GE Vernova delivered the kind of quarter that reinforces why it’s made the Top 15 AI list for a few quarters now. Orders were strong and the company is reporting strength across many products for rare diversification among the high-quality power names.
Q1 organic orders rose 71% to $18.3 billion, while backlog reached $163 billion up from $116 billion when GE Vernova was spun off. More importantly, management expected to see $200 billion in backlog by 2027, a full year earlier than expected: “In the last 90 days, we've added $13 billion to our total backlog and now expect to reach $200 billion in backlog in '27 versus our previous expectation of '28.”
In the Power segment, there was a 16.3% EBITDA margin and 16.5% on an organic basis although both segments are healthy with Electrification seeing an organic margin of 14.6%. The margin on Power was raised to 17% to 19% for the full year, up from 16% to 18%. Electrification’s margin was raised to 18% to 20%, up 100 basis points. While Electrification is growing more quickly, it’s also keeping pace with the Power segments margins. This is notable because it implies that GE Vernova is able to grow and expand yet maintain margins.
Below, I dissect the two major segments and why GEV’s diversification is key among quality power stocks.
Electrification Segment is Booming
Electrification orders tied to data center reached $2.4B in Q1 alone, exceeding the full-year 2025 total in only one quarter. Here is what was stated:
“This is being driven not just by traditional customers, but also data centers, which accounted for approximately $2.4 billion in orders in Q1, more than the full year of '25. Just to repeat that, our Q1 electrification orders to the data centers were more than full year '25 results.”
Since year-end 2022, electrification’s backlog has grown from $9 billion to $42 billion. North America is growing in importance compared to Europe, especially following the Prolec acquisition. Orders in Electrification grew 86% YoY to $7.1 billion, which shows the build-out is not only about generation but also the conditioning and stabilizing of power. Equipment orders within electrification roughly tripled year-over-year.
GEV’s backlog is comprised of $5 billion from Prolec, up from backlog of $1 billion in Q3 2025. We covered this acquisition in last quarter’s writeup stating, “Prolec designs and manufactures medium-and-large power transformers that was owned 50% by GE and 50% by Mexican industrial group Xignux. Transformers are a leading bottleneck with lead times of 2-4 years, to where they’ve become a gating item for AI data center power connections and grid expansion. Even if generation is available, transformers are needed to deliver power to an AI data center, which leads to a direct path for Prolec’s importance in the AI buildout. Now that Prolec is fully integrated, GEV’s electrification segment will benefit from owning one of the more capacity-constrained parts of the AI buildout. In exchange, this will lead to higher margins, pricing power and backlog visibility for GEV. Transformers are higher-margin with GEV’s electrification EBITDA margin at 14.9% in 2025 and now guided to 17% to 19%. The deal is also accretive to free cash flow within the first year.”
The backlog is also $10 billion HVDC which is high-voltage direct current. HVDC helps to move large amounts of electricity over long distances, resulting in lower power loss than AC (in certain situations). HVDC is also good for connecting different grids to help grids move bulk amounts of electricity across regions to stabilize the network. Right now, GEV’s opportunity for HVDC is primarily found in Europe and Asia.
Although in isolation, these solutions may seem minor in respective backlog contribution, it’s a combination of many smaller products boosting GEV’s electrification segment.
Pricing Will Remain Strong through 2H 2026
In the Power segment, the highlight was pricing with GE Vernova stating the new bidding activity in the first four months is running 10 to 20 points higher in price than was is already in the backlog as of the end of last year. Here is what was stated:
“I'd say for 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. You're going to start to see that cutting through in orders in the second quarter, and that's why we had included that context on the 10- to 20-point improvement in dollars per kilowatt through the first half of 2026, inclusive of Q1 and Q2, which is really telling you that the dollar per kilowatt growth is going to be very healthy in the second quarter of this year.”
Last quarter, I had covered that slot reservation agreements were 10 to 20 points higher than legacy backlog with this additional affirmation stating those slot reservations are beginning to convert to firm orders.
Increasing Content per GW through Product Diversification
GE Vernova’s management team referred to their ability to increase content per gigawatt as a “string of pearls.” Recently, I had referred to another promising energy stock as a “swiss army knife.” The point of the analogies is to cement for our Members’ that energy companies are undergoing rapid expansion across many products to prepare for the incoming AI energy crisis.
GEV is offering more adjacent products across power generation and the data center, including EMS solutions, stability block solutions, medium-voltage UPS, storage, and software. The EMS solution is a control layer to help customers monitor and optimize power flow across a site. The MV UPS solution is a backup power system that helps keep electricity stable and uninterrupted during a grid failure. Overall, the product suite represents reliability and control products to increase content per gigawatt.
Financials
By Royston Roche
FY2026 Revenue Guidance Raised
GE Vernova Q1 2026 revenue grew by 16.3% YoY and down (14.8%) QoQ to $9.34 billion, beating estimates by 1%. The company’s organic revenue grew by 7% YoY to $8.59 billion and accelerated 5 percentage points from the previous quarter, primarily driven by rising AI energy demand. The company is a major beneficiary of the increasing energy requirements from the global AI infrastructure build-out, positioning the company as a key beneficiary of this secular trend.
The continued slowdown in the Wind segment was offset by the growth in power and electrification segments that are benefitting from rising electricity consumption driven by data centers and artificial intelligence demand. The company’s CEO, Scott Strazik said, “We had a solid start to 2026 as we continue to serve the growing, long-cycle electric power market. Demand is accelerating for our Power and Electrification solutions from a diverse set of customers, with our backlog growing by more than $13 billion quarter-over-quarter.”
