Q4 2024 Earnings Summary
- Strong and diversified demand in the Gas Power segment, with increasing orders across various turbine types, including 25 H-class units, 20 F-class units, and over 40 aeroderivative units in 2024. This indicates robust growth opportunities, with demand becoming more diversified and the company planning to expand capacity to deliver approximately 20 gigawatts annually starting in 2027.
- The Electrification (Grid) segment is experiencing significant growth, with the equipment backlog increasing from $6 billion to $20 billion over the past two years. The company expects this backlog to grow substantially in 2025 and beyond, especially in North America and Asia, indicating substantial opportunities for expansion and revenue growth.
- Increasing service opportunities in the Gas Power business, as customers invest more in technology upgrades to improve performance. The company expects upgrades to grow by approximately 50% by the end of the decade, enhancing growth prospects in the high-margin services segment.
- GEV's wind segment remains soft, with market fundamentals being weaker than the other two large businesses, and uncertainty about when the North American wind market will improve, potentially impacting growth.
- Production capacity constraints in the gas turbine business, with GEV limited to 20 gigawatts of capacity per year by 2027, may limit the company's ability to capitalize on increased demand in the gas power market.
- Potential challenges in project execution due to constraints in EPC support could impact GEV's ability to fulfill orders and realize revenue on time, posing risks to financial performance.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | FY 2024 | 34B–35B | no current guidance | no current guidance |
Adjusted EBITDA Margin | FY 2024 | 5%–7% | no current guidance | no current guidance |
Free Cash Flow | FY 2024 | $1.3B–$1.7B | no current guidance | no current guidance |
Power Segment Revenue | FY 2024 | Mid single-digit organic growth | no current guidance | no current guidance |
Power Segment Margin | FY 2024 | +150–200 bps | no current guidance | no current guidance |
Wind Segment Revenue | FY 2024 | Flat year-over-year | no current guidance | no current guidance |
Wind Segment EBITDA | FY 2024 | 50% improvement from $1B loss | no current guidance | no current guidance |
Electrification Segment Revenue | FY 2024 | High-teens organic growth | no current guidance | no current guidance |
Electrification Segment EBITDA Margin | FY 2024 | High single-digit | no current guidance | no current guidance |
Free Cash Flow | Q1 2025 | no prior guidance | Positive free cash flow | no prior guidance |
Revenue | FY 2025 | no prior guidance | $36B–$37B | no prior guidance |
Adjusted EBITDA Margin | FY 2025 | no prior guidance | High single digits | no prior guidance |
Free Cash Flow | FY 2025 | no prior guidance | $2B–$2.5B | no prior guidance |
Power Segment Revenue | FY 2025 | no prior guidance | Mid single-digit organic growth | no prior guidance |
Power Segment EBITDA Margin | FY 2025 | no prior guidance | 13%–14% | no prior guidance |
Wind Segment Revenue | FY 2025 | no prior guidance | Down mid-single digits year-over-year | no prior guidance |
Wind Segment EBITDA | FY 2025 | no prior guidance | ($200M)–($400M) losses | no prior guidance |
Electrification Segment Revenue | FY 2025 | no prior guidance | Mid- to high-teens organic growth | no prior guidance |
Electrification Segment EBITDA Margin | FY 2025 | no prior guidance | 11%–13% | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | FY 2024 | Expected towards the high end of $34B to $35B | Achieved ~$34.9B (Sum of Q1: 7,260, Q2: 8,204, Q3: 8,913, and Q4: 10,558) | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Gas Power Demand and Capacity Expansions | Q3 2024: Strong equipment/orders growth (up 34%), expanding capacity to 70–80 units in 2026. Q2 2024: Booked 14 heavy-duty turbines, 9 GW YTD. Q1 2024: Focus on meeting rising orders (8 HA units, 18 aeroderivatives). | In Q4 2024, demand remained strong, with 20 GW of gas orders (double last year) and plans to boost turbine capacity to 70–80/year starting 2H 2026. | Recurring, consistently positive on upgrades and expansions. |
Electrification (Grid) Growth and Backlog | Q3 2024: 24% revenue increase, backlog of $19B, double-digit margins. Q2 2024: Orders more than doubled in NA, backlog $17B. Q1 2024: 21% revenue growth, backlog up $6B vs. prior year. | In Q4 2024, reported 18% revenue growth, $4.8B in Q4 orders, backlog reaching $20B, and EBITDA margin at 9%. | Recurring, strongly bullish on backlog and margins. |
Onshore Wind Profitability Trends | Q3 2024: High single-digit margins, major improvement vs. prior years. Q2 2024: Progress toward profitability in 2024–2025. Q1 2024: Positive EBITDA, aiming for high single-digit margins in 2024. | In Q4 2024, reached high single-digit EBITDA margins for the full year—its most profitable quarter in three years, aided by pricing and productivity. | Recurring, sentiment improving on cost-out and margin gains. |
Offshore Wind Challenges and Losses | Q3 2024: Significant losses, blade manufacturing deviation, $700M contract charge. Q2 2024: Blade event at Vineyard Wind, focused on remediation. Q1 2024: Continued challenges, disciplined backlog approach. | In Q4 2024, logged $1B in incremental contract losses, blade issues, and delayed project execution. Partial offset from a previous canceled project gain. | Recurring, sentiment remains negative due to execution and cost overruns. |
