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GE Vernova Inc. (GEV)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered double‑digit top-line growth and margin expansion: revenue $9.11B (+11% YoY), adjusted EBITDA $0.77B (8.5% margin, +210 bps YoY), and diluted EPS $1.86, with positive FCF of $0.19B .
  • Versus consensus (S&P Global), GEV beat on revenue (+3.6%), EPS (+18.4%), and EBITDA (+3.9%); the company raised FY25 guidance on adjusted EBITDA margin to 8–9% and FCF to $3.0–$3.5B, and now expects revenue at the high end of $36–$37B. Bold beats across all three headline metrics; guidance raised .
  • Segment cadence was strong in Power (revenue $4.76B, margin 16.4%) and Electrification (revenue $2.20B, margin 14.6%), while Wind remained loss‑making (margin −7.3%) due to services quality programs and offshore tariffs; backlog grew $5.2B sequentially and Gas Power backlog+SRAs expanded from 50 to 55 GW .
  • Call commentary highlighted accelerating grid demand (including synchronous condensers in Saudi), data center‑related orders, services pricing tailwinds, SMR progress, robotics/automation, and a restructuring to accelerate $600M G&A savings; cash balance was ~$7.9–$8.0B with continued buybacks and dividends .
  • Near‑term stock catalysts: raised FY25 guidance, expanding equipment/services backlog at improved margins, anticipated large Electrification orders (Saudi condensers) in Q3, and visible services pricing uplift; tariff headwinds are now trending to the lower end of the $300–$400M estimate .

What Went Well and What Went Wrong

What Went Well

  • Power delivered robust growth and margin expansion: revenue +7% YoY to $4.76B and segment EBITDA margin up 260 bps to 16.4%, driven by HA turbine deliveries, pricing, and productivity; backlog+SRAs increased to 55 GW and SRAs converted to orders .
  • Electrification posted 23% revenue growth to $2.20B and margin +740 bps to 14.6% on HVDC, switchgear, and transformer volume; equipment backlog rose ~$2B sequentially across Europe, North America, and Asia .
  • Management increased FY25 guidance (revenue high end of $36–$37B; adjusted EBITDA margin 8–9%; FCF $3.0–$3.5B), citing strength in Power/Electrification and better down payments/working capital; “We are raising our revenue, adjusted EBITDA margin, and free cash flow expectations for the year” — CEO Scott Strazik .

What Went Wrong

  • Wind remained loss‑making with segment EBITDA of −$165M (margin −7.3%), pressured by higher onshore services costs to improve fleet performance and offshore tariffs, despite onshore equipment volume gains .
  • Free cash flow declined YoY to $0.19B due to nonrecurrence of a $0.3B arbitration refund in Q2’24 and lower working capital benefit, though operating cash flow remained positive at $0.37B .
  • Electrification orders decreased (31)% YoY given unusually large orders in the prior year; management noted softer European HVDC near term with some projects canceled or deferred due to affordability, necessitating continued variable cost productivity as pricing decelerates .

Financial Results

Headline KPIs (sequential)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$10.56B $8.03B $9.11B
Diluted EPS ($)$1.73 $0.91 $1.86
Adjusted EBITDA ($USD Billions)$1.08B $0.46B $0.77B
Adjusted EBITDA Margin (%)10.2% 5.7% 8.5%
Cash from Operations ($USD Billions)$0.92B $1.16B $0.37B
Free Cash Flow ($USD Billions)$0.57B $0.98B $0.19B

Actual vs Wall Street Consensus (S&P Global) – Q2 2025

MetricConsensus*Actual*Surprise*
Revenue ($USD Billions)$8.80B$9.11B+$0.31B (+3.6%)
Primary EPS ($)$1.49$1.77+$0.28 (+18.4%)
EBITDA ($USD Billions)$0.72B$0.74B+$0.03B (+3.9%)

Values retrieved from S&P Global*

Segment Breakdown

SegmentQ1 2025 Revenue ($B)Q2 2025 Revenue ($B)Q2 YoYQ1 2025 EBITDA Margin (%)Q2 2025 EBITDA Margin (%)
Power$4.42B $4.76B +7% 11.5% 16.4%
Wind$1.85B $2.25B +9% −7.9% −7.3%
Electrification$1.88B $2.20B +23% 11.4% 14.6%

Additional KPIs

KPIQ2 2025
Orders ($USD Billions)$12.4B
Backlog Sequential Change ($USD Billions)+$5.2B
Gas Power Backlog + SRAs (GW)55 GW (from 50 GW)
Equipment Revenue ($USD Billions)$4.89B
Services Revenue ($USD Billions)$4.22B
Cash Balance ($USD Billions)$7.9B
Share Repurchases YTD ($USD Billions)$1.7B
Dividend$0.25 per share declared for Q3 2025 (payable Aug 18, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$36–$37B Trend to high end of $36–$37B Maintained; directional raised to high end
Adjusted EBITDA MarginFY 2025High‑single digits 8%–9% Raised low end
Free Cash FlowFY 2025$2.0–$2.5B $3.0–$3.5B Raised
Power Organic Revenue GrowthFY 2025Mid‑single digits 6%–7% Raised
Power Segment EBITDA MarginFY 202513%–14% 14%–15% Raised
Wind Organic RevenueFY 2025Down mid‑single digits Down mid‑single digits Maintained
Wind Segment EBITDA LossesFY 2025$200–$400M $200–$400M (trending bottom of range) Improved trajectory
Electrification Organic Revenue GrowthFY 2025Mid‑to‑high teens ~20% Raised
Electrification Segment EBITDA MarginFY 202511%–13% 13%–15% Raised
Tariffs (net of mitigation)FY 2025~$300–$400M Trending to lower end of ~$300–$400M Improved

