GE Vernova (GEV) Q1 FY26 earnings call: guidance and Q&A

How does AI and automation affect Gas Power capacity targets, and what are the current lead times for new orders, especially considering the 24 GW target?

Current lead time for Gas Power orders is about 3 years, with approximately 10 GW of capacity remaining for 2029 and 2030 combined. The company has added over 280 new machines and 1,800 production workers in Gas Power factories, expecting increased productivity from these investments. Gas turbines are often not the gating item for project completion, and lean initiatives will continue to add capacity efficiently.

“We still have about 10 gigawatts remaining cumulatively in '29 and '30 together, whereas in the course of where we were in January earnings, we had 10 gigawatts in total for '29.”

asked by Mark W. Strouse · answered by Scott Strazik

Why is Power Transmission well-positioned for market share gains? Can you elaborate on Electrification's capacity expansion plans? Are there any significant tariff issues or mitigation needs for Prolec?

GE Vernova's strength in Power Transmission comes from integrating electrical equipment with power generation solutions, driving momentum through combined offerings. Capacity expansion involves investing in existing factories and leveraging Prolec's three new US factories, applying lean principles for operational improvements. The total net tariff impact for 2026 is guided at $250 million to $350 million, with Prolec seeing a slightly higher impact from Section 232 tariffs, but mitigation plans are in place.

“Our total number of tariffs last year, we said was about a net $250 million impact on the company. We guided to $250 million to $350 million net impact on the company in 2026.”

asked by Julian Mitchell · answered by Scott Strazik

Could you provide more color on customer conversations and pipeline growth in Gas Power, and what are the expectations for pricing trends beyond the 10-20 point increase mentioned for early 2026?

New bidding activity in Gas Power continues to show 10-20 point price growth relative to Q4 last year, which is expected to be reflected in Q2 orders. The 100 GW under contract is with approximately 90 distinct customers across 24 countries, indicating broad demand. While Q1 order pricing was consistent with Q4, the conversion of Slot Reservation Agreements (SRAs) is expected to bring higher pricing into the backlog.

“through the first 4 months of this year now on new bidding activity, which is probably a forward-looking indicator, we continue to be in that 10 to 20-point growth in price on new bidding and winning activity today relative to where we were in the backlog in the fourth quarter of last year.”

asked by Nicole DeBlase · answered by Scott Strazik

Given that Q1 data center orders for Electrification exceeded full-year 2025, what is the progress on increasing entitlement per gigawatt for data centers, and what new products are in development?

GE Vernova is systematically building integrated solutions for data centers, including the Energy Management System (EMS), which secured its first order in Q1 and a second in April. They are also developing a stability block solution (MV UPS) with potential orders in H2 2026, and the Solid-State Transformer (SST) will be delivered to a hyperscaler in Fall 2026 for testing, with potential orders in H1 2027. R&D investment is heavily focused on Electrification to develop these new offerings.

“The largest proportion of that R&D is in Electrification because we see real opportunities to organically invest in this business and serve this customer need, and we're very determined to do that.”

asked by Andrew Kaplowitz · answered by Scott Strazik

What progress has been made on framework agreements for turbine orders, especially as bookings extend further out, and are there any pricing trade-offs involved?

Discussions for framework agreements, which involve long-term commitments at current pricing for 5-year periods in the next decade, are ongoing with 30-35 potential agreements, but none have closed yet. Customers continue to place incremental 'by the drink' orders. The expanded scope, including Electrification solutions, is elongating these discussions, but they are considered productive.

“We have not closed one of those transactions to date. Admittedly, we've been having these conversations for a period of time and what continues to happen is incremental orders, let's call it by the drink.”

asked by David Arcaro · answered by Scott Strazik

Will GE Vernova limit order intake beyond 2030 due to supply chain concerns, similar to a competitor, or what is your approach?

GE Vernova is confident in its ability to meet long-term demand and plans to continue taking orders for 2031 and beyond. The company is investing in its suppliers and partners, and heavy-duty gas turbines are generally not the gating item for 3-year cycle projects. Their significantly larger installed base provides a financial floor and optionality. Lean initiatives are expected to continuously add capacity efficiently.

“We do continue to expect to take on orders for '31 and beyond.”

asked by Joseph Ritchie · answered by Scott Strazik