GEV Q4 2025 Earnings Analysis

Absolutely, Alex. But before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

The scale is just incredible, Alex. We're talking about a $150 billion backlog - that's up 25% or $31 billion year-over-year. And they booked $59 billion in orders for the full year, up 34%. For context, their revenue was $38 billion, so they're booking orders at about 1.5 times their current revenue run rate.

Gas power is absolutely on fire - no pun intended. They went from having 46 gigawatts under contract at the start of 2025 to 83 gigawatts by year-end. That's almost doubling their contracted capacity in a single year. And here's the kicker - they expect to hit 100 gigawatts by the end of 2026.

It's really the perfect storm of factors. You've got data centers consuming massive amounts of power, aging grid infrastructure, and the need for reliable baseload power as renewable intermittency creates challenges. Strazik mentioned they signed 6 gigawatts of new gas contracts just in the last three weeks of December alone.

Exactly. This was one of the most interesting parts of the call. They added $8 billion in equipment backlog margin dollars in 2025 - that's more than the previous two years combined. In their Power segment specifically, they saw 11 percentage points of margin improvement in their equipment backlog. Strazik mentioned their current slot reservation agreements are pricing 10 to 20 points higher than their existing backlog.

Yeah, the Wind segment is definitely the problem child. They had $600 million in losses for the year, which was worse than their $400 million expectation. The big issue was a U.S. government stop-work order on December 22nd that halted all offshore wind construction, including their Vineyard Wind project that was nearly complete.

Absolutely. CFO Ken Parks said they only had 10 turbines left needing blades and 1 turbine left to install when the order came down. The good news is they got an injunction yesterday, so they might be able to resume work. But if they can't complete those remaining 11 turbines, it could impact 2026 revenue by about $250 million.

This is probably the most exciting part of the story long-term. Electrification revenue grew 26% in 2025, and they're expecting it to hit $13.5 to $14 billion in 2026. To put that in perspective, this business was doing about $5 billion in revenue back in 2022. So we're talking about nearly tripling the business in four years.

A lot of it is data center demand, but also just general grid modernization needs. They booked over $2 billion in orders directly for data centers in 2025 - more than triple their 2024 total. And they just completed the acquisition of the remaining 50% stake in Prolec GE, which should add about $3 billion in revenue.

Very bullish. They raised their 2026 revenue guidance to $44-45 billion, up from $41-42 billion previously. Free cash flow guidance went up to $5-5.5 billion from $4.5-5 billion. And they're maintaining their expectation of reaching 20% EBITDA margins by 2028.

He was pretty confident about their competitive position. Essentially said that smaller turbine applications might grab some near-term business, but for customers making 20-year investment decisions, efficiency matters a lot when you're running base load. He sees those smaller units potentially serving as reliability backup to their heavy-duty turbines rather than direct competition.

Yes, $3.6 billion total - through both dividends and share buybacks. They bought back over 8 million shares. And they announced they're doubling their dividend in 2026 and increased their buyback authorization to $10 billion from $6 billion.

Look, this is clearly a company riding some major secular trends - data center buildout, grid modernization, the need for reliable power generation. The order book momentum is undeniable. The concern I'd have is execution risk, particularly in Wind where they continue to struggle with offshore projects. But the Power and Electrification businesses seem to be firing on all cylinders.

I'd watch their ability to actually ramp production to meet this massive backlog. They're planning to add 200 new machines and 500 workers in 2026 after adding 200 machines and nearly 1,000 workers in 2025. That's a big operational challenge. Also, how quickly they can integrate Prolec and whether the Vineyard Wind situation gets resolved.

Absolutely. Everything we've discussed today is AI-generated analysis for educational purposes only. Past performance doesn't guarantee future results. Please do your own due diligence before making any investment decisions.

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