Overview
Since the Report + 2.4%
Revenue grew 26.8% year over year, EPS beat the estimate by 20.0%; the stock fell 3.6% in its first reaction.
- RevenueQ3
- $12.64B
- ▲ 26.8% YoY · 4.4% Beat
- EPSGAAP
- $4.81
- Estimate $4.01 · 20% Beat
Verdict
BUYGE Vernova grew third-quarter revenue 26.8% to $12.64 billion, and EPS beat the estimate by 20%. The stock still fell 3.6% intraday as investors weighed the $9 billion Trench acquisition and a revenue outlook only slightly above expectations. The one number to watch next is backlog, which the company expects to top $200 billion in the fourth quarter.
Close on Report DayOct 28
$863.14▼ 3.6%Report-Day Move
- Market Cap(Today)
- ≈ $235 B
- 1Y Return(At Report)
- + 44%
- P/E(At Today's Price · $38.11 · Trailing 12M)
- 23.2
- Net Margin(Trailing 12M)
- 23.0%
Earnings Summary
In 30 Seconds- Revenue of $12.64 billion beat the estimate by 4.4%, and GAAP EPS of $4.81 beat by 20%.
- The company raised 2026 revenue guidance to $47.0 billion and free cash flow guidance to $16-17 billion.
- The stock fell 3.6% intraday on the $9 billion Trench deal, which will be partly funded with debt.
The Numbers
Orders
$29.3B
▲ 96% Organic · Power $21.78B
Backlog
$197B
+$20B in Quarter · Target Above $200B
Free Cash Flow
$5.41B
Year Ago $732M · Down Payment Effect
Stock Reaction
−3.6%
Intraday 10:30 ET; Update This Evening
Quarterly Revenue ($ Billion)
9.97
Q3 25 · $9.97 B
10.96
Q4 25 · $11.0 B · QoQ + 9.9%
9.34
Q1 26 · $9.34 B · QoQ − 14.8%
11.10
Q2 26 · $11.1 B · QoQ + 18.9%
12.64
Q3 26 · $12.6 B · QoQ + 13.9% · YoY + 26.8%
13.4–14.4
Q4 26E · 13.4–14.4 · QoQ + 10.1% · YoY + 27.0%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26E
Q4 2026 Company Guidance
- Full-Year Revenue46.5 – 47.5 billion46.5 billion47.5 billion
Midpoint 47.0 · Market Expectation 46.3 · Prior 45.5–46.5Raised 2.2% ▲
- Adjusted EBITDA Margin13.5% – 14.5%13.5%14.5%
Prior 12–14% · Q3 Actual 15.4%Raised 1.0 Point ▲
- Free Cash Flow16 – 17 billion16 billion17 billion
Prior 11.5–12.5Raised 37.5% ▲
- Power Organic Revenue Growth19% – 21%19%21%
Prior 18–20%Raised 1.0 Point ▲
- Power EBITDA Margin19% – 21%19%21%
Prior 17–19% · Q3 Actual 21.4%Raised 2.0 Points ▲
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±5.8% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Power$6.07 BShare 47.9%▲ 25.0% YoY
- Electrification$3.86 BShare 30.5%▲ 51.0% YoY
Includes Prolec GE acquisition; organic 16%
- Wind$2.74 BShare 21.6%▲ 4.0% YoY
Key Metrics
Backlog
$197 B
Press Release
Orders
$29.3 B
Press Release
Adjusted EBITDA
$1.94 B
▲ 139.6% YoYPress Release
Adjusted EBITDA Margin
15.4%
Press Release
Operating Cash Flow
$6.06 B
▲ 518.0% YoYPress Release
Free Cash Flow
$5.41 B
▲ 639.0% YoYPress Release
Capital Expenditures
$647 M
▲ 162.0% YoYPress Release
Shares are computed over the segment total: $12.7 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We delivered strong financial results in the third quarter as demand for electricity infrastructure increases around the world. We now expect our backlog to exceed $200 billion in the fourth quarter, with improved margins, and to exit 2026 with at least 130 GW of gas equipment under contract. Given our performance and confidence in our trajectory, we are raising our 2026 financial guidance. Our opportunity to create value is accelerating.”
- Backlog at the $200B Mark
- 2026 Guidance Raised a Third Time
- Grid and Data Center Demand
Summary and Review
Summary
GE Vernova's revenue rose 26.8% year over year to $12.64 billion. The market expected $12.11 billion, so the revenue gate is open by 4.4%. GAAP EPS came in at $4.81, beating the $4.01 estimate by 20%. The midpoint of full-year revenue guidance is $47.0 billion. That is only 1.5% above the $46.3 billion expectation, so the guidance gate stays in line. The company raised its outlook for the third time this year.
Orders rose 96% organically to $29.3 billion, and backlog climbed to $197 billion. Free cash flow jumped from $732 million to $5.41 billion. Even so, the stock trades 3.6% below its $895 prior close. The market did not read this report as a demand story; it read it as a capital allocation story. The $9 billion Trench deal, half funded with debt, raised questions.