Analysts expect Q2 2026 revenue to grow by 15.4% YoY to $10.5 billion and 17.9% YoY to $11.8 billion in Q3.
Management raised FY2026 revenue guidance to $44.5 billion to $45.5 billion, up $500 million from the previous guidance provided during Q4 results, driven by additional growth in the Electrification segment. The updated guidance implies a 18.2% YoY growth at the midpoint.
Segments
Q1 Power Orders Grew by 59%
Q1 Power organic orders grew by 59% YoY to $10 billion, primarily driven by robust Gas Power equipment orders which more than doubled YoY on higher pricing and HA units. Power Services orders increased 29%, driven by large orders for upgrades at nuclear power, as well as continued growth at Gas Power.
Q1 Power segment organic revenue grew by 10% YoY to $5.0 billion. Equipment revenue increased due to higher volume and price, driven by both heavy-duty gas turbine and aeroderivative growth at Gas Power. The company shipped a total of 25 gas turbines in the quarter, up 32% YoY. Services revenue also increased due to growth at nuclear power.
Q1 organic EBITDA margins improved by 500 basis points to 16.5%, mainly driven by favorable price and higher volume, more than offsetting inflation as well as additional expenses to support capacity investments at gas and R&D at nuclear power.
Management expects continued strong growth in gas equipment orders in the next quarter. They have guided 15% to 17% organic revenue growth driven by both higher equipment and services revenue and EBITDA margin in the range of 17% to 18%.
Q1 Wind Orders grew by 85%
Q1 Wind organic orders grew by 85% YoY to $1.2 billion, due to improved onshore equipment orders, primarily in North America, and due to low YoY comparison. Management was cautious and said in the earnings call that it is still difficult to call an inflection point in U.S. orders as customers still face permitting delays and tariff uncertainty.
Q1 Wind organic revenue was down (25%) YoY to $1.39 billion, due to lower onshore equipment deliveries because of soft orders in the first half of 2025, partially offset by higher onshore services and offshore revenues. Wind segment organic EBITDA was ($329 million) in Q1.
For the next quarter, management expects organic Wind revenue to decline at a mid-teens rate YoY due to lower onshore equipment deliveries. Management expects EBITDA losses to be between $200 million and $300 million. They also expect Wind segment improvement in the second half of the year.
Q1 Electrification Orders were 2.4x of Revenue
Q1 Electrification organic orders grew by 86% YoY to $7.1 billion. The strong growth in orders was primarily due to growing grid equipment demand, particularly for substations, HVDC, switchgear, and transformers.
Q1 organic revenue grew by 29% YoY to $2.3 billion primarily due to substantial growth in switchgear, transformers, substations, and HVDC equipment. Q1 organic EBITDA margin improved by 590 basis points YoY to 14.6% primarily due to strong volume, productivity, and favorable pricing. Management expects revenues of $3.3 billion to $3.5 billion with modest sequential EBITDA margin expansion in the next quarter.
Q1 Adjusted EBITDA grew by 96%
The company’s Q1 adjusted EBITDA grew by 96.1% YoY to $896 million primarily due to strong growth in the Electrification and Power segments. Adjusted EBITDA margin improved by 390 basis points YoY to 9.6%. The strong improvement in the adjusted EBITDA margin was primarily due to better pricing, more profitable volume and improved productivity more than offsetting inflation, including the impact of tariffs, which started in the second quarter of 2025.
Management also raised the 2026 adjusted EBITDA margin to 12%-14%, up from the previous range of 11%-13%, primarily due to improved profitability in the power and electrification segments. Management expects 2026 adjusted EBITDA to be more second half weighted than 2025 with the highest revenue and adjusted EBITDA in Q4 26.
EPS
The company’s GAAP EPS came at $17.44, and it included M&A net gains of $4.5 billion or $16.5 per share. Excluding the gains, the EPS would be $0.92 compared to $0.91 in the same period last year.
Analysts expect strong GAAP EPS growth of 86.8% YoY to $3.47 in Q2 and 140.8% YoY to $3.95 in Q3 2026.
Cash Flow and Balance Sheet
The company’s cash flows were robust in Q1 2026 primarily due to higher adjusted EBITDA and better working capital.
- Q1 operating cash flows grew by 347.4% YoY to $5.19 billion with an operating cash flow margin of 55.6% compared to 14.4% in Q1 2025. The improvement in operating cash flow was primarily due to higher down payments on increased orders and slot reservations at Power as well as higher orders at Electrification segment.
- Q1 free cash flow grew by 391.3% YoY to $4.79 billion with a free cash flow margin of 51.3% compared to 12.1% in Q1 2025.
- Management also raised the full year free cash flow guidance range to $6.5 billion-$7.5 billion, up from the previous $5.0 billion -$5.5 billion.
- The company had cash of $10.2 billion and debt of $2.6 billion at the end of Q1 2026.
- The company completed the acquisition of the remaining 50% ownership stake of Prolec GE for $5.3 billion in February 2026.
Conclusion:
The key takeaway from this quarter is that GE Vernova is increasing its content per gigawatt. That matters because the next phase of the AI buildout will not be defined by companies that offer integrated solutions across the power chain.
Power remains the current earnings anchor, but Electrification is quickly becoming a much larger part of the story as customers race to move and stabilize electricity for data centers and very-stretched grid demand. There is the need for more electrons, but also the growing complexity of delivering them. GEV stands to benefit from both.
Please note: The I/O Fund conducts research and draws conclusions for the company’s portfolio. We then share that information with our readers and offer real-time trade notifications. This is not a guarantee of a stock’s performance and it is not financial advice. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis. Beth Kindig and the I/O Fund own shares in GEV at the time of writing and may own stocks pictured in the charts.
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