GE Vernova (GEV) Q4 2025: Backlog Jumps $31B, Power and Electrification Margins Set Up Multi-Year Growth
GE Vernova’s 25%+ backlog surge and $8B in new equipment margin highlight a decisive inflection in power and grid demand, while wind losses and offshore disruption remain a drag. Management’s guidance upgrade and capital allocation pivot signal durable confidence in multi-year margin expansion, with electrification and gas power as the clear engines. Investors will need to monitor execution on productivity and integration as scale accelerates into 2026.
Summary
- Backlog Expansion Reshapes Growth Profile: $150B backlog, up $31B, anchors multi-year visibility in power and electrification.
- Margin Accretion in Core Segments: Power and electrification drive high-margin backlog and set up for sustained profitability gains.
- Execution Risks Surface in Wind and Integration: Offshore wind challenges and Prolec integration will test operational discipline in 2026.
Performance Analysis
GE Vernova’s Q4 capped a transformative year, with total orders reaching $59B, up 34% year-over-year, and revenue advancing 9% to $38B. The company’s backlog grew by over 25%, or $31B, to $150B, led by robust demand in gas power and electrification. Equipment backlog climbed 50% to $64B, while services backlog rose 13% to $86B. Free cash flow more than doubled to $3.7B, supporting increased shareholder returns and capital investment.
Power and electrification segments delivered the bulk of profit expansion, with power EBITDA margin up 100bps to 14.7% and electrification margin surging 560bps to 14.9%. Electrification revenue grew 26% for the year, with particularly strong orders for grid equipment and data center solutions. In stark contrast, wind posted a $600M EBITDA loss, exceeding earlier expectations due to the US government’s late-year halt on offshore wind projects, which introduced further project delays and cost accruals.
- Backlog Quality Uptrend: $8B in incremental equipment margin added to backlog in 2025, with six points of margin expansion.
- Electrification Orders Surged: Largest order quarter in segment history, including $2B+ direct to data centers and global grid projects.
- Wind Remains a Drag: Offshore delays and US onshore softness drove outsized losses, offsetting gains elsewhere.
The company’s capital allocation was aggressive, with $3.6B returned to shareholders and a dividend and buyback authorization increase. The Prolec GE acquisition, closing in early 2026, is now embedded in guidance, further boosting electrification’s scale and revenue base.
Executive Commentary
"We achieved that expectation, adding $8 billion in equipment backlog margin dollars in 25, more than the prior two years combined. We ended 25 with $64 billion in equipment backlog, an increase of approximately 50% year-over-year, with an incremental six points in equipment margin expansion."
Scott Strasik, Chief Executive Officer
"Adjusted EBITDA grew 6% year-over-year to $1.2 billion led by electrification and power. Adjusted EBITDA margin expanded 30 basis points, with higher price and productivity more than offsetting higher contract losses at offshore wind, as well as inflation and investments in growth and innovation."
Ken Parks, Chief Financial Officer
Strategic Positioning
1. Power Segment: Margin and Scale Inflection
Gas power demand continues to surge, with 24GW of new contracts in Q4 alone and slot reservations rising to 83GW. Management expects this to reach 100GW by year-end, with pricing in slot reservation agreements running 10–20 points above current backlog levels. The margin profile of both equipment and associated services contracts is improving, creating a long-tail of profitable growth. The business model—selling large-scale turbines and long-term service agreements—locks in high-margin recurring revenue as new units are deployed.
2. Electrification: Data Center and Grid Tailwinds
Electrification is now the fastest-growing and most strategically leveraged segment, with orders up 21% and revenue up 26% for the year. Backlog hit $35B, driven by grid modernization, data center demand, and national security projects globally. Notably, orders for data centers tripled to $2B, and large grid contracts were secured in the Middle East, Germany, and Australia. The Prolec GE acquisition adds $3B in revenue and expands transformer output, with management targeting 20% organic growth (excluding Prolec) in 2026.
3. Wind: Offshore Disruption and Onshore Softness
Wind remains structurally challenged, posting a $600M EBITDA loss as offshore project delays and US onshore order weakness persist. The US government’s halt of offshore activity in December led to new cost accruals, with management warning that further installation delays could impact 2026 revenue by $250M. Despite some improvement in onshore service profitability, wind’s near-term outlook is for continued losses, with any recovery dependent on permitting and tariff clarity.
