GE Vernova Inc.

Good day, ladies and gentlemen, and welcome to GE for NOVA's first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. My name is Liz, and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I'd now like to turn the program over to your host for today's conference, Michael Lapidus. Vice President of Investor Relations. Please proceed.

Thank you. Welcome to GE Vernova's first quarter 2026 earnings call. I'm joined today by our CEO, Scott Strasik, and CFO, Ken Parks. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's Form 10Q press release and presentation slides, all of which are available on our website. 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, which includes the removal of the impact of our ProLite GE acquisition. In addition, we realigned the reporting of certain business units to reflect how we are managing the company. Notably in power, we integrated the STEAM business primarily into our nuclear business. In electrification, we realigned the segment into four distinct business units to provide investors with greater visibility. This included revising our former grid solutions and electrification software business units into three separate business units, power transmission, grid systems integration, and grid automation and software. A portion of our electrification software was also moved to gas power, Finally, in wind, we simplified our reporting by integrating LM wind into onshore wind. These changes are reflected in our first quarter 2016 Q and throughout our slide deck. We have posted a financial supplement on our IR website reflecting our realigned 2025 segment results. And please note, there were no changes to our 2025 total company results. We will make forward-looking statements about our performance. 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, actual results may differ materially due to risks and uncertainties. With that, I'll hand the call over to Scott.

