GEV GE Vernova 10-Q 2026-09-30 section summaries

GE Vernova — Q3 and nine months ended September 30, 2026

Revenue, margins, and operating performance

Consolidated revenue rose to $12.642B in Q3 2026 from $9.969B and to $33.084B in 9M 2026 from $27.112B. Equipment revenue was $8.340B from $5.880B in Q3 and $20.053B from $14.971B in 9M; service revenue was $4.302B from $4.089B in Q3 and $13.031B from $12.141B in 9M.

Cost of revenue increased to $9.536B from $8.071B in Q3 and $25.837B from $21.899B in 9M. Equipment costs were $6.391B from $5.165B in Q3 and $16.718B from $13.346B in 9M; service costs were $3.145B from $2.906B and $9.119B from $8.553B, respectively. Gross profit improved to $3.107B from $1.897B in Q3 and $7.247B from $5.213B in 9M, with gross margin rising to approximately 24.6% from 19.0% and 21.9% from 19.2%, respectively. Reported operating income was $1.394B in Q3 and $2.227B in 9M. SG&A was $1.354B from $1.221B in Q3 and $4.024B from $3.594B in 9M; R&D expense was $310M in Q3 and $832M in 9M.

Segment results

Segment EBITDA improved to $2.109B from $977M in Q3 and $4.493B from $2.487B in 9M.

Power and Electrification led growth and profitability gains. Wind’s 9M revenue declined and its EBITDA loss widened, although it was modestly profitable in Q3. Total segment revenue was $12.671B in Q3 and $33.175B in 9M, compared with consolidated revenue of $12.642B and $33.084B, respectively, after other revenue and intersegment eliminations. Corporate and other was $(166)M in Q3 in both years and $(405)M in 9M 2026 from $(448)M. Restructuring and other charges were $(6)M from $(83)M in Q3 and $(109)M from $(192)M in 9M; separation costs were $(31)M from $(43)M and $(92)M from $(122)M, respectively.

Earnings quality, acquisition, and portfolio changes

Net income was $1.289B in Q3 2026 from $453M and $6.687B in 9M from $1.209B; net income attributable to GE Vernova was $1.291B from $452M and $6.704B from $1.220B, respectively. Diluted EPS was $4.81 from $1.64 in Q3 and $24.81 from $4.41 in 9M. The 9M increase is materially affected by nonrecurring gains: other income, net, was $4.947B from $455M, including a $3.992B pretax gain from remeasuring the previously held Prolec GE interest, a $366M pretax gain on the Proficy sale, and gains on China XD Electric and an equity-method investment. The Prolec acquisition also resulted in a $106M expense from acquired-inventory fair-value step-up. The effective tax rate was 14.4% in 9M, versus 29.8% a year earlier, benefiting in part from the nontaxable acquisition gain and other tax items.

GE Vernova acquired the remaining 50% of Prolec GE on February 2 for $5.212B cash; total preliminary consideration was $9.614B, including the $4.402B fair value of its previously held interest. Preliminary purchase accounting recorded $5.222B goodwill and $4.172B identifiable intangibles (customer-related $2.860B, patents and technology $533M, software $8M, and trademarks and other $771M). Prolec GE contributed $944M revenue and a $5M pretax loss in Q3, and $2.287B revenue and a $171M pretax loss from acquisition through September. Its purchase accounting remains preliminary. GE Vernova sold Proficy for $604M net cash proceeds and sold Linden VFT for $138M net proceeds.

Cash flow, balance sheet, and capital allocation

9M operating cash flow was $16.737B from $2.508B; capital expenditures were $1.430B from $606M. Cash generation was substantially supported by a $19.511B increase in contract liabilities and current deferred income, versus $2.419B in 9M 2025. Remaining performance obligations were $196.721B at September 30, comprising $104.054B equipment-related and $92.667B services-related, with fulfillment extending over several years. Cash, cash equivalents, and restricted cash were $16.764B, up from $8.848B at year-end. Net cash paid for acquisitions was $4.877B from $164M; investing cash outflow was $4.729B from $381M.

