GE Vernova Raises 2026 Outlook After Strong Q3, Plans $9 Billion Trench Deal

GE Vernova (NYSE: GEV) raised its 2026 revenue, adjusted EBITDA margin and free cash flow guidance after third-quarter results showed strong equipment demand, wider margins and a sharp increase in cash generation. The company also agreed to acquire high-voltage equipment supplier Trench Group for $9 billion, expanding its Electrification portfolio as total backlog approached $200 billion.

For 2026, GE Vernova now expects revenue of $46.5 billion to $47.5 billion, up from its prior range of $45.5 billion to $46.5 billion. It forecasts an adjusted EBITDA margin of 13.5% to 14.5%, compared with 12% to 14% previously, and free cash flow of $16 billion to $17 billion, versus the earlier $11.5 billion to $12.5 billion outlook. Adjusted EBITDA margin and free cash flow are non-GAAP measures.

Third-quarter revenue rose to $12.64 billion from $9.97 billion a year earlier. On an organic basis, which excludes acquisitions, dispositions and foreign-currency effects, revenue increased 18%. Equipment revenue led the increase, supported by Power and Electrification, while higher services revenue more than offset lower Wind equipment revenue.

Adjusted EBITDA more than doubled to $1.94 billion from $811 million, and adjusted EBITDA margin widened to 15.4% from 8.1%. The company attributed the organic margin expansion to pricing, more profitable volume and productivity. GAAP net income increased to $1.29 billion from $453 million.

Free cash flow climbed to $5.41 billion from $732 million in the year-earlier quarter, while cash from operating activities rose to $6.06 billion. GE Vernova said stronger adjusted EBITDA and increased working-capital benefits were partly offset by cash taxes, capital spending and a voluntary payment for retiree benefits. The quarter included a substantial increase in contract liabilities and current deferred income.

Orders reached $29.32 billion, up 96% organically, with equipment orders more than doubling. Remaining performance obligations, which the company uses as its backlog measure, rose 45% year over year to $196.72 billion, including $104.05 billion of equipment and $92.67 billion of services.

Power leads growth and margin expansion

Power generated third-quarter revenue of $6.07 billion, up 25% organically, as Gas Power benefited from increased equipment volume and favorable pricing. Segment EBITDA nearly doubled to $1.30 billion, lifting the margin to 21.4% from 13.4%.

Power orders rose 178% organically to $21.78 billion, driven by Gas Power equipment and services. The segment’s backlog increased 55% to $130.85 billion, including a 187% rise in equipment backlog.

GE Vernova now expects Power organic revenue growth of 19% to 21% in 2026, compared with its previous 18% to 20% range. It also raised the segment’s EBITDA margin forecast to 19% to 21% from 17% to 19%. The company said price and volume more than offset inflation and additional spending on capacity and research and development during the quarter.

Electrification expands as Trench deal adds high-voltage capacity

Electrification revenue increased to $3.86 billion from $2.57 billion. Excluding acquisitions, dispositions and currency effects, revenue grew 16%, supported by substations, high-voltage direct-current equipment and switchgear. Segment EBITDA rose to $739 million from $387 million, while the margin expanded to 19.1% from 15.1%.

The segment’s orders totaled $5.37 billion and were approximately 1.4 times revenue, according to the presentation. Electrification backlog increased 55% to $46.15 billion. For the full year, GE Vernova continues to expect Electrification revenue of $14.5 billion to $15 billion, including about $3.1 billion from Prolec, and an EBITDA margin of 18% to 20%, now trending toward the upper end of that range.

The planned Trench Group acquisition would add bushings, instrument transformers and coils used in high-voltage transmission equipment. GE Vernova expects the transaction to close in late 2027, subject to customary regulatory approvals and information and consultation requirements.

Trench is projected to produce $1.4 billion of revenue and $500 million of adjusted EBITDA in 2026, implying an adjusted EBITDA margin of about 33%. GE Vernova expects Trench revenue to reach $1.9 billion and adjusted EBITDA to reach $700 million by 2028. Those forecasts are standalone non-GAAP estimates and exclude expected synergies, integration costs and purchase-accounting adjustments.

GE Vernova plans to fund the purchase with roughly equal amounts of cash and debt and anticipates about $200 million of annual interest expense. It expects debt to adjusted EBITDA to remain below one times and said the transaction should be accretive to adjusted EBITDA margin and free cash flow before synergies. The company estimates annual cost synergies of about $50 million to $100 million by 2030, with additional potential revenue synergies.

Wind posts a profitable quarter but remains loss-making year to date

Wind revenue rose 3% organically to $2.74 billion. Higher Onshore Wind services and Offshore Wind equipment revenue offset lower Onshore Wind equipment deliveries. Services revenue increased 40% organically, while equipment revenue declined 4%.

The segment reported EBITDA of $72 million and a 2.6% margin, compared with a $61 million loss and a negative 2.3% margin a year earlier. GE Vernova attributed the improvement to lower Offshore Wind project costs and better Onshore Wind performance despite reduced deliveries.

For the first nine months, however, Wind recorded an EBITDA loss of $585 million, wider than the $373 million loss in the comparable 2025 period. Backlog declined 7% to $19.95 billion. GE Vernova now expects full-year organic revenue to decline by a mid-single-digit percentage, compared with its previous expectation for a low-double-digit decline, and forecasts segment EBITDA losses of $400 million to $500 million.

Capital returns and transaction risks

GE Vernova’s board increased the authorized share repurchase program to $20 billion from $10 billion. Through Oct. 23, the company had repurchased 15.6 million shares for approximately $9.91 billion at an average price of about $635 per share.

The Trench acquisition remains subject to regulatory and other closing conditions, and its timing, costs and expected benefits could differ from current projections. The transaction figures were translated using a euro-to-dollar exchange rate of 1.12, meaning the ultimate dollar amounts may vary with exchange rates. GE Vernova also noted that Trench’s financial information was prepared using accounting policies that may differ from its own.