GE Vernova turned 13 GW of reserved turbine slots into firm orders; backlog hit $197 billion
The quarter answers whether the gas slot book was real demand: 13 gigawatts converted to firm orders, backlog hit $197 billion, and free cash flow guidance jumped to $16-17 billion. What the company does with that cash, and who pays the AI premium, is the trade.
Vincent Jiang · 3 min read
The waiting room is emptying. A quarter ago the question hanging over GE Vernova−1.44% — GE Vernova, down 1.44 percent today, the Cambridge, Massachusetts power-equipment maker spun out of GE, was whether its 116 gigawatts of contracted-and-reserved gas turbine capacity was demand or a queue of tentative tire-kickers 1. This morning's third-quarter filing answers it: 13 GW of slot reservation agreements converted to firm orders, another 11 GW of new gas contracts were signed, and 5 GW of equipment shipped out the door 1. Orders hit $29.3 billion, up 96% organically 1.
The backlog is now $197 billion, and the money is arriving
Total backlog reached $197 billion, up $20 billion sequentially, and management expects it above $200 billion next quarter 1. The cash side converted too: free cash flow of $5.4 billion in the quarter, and full-year guidance raised to $16-17 billion from $11.5-12.5 billion 1. Revenue of $12.6 billion beat the $12.01 billion consensus; earnings per share of $4.81 beat $4.01 4.
Free cash flow has outrun revenue growth for three straight quarters
- Revenue
- Free cash flow
Data
| Revenue | Free cash flow | |
|---|---|---|
| Q3 '24 | 8.9 | 1 |
| Q4 '24 | 10.6 | 0.6 |
| Q1 '25 | 8 | 1 |
| Q2 '25 | 9.1 | 0.2 |
| Q3 '25 | 10 | 0.7 |
| Q4 '25 | 11 | 1.8 |
| Q1 '26 | 9.3 | 5 |
| Q2 '26 | 11.1 | 5.1 |
| Q3 '26 | 12.6 | 5.4 |
The AI premium shows up in margin, not just volume
Adjusted EBITDA margin of 15.4% rose 690 basis points organically on higher price, volume and productivity; the Power segment alone priced at a 21.4% margin, up 800 basis points 1. Utilities and data centers that need megawatts this decade are paying up for rationed turbine slots, and hyperscalers sit among the named customers of the grid-equipment supplier GE Vernova just agreed to buy 13.
The complication: a $0.6 billion quarter of capex against a $20 billion buyback
Here is what should raise an eyebrow. The board doubled the repurchase authorization to $20 billion, and the company has already spent $9.9 billion buying back stock at about $635 a share 1. Quarterly capital expenditure was $0.6 billion against a $6 billion 2025-28 commitment 1.
Meanwhile a $9 billion acquisition of Trench Group, a high-voltage grid-equipment maker bought from Triton Partners at 13x 2028 EBITDA before synergies, will be funded half with cash and half with debt, and does not close until late 2027 3. The landlord is returning cash and buying suppliers, not breaking ground on factories.
Gas contracts under signature or reservation: 122 GW, with 130 GW promised by year end
- Equipment backlog
- Slot reservations
- Estimate
Data
| Equipment backlog | Slot reservations | |
|---|---|---|
| Prior quarter | 53 | 63 |
| Q3 2026 | 64 | 58 |
| Year-end 2026 target (estimate) | 75 | 60 |
The counterpoint, and what to watch
Shares rose about 2% premarket on the print 2. The bear case is still alive: Wind remains guided to $400-500 million of segment EBITDA losses in 2026, and Wall Street expects full-year EPS to shrink 38.5% over the next 12 months as growth investments bite 14.
What settles it is on the calendar: Q4 backlog above $200 billion and gas capacity under contract of at least 130 GW by December 31, 2026, both promised in writing 1. If slot money keeps converting into delivered revenue at these margins, the premium holds; a slowdown in data center capex is the thing that empties the queue from the other end.
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