At September 30, total assets were $86.220B, total equity $12.538B, goodwill $9.609B, and net intangible assets other than goodwill $4.343B. Equity attributable to GE Vernova was $11.382B, implying approximately $(2.570)B tangible equity attributable to the company after goodwill and intangibles. Long-term borrowings and finance leases totaled $2.826B; the $2.553B carrying value of borrowings excluding finance leases had estimated fair value of $2.381B. The company issued $2.600B principal amount of senior notes, receiving approximately $2.543B net proceeds, and had $6.000B of committed revolving and letter-of-credit/bank-guarantee facilities with no borrowings outstanding.

Shares outstanding declined to 264.677M at September 30 from 269.529M at December 31, 2025. The company repurchased approximately 6.0M shares for $5.274B in 9M; cash-flow reporting showed $5.296B of treasury-stock purchases. The board increased the repurchase authorization to $20B on October 28.

Other notable exposures

Total contract liabilities and deferred income in the contract disclosure were $45.747B, versus $25.950B at year-end; revenue recognized in 9M from opening contract liabilities was approximately $10.688B, versus $9.754B. Product warranty liabilities were $1.665B, up from $1.573B. Indemnification commitments totaled $1.008B, with a $671M recorded liability; a potential tax-matter indemnification tied to an IRS audit is not reasonably estimable and no liability was accrued. Gross derivative notional was $42.478B, down from $44.940B; the company uses derivatives mainly to hedge contract-related currency and commodity exposures.

GE Vernova (GEV) — Q3 2026 and nine months ended September 30, 2026

Performance and revenue

Q3 revenue rose 27% to $12.642B from $9.969B; organic revenue increased 18% to $11.676B. Equipment revenue was $8.340B from $5.880B (organic growth 26%), while services revenue was $4.302B from $4.089B (organic growth 6%). For the first nine months, revenue was $33.084B from $27.112B, up 22%; organic revenue grew 13% to $30.411B. Equipment revenue was $20.053B from $14.971B and services revenue $13.031B from $12.141B.

Q3 operating income increased to $1.394B from $366M. GAAP net income was $1.289B from $453M, diluted EPS $4.81 from $1.64, and adjusted EBITDA $1.943B from $811M, with margin improving to 15.4% from 8.1%. Gross profit was $3.1B from $1.9B; gross margin rose to 24.6% from 19.0%, reflecting stronger Power results, Electrification growth and improved Wind project costs.

For 9M, operating income was $2.227B from $787M, and GAAP net income was $6.687B from $1.209B. Adjusted EBITDA reached $4.089B from $2.038B, with margin of 12.4% versus 7.5%. Net income benefited substantially from non-operating gains, including a $3.992B pretax gain on remeasurement of the previously held Prolec GE stake and a $366M pretax gain on the Proficy sale; other income increased $4.5B overall. Adjusted measures provide important context for underlying operating performance.

Segment results and demand

Power’s EBITDA margin increased to 21.4% from 13.4%, driven mainly by Gas Power pricing and higher Aeroderivative and Heavy-Duty Gas Turbine deliveries; inflation partly offset gains. Q3 Gas Power revenue was $5.117B from $3.948B. Gas-turbine orders were 16.6 GW from 7.4 GW, while sales were 5.3 GW from 4.0 GW.

Electrification’s reported revenue growth substantially reflected the Prolec GE acquisition; organic revenue grew 16%, and organic EBITDA rose 57%, supported by higher grid-system, switchgear, transformer and power-conversion volumes, productivity and pricing. Acquisition and labor-inflation costs increased SG&A, partly offset by cost reductions. Wind improved year over year, but remained modestly profitable: lower Offshore Wind project costs, tariff recoveries and services volume helped, while lower North American equipment volume remained a headwind.

RPO reached $196.721B at September 30, 2026, compared with $150.238B at year-end 2025 and $135.269B a year earlier; equipment represented $104.054B and services $92.667B. Power RPO was $130.854B. Electrification RPO was $46.148B, including $42.204B equipment and $3.943B services, up 55% year over year; Prolec GE added $5.0B. Wind RPO was $19.952B, down 7% year over year as contracts were executed and North American Onshore Wind orders declined.

