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GE Vernova Inc. (GEV)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered broad-based growth and margin expansion: revenue $8.03B (+11% YoY), diluted EPS $0.91, adjusted EBITDA $0.46B (5.7% margin), and free cash flow $0.98B; backlog rose, with services now >60% of backlog and total backlog reaching $123B .
  • Against S&P Global consensus, GEV posted a significant beat: revenue beat by ~$0.50B ($8.03B vs $7.53B*) and EPS beat by ~$0.54 ($0.91 vs $0.37*) as pricing and productivity offset inflation; beats were across Power and Electrification while Wind losses improved YoY* .
  • Guidance reaffirmed for FY25 (revenue $36–$37B, high-single-digit adj. EBITDA margin, FCF $2.0–$2.5B), now explicitly including estimated tariff/inflation impact of ~$300–$400M net of mitigating actions; segment guardrails unchanged .
  • Stock-relevant narrative: strong orders and pricing (Power and Grid), cash generation + buybacks/dividend, and visibility from gas turbine slot reservations (21 GW) and growing equipment backlog; offset by ongoing offshore wind losses and tariff headwinds .

What Went Well and What Went Wrong

What Went Well

  • Power strength: 29 heavy-duty gas turbines booked (8 HA), Power revenue up +10% (+16% organically), segment EBITDA margin expanded +290 bps to 11.5%, aided by price and productivity .
  • Electrification momentum: revenues up +14% (+18% org), EBITDA margin up +740 bps to 11.4% on more profitable transformer/switchgear volume; strong equipment orders in North America (+44%) and Asia (+92%) .
  • Cash generation and capital return: CFO emphasized “positive free cash flow in the first quarter, a significant milestone,” and returned $1.3B in capital (repurchases + dividend), ending with $8.1B cash .
    • CEO: “We are only at the beginning of the electricity investment supercycle” .

What Went Wrong

  • Wind still loss-making: Wind segment EBITDA $(146)M with margin (7.9)%; equipment orders down (43)% organically due to U.S. onshore policy/permitting delays; offshore recorded ~$70M one-time termination charge .
  • Tariffs/inflation: Management flagged ~$300–$400M net impact in ’25; largest exposure in China with ~1/4 of direct spend affected after scope expansion; mitigation includes pricing pass-through and supply chain re-routing .
  • Services costs in Wind increased to accelerate onshore fleet improvements (more crews/cranes), holding back loss reduction despite better onshore equipment profitability .

Financial Results

Multi-period comparison (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD Billions)$8.913 $10.559 $8.032
Diluted EPS ($)$(0.35) $1.73 $0.91
Adjusted EBITDA ($USD Billions)$0.243 $1.079 $0.457
Adjusted EBITDA Margin (%)2.7% 10.2% 5.7%
Net Income ($USD Billions)$(0.099) $0.484 $0.264
Net Income Margin (%)(1.1)% 4.6% 3.3%
Free Cash Flow ($USD Billions)$0.968 $0.572 $0.975
Cash from Operations ($USD Billions)$1.127 $0.922 $1.161
Total Orders ($USD Billions)$9.4 $13.2 $10.2

YoY comparison (Q1 2024 → Q1 2025)

MetricQ1 2024Q1 2025
Total Revenues ($USD Billions)$7.260 $8.032 (+11%)
Diluted EPS ($)$(0.47) $0.91 (F)
Net Income ($USD Billions)$(0.106) $0.264 (+$0.370B)
Adjusted EBITDA ($USD Billions)$0.189 $0.457 (+$0.268B)
Adjusted EBITDA Margin (%)2.6% 5.7% (+310 bps)
Free Cash Flow ($USD Billions)$(0.661) $0.975 (F)

Versus S&P Global consensus (Q1 2025)

MetricActualConsensusBeat/(Miss)
Revenue ($USD Billions)$8.032 $7.535*+$0.497
Primary EPS ($)$0.91 $0.368*+$0.542
# of Estimates (Revenue / EPS)—19* / 13*—

Values retrieved from S&P Global.*

Note: Company-reported diluted EPS ($0.91) is compared against SPGI Primary EPS consensus, which may differ in methodology.*

Segment breakdown (trend)

SegmentQ4 2024Q1 2025
Power Revenues ($B)$5.431 $4.423
Power Segment EBITDA ($B)$0.810 $0.508
Power EBITDA Margin (%)14.9% 11.5%
Power Orders ($B)$6.552 $6.247
Wind Revenues ($B)$3.109 $1.850
Wind Segment EBITDA ($B)$0.019 $(0.146)
Wind EBITDA Margin (%)0.6% (7.9)%
Wind Orders ($B)$2.031 $0.640
Electrification Revenues ($B)$2.181 $1.879
Electrification Segment EBITDA ($B)$0.283 $0.214
Electrification EBITDA Margin (%)13.0% 11.4%
Electrification Orders ($B)$4.786 $3.393

KPIs

KPIQ1 2025
Total backlog ($B)$123
Equipment backlog growth (seq., $B)$2.4
Services backlog growth (seq., $B)$2.0
Gas Power equipment backlog (GW)29
Slot reservation agreements (GW)21
Free cash flow ($B)$0.975
Cash balance ($B)$8.1
Share repurchases ($B)$1.2 in Q1; +$0.3 early April
Dividend per share ($)$0.25 declared for Q2 (paid May 16, 2025)
R&D spend ($B)$0.2
Capex ($B)$0.2
Estimated tariffs/inflation impact (FY25, $M)~$300–$400