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/data center demandElectrification growth driven by grid equipment; backlog expansion including HVDC orders Strong data center demand; ~$500M YTD orders vs $600M for all of 2024; synchronous condenser opportunity ($5B/year TAM) Accelerating demand and pipeline
Services pricingServices strength across segments Capacity market pricing (e.g., PJM) supports upgrades and services price‑ups; pricing tailwinds to flow through over 12–24 months Positive pricing momentum
Tariffs/macroFY25 tariff impact ~$300–$400M estimated Tariffs trending to lower end; offshore wind tariff headwinds; mitigation via contracting/sourcing/free trade zones Improving vs prior expectations
SMR/nuclearNuclear extensions and upgrades supported services First Western SMR (Ontario Darlington) FID; NRC accepted TVA Clinch River application; higher R&D spend Execution milestones achieved
Electrification regional trendsStrong NA/Asia orders; large prior HVDC orders impacted YoY comps Europe softness on HVDC affordability; Middle East/North America strong; Europe/Asia switchgear growth Mixed: HVDC Europe softer; other regions strong
Robotics/automation & AILean improvements noted Ready to invest in robotics and AI; integrating Alteia into GridOS; lighthouse factory projects Early investments, expected 2026 ramp
Restructuring/G&ACost focus noted ~$250–$275M restructuring costs to accelerate $600M G&A reduction; ~$250M annualized savings from 2026 Accelerating cost takeout
Capacity expansionsCapex programs in Power/Electrification Pennsylvania expansion: +250 jobs and up to $100M investment; manufacturing ramp via shifts Capacity increasing

Management Commentary

  • CEO Scott Strazik: “With strength in Power and Electrification, we are raising our revenue, adjusted EBITDA margin, and free cash flow expectations for the year.”
  • CFO Ken Parks: “Adjusted EBITDA increased just over 25% to $770 million…margin expansion of 80 bps was driven by more profitable volume, price, and productivity…We expect to deliver positive free cash flow in all four quarters this year.”
  • CEO on backlog and SRAs: “We signed 9 GW of gas equipment contracts…converted 3 GW of SRAs to orders…backlog remained at 29 GW while SRAs grew from 21 to 25 GW, building total to 55 GW.”
  • CEO on grid demand: “We expect at least $1.5B of [Saudi synchronous condenser] agreement to become an order in the third quarter.”
  • CEO on automation/AI: “We are now ready for both, and these two themes are important parts of our strategy reviews…we were excited to announce…our acquisition of Alteia…to help our customers manage and orchestrate the grid.”

Q&A Highlights

  • Electrification margins and regional dynamics: Management expects modest sequential margin improvement in 3Q/4Q; pricing remains positive but decelerating, necessitating variable cost productivity; Europe’s big HVDC projects face more scrutiny while core switchgear/transformers remain strong .
  • Services pricing uplift: Capacity market dynamics (e.g., PJM) support upgrades and justify incremental pricing; services price‑up expected to translate into income statement over 12–24 months .
  • Gas equipment orders and mix: More combined‑cycle orders expected in H2’25, implying higher dollar per GW connections; pricing positive on both equipment and services .
  • Aero derivatives: Demand strong as bridge power with faster commissioning; opportunity across U.S. and globally; services backlog grew ~$1B in Q2 .
  • Capacity expansion: Electrification factory capacity ramp via shifts (e.g., Charleroi, PA) with incremental jobs and investment; gas aims for a 20 GW run rate by H2’26 before considering further capacity .

Estimates Context

  • Q2 2025 beats vs S&P Global consensus across revenue, EPS, and EBITDA; narrative supports estimate revisions higher for FY25 EBITDA/FCF given raised guidance and backlog quality.
  • Wind losses trending to bottom of the guided range and tariff impacts trending lower‑end should further support margin estimates.
    Values retrieved from S&P Global*

Key Takeaways for Investors

  • Raised FY25 guidance with revenue at high end of $36–$37B, adjusted EBITDA margin 8–9%, and FCF $3.0–$3.5B; tariff headwinds trending lower‑end of $300–$400M net of mitigation .
  • Power momentum (HA and aero derivatives) and services pricing tailwinds underpin margin durability; segment EBITDA margin at 16.4% in Q2 with continued backlog growth and SRAs conversions .
  • Electrification’s backlog, margin expansion (14.6% in Q2), and expected large orders (e.g., Saudi synchronous condensers) set up H2 sequential growth; Pennsylvania factory expansion accelerates capacity .
  • Wind remains the swing factor: onshore equipment profitability improving, services costs weighing; management expects approaching break‑even in H2’25 absent prior offshore settlement effects .
  • Strong cash/liquidity (~$7.9–$8.0B) supports buybacks ($1.7B YTD) and $0.25/share dividends, while restructuring accelerates the $600M G&A reduction roadmap for 2026 savings .
  • Tactical: Near‑term catalysts include Q3 order conversion (Saudi), services price‑up visibility, and margin delivery within raised ranges; medium‑term thesis leverages SMR milestones, data center electrification, and automation/AI productivity .

Appendix: Prior Quarter Context

  • Q1 2025: Revenue $8.03B (+11%), adjusted EBITDA $0.46B (5.7%), positive FCF $0.98B; reaffirmed FY25 guidance with tariff impact ~$300–$400M .
  • Q4 2024: Record revenue $10.56B (+5%), adjusted EBITDA $1.08B (10.2%), FCF $0.57B; set FY25 guide and highlighted Electrification backlog and segment margin expansion .