Supply Chain and Production Constraints | Q3 2024: Capacity expanded to 70–80 turbines, funded by customer orders. Q2 2024: Greenville factory growth hindered by castings/forgings constraints. Q1 2024: Ongoing lean initiatives, collaborating with suppliers to address medium-term needs. | In Q4 2024, limited supply base capacity for H-class turbine ramp-up, balancing production with strong demand. | Recurring, a persistent operational challenge with ongoing mitigation. |
Small Modular Reactors (SMRs) in Nuclear | Q3 2024: BWRX-300 technology, revenue expected by early 2030s. Q2 2024: No mention. Q1 2024: Brief mention regarding future power mix, no specifics. | Q4 2024 confirmed rising interest: Duke & AEP joined consortium, first SMR in 2029, larger impact in early 2030s. | Newer growth area, long-term potential. |
AI and Data Center-Driven Electrification | Q3 2024: Hyperscalers shifting to larger HA turbines, not explicitly framed as “AI”. Q2 2024: Data centers mentioned among broader manufacturing/EV drivers. Q1 2024: Cited as a factor pushing power demand above deployment. | In Q4 2024, AI/data center load partly drove up gas turbine demand, highlighting baseload power needs. | Recurring, increasingly positive as a driver of gas and grid demand. |
Project Execution and EPC Constraints | Q3 2024: No direct EPC remarks, though offshore wind delays cited. Q2 2024: No mention. Q1 2024: No mention. | In Q4 2024, EPC scheduling flagged as a significant hurdle for on-time project delivery; planning 2025 alignment sessions. | Newer, primarily negative execution challenge. |
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Gas Turbine Capacity
Q: Can you discuss gas turbine pricing and capacity constraints?
A: Our H-class gas turbine pricing is around $2,000 per kilowatt all-in, with our content making up 30%-35% of that cost, as you mentioned. We're quickly filling our annual 20 gigawatt capacity, and orders are extending through 2029. There's little pricing difference between 2027 and 2029 deliveries, and we expect to start discussing 2029 orders soon. The main challenge is ensuring customers can secure not just our equipment but also the necessary EPC support to keep projects on schedule. -
Electrification Backlog Growth
Q: What's the outlook for your electrification business, especially in North America?
A: Our electrification equipment backlog has grown to over $20 billion, and we expect it to grow substantially in 2025 and beyond. North America now represents 20%-25% of this business, with significant opportunities ahead. We're investing in capacity expansion, leveraging our industrial footprint in both Asia and North America. -
Capacity Expansion in Electrification
Q: Are you accelerating capacity in your electrification business?
A: Yes, we're accelerating capacity build-out in electrification, particularly in North America. We're focusing on lean initiatives to expand capacity without significant capital investment. The ability to sell premium slots is a key opportunity as the market needs everything we can provide. -
Services Growth in Power Segment
Q: How should we think about power services growth this year?
A: We're projecting mid-single-digit growth overall, with 90% of our GE Vernova volumes in backlog. While early in the year may see slightly slower growth, it's due to how the backlog rolls out. We see opportunities in both contract and transactional services as gas power utilization rises. We expect an acceleration to high single-digit growth in 2026 and beyond. -
Gas Turbine Pricing and Premium Slots
Q: Any updates on gas turbine pricing and customer receptivity?
A: While there hasn't been significant order activity in the last six weeks due to the holidays, discussions are intense. Customers are focused on securing premium slots for 2028-2029 deliveries rather than price. We haven't raised prices since December, but we're partnering with customers to meet their needs while maximizing our economics. -
Impact of Rising Gas Prices on Services
Q: How will rising gas prices affect your service activities?
A: Customers are investing more in technology during outages to increase output. We have over 700 F-class gas turbines in the U.S. and can provide upgrades to enhance output and efficiency. We expect upgrades to grow directionally by 50% by the end of the decade. -
SMR Deployment and Customer Interest
Q: Can SMR deployment be accelerated, and is customer interest increasing?
A: Last week's announcement was significant, with Duke and AEP joining our consortium for projects slated between 2032-2034 in the U.S.. While the first plant in Canada will be commissioned in 2029, we don't expect to accelerate that timeline. Customer interest is strengthening both in the U.S. and internationally. -
Turbine Diversification and Supply Constraints
Q: How does turbine diversification impact your capacity constraints?
A: While it won't materially change our 2026 capacity, producing more F-class turbines, which are easier to make, helps. Supply constraints limit overall capacity to 20 gigawatts by 2027, steady going forward. We're balancing opportunities with what our supply base can serve. -
Premium Slots and Capacity Expansion
Q: Can you provide more color on accelerating capacity to sell premium slots?
A: In electrification, we're expanding capacity and focusing on selling premium slots. Lean initiatives are allowing us to increase capacity effectively without heavy capital investment. We're dedicated to meeting market demand and see fulfillment and price opportunities.
Research analysts covering GE Vernova.