4. Productivity and Automation Initiatives
Lean and automation investments are scaling, with 200+ new machines installed and 1000+ production workers added in 2025. The company is targeting further productivity gains through robotics, AI, and supply chain optimization. Management expects these efforts to become a more material margin lever in 2027 and beyond, but notes that sourcing productivity is still maturing relative to the scale of recent backlog growth.
5. Capital Allocation and M&A Integration
Capital returns are accelerating, with the dividend doubling and buyback authorization rising to $10B. The Prolec GE acquisition is expected to be immediately accretive to electrification scale, though management is not yet including synergy estimates in long-term guidance. Integration discipline and cost management will be key as the company absorbs five new factories and ramps output for transformer and switchgear products.
Key Considerations
GE Vernova’s Q4 and full-year results mark a pivotal transition from backlog accumulation to profitable conversion, but the mix of opportunity and risk is shifting as the company scales new platforms and navigates segment headwinds.
Key Considerations:
- Backlog Quality and Conversion: $8B in incremental equipment margin was added in 2025, with management projecting a similar or greater contribution in 2026, underpinning future EBITDA expansion.
- Electrification’s Strategic Leverage: Data center and grid orders are accelerating, but execution on Prolec integration and transformer output ramp will be critical to meeting 2026–2028 targets.
- Wind Segment Volatility: Offshore project delays and US onshore order weakness continue to weigh on results, with further revenue and margin risk if permitting or vessel access issues persist.
- Productivity and Sourcing Maturity: Lean initiatives and automation are progressing, but management acknowledges significant opportunity to further leverage sourcing scale for cost savings.
Risks
Offshore wind disruption, including regulatory halts and project delays, introduces material near-term revenue and margin risk. Integration risk from the Prolec GE acquisition could challenge electrification margin delivery if cost or operational synergies are slower to materialize. Execution on productivity and sourcing initiatives is essential as backlog scales, and any underperformance could erode margin expansion. Macro uncertainty, commodity inflation, and tariff volatility remain persistent external risks.
Forward Outlook
For Q1 2026, GE Vernova guided to:
- Continued year-over-year revenue growth and adjusted EBITDA margin expansion
- Positive free cash flow, supported by working capital discipline and order inflows
For full-year 2026, management raised guidance to:
- $44–$45B in revenue (prior: $41–$42B), including Prolec GE
- Adjusted EBITDA margin of 11%–13%
- $5–$5.5B in free cash flow (prior: $4.5–$5B)
Management highlighted:
- Strong second-half weighting in revenue and EBITDA, with gas turbine output ramping in 3Q26
- Electrification and power as primary growth engines, with wind expected to improve but remain loss-making
Takeaways
GE Vernova’s backlog-driven growth strategy is crystallizing, with power and electrification margin expansion anchoring a multi-year profitability upcycle. The addition of Prolec GE and a relentless focus on productivity position the company to leverage secular demand for grid, data center, and gas power solutions.
- Margin Accretion Is Durable: Power and electrification are compounding margin in backlog, with pricing power and scale visible into 2027 and beyond.
- Wind and Integration Execution Remain Critical: Offshore wind disruption and Prolec integration are the key operational watchpoints for 2026.
- Productivity Levers Will Define Outperformance: Sourcing, automation, and lean execution must accelerate as scale increases to deliver on long-term EBITDA targets.
Conclusion
GE Vernova enters 2026 with unprecedented backlog visibility and high-quality margin momentum in its core segments. While wind remains a drag and integration risk is rising, the company’s capital allocation, pricing discipline, and operational investments support a credible path to multi-year growth and margin expansion. Execution on backlog conversion and productivity will be the investor focus as the next phase unfolds.
Industry Read-Through
GE Vernova’s results confirm a global surge in demand for grid, data center, and gas power infrastructure, with pricing power and backlog quality improving for leading OEMs. The electrification segment’s data center order growth and grid modernization wins signal secular tailwinds for peers exposed to transmission, transformers, and high-voltage equipment. Wind’s continued volatility and regulatory disruption highlight persistent risk for turbine manufacturers and offshore supply chains. The company’s capital deployment and automation push may set a new bar for margin expansion as scale returns to the sector.