The score is 75 and the view is buy. Revenue and earnings gates are open, and the guidance gate is in line; the decision table puts this mix in the 70-79 band. Two caveats keep it from the top of the band. Wind still guides to a loss, and most of the cash jump comes from customer down payments. Still, gas turbine and grid demand is enough for the company to raise guidance every quarter.
Full Review
Gas turbine orders more than doubled.
Power segment orders reached $21.78 billion. A year ago they were $7.83 billion, an increase of 178%. Segment revenue grew 25% to $6.07 billion. Power now accounts for 47.9% of total revenue. Segment EBITDA margin rose from 13.4% to 21.4%, a gain of 8.0 points. The company expects at least 130 GW of gas equipment under contract by year-end. According to the earnings call, it also sold production slots for 2032 delivery this quarter. That shows demand is booked six years out. Management stressed that the pricing environment remains strong. Margin expansion alongside revenue growth shows price increases are starting to reach results. Full-year Power margin guidance rose from 17-19% to 19-21%. Organic revenue growth guidance was raised from 18-20% to 19-21%.
Electrification is growing through acquisitions.
Electrification revenue rose 51% year over year to $3.86 billion. Organic growth, however, was 16%. Most of the gap comes from the Prolec GE acquisition. Segment EBITDA margin rose from 15.1% to 19.1%, an expansion of 4.0 points. Organic orders fell 9%, the segment's one weak line. The same day, the company announced it will buy high-voltage equipment maker Trench Group for $9 billion. The deal will be funded half with cash and half with debt, and is expected to close in late 2027. Trench broadens the company's grid equipment lineup. The company says Trench brings about $5 billion in backlog and framework agreements. Full-year Electrification revenue guidance was kept at $14.5-15.0 billion. Margin is trending toward the top of the 18-20% range.
Record cash flow, but driven by down payments.
Operating cash flow was $6.06 billion and free cash flow $5.41 billion. A year ago free cash flow was $732 million. Most of the jump comes from working capital, meaning customer down payments. This cash is real, but it is not recurring profit. Down payments will turn into revenue as deliveries happen, and cash flow will slow then. Full-year free cash flow guidance rose from $11.5-12.5 billion to $16-17 billion. The company bought back $1.6 billion of stock in the third quarter. The buyback authorization was raised from $10 billion to $20 billion. See the share buyback guide and the cash flow guide for background. Quarter-end cash stood at $16.8 billion. That easily covers the cash portion of the Trench deal.
Wind is still in loss territory.
Wind revenue rose 4% to $2.74 billion. Segment EBITDA turned positive this quarter at $72 million, a 2.6% margin. A year ago it was a $61 million loss. Full-year guidance, however, calls for a segment EBITDA loss of $400-500 million. The prior outlook was about $400 million. The expected revenue decline narrowed from low double digits to mid single digits. Management said it cannot yet call an inflection point in U.S. wind orders. The segment makes up about a fifth of total revenue and weighs on the margin story. The company therefore manages wind as a loss-reduction business rather than a growth one. Still, segment orders rose 17% this quarter to $2.14 billion.
Next quarter, watch one line.
The average 12-month analyst target is $1,224. The stock trades 41.8% below that target. GAAP EPS over the past four quarters totals $38.11. That sum, however, includes one-time tax and acquisition gains. So the P/E ratio does not reflect the company's normal profitability. Adjusted EBITDA is a better gauge of underlying earnings power. The one number for readers to track is backlog. The company expects it to exceed $200 billion in the fourth quarter. If that threshold is cleared and margins hold, the demand story stands. If backlog stays below $200 billion, this quarter may have been the peak. The second gauge is Power margin; holding 21.4% would show pricing power is intact. This guide explains how to read an earnings day.
Looking Ahead
Strengths and Risks
5 Strengths · 5 RisksStrengths
5- Revenue beat the estimate by 4.4%, and GAAP EPS beat by 20%.
- Power segment orders rose 178% year over year to $21.78 billion.
- Power segment EBITDA margin widened 8.0 points in a year to 21.4%.
- Full-year free cash flow guidance rose from $12 billion to $16.5 billion at the midpoint.
- Backlog grew $20 billion in the quarter to reach $197 billion.
Risks
5- Half of the Trench deal will be funded with debt, and it awaits regulatory approval until late 2027.
- Wind is guided to a full-year EBITDA loss of $400-500 million.
- Most of the free cash flow jump comes from customer down payments, which is non-recurring working capital.
- Organic Electrification orders fell 9% year over year.
- Full-year revenue guidance is only 1.5% above the market expectation.
What to Watch
4- Fourth-quarter results are expected in late January 2027, when the company will set its Capital Markets Day date.
- The company expects backlog above $200 billion and gas equipment contracts above 130 GW by the end of 2026.
- The quarterly dividend of $0.50 per share will be paid on November 24.
- The Trench Group deal is expected to close in late 2027 after regulatory approvals.
Upcoming Earnings
To Understand This