 30 to 35 framework agreements, but we have not closed one to date and are continuing to iterate both strategically on the gas turbine content but also the attached potential with the electrical equipment and some of the other solutions we are talking about. In some fashion, that expanded scope, including Electrification in some of the discussions, is further elongating the iteration that is happening, but it is a productive iteration we are going to keep working hard on.

Operator: Our next question comes from Joseph Alfred Ritchie with Goldman Sachs.

Joseph Alfred Ritchie: Hey, guys. Good morning. Obviously, a big uptick in SRAs. One of your biggest competitors has talked about not taking orders beyond 2030 because they want to make sure that the supply chain can deliver on anything beyond 2030. What is your approach? Are you planning on limiting any type of order intake?

Scott L. Strazik: We feel better and better, Joe, about our ability to meet this moment for the long term. We continue to invest in our suppliers and our partners that are making very good progress. I spend a substantial amount of time within that supply chain, and we do continue to expect to take on orders for 2031 and beyond. We referenced earlier we have about 10 gigawatts remaining of 2029 and 2030 capacity, and generally speaking, we do not find our heavy duty gas turbines to be the gating item on a directionally three-year cycle time right now. We will continue to invest to meet this moment, sustaining the demand.

In our case, the dynamic will be different than our competitors because our base is so much larger. When you have an exponentially larger installed base than the other OEMs, we have to continue to partner with our supply chain to support a growing fleet. We have 231 units on order right now; over 100 of those have not been commissioned yet. That number is going to grow substantially through the rest of the year.

That very large installed base relative to anyone else—whether we talk new units or total gas turbines—is a luxury because it provides a financial floor of demand we already have contracted in our service book that gives us a little bit more optionality to play to win and to serve this market, which is exactly what we are going to do.

Kenneth S. Parks: The other thing that is really important as you think about GE Vernova Inc.—we talk about lean a lot. We do that not just for the words, but because it is a part of our culture. We told you last time that we were going to reach approximately 20 gigawatts of capacity in the middle of this year and then that would step up to 24 in 2028—a couple of gigawatts from lean, a couple of gigawatts from some incremental capacity.

To your question about what we do past 2030, lean is not something that we do only in events; it is something that we do continually, and we will continue to add capacity at a very attractive value by continuing to grow our lean initiatives. There is opportunity there as well, Joe.

Operator: We have time for one last question. This question comes from Alexander Virgo with Evercore ISI.

Alexander Virgo: Thanks very much for squeezing me in. Good morning, gentlemen. I wondered if you could clarify your comments around April in terms of the Power turbines that you have already signed in April. And could you touch on the Vietnam order for us, Scott? I think you also referred in your comments about some questions over availability of fuel. There has been a little bit of debate over the complexion of that Vietnam order with one of the slugs of the 4.8 gigawatts being questioned over whether or not they change it to renewables. Any color would be appreciated. Thank you.

Scott L. Strazik: You bet, Alexander. When I am iterating with our Asian customers right now—and you think about LNG opportunities in a place like Vietnam or Japan, I was with one of our largest Japanese customers last week—you are talking about gas turbine deliveries in 2030 and beyond right now and commissioning projects for 2032 and 2033. For those customers, the LNG dynamic in the moment with the crisis in the Middle East is not really changing their underwriting assumptions for LNG economics in 2032 today. We are not seeing a change in buying behavior, I would say, in LNG-oriented markets like that in Asia, at least to date.

We have talked in the past about the fact that we have commissioned our first LNG-to-power project in Vietnam, 1.6 gigawatts. We have an incremental three projects on contract that are more in SRA category right now that will evolve into orders over time. I have seen—and we have been iterating with our customers on—some of what you could be citing in the press on one of the customers evaluating gas relative to a shift to renewables. I would just tell you there are more projects that our customers are talking about than what we have on contract today. Our 4.8 gigawatts that we have cited in the past are all continuing to progress.

Frankly, there are more than those three projects that are being negotiated with the government in Vietnam. We will continue to work with our customers in Vietnam and throughout the world on the dynamics that they are facing to get projects done and are highly confident that we can do that.

Kenneth S. Parks: A quick one just to answer your first question. The clarification on April orders was that in April we have booked Power equipment orders at a value equivalent to what we booked in the full first quarter.

Michael Jay Lapides: Got it. Before we wrap up, let me turn it back to Scott for closing comments.

Scott L. Strazik: Everybody, we appreciate you giving us the time this morning. Similar to our Capital Markets Day in New York City in December at the end of last year, we talk a lot about giving being an important part of the culture we are building at the company. In December, we had done the STEM toy drive that led to 80,000-some-odd toys ultimately contributed.

We have a team at the New York Stock Exchange this morning announcing a $4.5 million commitment to the Engineering of Change program that is going to touch 6,000 students over the next four years in some important markets for us in the U.S. and the U.K., and I wanted to reinforce and share that will be made today through our foundation. It is just an important part of who we are and the company and culture we are building. For our customers, we continue to appreciate their trust in us. For our employees, I personally thank each and every one of them for their work every day, and I am proud of the team that we are building.

We need our partners and are appreciative of them. And for all of you, our investors, thank you for your continued commitment to GE Vernova Inc. and continued interest in the company. We are appreciative and proud of our start, but it is just that—a start. This is just the beginning, and we have substantial opportunity ahead. Thanks, everyone.

Operator: Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.

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