Cuộc họp công bố kết quả kinh doanh quý 3/2026 của GE Vernova: Giá trị đơn hàng tồn đọng đạt 197 tỷ USD khi dự báo tăng

GE Vernova (NYSE: GEV) đã báo cáo số lượng đơn hàng tăng tốc, tăng trưởng doanh thu và mở rộng biên lợi nhuận trong quý 3 năm tài chính 2026. Công ty cũng thông báo thương vụ thâu tóm Trench Group trị giá 9 tỷ USD và tăng gấp đôi hạn mức mua lại cổ phiếu lên 20 tỷ USD.

Các điểm chính

• Đơn hàng quý 3 tăng 96% so với cùng kỳ năm trước lên 29,3 tỷ USD, mang lại tỷ lệ đơn hàng trên doanh thu (book-to-bill) vượt quá 2 lần. Tổng giá trị đơn hàng tồn đọng đạt 197 tỷ USD.
• Doanh thu tăng 18%, trong khi EBITDA điều chỉnh tăng hơn gấp đôi lên 1,9 tỷ USD. Biên EBITDA điều chỉnh mở rộng 690 điểm cơ bản.
• Dòng tiền tự do đạt 5,4 tỷ USD, được hỗ trợ bởi EBITDA mạnh hơn và 5,3 tỷ USD lợi ích từ vốn lưu động, chủ yếu đến từ các khoản trả trước của khách hàng.
• Biên EBITDA mảng Năng lượng tăng 830 điểm cơ bản lên 21,4%, phản ánh giá bán thuận lợi, sản lượng tuabin cao hơn và năng suất cải thiện.
• GE Vernova đã nâng dự báo năm 2026 lên doanh thu đạt 46,5 tỷ USD - 47,5 tỷ USD, biên EBITDA điều chỉnh đạt 13,5% - 14,5% và dòng tiền tự do đạt 16 tỷ USD - 17 tỷ USD.
• Thương vụ thâu tóm Trench Group trị giá 9 tỷ USD theo kế hoạch dự kiến sẽ hoàn tất vào cuối năm 2027, tùy thuộc vào sự phê duyệt của cơ quan quản lý và các điều kiện hoàn tất thông thường.

Dữ liệu tài chính quan trọng

Đơn hàng tồn đọng mảng thiết bị tăng khoảng 16 tỷ USD so với quý trước và tăng 92% so với cùng kỳ năm trước. Đơn hàng tồn đọng mảng dịch vụ tăng 11 tỷ USD, tương đương 14%, lên 93 tỷ USD, dẫn đầu là mảng Năng lượng.

Kết quả hoạt động kinh doanh

Năng lượng

Đơn hàng mảng Năng lượng tăng hơn gấp đôi do đơn hàng thiết bị điện khí tăng khoảng 4 lần nhờ sản lượng và giá bán tuabin HA và aeroderivative cao hơn. Đơn hàng Dịch vụ Năng lượng tăng 12%, được thúc đẩy bởi điện khí và điện hạt nhân.

Doanh thu tăng 25%. GE Vernova đã giao 32 tuabin khí, tăng 60% so với cùng kỳ năm trước, bao gồm 13 đơn vị tuabin aeroderivative. Biên EBITDA mảng Năng lượng đạt 21,4%, tăng 830 điểm cơ bản, do giá bán và sản lượng thuận lợi đã bù đắp lạm phát, đầu tư công suất và chi phí R&D.

Công ty đã giao 5 GW thiết bị điện khí và ký kết 11 GW đơn hàng cùng các thỏa thuận giữ chỗ trong quý. Tổng công suất điện khí đã ký hợp đồng tăng so với quý trước từ 116 GW lên 122 GW. Ban lãnh đạo kỳ vọng sẽ đạt ít nhất 130 GW theo hợp đồng vào cuối năm 2026.

Giá các đơn hàng thiết bị điện khí trong quý 3 cao hơn 20% so với mức của quý 4/2025. Ban lãnh đạo dự kiến giá đơn hàng điện khí trên mỗi kilowatt cho cả năm 2026 sẽ cao hơn khoảng 50% so với năm 2025, mặc dù giá trên mỗi kilowatt trong quý 4 dự kiến sẽ giảm so với quý trước do cơ cấu sản phẩm.

Điện khí hóa

Đơn hàng mảng Điện khí hóa đạt 5,4 tỷ USD, tương đương khoảng 1,4 lần doanh thu. Tổng đơn hàng giảm 9% so với cùng kỳ năm trước do quý 3/2025 bao gồm đơn hàng máy bù đồng bộ trị giá 1,6 tỷ USD tại Ả Rập Xê Út. Đơn hàng thiết bị tại Bắc Mỹ tăng gấp đôi.

Doanh thu báo cáo tăng 51%, bao gồm cả Prolec, trong khi doanh thu hữu cơ tăng 16%. Prolec mang lại doanh thu gần 950 triệu USD. EBITDA mảng Điện khí hóa tăng 57% lên 739 triệu USD, với biên lợi nhuận mở rộng 470 điểm cơ bản lên 19,1%.

Đơn hàng tồn đọng mảng thiết bị điện khí hóa đạt 42 tỷ USD, tăng khoảng 16 tỷ USD, tương đương 60% so với cùng kỳ năm trước. Đơn hàng từ trung tâm dữ liệu tính từ đầu năm đến nay vượt 6 tỷ USD, bao gồm khoảng 1,4 tỷ USD trong quý 3.

Năng lượng gió

Mảng Năng lượng gió đã khôi phục lợi nhuận theo quý, tạo ra 72 triệu USD EBITDA. Đơn hàng tăng 16%, nhờ thiết bị trên bờ, dịch vụ và hoạt động nâng cấp (repowering) tại Bắc Mỹ. Doanh thu tăng 3% do dịch vụ trên bờ và lượng giao hàng dự án Dogger Bank B cao hơn đã bù đắp cho sản lượng thiết bị trên bờ giảm.

Ban lãnh đạo cho biết thị trường trên bờ tại Mỹ vẫn yếu, tình trạng chậm trễ cấp phép và sự bất ổn về thuế quan làm hạn chế tầm nhìn dài hạn. GE Vernova tiếp tục thực hiện các đơn hàng tồn đọng ngoài khơi và dự kiến sẽ có thêm một năm triển khai dự án tại Biển Bắc vào năm 2027.

Thâu tóm Trench Group và phân bổ vốn

GE Vernova đã đồng ý thâu tóm Trench Group với giá 9 tỷ USD. Trench sản xuất sứ xuyên cao thế và trung thế, máy biến áp đo lường và cuộn dây tại 11 nhà máy với hơn 3.000 nhân viên.

Trench dự kiến sẽ đạt doanh thu khoảng 1,4 tỷ USD vào năm 2026, hướng tới mức 2 tỷ USD vào năm 2028. Ban lãnh đạo dự báo tăng trưởng doanh thu hàng năm ở mức khoảng 15% (mid-teens) từ năm 2026 đến năm 2028 và biên EBITDA điều chỉnh khoảng 36% vào năm 2028, trước khi tính đến hiệu ứng cộng hưởng.