Cash, capital allocation and financing

Nine-month operating cash flow was $16.737B from $2.508B, and free cash flow was $15.307B from $1.902B, after capital expenditures—gross additions to PP&E and internal-use software—of $1.430B from $606M. The cash surge was substantially working-capital driven: a $17.0B working-capital inflow included $19.5B from contract liabilities and current deferred income, principally customer down payments and slot reservations. Thus, cash generation was not solely earnings-driven.

Cash, cash equivalents and restricted cash totaled $16.8B, including $0.4B restricted. Debt excluding finance leases rose to $2.6B from less than $0.1B, primarily after issuance of $2.6B principal of senior notes due in 2031, 2036 and 2056. The company paid $4.8B net cash to acquire Prolec GE’s remaining 50% stake. It repurchased 1.7M shares for $1.6B in Q3 and 6.0M shares for $5.3B in 9M; cumulative repurchases were $8.6B at quarter-end, and the board subsequently raised authorization to $20.0B.

GE Vernova completed the Prolec GE acquisition on February 2, 2026, for $5.2B cash. Subsequent to quarter-end, it agreed to acquire Trench Group for approximately €8.0B, expected to be funded equally with cash and debt; closing is expected in late 2027, subject to approvals.

Risks and outlook

Offshore Wind continues to face project-cost and execution risks. Vineyard Wind turbine installation was completed and substantially all turbines commissioned; remaining commissioning is expected in early 2027. The company reached commercial resolution with its customer on outstanding claims and counterclaims in Q3. Estimated 2026 tariff impact is under $100M after protections and mitigation, though outcomes depend on tariff scope, duration and recovery actions.

GE-provided guarantees and other credit support associated with RPO and obligations were approximately $5.4B, down over 85% since separation; approximately $4B is expected to mature contractually by December 31, 2029. The company reported no known historical instances of GE having to perform under customer-contract guarantees. A below-investment-grade downgrade was estimated to have insignificant direct liquidity impact, but could raise financing and hedging costs, impair contract awards and credit access, and increase refinancing risk. Fitch upgraded the long-term rating to A− (Stable); S&P rated it BBB (Positive). Industry opportunities include rising electricity demand and grid modernization, while policy, geopolitical and economic changes, and access to capital remain uncertainties.

Market risk

GEV is exposed to foreign-exchange, interest-rate, and commodity-price risk. It manages these exposures with financial instruments, including derivatives, under policies that prohibit speculative activity.

Foreign-currency effects on earnings were less than $(0.1)B in both Q3 2026 and Q3 2025. For the first nine months of 2026, the effect was $(0.1)B, compared with less than $0.1B in the first nine months of 2025. No quantitative impacts for interest-rate or commodity-price risk were provided.

Controls and Procedures

Management, including the CEO and CFO, concluded that GEV’s disclosure controls and procedures were effective as of September 30, 2026. By that date, the company had completed its exit from all General Electric transition service agreements and assumed responsibility for the associated financial-reporting controls.

After acquiring the remaining 50% of Prolec GE on February 2, 2026, GEV began evaluating the business’s internal-control environment and may make related changes. Prolec GE will be excluded from management’s 2026 annual assessment of internal control over financial reporting (ICFR), consistent with the SEC’s transition guidance for acquired businesses. GEV reported no other quarterly changes that materially affected, or were reasonably likely to materially affect, ICFR.

Risk Factors

This section identifies no specific risks or financial metrics. It directs readers to Item 1A, “Risk Factors,” in GEV’s Form 10-K for the fiscal year ended December 31, 2025, for risks that could materially adversely affect the company’s business, results of operations, cash flows, financial condition, or future prospects.

Trench Group acquisition

On October 25, 2026, GE Vernova agreed to acquire Trench Group from Triton Partners for approximately €8.0 billion. Trench develops and manufactures high- and medium-voltage electrical components, including bushings, instrument transformers, and coils. It has more than 3,000 employees and 11 manufacturing sites. The acquisition would expand GE Vernova’s electrical-grid component business.

GE Vernova currently expects to fund the purchase price equally with cash and debt. Closing is expected in late 2027 and is subject to customary conditions, including regulatory approvals. The agreement includes a customary termination fee if approvals are not obtained within specified timeframes; if triggered, it would be payable no earlier than the second half of 2027.

Insider trading arrangements

During Q3 2026, no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements.