GE Vernova Inc.

Thank you for holding. Your conference will begin in five minutes. Thank you for your patience. Good day, ladies and gentlemen, and welcome to GE Vernova's third 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 would now like to turn the program over to your host for today's conference, Michael Lapides, Vice President of Investor Relations. Please proceed.

Thank you. Welcome to the conference call on GE Vernova's third quarter 2026 earnings in the planned acquisition of Trench Group. I'm joined today by our CEO, Scott Strazik, and CFO, Ken Parks. Our conference call remarks will include both GAAP and non-GAAP financial results, including the standalone forecast of Trench Group, Reconciliations between GAAP and non-GAAP measures can be found in today's press release and presentation slides, both of which are available on our website. Our trench group comments reflect expectations for the transaction, the cost and revenue synergies from the transaction, and capital allocation plans. The trench group acquisition price and financial information are expressed in U.S. dollar equivalent. based on a Euro to US dollar exchange rate of 1.12. Actual US dollar equivalent amounts may differ based on the prevailing exchange rate at the applicable times. The Trench Group financial information was prepared by GE Vernova based on data provided by Trench Group and reflect Trench Group's accounting policies, which may differ from GE Vernova's. Please note that unless otherwise specified, our year-over-year commentary or variances on orders revenue adjusted in segment EBITDA and margin discussed during our prepared remarks or on an organic basis. We will make forward-looking statements about our performance in the trench group business. 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, today's press release and presentation slides All of which are available on our website. Actual results may differ materially due to risks and uncertainties. The acquisition is subject to regulatory approvals in standard closing conditions, including information and employee consultation where required. With that, I'll hand the call over to Scott.

