GE Vernova (NYSE: GEV) raises full-year outlook and doubles its buyback authorization

What happened

GE Vernova Inc. (NYSE: GEV) raised its full-year guidance after third-quarter orders jumped 96% organically to $29.3 billion.

The company also raised its share repurchase authorization and agreed to buy Trench Group, a high-voltage grid equipment company. Revenue was $12.6 billion, up 27% from $9.97 billion a year earlier and up 18% organically.

Backlog rose from the prior quarter to $197 billion. Management expects it to top $200 billion in the fourth quarter, with better margins.

Key numbers

Metric	Latest	Change	Source
Third-quarter revenue	$12.6 billion	from $9.97 billion, +27%	SEC 8-K, Exhibit 99 press release
Third-quarter orders (organic change)	$29.3 billion	+96% organically	SEC 8-K, Exhibit 99 press release
Adjusted EBITDA margin	15.4%	from 8.1%, +730 basis points	SEC 8-K, Exhibit 99 press release
Third-quarter free cash flow	$5.4 billion	from $0.73 billion, +$4.7 billion	SEC 8-K, Exhibit 99 press release
2026 free cash flow guidance (prior $11.5-$12.5 billion)	$16-$17 billion		SEC 8-K, Exhibit 99 press release
Total backlog	$197 billion	+$20 billion from the prior quarter	SEC 8-K, Exhibit 99 press release

Read more: GE Vernova (GEV) company research

Where the growth came from

Power drove the quarter. Orders rose 178% organically to $21.8 billion, led by Gas Power equipment. Segment EBITDA margin reached 21.4%, against 13.4% a year earlier. The filing credits favorable price and higher volume at Gas Power.

Gas equipment backlog and slot reservation agreements grew from 116 GW to 122 GW. The company expects at least 130 GW by year-end.

Electrification revenue rose 51% to $3.9 billion, but only 16% organically. The Prolec GE acquisition added $945 million of revenue in the quarter. Electrification orders fell 9% organically because of large synchronous condenser orders a year earlier.

Wind revenue rose 4% to $2.7 billion. Wind segment EBITDA was $72 million, against a loss of $61 million a year earlier.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

Cash and the guidance raise

Cash changed the most. Free cash flow reached $5.4 billion, up $4.7 billion from a year earlier. The filing credits working capital benefits and stronger adjusted EBITDA, partly offset by higher taxes. Adjusted EBITDA was $1.9 billion, a 15.4% margin against 8.1% a year earlier.

Guidance rose on all three company-wide measures. Revenue is now expected at $46.5-$47.5 billion, up from $45.5-$46.5 billion. Adjusted EBITDA margin is now 13.5%-14.5%, up from 12%-14%. Free cash flow is now $16-$17 billion, up from $11.5-$12.5 billion.

Most of that cash is already in hand. Free cash flow for the first nine months was $15.31 billion, so OptimistFi's calculation puts the implied fourth-quarter range at $0.69 billion to $1.69 billion. Power segment EBITDA margin guidance also rose, to 19%-21% from 17%-19%.

The buyback and the Trench Group deal

The board raised the share repurchase authorization to $20 billion from $10 billion in October, leaving $10.1 billion to spend. Since the program began in December 2024, the company has repurchased 15.6 million shares for $9.9 billion, about $635 per share.

Buying continued at pace. The company repurchased about 1.7 million shares for $1.6 billion in the third quarter and about 1.4 million shares for $1.3 billion from Oct. 1 to Oct. 23. It returned $5.7 billion to shareholders in the first nine months and ended September with $16.8 billion in cash.

The quarterly dividend of $0.50 per share is payable Nov. 24 to holders of record as of Oct. 27.

Trench Group will cost $9.0 billion in U.S. dollars, based on a euro-dollar rate of 1.12. The company expects to close in late 2027. Fitch upgraded GE Vernova to A- from BBB+ in August.

Why it matters

OptimistFi has argued that GE Vernova is a durable power-infrastructure compounder if electricity demand keeps flowing and management turns scale into sustained cash margins. The quarter supports that view. Net income was $1.29 billion against $453 million a year earlier, and orders, backlog, margins and cash all rose together.

Not all of the earnings uplift is operating. Net income for the nine months of $6.69 billion includes a pre-tax gain of $3.99 billion from remeasuring the Prolec GE stake and a $366 million pre-tax gain on the Proficy sale.

Other caveats sit beside the raise. Wind segment losses are now guided at $400-$500 million, versus about $400 million before. The quarter's cash jump leaned on working capital. Trench Group still needs regulatory approvals.

What's next

The fourth-quarter report is the next test. Management expects backlog above $200 billion and at least 130 GW of gas equipment under contract by year-end. Meeting both would back the demand argument. A miss on either would weaken it.

Trench Group is expected to close in late 2027, subject to customary regulatory approvals.

More from OptimistFi

• GEV stock: research and coverage of GE Vernova
• Stock research on every company OptimistFi covers

From OptimistFi Perps