Doanh nghiệp này sở hữu tổng cộng khoảng 5 tỷ USD đơn hàng tồn đọng và thỏa thuận khung tính đến tháng 9/2026. GE Vernova dự kiến đạt 50 triệu USD - 100 triệu USD chi phí cộng hưởng hàng năm vào năm 2030, cùng các cơ hội doanh thu bổ sung từ bán hàng chéo và mở rộng thị trường địa lý.

Ban lãnh đạo có kế hoạch tài trợ cho giao dịch này bằng tỷ lệ cân bằng giữa tiền mặt và nợ. Ngay cả sau khi phát hành khoảng 4,5 tỷ USD nợ liên quan đến thương vụ thâu tóm, công ty dự kiến tỷ lệ nợ trên EBITDA điều chỉnh vẫn duy trì dưới 1 lần.

GE Vernova cũng tăng hạn mức mua lại cổ phiếu từ 10 tỷ USD lên 20 tỷ USD. Tính đến ngày 23/10, công ty đã mua lại 15,6 triệu cổ phiếu với tổng số tiền khoảng 9,9 tỷ USD, ở mức giá trung bình khoảng 635 USD/cổ phiếu.

Dự báo của ban lãnh đạo

Đối với quý 4, ban lãnh đạo kỳ vọng doanh thu và EBITDA điều chỉnh sẽ tăng trưởng, biên EBITDA điều chỉnh tiếp tục mở rộng và dòng tiền tự do dương. Triển vọng năm 2026 bao gồm tổng mức tăng hơn 30% cho chi phí R&D và chi phí đầu tư tư bản.

Rủi ro và các điểm cần theo dõi

• Thương vụ thâu tóm Trench vẫn tùy thuộc vào sự phê duyệt của cơ quan quản lý, việc tham vấn người lao động ở những nơi được yêu cầu và các điều kiện hoàn tất thông thường. Thời điểm hoàn tất dự kiến là vào cuối năm 2027.
• Các số liệu giao dịch của Trench sử dụng tỷ giá EUR/USD là 1,12, do đó số tiền thực tế tính bằng USD có thể thay đổi tùy thuộc vào tỷ giá hối đoái hiện hành.
• Nhu cầu điện gió trên bờ tại Mỹ tiếp tục chịu ảnh hưởng bởi sự chậm trễ trong việc cấp phép, bất ổn về thuế quan và quy mô thị trường hiện tại còn nhỏ.
• Việc triển khai dự án điện gió ngoài khơi tiếp tục kéo dài đến hết năm 2027, bao gồm các phần việc còn lại của dự án Biển Bắc.
• Tăng trưởng mảng Dịch vụ Năng lượng có thể bị ảnh hưởng bởi việc phân bổ công suất giữa sản xuất thiết bị mới và cung ứng phụ tùng dịch vụ trong năm 2027 và 2028.

Điểm nổi bật trong phần Hỏi & Đáp với chuyên gia phân tích

Ban lãnh đạo cho biết nửa sau năm 2026 cung cấp điểm khởi đầu hợp lý để xem xét biên lợi nhuận năm 2027 của mảng Năng lượng. Thiết bị điện khí có giá bán tốt hơn đã bắt đầu được giao khi sản lượng hàng quý đạt khoảng 5 GW, đồng thời năng suất nhà máy cũng được cải thiện.

Đối với mảng Điện khí hóa, ban lãnh đạo nhận thấy còn nhiều dư địa để mở rộng biên lợi nhuận hàng năm khi khả năng sinh lời từ các đơn hàng tồn đọng cải thiện, đồng thời Prolec và Trench bổ sung các hoạt động có biên lợi nhuận cao hơn. Các mục tiêu chi tiết hơn cho năm 2030 dự kiến sẽ được công bố tại Ngày Hội nghị Nhà đầu tư (Capital Markets Day) tiếp theo của công ty.

Ban lãnh đạo cho biết không có trường hợp hủy hợp đồng liên quan đến tài chính, rút khỏi thỏa thuận giữ chỗ hay chậm lại trong việc chuyển đổi từ phía khách hàng tuabin khí. Công ty cũng kỳ vọng công suất điện khí đã ký hợp đồng và đơn hàng tồn đọng sẽ tiếp tục tăng trong năm 2027, mặc dù lượng tăng thêm hàng quý có thể gần với mức của quý 3 và quý 4/2026 hơn là tốc độ mạnh mẽ của nửa đầu năm.

Về mảng Năng lượng gió, ban lãnh đạo nhấn mạnh tính linh hoạt chiến lược nhưng cho biết muốn hoàn thành việc thực hiện các dự án ngoài khơi còn lại và đánh giá hướng đi của thị trường Mỹ trong năm 2027 trước khi đưa ra kết luận dài hạn hơn.

Toàn văn cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, ladies and gentlemen, and welcome to GE Vernova Third Quarter 2026 Earnings Conference Call. My name is Liz, and I will be your conference coordinator today.

[Operator Instructions]

As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Michael Lapides, Vice President of Investor Relations. Please proceed

Michael Lapides

Thank you. Welcome to the conference call the planned acquisition of Trench Group. I'm joined today by our CEO, Scott Strazik and CFO, Ken Parks. Our conference call remarks will include both GAAP and non-GAAP financial results, including the stand-alone forecast of Trench Group. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and presentation slides, both of which are available on our website.

Our Trench Group comments reflect expectations for the transaction, the cost and revenue synergies from the transaction and capital allocation plans. The Trench Group acquisition price and financial information are expressed in U.S. dollar equivalents based on a euro to U.S. dollar exchange rate of $1.12 and actual U.S. dollar equivalent amounts may differ based on the prevailing exchange rate at the applicable times. The Trench Group financial information was prepared by GE Vernova based on data provided by Trench Group. and reflect Trench Group's accounting policies, which may differ from GE Vernova. Please note that unless otherwise specified, our year-over-year commentary or variances on orders revenue, adjusted and segment EBITDA and margin discussed during our prepared remarks are on an organic basis. We will make forward-looking statements about our performance in the Trench Group business. These statements are based on how we see things today.

While we may elect to update these forward-looking statements at some point in the future, we do not undertake any obligation to do so. As described in our SEC filings, today's press release and presentation slides, all of which are available on our website. Actual results may differ materially due to risks and uncertainties. The acquisition is subject to regulatory approvals and standard closing conditions, including information and employee consultation where required. With that, I'll hand the call over to Scott.

Scott Strazik

Thanks, Michael. We have a lot to cover today, but I wanted to start with 3 main messages. First, our growth continues to accelerate with both our core business and new products with almost $30 billion in new orders and an expansion of our backlog from $176 million to approximately $200 billion in 3Q, we continue to see strong pull from customers for the solutions we offer. This demand is not only for our existing equipment, but also for services where we saw 10% orders growth in the quarter.

We also see growing interest in our new offerings, including in both power with the nuclear SMR and multiple products in electrification, including MV UPS and solid-state transformers. Second, our margin expansion is encouraging, but no one inside GEV is satisfied with where we are. This is just the beginning with significant opportunity in all 3 business segments. Power reached 21% EBITDA margins in what is historically our weakest margin quarter as 3Q is typically our lowest quarter for services activity. These margins reflect the first quarter of our 5 gigawatt of gas power equipment shipments at better prices. Electrification reached 19%. EBITDA margins while growing R&D mid-teens to support strong new product introduction opportunities. Wind turned profitable on strong services improvement, and we continue improving execution in offshore as our backlog to complete continues to come down.