Thank you, Michael. Good morning, and welcome to GE Vernova's Q126 earnings call. We've had a solid start to 26. As global electrification accelerates, the structural drivers underpinning demand for our solutions continue to strengthen. The growth is just starting, and there is no company better positioned to serve and transform the global electricity system than GE Vernova. Sense our spin. We launched with a $116 billion backlog. We've grown this backlog to $163 billion. with an 80% increase in our equipment backlog at considerably better margins. 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 power, we delivered strong results in further margin expansion in 1Q, even with the continuing investments in capacity expansion and SMR. In gas power, we continue to see significant demand and favorable pricing trends for both equipment and services. This demand is global and spans a diverse set of customers. We saw continued strength in new gas turbine agreements in Q1, signing 21 gigawatts in countries like the U.S., Vietnam, Mexico, Brazil, and Canada to grow our total gigawatts under contract from 83 to to 100 gigawatts sequentially. Backlog grew from 40 to 44 gigawatts, and slot reservation agreements increased from 43 to 56 gigawatts. Approximately 80% of our total gigawatts under contract are with traditional customers, with the remaining 20% explicitly supporting data centers. Our momentum has continued into April. Quarter to date, we have booked more power equipment orders in terms of value than we did in all of Q126. On pricing, we expect our orders in the first half of Q126 to be priced 10 to 20 points higher than our four Q25 orders on a dollar-per-KW basis. We now expect to book 10 to 15 gigawatts of contracts in Q2 and to end Q126 with at least 110 gigawatts under contract. On production capacity, we now have installed over 280 new machines in our gas power factories and remain on track to reach 20 gigawatts of annualized output by 3Q. Delivering on our growing backlog in the second half of this decade will lead to a larger and even more profitable service book that will benefit us in the 2030s and beyond. On the nuclear front, let's start with our operational progress in Canada on Unit 1 of the SMR project at OPG's Darlington site. With the recent regulatory approvals received by our customer, installation will soon begin on the 2 million pound base map, a pedestal that will serve as the reactor's foundation. This is a critical milestone and serves as a great illustration of the progress we're making on the first SMR in construction in North America. We also continue to make progress on our commercial pipeline in North America as well as Europe. We are inspired and appreciative of the U.S. and Japanese governments' announcement of up to $40 billion for GE Vernova Hitachi to build SMRs in the U.S. This represents the best of government leadership to reindustrialize an industry that matters to the world's future, and we continue to work hard to advance next steps with both governments. In parallel, we continue to work with TVA and the Nuclear Regulatory Commission, and we expect the NRC to issue the license to construct for Clinch River in Tennessee as soon as the second half of 26. In electrification, we achieved significant growth and margin expansion in Q1. As customers work to keep pace with increasing electricity demand, grid stability needs, and national security interests. This is a large and growing market where we continue to see strong demand for our portfolio of solutions. We'll approach $14.5 billion in revenue this year, but project an annual addressable market by the end of the decade of approximately $300 billion based on what we offer today. Point being, there remains substantial opportunity for us to grow. The first two months of running the Pro-Lect business since closing the acquisition have only reinforced the substantial opportunity I had. I will talk more about electrification in two pages. In wind, the team is executing with discipline and is focused on the factors within our control. After successfully completing installation of the remaining wind turbines at Dogger Bank A and Vineyard Wind in Q1, we now have moved to the remaining commissioning activities for both projects. We're off to a very strong start on the installation of Dogger Bank B and continue to expect Dogger Bank B and C to take us through the better part of 27 to complete. In onshore, we continue to drive a more profitable service business with double-digit margin expansion versus the prior year for the second quarter in a row. While the U.S. market for new onshore equipment remains soft, we are monitoring the outcome of 232 wind and solar tariffs, which could lead to more orders clarity in the second half of the year. As our total company backlog builds, we remain focused on driving even stronger execution. In Q1, we held a CEO Kaizen Week with almost 2,000 team members, doing roughly 200 Kaizens with a focus on improving safety, quality, delivery, and cost. Coming out of the Kaizen Week, we see the opportunity for over $100 million in EBITDA improvement in future years, driven from the lower costs and better quality performance. For example, we held our first series of Kaizens at ProLock post-acquisition. In one Kaizen, we focused on improving our sub-assembly process for transformer tanks, decreasing our rework hours by nearly 70%, and delivering a nearly 40% output improvement. In another, we use lean manufacturing methods to reduce cycle times in the winding process for transformer production. These advances are helping us meet the growing demand for transformers as we accelerate the ramp and capacity to grow this business. We're also deploying AI to enable our employees, improve how we run our businesses, and accelerate innovation. we entered the year with 13 AI-based process transformations we were focused on executing. And the team is now working to double the transformations to 26 across GEV. I spent a minute to try to make this real for you all with two examples. In our gas power business, where we have the largest install base of gas turbines, steam turbines, and generators of any OEM in the world, one of our real challenges is to project the demand and timing of needed investments in our customer fleets and ensure we have the right parts and resources available when a customer needs us. We utilize our decades' worth of data and our building AI tools to automate our ability to match install-based demand with our planning to deliver better performance for customers as well as a higher scope per outage for GEV. This is a very real customer example. But we also see substantial opportunity with sourcing as we leverage AI to drive parts rationalization and more intelligent bidding while further automating manual processes like invoice matching. We expect to save tens of millions of dollars every year going forward with these new tools while freeing up tens of thousands of hours of manual work. I give these two examples to reinforce for you that when you think about AI and GE Vernova, do not just think about AI as a demand driver for our equipment and solutions. We are running this company with a very determined focus on meeting the demand for growing electricity for AI while simultaneously incorporating the technology into how we work to transform our company. GE Vernova is operating from a position of financial strength and executing our capital allocation strategy with discipline. In Q1, we invested approximately $700 million in R&D and CapEx combined, with R&D growing by roughly 25%, including work to commercialize new technologies. We also further simplified the organization with business dispositions that generated approximately $900 million, in pre-tax cash. We also returned approximately $1.4 billion to shareholders, including the dividend, and $1.3 billion in share repurchases. Turning to first quarter financial results, we are executing well in the growing long-cycle electric power industry. We booked $18 billion of orders in Q1, up 71% year-over-year. We also grew revenue, by 7% year-over-year with growth in both equipment and services, while increasing our adjusted EBITDA margin by 390 basis points. We generated $4.8 billion in free cash flow in the first quarter, meaningfully above our full-year 25 free cash flow of $3.7 billion. This robust performance was driven by strong orders and slot reservations of power and electrification as demand, continues to accelerate. Regarding recent conflicts in the Middle East, the safety and well-being of our employees and partners in the region remains our top priority, and we continue operations in the region where it is safe to do so. We are monitoring the situation closely and have seen minimal impact to our business and financial performance to date. Given the strength of our first quarter performance and confidence in our full-year trajectory, We are raising our revenue, adjusted EBITDA, and free cash flow guidance for the full year of 26, reflecting higher revenue growth and electrification, as well as further margin expansion at power and electrification. On the next slide, I want to spend some time on electrification. This segment is the biggest beneficiary of how we are operating GE Vernova today as one focused and integrated company. electrification's growth trajectory has been significant. Since year end 22, its backlog has grown from 9 to 42 billion, and we expect substantially more growth moving forward. 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. Additionally, electrification's backlog in North America is now nearly as large as its backlog in Europe, following a strong Q1 and the addition of Prolux. This growth is underpinned by our integrated, diverse product offerings and productivity-driven capacity expansions to fulfill rising demand, for grid infrastructure. Let me expand on these business units for those less familiar with our electrification segment. Grid systems integration, the largest part of electrification's backlog, delivers integrated solutions for large-scale electrification. This business sells HVDC systems and substations, including key data center solutions, all areas, which is driven significant backlog and revenue growth as well as margin accretion. Today, our HVDC backlog represents approximately $10 billion to be delivered over the coming years and is located primarily in Europe, but we are seeing increasing momentum in other regions, including Asia, where we booked another large HVDC order this quarter. We expect to continue growing this portion of our backlog as we benefit from accelerating demand, and investment in new products to expand our offerings for data centers. Power transmission produces high and medium voltage transformers as well as switchgear and capacitors to modernize the grid and expand global electrification. We continue to drive productivity to increase volumes into this attractive market with healthy margins. With our acquisition of Prolac, this business now has increased offerings, scale, and strategic flexibility in transformers, a product category seeing robust demand and a backlog that is approaching the size of GSI. This includes $5 billion of backlog from Prolec, up $1 billion since we announced the transaction at 3Q25 earnings. This 25% growth in the Prolec backlog since announcing the acquisition well illustrates the customer enthusiasm for this acquisition and the opportunity ahead. Power conversion and storage helps customers to improve grid resiliency and industrial power stability through advanced electrical solutions, including rotating machines, power electronics, and battery systems. Within PCS, synchronous condensers are a critical product needed for markets experiencing increased intermittency, representing a $5 billion-plus annual market opportunity. Overall, we see industry demand for grid resiliency products as growing low double digits through the end of the decade. Finally, we've combined our businesses to provide asset intelligence, monitoring, and grid software into grid automation and software. Real synergies exist between our GridOS software and GridBeats that can help improve how the grid thinks, learns, and acts. to enable utilities to move from reactive operations to predictive autonomous grid management. We are also making investments in technologies that will define the next chapter of this segment's growth. For example, our historical business with the data centers has been the substation electrical equipment outside the data center, which remained the majority of our Q1 orders for this customer type. However, We also closed our first Energy Management System, or EMS, order in complement with substation equipment for a data center customer in Q1. EMS incorporates solutions from power conversion and grid automation software to seamlessly integrate GEV assets with load requirements in the data center. This first order is part of a larger project that also includes our gas power equipment and substation electrical equipment. In dollars, EMS is a small part of this large order, but illustrates well the unique opportunity we have as GEV to provide integrated solutions that span power generation, electrical equipment, and automation and software solutions. With that, I will turn the call over to Ken for more details on our Q1 performance, as well as our financial outlook.