Thanks, Michael. We have a lot to cover today, but I wanted to start with three main messages. Our growth continues to accelerate with both our core business and new products. With almost $30 billion in new orders and an expansion of our backlog from 176 to approximately $200 billion in 3Q, we continue to see strong pull from customers for the solutions we offer. This demand is not only for our existing equipment, but also for services, where we saw 10% orders growth in the quarter. We also see growing interest in our new offerings, including in both power with a nuclear SMR and multiple products and electrification, including MVUPS and solid state transformers. Second, our margin expansion is encouraging, but no one inside GEV is satisfied with where we are. This is just the beginning with significant opportunity in all three business segments. Power reached 21% EBITDA margins in what is historically Our weakest margin quarter as 3Q is typically our lowest quarter for services activity. These margins reflect the first quarter of our 5 GW of gas power equipment shipments at better prices. Electrification reached 19% EBITDA margins while growing R&D mid-teens to support strong new product introduction opportunities. win-turn profitable on strong services improvement, and we continue improving execution and offshore as our backlog to complete continues to come down. Across all three businesses and corporate, we have investments in automation and AI with strong use cases that will expand margins over the medium term, but in 3Q and isolation remain a net expense. Point being, We are early in our margin expansion acceleration. Third, we have delivered significant year-to-date cash generation to end the quarter with approximately $17 billion in cash, and we've been working hard to position GE Vernova to invest this capital for strong returns. We are pleased to announce the signing of the Trench Group acquisition, which will strengthen our core electrification offerings in high-voltage grid equipment, be accretive on day one, and bring us industry leading technology to innovate into the future and serve this growing market. In parallel with announcing this $9 billion acquisition, we are announcing a doubling of our stock buyback program from 10 to $20 billion. After investing 1.6 billion in the buyback in 3Q and over 1.3 billion in October, we have largely completed our $10 billion authorization with excellent returns having acquired 15.6 million shares and an average price of approximately 635. It is early in our journey. We remain humble, but we have real conviction that we are building a unique company to serve the growing market and deliver for our shareholders for the long term. With that, I'd like to go to the next page and give an overview of the trench acquisition. The announcement today of our acquisition of the Trench Group is an important step forward in strengthening and scaling our electrification business in the high and medium voltage markets globally. If I take a step back, the beginning of 25, there were two assets of scale I felt we needed in electrification. The first was Prolec to expand our North American manufacturing footprint and to simplify the front-end commercial experience for our end customers, especially the hyperscalers. and the second is Trench for the technology differentiation, management team, and the importance of the components Trench provides in solutions we deliver today. There are many factors driving our conviction in the high voltage market for the long term. Data centers require large electricity loads, driving the increasing need for more efficient high voltage equipment. Trench, as an example, has secured multiple agreements with hyperscalers in the past two years. In addition, global utilities are also building out more high-voltage infrastructure. Today's grid loses as much as 8% from power generation to end use, and the upgrade of the grid to higher voltages dramatically reduces energy losses, making the whole grid more economical. In addition, as the existing grid takes on more load with increased building electrification, manufacturing growth, heat pumps, and EVs, Thank you for joining us. Trench further positions us to serve this global high voltage market opportunity we project to be $130 billion by the end of the decade. As an existing supplier to Vernova, Trench is a business we know well. Its complementary and differentiated technology for high voltage solutions will broaden our grid equipment portfolio and expand our presence across product lines where we have a modest presence today. Vertically integrating Trench will also give us greater capacity and certainty across a key part of the supply chain, strengthening our ability to deliver for customers. The foundation of Trench's success is technical excellence and a strong management team. With more than 3,000 highly skilled employees across 11 factories, Trench has established a footprint in many of the world's largest grid markets. These capabilities have enabled Trench to develop deep Trusted relationships with a broad customer base serving utilities, grid operators, and increasingly hyperscalers. We expect this transaction to close late 27, and with a $9 billion purchase price, we are paying 13 times 28 EBITDA before synergies, the first full year we expect Trench to be included in our financial results. This is a strategically compelling and attractive acquisition that is directly aligned with our capital allocation priorities. We will add scale to the core of our fast-growing electrification segment to better serve the global electricity super cycle. Turn to the next page. You can see on the left-hand side the estimated 26 revenue of Trench and GE Vernova with the three primary product lines in the Trench portfolio. Trench revenue in 26 is estimated at $1.4 billion and similar to our electrification business is projected to grow at double digit levels over the coming years to approach $2 billion of revenue in 28 after the expected close. I'd like to provide a bit more context and color on each of the product lines. Every medium and high voltage transformer has a bushing for insulation and mechanical support used for reliable grid connection. Today, we source most of our bushings externally, but tomorrow we will be able to internalize this key technology within the trench facilities and better serve our customers with improved cycle time and integrated performance as we continue to invest in this business, just as we're doing with Prolec, which you see very clearly in the growth of our Prolec results. In many cases, customers specify the bushing provider for large transformers, and we see opportunities where trench bushings are the preferred technology to better integrate our transformer product line to drive commercial synergies. Post-close, we will source a much larger percentage of bushings for our transformers from the trench factories to deliver better outcomes for our customers. Instrument transformers are important high voltage equipment and electrical substations typically greater than 35 kV that are used to measure voltage and provide protection. This equipment is utilized for new build high voltage electrical substations, for instance, with data centers where you see us playing a significant role. But this is also technology to support upgrades as existing infrastructure extends past its useful life. In the U.S. alone, we project over 55,000 transmission substations will be completely rebuilt or upgraded to higher voltages in the next decade. Point being, our opportunity is both in expanding and modernizing the existing grid and serving new growth with opportunities like data centers. And finally, medium and high voltage coils. This equipment connects to the substation and stores electrical energy inside a magnetic field to enhance grid reliability and Power Quality. The innovative high voltage technology Trench produces is directly aligned with where customers are investing and where we see long-term demand continue to grow. We are very confident these technologies will allow us to better serve our customers, which I'll go into in more detail on the next page. We talked in the past how our existing addressable market in electrification is projected to reach 300 billion by 2030. The high voltage equipment market is an estimated 130 of the 300 billion, and you can see on the left-hand side of this page how each product line inside Trench supports our offerings across the columns. We see the high voltage equipment market continue to grow at high single digits for the long term, driven by the macro factors I mentioned on the earlier page. The real message on this page is we have a great conviction that customers will benefit significantly with our addition of Trench to the product portfolio to deliver to them more optimized, integrated solutions. This will also provide our customers a more seamless experience and increase our capabilities in delivering sustainable solutions our customers value today. For instance, Trench is the leader in dry type bushings and increasingly important technology across power transformers, switchgear, HVDC systems, substations and stability solutions. Dry type transformers use a resin instead of oil, which reduces maintenance, is better for the environment and dramatically reduces the risk of fire. Our combined global manufacturing footprint will be a key differentiator, enhancing delivery and lead time management. With Trench, we will strengthen our ability to support the development of higher voltage electrical systems globally, including the build-out of 765 kV transmission in the U.S. As we continue to serve Trench's existing customers, we can also extend Trench's products to regions with significant electrical infrastructure needs for customers that we serve today. Finally, Trench's track record in quality and delivery aligns directly with our own and positions us to better serve customers rising demand for grid equipment. Turning to the next slide, I want to put in context how this acquisition supports our existing electrification businesses. Today, we have a $46 billion backlog, which again, to remind everyone, was $7 billion at the start of 22. Our two largest businesses, Grid Systems Integration and Power Transmission will be the largest direct beneficiaries on day one of the acquisition. Although longer term, we also see a positive impact on our power conversion and storage business, especially with the new products we're developing like the MVUPS stability block. GSI delivers HVDC projects and AC substations for utilities and data centers, among other high voltage solutions. Today, we sourced some of the components for these offerings externally, including from Trench, which supply the majority of HVDC lines globally. Going forward, we will be able to offer better integrated solutions using technologically advanced products that improve system durability and are demanded by customers to grow our GSI business at attractive margins. and Power Transmission, which produces transformers, switchgear and capacitors. Trench will provide scale through its bushings and instrument transformers. Bushings are a key component used in our power transformers and Trench's differentiated technology will help to deliver high voltage transformers to customers. Lead times across the industry are increasingly important, and this transaction will enhance supply chain certainty for both businesses within electrification. By bringing Trench's manufacturing footprint and capabilities inside Vernova, we expect greater visibility into production planning and improved ability to align this component supply with our customers' project schedules. Finally, Trench is adding significant capacity across its 11 factories globally to meet rising demand. This includes Trench's newly opened factory in North Carolina, which will be the first U.S. manufacturer of high-voltage bushings up to 765 kV, expanding Trench's leadership in extra-high-voltage technology and giving us an important capability within our U.S. footprint with Trench. We will have additional scale and key geographies and more flexibility to serve customers, complementing our existing and planned capacity across electrification. Taken together, Trench enhances our electrification segment's ability to deliver. As you will see in our 3Q results on the subsequent pages, our core businesses continue to gain momentum with accelerating growth and margin expansion, The Prolac acquisition is outperforming our expectations, and Trench is the right next step in creating an industry-leading electrification business at Attractive Economics, serving our customers with a team and technology we love. With that, I'll hand it over to Ken to walk through the financial details.