Across all 3 businesses and corporate, we have investments in automation and AI with strong use cases that will expand margins over the medium term, but in 3Q in isolation, remain in net expense. Point being, we are early in our margin expansion acceleration. Third, we have delivered significant year-to-date cash generation to end the quarter with approximately $17 billion in cash, and we've been working hard to position GE Vernova to invest this capital for strong returns. We are pleased to announce the signing of the Trench Group acquisition, which will strengthen our core electrification offerings and high-voltage grid equipment be accretive on day 1 and bring us industry-leading technology to innovate into the future and serve this growing market.

In parallel announcing this $9 billion acquisition, we are announcing a doubling of our stock buyback program from $10 billion to $20 billion. After investing $1.6 billion on the buyback in 3Q and over $1.3 billion in October, we have largely completed our $10 billion authorization with excellent returns having acquired 15.6 million shares at an average price of approximately $635. It is early in our journey. We remain humble but we have real conviction that we are building a unique company to serve the growing market and deliver for our shareholders for the long term. With that, I'd like to go to the next page and give an overview of the trench acquisition. The announcement today of our acquisition of the Trench Group is an important step forward in strengthening and scaling our electrification business in the high and medium voltage markets globally.

If I take a step back, the beginning of '25, there were 2 assets of scale. I felt we needed an electrification. The first is [ prolix ] to expand our North American manufacturing footprint and to simplify the front-end commercial experience for our end customers, especially at hyperscalers and the second is trench for the technology differentiation, management team and the importance of the components trench provides and solutions we deliver today. There are many factors driving our conviction in the high-voltage market for the long term. Data centers require large electricity loads driving an increasing need for more efficient high-voltage equipment. Trench as an example, has secured multiple agreements with hyperscalers in the past 2 years. In addition, global utilities are also building out more high-voltage infrastructure.

Today's grid loses as much as 8% from power generation to end use and the upgrade of the grid to higher voltages dramatically reduces energy losses, making the whole grid more economical. In addition, as the existing grid takes on more load, with increased building electrification, manufacturing growth, heat pumps and EVs, grid reinforcements to higher voltages will be required. And in parts of the world building significant wind and solar, there is a need to transport electrons over long distances at higher voltages to eliminate waste. India is a great example of this today and is a market where we are demonstrating real commercial success including our announced win on the Barmer HVDC project that will be a $1.5 billion order in 4Q. Trench further positions us to serve this global high-voltage market opportunity we project to be $130 billion by the end of the decade.

As an existing supplier to Vernova, trench is a business we know well. It's complementary and differentiated technology for high-voltage solutions will broaden our grid equipment portfolio and expand our presence across product lines where we have a modest presence today. Vertically integrated trench will also give us greater capacity and certainty across a key part of the supply chain, strengthening our ability to deliver for customers. The foundation of Trench's success is technical excellence and a strong management team, with more than 3,000 highly skilled employees across 11 factories, Trench has established a footprint in many of the world's largest grid markets. These capabilities have enabled trench to develop deep, trusted relationships with a broad customer base, serving utilities, grid operators and increasingly hyperscalers. We expect this transaction to close late '27 and with a $9 billion purchase price. We are paying 13x '28 EBITDA before synergies the first full year, we expect trench to be included in our financial results.

This is a strategically compelling and attractive acquisition that is directly aligned with our capital allocation priorities. We will add scale to the core of our fast-growing electrification segment to better serve the global electricity super cycle. Turning to the next page. You can see on the left-hand side the estimated '26 revenue of trench and GE Vernova with the 3 primary product lines in the trench portfolio. Trench revenue in '26 is estimated at $1.4 billion, and similar to our electrification business is projected to grow at double-digit levels over the coming years to approach $2 billion of revenue in '28 after the expected close. I'd like to provide a bit more context and color on each of the product lines. Every medium- and high-voltage transformer has a bushing for insulation and mechanical support used for reliable grid connection.

Today, we source most of our bushings externally. But tomorrow, we will be able to internalize this key technology within the Trench facilities and better serve our customers with improved cycle time and integrated performance as we continue to invest in this business, just as we are doing with Prolec, which you see very clearly in the growth of our Prolec results. In many cases, customers specify the bushing provider for large transformers, and we see opportunities where trench bushings are the preferred technology to better integrate our transformer product line to drive commercial synergies. Post close, we will source a much larger percentage of bushings for our transformers from the trench factories to deliver better outcomes for our customers. Instrument transformers or important high-voltage equipment and electrical substations, typically greater than 35 kV that are used to measure voltage and provide protection. This equipment is utilized for new build, high-voltage electrical substations.

For instance, with data centers where you see us playing a significant role but this is also technology to support upgrades as existing infrastructure extends past its useful life. In the U.S. alone, we project over 55,000 transmission substations will be completely rebuilt or upgraded to higher voltages in the next decade. Point being, our opportunity is both in expanding and modernizing the existing grid in serving new growth with opportunities like data centers. And finally, medium- and high-voltage coils. This equipment connects to the substation in stores electrical energy inside a magnetic field to enhance grid reliability and power quality. The innovative high-voltage technology Trench produces is directly aligned with where customers are investing and where we see long-term demand continue to grow. We are very confident these technologies will allow us to better serve our customers, which I'll go into in more detail on the next page.

We talked in the past how our existing addressable market in electrification is projected to reach $300 billion by 2030. The high-voltage equipment market is an estimated $130 billion of the $300 billion, and you can see on the left-hand side of this page, how each product line inside trench supports our offerings across the columns. We see the high-voltage equipment market continue to grow at high single digits for the long term, driven by the macro factors I mentioned on the earlier page. The real message on this page is we have a great conviction that customers will benefit significantly with our addition of Trench to the product portfolio to deliver to them more optimized, integrated solutions. This will also provide our customers a more seamless experience and increase our capabilities in delivering sustainable solutions our customers value today.

For instance, Trench is the leader in dry type bushings, an increasingly important technology across power transformers, switchgear, HVDC systems, substations and stability solutions. Dry-type transformers use a resin instead of oil, which reduces maintenance, is better for the environment and dramatically reduces the risk of fire. Our combined global manufacturing footprint will be a key differentiator, enhancing delivery and lead time management. With Trench, we will strengthen our ability to support the development of higher voltage electrical systems globally, including the build-out of 765 kV transmission in the U.S. As we continue to serve Trench's existing customers, we can also extend trenches products to regions with significant electrical infrastructure needs for customers that we serve today. Finally, Trench's track record in quality and delivery aligns directly with our own and positions us to better serve customers' rising demand for grid equipment.

Turning to the next slide. I want to put in context how this acquisition supports our existing electrification businesses. Today, we have a $46 billion backlog which, again, to remind everyone, was $7 billion at the start of '22. Our 2 largest businesses, grid systems integration and power transmission will be the largest direct beneficiaries on day 1 of the acquisition. Although longer term, we also see a positive impact on our power conversion and storage business, especially with the new products we're developing like the MVUPS stability block. GSI delivers HVDC projects and AC substations for utilities and data centers, among other high-voltage solutions. Today, we source some of the components for these offerings externally, including from Trench, which supply the majority of HVDC lines globally.

Going forward, we will be able to offer better integrated solutions using technologically advanced products that improve system durability and are demanded by customers to grow our GSI business at attractive margins. In power transmission, which produces transformers, switchgear, and capacitors. Trench will provide scale through its bushings and instrument transformers. Bushings are a key component used in our power transformers and Trench's differentiated technology will help to deliver high-voltage transformers to customers. Lead times across the industry are increasingly important and this transaction will enhance supply chain certainty for both businesses within electrification. By bringing Trench's manufacturing footprint and capabilities inside Vernova, we expect greater visibility into production planning and improved ability to align this component supply with our customers' project schedules.

Finally, Trench is adding significant capacity across its 11 factories globally to meet rising demand. This includes Trench's newly opened factory in North Carolina, which will be the first U.S. manufacturer of high-voltage bushings up to 765 kV, expanding Trench's leadership and extra high-voltage technology in giving us an important capability within our U.S. footprint. With Trench, we will have additional scale in key geographies and more flexibility to serve customers, complementing our existing and planned capacity across electrification. Taken together, Trench enhances our electrification segment's ability to deliver.

As you'll see in our 3Q results on the subsequent pages, our core businesses continue to gain momentum with accelerating growth and margin expansion. The Prolec acquisition is outperforming our expectations and Trench is the right next step in creating an industry-leading electrification business at attractive economics, serving our customers with a team and technology we love. With that, I'll hand it over to Ken to walk through the financial details.

Kenneth Parks

Thanks, Scott. On Slide 9, let me highlight the financial profile of Trench Group and our expectations for the next few years before synergies and integration costs. Trench has strong fundamentals and approximately $5 billion in combined backlog and framework agreements as of September 2026 and which has grown over the past several years. Trench has approximately 80 existing framework agreements, some extending into the 2030s, representing volume commitments that account for approximately half of the $5 billion. We expect Trench to generate mid-teens revenue growth annually from 2026 to 2028.

As Scott mentioned, this revenue growth is supported by planned capacity expansions. The majority of the CapEx for these expansions will be completed prior to our anticipated close in late 2027. We also expect Trench to deliver strong margins including an adjusted EBITDA margin of approximately 36% in 2028, even before synergies, this is an immediately accretive transaction. As Scott noted, we currently plan to fund the $9 billion acquisition price using an equal mix of debt and cash on hand, and remain committed to maintaining an investment-grade balance sheet. Even after issuing roughly $4.5 billion in debt resulting from the acquisition, we expect to remain below a 1x debt to adjusted EBITDA ratio. Turning to Slide 10. I'll walk through the synergy opportunities we see in this transaction, which are reinforced by the proven execution of value creation we've demonstrated in the integration of Prolec that is already well underway and performing ahead of expectations.

Starting with cost synergies, we plan to apply our combined advanced manufacturing expertise, including robotics and automation, across the expanded footprint. We'll expand lean to increase volume and capture efficiencies by redesigning and enhancing floor layouts to improve yields and factory flow. We'll also bring together the sourcing operations of trench and GE Vernova to drive efficiency in the aggregated material spend. And finally, we see potential to optimize the production cost of these offerings through the use of best cost locations. On revenue, we see growth opportunities across GE Vernova and Trench's combined and highly complementary customer base. This is especially true for utilities and hyperscalers in North America. In 2026, Trench saw significant growth in its hyperscaler business and our strong track record of partnering with these customers positions us well to continue serving their evolving needs.

We also plan to use our existing commercial capabilities in markets like India, Southeast Asia and the Middle East to expand trenches reach and grow revenues. For example, India is one of Asia's largest HVDC markets and its electrical system increasingly relies on high and extra high-voltage grid equipment. We'll utilize Trench's offerings, combined with our existing capabilities in India to serve this opportunity, especially as we evaluate expanding manufacturing of Trench's products there. In summary, we expect to realize approximately $50 million to $100 million of annualized cost synergies by 2030, and we see additional revenue synergy potential over time. As we move forward, we will stay focused on both a disciplined integration and execution to deliver on the opportunities we've outlined today. With that, let me turn it back to Scott.

Scott Strazik

Thanks, Ken. Put simply, Trench strengthens our offerings and high-voltage grid equipment expands our scale in key product categories and improves our ability to serve customers as global demand for electrification continues to grow. With approximately $5 billion in combined backlog and framework agreements, Trench has strong visibility into its long-term growth and earnings profile. This is an attractive acquisition that will be immediately accretive and after closing.

Our electrification team continues to deliver solid results, with' '26 representing another year of increasing backlog, growing revenues and expanding margins. The Prolec integration is performing ahead of expectations, and we are successfully driving both revenue and cost synergies. We expect Prolec integration to be substantially complete before trench closes and this experience reinforces our confidence in our ability to integrate trench with that same discipline and focus. Finally, this acquisition is fully aligned with our capital allocation priorities which include investing for organic growth, returning capital to shareholders and pursuing targeted M&A in our core businesses where we can add scale, increase vertical integration and accelerate R&D.

Trench fits that framework very well, and we're doing this all while returning significant capital to shareholders and maintaining a strong balance sheet.

Now with that, let's shift to our 3Q results on Page 13. Throughout '26, demand for our solutions has continued to strengthen, and our teams are executing well to meet customers' growing energy needs. So far, we have added $46 billion to our total backlog to reach approximately $200 billion with a margin profile that continues to improve. In '26, we expect the growth in equipment margin in backlog to be substantially larger than that of '25 which was approximately $8 billion, at improved margin rates, positioning us well to drive further margin expansion and cash generation in the years to come. As we grow our large installed base, we will generate additional services growth at high margins. This year alone, we've seen 17% growth in services orders, with services backlog of $7 billion. We are running the business better day with solid execution across our 3 segments.

In Power, we continue to see strong global demand for our equipment and services. In Gas Power, we've signed 52 gigawatts of new agreements year-to-date and now expect at least 130 gigawatts under contract by the end of 26 compared to 83 gigawatts when we started the year. In '27, we expect our combined gigawatts under contract and our gas power equipment backlog to continue to grow. In 3Q, we shipped 5 gigawatts while signing 11 gigawatts of orders and slot reservation agreements to grow our total gigawatts under contract from 116 to 122 gigawatts sequentially. This includes orders for 55 heavy-duty units and 57 air derivatives. As expected, we've reached an important inflection point where backlog is now greater than our SRA balance, further reinforcing the certainty that we will ship more gigawatts through the rest of the decade.

This quarter, we sold multiple slots for 32 delivery as the demand environment remains strong and customers secure turbines further into the future. Demand also remains diverse, with approximately 100 customers in 25 different countries, of which approximately 80% are traditional customers, and 20% and are for data centers. We are seeing strong equipment pricing and total life cycle economics and gas. On the equipment side, 3Q orders were priced more than 20% above 4Q '25 equipment orders based on higher-priced turbines and a greater mix of era derivatives. Given our view of SRA conversions, we expect gas equipment orders to have a price per kW in 4Q and that is lower than 3Q due to fewer error derivatives, and relatively more 50 Hertz units. Full year '26 gas orders pricing per KW will be approximately 50% higher than full year '25 orders.

