The demand for gas turbines and grid equipment has surged, GE Vernova's Q4 revenue exceeded expectations, and backlog orders reached $150 billion | Earnings report insights

Energy transition giant GE Vernova has delivered an impressive fourth-quarter performance. The company's fourth-quarter revenue reached $10.96 billion, exceeding market expectations of $10.27 billion; earnings per share soared to $13.39, driving the company's pre-market stock price up over 7%. This financial report not only showcases strong current performance but also reveals the company's significant growth potential in the wave of energy transition.

The most striking aspect is the explosive growth in backlog orders. Driven by strong orders for gas turbines and grid equipment, GE Vernova's total backlog increased by $31.2 billion last year, reaching a historic high of $150 billion. Among these, gas turbine orders surged from 33 gigawatts to 40 gigawatts, while equipment backlog and slot reservation agreements skyrocketed from 62 gigawatts to 83 gigawatts, laying a solid foundation for the company's growth in the coming years.

The company is positioned at the forefront of surging electricity demand. The rapid expansion of artificial intelligence data centers, the commissioning of new factories, and the accelerated overall electrification process have collectively driven explosive growth in global electricity demand. As an industry leader, GE Vernova, with its comprehensive layout in gas power generation, grid equipment, and renewable energy, has become one of the biggest beneficiaries of this historic opportunity.

Strong cash flow performance also provides ample ammunition for the company's capital allocation. In the fourth quarter, the company's operating cash flow reached $2.5 billion, with free cash flow of $1.8 billion; the annual operating cash flow was as high as $5 billion, with free cash flow of $3.7 billion. By the end of the year, the company's cash balance was close to $9 billion, and while returning $3.6 billion to shareholders, it still maintained a healthy investment-grade balance sheet.

Rapid Order Growth, Significant Improvement in Backlog Quality

In the fourth quarter, GE Vernova secured $22.2 billion in new orders, with an organic growth of 65% year-on-year, and all three business segments achieved growth. The total order amount for the year reached $59.3 billion, with an organic growth of 34%, primarily driven by equipment orders in the electrification and power businesses, as well as service orders across various segments.

More importantly, the quality of backlog orders is also significantly improving. The profit margin for equipment backlog orders increased by 8 percentage points for the year, achieving a 6 percentage point increase in profit margin, reflecting a favorable pricing environment and the company's continued focus on strict underwriting. This means that when future orders convert to revenue, they will bring higher profitability.

Steady Revenue Growth, Significant Improvement in Profitability

Fourth-quarter revenue reached $11 billion, a year-on-year increase of 4%, with organic growth of 2%, and all business segments' service operations achieved growth. Annual revenue was $38.1 billion, achieving a 9% growth under both U.S. Generally Accepted Accounting Principles and organic growth metrics, primarily driven by electrification and power businesses.

The performance in terms of profitability is particularly outstanding. Fourth-quarter net profit reached $3.7 billion, with a net profit margin of 33.5%, although this figure includes $2.9 billion in tax benefits (release of U.S. valuation reserves). Adjusted EBITDA was $1.2 billion, with an adjusted EBITDA margin of 10.6%. The annual net profit was $4.9 billion, with a net profit margin of 12.8%; Adjusted EBITDA is $3.2 billion, with an adjusted EBITDA margin of 8.4%, demonstrating the company's ongoing ability to expand its margins.

Strong Cash Generation and Increased Shareholder Returns

GE Vernova has demonstrated strong cash generation capabilities. In the fourth quarter, operating cash flow was $2.5 billion, and free cash flow was $1.8 billion, perfectly concluding the year. For the entire year, operating cash flow reached $5 billion, and free cash flow was $3.7 billion, fully proving the health and sustainability of the company's business model.

Based on strong cash flow performance, the company's year-end cash balance reached $8.8 billion, providing ample capital allocation flexibility. In 2025, the company returned $3.6 billion to shareholders through stock buybacks and quarterly dividends. Chief Financial Officer Ken Parks stated that the healthy cash position allows the company to confidently balance investments in core businesses, shareholder returns, and maintaining a strong investment-grade balance sheet.

Management's Outlook is Optimistic, Raising Multi-Year Financial Guidance

CEO Scott Strazik stated, "We achieved strong financial performance in 2025, with our power and electrification businesses maintaining sustained growth momentum while focusing on the aspects of the wind power business that we can control. We increased our backlog to $150 billion, with higher equipment margins, and are entering 2026 with strong momentum. Our advanced solutions platform is well-positioned to serve the growing long-cycle power market, with significant opportunities for better performance in the future."

CFO Ken Parks added, "We ended 2025 with strong performance, executing our financial strategy, achieving robust quarterly orders, revenue growth, margin expansion, and significant free cash flow generation." He also announced that the company is raising its multi-year financial guidance, incorporating Prolec GE, reflecting management's confidence in future growth.

With a historic backlog of $150 billion, expanding margins, and an AI-driven wave of power demand, GE Vernova is on the best track for energy transition, with promising growth potential ahead