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025$36–$37 $36–$37 Maintained
Adjusted EBITDA Margin (%)FY 2025High-single-digit High-single-digit Maintained
Free Cash Flow ($B)FY 2025$2.0–$2.5 $2.0–$2.5 Maintained
Power: Organic Revenue GrowthFY 2025Mid-single digit Mid-single digit Maintained
Power: EBITDA Margin (%)FY 202513–14 13–14 Maintained
Wind: Organic Revenue GrowthFY 2025Down mid-single digits Down mid-single digits Maintained
Wind: EBITDA ($M)FY 2025$(200)–$(400) $(200)–$(400) Maintained
Electrification: Organic Revenue GrowthFY 2025Mid-to-high teens Mid-to-high teens Maintained
Electrification: EBITDA Margin (%)FY 202511–13 11–13 Maintained
Tariff/Inflation Impact (Net, $M)FY 2025Not quantified ~$300–$400 Newly quantified

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
AI/data center power demandNot explicit in 8-K—~1/3 of 21 GW SRAs aligned with data centers; US ~60% of 50 GW combined backlog/SRAs Emerging driver
Tariffs/macroForward-looking risk framing Macro/FX/supply chain risks ~$300–$400M net impact; pricing pass-through, G&A acceleration, supply chain moves Cost pressure + mitigation
PricingPositive price across segments Positive price aiding margins Gas: “price up”; Electrification: still positive but slower vs ’24 Ongoing price tailwind (esp. Gas)
Supply chain/capacity—Capacity expansion initiatives $600M US investment, +1,500 jobs; vertical integration (Woodward parts) Accelerating build-out
Wind (onshore/offshore)Offshore losses, settlement impact Onshore profitable; offshore losses reduced Onshore 5th straight profitable quarter; offshore $70M termination; services cost elevated Onshore improving; offshore challenged
Nuclear SMR——OPG license to construct first SMR in North America; growing US interest Building momentum
Backlog visibility——Total backlog $123B; services >60% of backlog; strong SRAs Rising visibility
Cash linearity——Lean improving DSO/past due; +$150M FCF benefit at Power Execution improving

Management Commentary

  • CEO on demand backdrop: “The world is entering an era of accelerated electrification… driving an unprecedented need for investment in reliable baseload power, grid infrastructure and decarbonization solutions… only at the beginning of the electricity investment supercycle.”
  • CEO on Gas Power visibility: “‘26 and ‘27 are largely sold out… approaching filling out ‘28… now have orders for ‘29 and are in active discussions for 2030.”
  • CFO on cash execution: “We generated positive free cash flow in the first quarter, a significant first quarter milestone for GE Vernova… Lean decreased Power past dues by nearly 30% and reduced DSO by 3 days, resulting in ~$150M additional FCF.”
  • CEO on strategy: “We remain focused on creating value… returning significant capital to shareholders… reaffirming our 2025 guidance.”

Q&A Highlights

  • Tariffs mitigation: Largest impact in China; ~¼ of direct spend now affected; actions include contractual pass-throughs, change-in-law clauses, supplier dual-qualification (~2/3 of China spend), and accelerated G&A cost transformation ($600M target by 2028) .
  • Backlog/SRA resiliency: ~20% of SRAs prepaid; low cancellation risk; timing can shift as EPC/site/permits firm up (’26–’27 largely sold out; ’28 materially sold; bookings starting for ’29–’30) .
  • Pricing dynamics: Gas turbines firmly in “price up” environment; Electrification pricing still positive but normalizing by geography/product (e.g., NA switchgear strong) .
  • Customer behavior: Despite tariff headlines and macro worries, management sees consistent growth trajectory vs April 1; contract structures and cash curves being managed to keep positive cash profile .
  • Wind trajectory: Onshore orders in NA cautious due to interconnection queues/permitting and rates; services costs elevated near term; offshore tariffs more pronounced given backlog state .

Estimates Context

  • Q1 2025 delivered a clear beat vs consensus: revenue $8.03B vs $7.54B* (+$0.50B), diluted EPS $0.91 vs Primary EPS $0.37* (+$0.54); estimate counts were 19 (revenue) and 13 (EPS)* .
  • With price/mix tailwinds and backlog margin improving, consensus likely needs to reflect higher pricing realization and improved cash linearity; Wind losses remain a constraint but are trending better YoY*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Demand visibility strengthening: Gas Power SRAs and backlog support multi-year delivery plans (’26–’27 sold out), with emerging data center-linked load growth as a new driver .
  • Pricing + productivity outweigh cost inflation: Gas turbine pricing actions and Grid Solutions margin expansion underpin beats and margin resilience .
  • Cash-generation flywheel: $0.98B FCF in Q1, improved linearity, and robust down payments enable continued buybacks/dividends alongside capacity/R&D investments .
  • Tariff headwinds manageable: ~$300–$400M net impact embedded in FY25 guidance with contractual pass-throughs and supply-chain shifts underway .
  • Wind is improving but still the swing factor: Onshore profitability improving; offshore losses persist (one-time termination) and tariffs impact offshore more severely .
  • Near-term trading: Focus on continued orders/pricing momentum in Power/Electrification, Q2 margin trajectory, and tariff mitigation updates; watch Wind services cost curve and offshore execution .
  • Medium-term thesis: Electrification and baseload investment “supercycle” plus margin-rich services backlog and improving backlog margin support compounding EBITDA/FCF; capital returns add to TSR .

Additional Relevant Q1 Press Releases

  • Dividend: Board declared $0.25 per share quarterly dividend (payable May 16, 2025; record April 18, 2025) .
  • Homer City Redevelopment: Seven GE Vernova 7HA.02 turbines to power up to 4.5 GW AI/HPC data center campus; first deliveries in 2026 .
  • PyroGenesis MOU: Strategic collaboration on multi-MW plasma torches for industrial electrification (steel/aluminum/calcination) with GE Vernova Power Conversion & Storage providing electrical infrastructure .