Our large and growing installed base will generate services growth at higher margins for years to come, increasing in the 30s as these units are installed. Our HA fleet running or on contract will be at least 400 units by the end of '27. And as I mentioned at a recent conference, we expect every gigawatt of HA to generate $0.5 billion of high-margin services revenue over the first 20 years of its lifetime. It's not just gas where we're seeing services growth. More customers coming to our nuclear business for uprates and life extensions as our equipment touches 65 gigawatts of the U.S. nuclear fleet. In electrification, backlog growth is being driven by both traditional customers and data centers with equipment backlog rising by $12 billion in '26 so far.

Total segment data center orders are now more than $6 billion year-to-date, including roughly $1.4 billion in 3Q. As mentioned earlier, Prolec is performing well and we're encouraged by the continued strong momentum we are seeing in this business's integration and the capabilities it brings to better serve our customers, especially in North America. In '26 so far, we have booked $900 million in orders for transformers in the U.S. that will be fulfilled by our global factories, something we could not do when we did not fully own Prolec. In wind, the team has remained focused on execution this year to reach profitability in 3Q despite a softer U.S. market for new onshore equipment. This year, we have continuously driven onshore services margin expansion versus a year ago.

While the U.S. market for new onshore equipment remains soft, we are monitoring the outcome of 232 tariffs that impact wind development, which should lead to more orders clarity. In offshore, we are making good progress on [ Dogger ] Bank and are pleased that we closed out the open dispute with Vineyard Wind in 3Q with a very modest negative P&L impact. We are focused on investing to deliver innovative solutions for profitable growth. We have spent $2.4 billion in R&D and CapEx so far in '26, reinvesting nearly as much back in the business as an all of '25. Let me give you a few examples of where our investments are leading to new business and commercial opportunities. In nuclear, we continue advancing the SMR for industrialization at scale as evidenced by our continued progress on the existing project underway in Ontario. The recent approval by the NRC for the construction permit at Clinch River is a significant milestone for TVA, GE Vernova Hitachi and the U.S. nuclear industry as the country advances towards a new generation of nuclear power deployment with SMRs.

We also won a 1.2 gigawatt Tech Select for SMR in Sweden in 3Q, building momentum in Europe. In electrification, this includes commercializing multiple new solutions like energy management system UPS and solid-state transformers. We recently signed our first MVUPS order with a hyperscaler as well as several EMS orders this year. We are also making good progress developing SSTs with hyperscalers, and we already have our first prototype in testing now in our facility in [indiscernible] New York. Additionally, we have already received notification of a hyperscaler award for our 6-megawatt outdoor SST and will advance contracting in 4Q. We are operating from a position of financial strength and are well positioned to serve and transform the global electricity system. We're actively improving how we operate and generating better returns while expanding the platform of solutions we provide customers as their need for infrastructure accelerates.

Given the strength of third quarter performance and confidence in our fourth quarter trajectory, we are raising our revenue margin and free cash flow guidance for '26. With that, I will turn the call over to Ken for more details on our 3Q performance as well as our financial outlook.

Kenneth Parks

Thanks, Scott. Turning to Slide 14. We delivered strong results in the third quarter with robust orders, growing backlog and revenues, margin expansion and significant free cash flow generation. In the quarter, we booked orders of $29.3 billion, a 96% increase year-over-year and a book-to-bill ratio of more than 2x with growth in both equipment and services. As Scott mentioned, our backlog expanded to $197 billion, a significant year-over-year and sequential increase. Equipment backlog increased to $104 billion, up approximately $16 billion sequentially and 92% year-over-year driven by both power and electrification incorporates Prolec backlog. Equipment backlog margin continues to expand, reflecting favorable price and our continued focus on disciplined underwriting.

Our services backlog grew approximately $11 billion or 14% year-over-year to $93 billion, led by Power. As Scott touched on, the growth in our installed base will continue to generate strong services growth at high margins. Revenue increased 18% and equipment revenue rose 26% year-over-year as 65% growth at Power and 21% growth at electrification was partially offset by anticipated lower wind revenues. Services revenue increased 6% year-over-year with growth in onshore wind and power. Price remained positive. Adjusted EBITDA grew 123% year-over-year to $1.9 billion, led by power and electrification. Adjusted EBITDA margin expanded 690 basis points with higher price, more profitable volume and further productivity more than offsetting inflation.

We completed our exit from transition services agreements with GE Aerospace in the quarter, an important milestone as we successfully concluded a multiyear effort to build the stand-alone capabilities required to operate independently. This work not only completes an important part of the separation but will also drive approximately $135 million of G&A savings, of which approximately $100 million has been realized to date. This strong adjusted EBITDA and working capital management drove $5.4 billion of free cash flow in the third quarter. Working capital was a $5.3 billion cash benefit, driven primarily by down payments on increased orders and slot reservations at Power as well as down payments at electrification.

Year-over-year, free cash flow increased $4.7 billion, driven by higher positive benefits from working capital and stronger adjusted EBITDA, partially offset by higher taxes and CapEx investments supporting capacity expansion. We also made a voluntary payment of approximately $350 million to fund retiree benefits and transfer the obligation to a third-party insurer. The transaction generated an $84 million gain, which is removed from our adjusted EBITDA results. With our strong cash position, we'll continue to seek opportunities to utilize cash proactively when those opportunities generate solid economic returns. We ended 3Q with a cash balance of approximately $17 billion, a $4 billion increase from the end of the second quarter, after returning $1.8 billion of cash to shareholders through share repurchases and dividends in the quarter.

Under our repurchase program, we've repurchased 15.6 million shares at an average price of $635 per share totaling approximately $9.9 billion through October 23. Importantly, with the $10 billion increase in our share repurchase authorization, we'll continue to be disciplined in returning capital to shareholders and remain committed to maintaining a strong investment-grade balance sheet. We're encouraged by our strong financial performance in the third quarter. Our growing backlog with increasing margin continues to provide an excellent foundation for further improvement in our financial performance moving forward. Now turning to Power on Slide 15. The segment delivered another strong quarter with robust demand, strong revenue growth and solid EBITDA margin expansion. Power orders more than doubled as gas power equipment increased by approximately 4x year-over-year on higher volume and pricing from both HA and aeroderivative units.

Power Services orders increased 12%, driven by gas power and nuclear power. Revenue increased 25%. Equipment revenue increased primarily from gas power driven by higher turbine volume and favorable price. We shipped a total of 32 gas turbines in the quarter, a 60% increase year-over-year, including 13 aero derivatives. Services revenue also increased due to growth at Gas Power and nuclear power. EBITDA margins expanded 830 basis points to 21.4% and mainly driven by favorable price and higher volume, more than offsetting inflation as well as additional expenses to support capacity investments at gas as well as R&D. For the full year, we're raising our organic revenue growth expectations from 18% to 20% to 19% to 21% due to higher volume, including aero derivatives. Given the improved volume, we're also raising our power EBITDA margin range by 2 points from 17% to 19%, to 19% to 21%.

Turning to electrification on Slide 16. We had another quarter of significant backlog and revenue growth as well as EBITDA margin expansion. Orders remained strong, reaching $5.4 billion at roughly 1.4x revenue. While we saw significant growth in substations and switchgear total orders decreased 9% year-over-year due to a significant order for $1.6 billion of synchronous condensers in Saudi Arabia in the third quarter of 2025. Equipment orders growth was particularly strong in North America, doubling year-over-year. North America, which includes role backlog continues to be the largest portion of our electrification equipment backlog, while all regions, including Europe, are still growing. Importantly, electrification equipment orders continued outpacing revenue and further increased our equipment backlog to $42 billion, up 60% or roughly $16 billion compared to the third quarter of 2025.

Revenue increased 51% on a reported basis, inclusive of Prolec and 16% organically with growth across all regions. We saw increased volume at Grid systems integration primarily from substations and HVDC equipment and at Power Transmission primarily from switchgear and Transformers. Prolec also delivered solid performance with almost $950 million of revenue. Electrification segment EBITDA was $739 million, increasing by 57% year-over-year with margin expansion of 470 basis points to 19.1% led by strong volume, productivity and favorable pricing. For the full year, we continue to expect revenue at electrification to be between $14.5 billion to $15 billion. In addition, we now expect electrification EBITDA margin to trend towards the higher end of the 18% to 20% range as the team continues to deliver solid execution.

Turning to Slide 17 on wind. We delivered a profitable quarter as we made good progress executing our strategy. In the third quarter, the team continued to deliver improving performance in onshore wind services while making good progress on Dogger Bank B installations and commissioning. Wind orders increased 16% with growth in onshore equipment and services, especially for repowering in North America. It remains difficult to call an inflection point in U.S. orders as customers still face permitting delays and tariff uncertainty. Wind revenue increased 3% in the quarter due to higher onshore services and offshore equipment driven by higher deliveries and installations at Dogger Bank B, partially offset by lower onshore equipment deliveries. Wind delivered EBITDA of $72 million. The year-over-year improvement in EBITDA was primarily due to lower offshore project costs and improved onshore wind performance including recoveries of previously paid tariffs and better services, partially offset by lower onshore equipment volume.

For the full year, we now anticipate organic revenue to be down mid-single digits better than our previous expectation of down low double digits due to additional onshore wind turbine deliveries in the second half of the year. We now expect EBITDA losses to be between $400 million and $500 million for the year. Significant performance improvement in onshore services has enabled us to accelerate scheduled maintenance from 2027 into the fourth quarter. These incremental service costs, along with the Vineyard Wind settlement more than offset the impact of additional onshore volume. Moving now to Slide 18 to discuss 2026 GE Vernova guidance. Based on our strong year-to-date results and full year segment expectations, we're raising our GE Vernova financial guidance. We now expect revenue to be in the range of $46.5 million to $47.5 billion and adjusted EBITDA margin to be in the range of 13.5% to 14.5%.

In addition, we also anticipate our free cash flow to be in the range of $16 billion to $17 billion. We're generating significant margin expansion in cash flow this year while still investing in the business. Our 2026 guidance includes a more than 30% year-over-year combined increase in R&D and CapEx as we accelerate our work to support innovation and growth. At corporate, costs are typically uneven across quarters due to compensation timing and portfolio activity at our financial services business. We continue to expect full year 2026 corporate costs to be between $450 million and $500 million as we continue investing in AI, robotics and automation to drive productivity over the medium and long term.

For the fourth quarter, we expect growth in revenue and adjusted EBITDA, adjusted EBITDA margin expansion and positive free cash flow. We have delivered strong results year-to-date. The combination of rising demand with consistently stronger execution, investments into our business, the completion of the acquisition of Prolec and the announced acquisition of Trench, sets us up nicely going forward. With that, I'll turn it back to Scott.

Scott Strazik

Thanks, Ken. We delivered another strong quarter, and I'm proud of how our teams continue to execute as demand for electricity infrastructure accelerates around the world. With a growing backlog and improving margins, our potential continues to grow, and we are deploying capital, both organically and through M&A with Prolec and Trench to generate strong returns, all while returning significant capital to our shareholders. We remain focused on meeting the moment, serving our customers as well as the communities we're in, improving how we operate through lean, AI, robotics and automation and delivering continued profitable growth. We are still in the early stages of this electricity investment super cycle, and we are working with humility, confidence and conviction to deliver for all stakeholders.

Finally, I'm also excited to welcome Claire McDonough as our next CFO and Wind leader, respectively. We'll start next week and will be in transition with Ken and Vic through the remainder of this year before taking their roles in January '27. Both Ken and Vic will be with us for a period of time in '27 in which we'll have multiple opportunities to celebrate and recognize their contributions to the foundations of GEV. With that, Michael, let's open it up for questions.

Michael Lapides

Before we open the line, I'd ask everyone in the queue to consider your fellow analysts and ask just one question so we can get to as many people as possible. Please return to the queue if you have follow-ups. Operator, please open the line.

Operator

[Operator Instructions]

Our first question comes from Joe Ritchie with Goldman Sachs.

Phần hỏi đáp

Unknown Analyst

Congrats on the next quarter and then obviously the trench acquisition, I'm sure many people asked about that. But I really want to focus my question on power margins. So the margins this quarter were exceptional, especially given the fact that from a seasonality standpoint, 3Q is all always a little bit lower from a service revenue perspective. I think you were down $300 million, $300 million Q-on-Q.

I guess the question is, from a pricing standpoint, are you still largely shipping orders from the second half and then as I look at the high end of your 4Q power margin guide, it implies about mid-20s margins exiting the year. Is it fair to use this like second half of the year power margins as the jump-off point for margins in 2027?

Scott Strazik

Yes, Joe, I mean I'll start, Ken complement. Certainly, the second half of this year is the beginning of us starting to ship our better priced equipment shipments. So and yes, with orders in the second half of '24. But there are orders that were shorter cycle than that, that are contributing to the 3Q, 4Q shipment profile that's helping. But there's no reason to think that the second half of this year isn't the right way to start to think about our projection into '27.

We've been pretty open for a while that we needed to get to this 5 gigawatt quarterly run rate and that this is going to be the first quarter with better margin shipments. And that's what you're seeing in the margins in the third quarter even with it being the lightest services quarter that we'll have in the year.

Kenneth Parks

Yes. And Joe, I think, Scott, obviously covered it well. I think the thing I would say is one of the things we're excited about is just how the factory has ramped as we brought on this new capacity. So running at the 5 gigawatts a quarter. We were not overly cautious about our ability to do that, but that always is a big move for the factory. So getting that productivity and the ability to kind of deliver that to the bottom line is also a positive contribution as we move out of 26 to '27.

Operator

The next question comes from Nigel Coe with Wolfe.

Nigel Coe

So since Joe passed over the Trench acquisition, the thing I'll dive into that. Can you just maybe talk about how much of trench is supplying GV versus external customers? And you touched on the U.S. international sort of opportunity. But maybe talk about -- is there opportunities to do even more supply chain deals, recognizing that $9 billion is a big deployment?

Scott Strazik

Yes. You bet, Nigel, I'll start. I mean today of their $1.4 billion of revenue, we're a very small part of the $1.4 billion of revenue that you'll see on the page, although we are buying from them across those product lines that we showed on the page, what I would just share to provide context is bushings generally speaking, are 5% to 8% of the bill of materials of every transformer. The Barmer HVDC order that will come in the fourth quarter, what trench provides across both bushings, instrument transformers and coils. It's about 10% of the bill of materials of that $1.5 billion HVDC order.

We talked about the MV UPS order that we had in the third quarter, which is an NPI, the coils that Trench provides about 5% of the bill of materials of an MD UPS on a go-forward basis. So my point is just this gives us a lot more control over the critical technology in the supply chain to meet the growing backlog that we see with differentiated technology. I mean I talked about it earlier in the prepared remarks, but the fact that many customers select their bushing specifically for a transformer as we are going through diligence on this project, we see a lot of opportunities where there's strong customer loyalty to trench for the bushings that we think is going to pull forward more of our transformer volumes.

So we are in a position now as we did with Prolec, that on day 1, we wanted to quantify revenue synergies as an example. But we also see opportunities there because of the customer connectedness that trench has with many customers, including hyperscalers relative to where we have it. But foundationally, it's a very attractive vertical integration of critical components that we need to meet this growing backlog. And I know we talk about this a lot, but beginning of '22, this is a $7 billion electrification backlog, the fact it's $40 billion higher as we go into the fourth quarter. Controlling this part of the supply chain will help us meet this moment.

Now on the other part of your question on, are there more, we'll keep looking, right? We're always going to be looking for opportunities to invest in businesses that are within our core that give our teams more control to meet this moment. But as I said in the prepared remarks, our 2 priorities with M&A were really getting Trench done for the technology and all the reasons I mentioned in Prolec for the North America footprint, and we'll move forward from here.

Operator

The next question comes from Julian Mitchell with JPMorgan.

Unknown Analyst

Maybe I just wanted to ask about the Power segment and specifically that SRA and backlog figure. So I think you've raised that 5 gigawatts plus for the end of the year, that expectations over 130. Just wondered, as you look at that figure, the probability that, that continues to expand, given you just had such an exceptional year-to-date of SRAs and just wondered how that customer conversation around SRAs kind of is progressing and that conversion rate [indiscernible]

Scott Strazik

Very healthy conversations, Julian, across the board. What we're really guiding you to here is that we see the fourth quarter gigawatts that we'll get an agreement to be modestly larger than the third quarter. We did 11 gigawatts in the third quarter by saying we're going to end up at [ 130, ] that's saying probably 13 gigawatts plus in the fourth quarter, so modestly higher.

As we look into '27, although it's hard to call the quarters per se at this point, we certainly continue to see real growth in our gigawatts on contracts throughout 2027, but that maybe the quarterly profiles in 2 are more likely to feel like 3Q and 4Q than they may have felt in 1Q and 2Q, but with an ability for us to materially continue to grow both our backlog and our gigawatts on contract throughout next year.

Operator

The next question comes from Andrew Obin with Bank of America.

Andrew Obin

Congratulations on the quarter. I don't see it often, but very impressive margins on power. Just shifting to wind a little bit. As you are pivoting strategically, right, more focus on data centers, clearly deploying cash in supply chain building out vertically, a question I have on wind. Now that the business has stabilized, and I appreciate some moving pieces in the fourth quarter. How are you guys feeling about long-term strategic optionality for the business. We talked about it a couple of years ago. then you had a lot of North American movement margins, but the business clearly has turned positive. What does the future hold for Wind business within GEV?

Scott Strazik

Andrew, I appreciate the question. And as you framed in the question, I mean, we're pleased that we've gotten the business back to profitability. We see real improvement in services profitability this year and expect a similar year-over-year improvement in '27 relative to '26. We're pleased that we're largely through our North America offshore project execution. But to be clear, we've got one more year to go in the offshore execution in the North Sea which is a variable to kind of answer the question as you're framing with our optionality as I see it.

And I think it's important for us to see where the U.S. market goes because practically speaking, we have historically been about 50% of the North America onshore wind market. We expect to continue to perform very well in the North America onshore wind market, but it's a very small market right now. And although our orders grew year-over-year, that's off of a very small base. So I think we're improving our optionality with this business, but we've got to navigate through '27, execute on the rest of offshore.

And for me in leading a company, I'd like to see where the U.S. market goes over the next year and continue to evaluate how we invest in this business for value and/or continue to evaluate how we create value in this business. And whatever is the smartest way possible. But we are making progress. I'm proud of the team, and I think 2027 is going to be another very important year for us to continue to create value and optionality for ourselves with our wind business.

Kenneth Parks

I think that optionality point is extremely important. As we gave you guidance on how this business would look when we were with you in December of last year and gave the look through 2028. It's important as you're thinking about the optionality there that we keep saying that we're focused on our strategy which is getting offshore wind backlog deployed working on our service margins.

But in those expectations, we kind of held the expectations for volume in North America wind to be essentially flat, essentially flat to what we saw in 2025. I make that point, because as you asked the question about optionality, we're focused on all the things that we can control today and getting them to the best place, and we're very proud of the team delivering a profitable quarter this quarter, including settling the matter that we had with Vineyard Wind, which we mentioned in our earlier comments. But it sets us up well.

We keep saying it's hard to call the inflection in this U.S. market based upon all the dynamics at play, but we will be ready to actually benefit from that based upon all the work that the team is doing today.

Operator

The next question comes from Alexander Virgo with Evercore ISI.

Alexander Virgo

I wonder if you could talk a little bit about the opportunity in electrification margins given where Trench is coming in. Prolec, obviously, high 20s was the original target performing very, very well by the looks of things. And I appreciate you might address this in more detail at next year with the full year numbers. But can you just give us a sense of why margins in electrification can't be north of 30%, given the sort of setup that you're seeing here?

Scott Strazik

Listen, I think your framing is appropriate with where the Prolec margins were the day that we acquired the deal, and we real operating leverage that we're going to yield through the acquisition, what you see with the Trench margins and the continued growth in backlog and electrification, our expectations are growing with electrification. I think the next important data point will show you in the January earnings call is the change in margin in backlog and electrification in 2026, which will further strengthen the thread that says, okay, this is a business that is -- has a jump-off point, so to speak, in the second half of '26, that's approximately 20% and with a change in margin in backlog that will continue to be healthy, acquisitions that are very accretive, we see significant opportunity to continue to accrete margins in this business.

Now we owe you when we get to our next Capital Markets Day that will set that date at the January earnings call on when we're going to have that meeting to create a 2030 financial guide, including margins and electrification that will, like all of our financial estimates be a floor on what we expect by 2030. But we have high expectations of significant margin expansion every year between now and then, and that's going to take you directionally in the neighborhood of your question.

Operator

The next question comes from Nicole DeBlase with Deutsche Bank.

Nicole DeBlase

Congrats on a great quarter. Just wanted to ask about gas turbine pricing. I don't think that question has been asked yet. Scott, you had said that pricing was up over 20%, I think, in the first half. Just curious how that momentum has continued into 3Q? And then maybe you could also comment on what you're seeing with respect to electrification pricing as well.

Scott Strazik

You bet, Nicole. I mean we've been talking throughout the year that off the baseline of the fourth quarter orders last year that we were expecting to see orders up 10 to 20 points relative to the fourth quarter. Third quarter in isolation was north of 20 points. So that just shows you that the pricing environments continue to be strong. But we did call out in the prepared remarks that mix did contribute to that with a very healthy mix of both aero and 60-hertz gas turbines that drove a very strong comp.

We expect to be within the range that we've talked about in the fourth quarter that leads to a result for the year. The year-over-year are orders in 26 relative to '25, pricing is up directionally 50%. So that kind of -- with any 1 quarter mix can move those numbers, but I think that year-over-year marker is important and we look forward to showing you in the January earnings call, the change in margin and backlog in power that's largely reflective of that price in which we talked about on the call earlier that we -- that the margin in backlog for '26 relative to the margin at the end of last year is going to be -- is going to grow substantially more this year than last year.

Kenneth Parks

And then on electrification, we are continuing to see positive pricing overall in the electrification business. Now as you know, we talk about multiple different products and businesses within that. it's not consistent across in the sense of what the rate of growth is across each one of the lines. We talked a lot in the last few years about the growth in the HVDC side of the business. and we saw good pricing growth in that over 2023, 2024, and it kind of stabilized at a relatively high price.

Now what we're seeing is more pricing growth in parts of the business. Transmission, switchgear, synchronous condensers, things like that. But when you mix it all together, we continue to see positive pricing in electrification but more at a slightly less growth rate than what Scott talked about on the Power business.

Operator

The next question comes from Amit Mehrotra with UBS.

Amit Mehrotra

Obviously, there's just been so much pricing that's now manifesting itself in the gas equipment margin and that's great. But I guess the natural question is maybe what the mix impact is when eventually service starts to outgrow equipment. I can't believe I'm asking this question, but I guess it's the sign of the times. I'd just be curious if you think that margins for the service business as a whole, and maybe even on an annual basis, will be accretive to sort of group margins when this backlog gets delivered and there's a handoff to the service part of the business.

Scott Strazik

Yes. The service is growing as a proportion of the equipment would continue to be accretive to margins because as much as the equipment margins are improving, and you can see that in really the beginning of this journey with our first quarter now of the better priced equipment shipments. We also are pricing up the services book and the margins will continue to expand there not on a nominal basis and points growth as steeply as the equipment margin expansion because it's already off of a much higher baseline. But to be clear, as services grow as a proportion of the total, that drives margin expansion for the power business.

Operator

The next question comes from Andy Kaplowitz with Citi Group.

Andrew Kaplowitz

Just a little bit more on services. Scott, I think you mentioned 17% growth in service orders this year, and I know you mentioned again that generated $0.5 billion of revenue over 20 years. I think you've also talked about transactional generally picking up. So how are you thinking about that trajectory in Power Services? I think you originally gave that guidance of going from $12 billion to $22 billion by $235 million, recent conference you talked about that maybe being a little conservative.

Scott Strazik

Yes. And I think when we get to our next Capital Markets Day, that likely will out to be conservative, the $22 billion that we framed up last year. What I would say on the trajectory with services over the next few years is we have a confluence of dynamics where as our supply chain builds up for new units. We're also having to fulfill on services, and that's driving of continued backlog of services fulfillment that if the outages give us the grace of more time before we need to ship parts frankly, we may be prioritizing at times the equipment shipments to hold schedule as long as we don't put customers at risk for services.

So we're going to continue to see real services growth, but we have a lot of fulfillment rent to come here in '27 and '28. So clearly, our revenue is going to continue to grow at a healthy basis over the next number of years in services through the end of the decade. The growth is going to be percentage-wise exponentially larger in equipment. But what that's all contributing to is just a larger and larger annuity stream for services that's very high-margin business for a very long time into the next decade.

Operator

The next question comes from Ameet Thakkar with BMO Capital Markets.

Ameet Thakkar

Scott, I think you've booked like nearly 120 aero derivatives over the last 2 quarters. Is that like a level of demand that you see kind of changing? And how do you think about the size and duration of the aeroderivative cycle? And given the strength in what are the kind of key constraints in kind of maybe increasing output from here?

Scott Strazik

I mean, the demand is strong, but I wouldn't say that we'll sustain the 2Q, 3Q run rate as an example in 4Q. So that's partly why we framed up the dollar per kW is going to come down a little bit in the fourth quarter relative to third quarter because the dollar per kW is very high with Aero. Not because the demand is softer, but more because we're now going out so far in the future before we have availability, right? Because we're sold out so far. So that continues to be an attractive market.

We continue to have supply, but being very transparent. We're also using the error derivatives in strategic partnerships where we also secure heavy-duty and electrification equipment combined. And we'll continue to do that. So good demand, fourth quarter arrows will be lighter than the 2Q, 3Q run rate, but it's an important part of our business and one that we're very excited about.

Operator

The next question comes from David Arcaro with Morgan Stanley

David Arcaro

I was wondering for the projects and customers in your turbine backlog and across your contracts overall, are you seeing any financing challenges leading to disruptions or slowdowns at all or requests to exit slot reservations, or any slowing of the conversion of SRAs to backlog?

Scott Strazik

No, David. We're not. And I mean I think what you can see is with the orders growth, the gigawatts on contract growth attached with $17 billion of cash in the bank account is that there's no change in our cash terms required to secure the equipment and the customer archetype that we're serving have strong balance sheets and continue to lean in with us, and no is the short answer to the question.

Michael Lapides

Operator, we have time for one more question, please.

Operator

This question comes from the line of Rob Wertheimer with Melius Research.

Robert Wertheimer

So my question, obviously, there's an immense value to getting compute online right now. And I was curious, I mean, obviously, in turbines, you sold out for a number of years. Where do you see bottlenecks in that system now? And is there any opportunity for electrification kind of near term where your products can solve and bring capacity online faster pricing power, et cetera.

Scott Strazik

Yes. I mean, Rob, our electrification business orders 3Q year-to-date is up or thereabouts. We expect the fourth quarter to, as it normally is, to be our largest quarter orders in the year while growing our backlog probably more in the fourth quarter than we did in the third quarter as an example. So we continue to see real demand for electrification. But I don't know if electrification and isolation us or any other provider can provide enough of an unlock for what we're seeing for the need for incremental electricity in the country and in the world today.

It's a contributor, but it's not going to replace the need for more power generation that gets added to the system, it's a complement is the way that I would say it. So we're going to continue to invest in our electrification business really to modernize the grid and drive these unlocks. But I would view this to be a medium- to long-term very durable demand, but not an electrification solution for the country of the world that is going to replace the need for more incremental power generation.

Michael Lapides

Operator, before we wrap up, let me turn it back to Scott for closing comments.

Scott Strazik

Everybody, as I always do, I just want to thank our team. I'm proud of how we're performing. I want to thank our customers and partners for being with us. We do this together and I want to thank all of you for giving us this time today. I know we extended the call by a few minutes today and went a little bit longer with our prepared remarks, but we wanted to provide a lot of transparency and visibility into the trench acquisition that we're really excited about.

We're deep into the fourth quarter and looking forward to being out in the field operationally with a lot of our teams in the next 90 days, and we look forward to seeing many of you and platforms where it presents itself. And soon enough, we'll be in front of you with our January earnings call for the fourth quarter. So thanks, everybody.

Operator

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.