GE Vernova Powers Past Expectations as Data Center Energy Boom Fuels Growth

GE Vernova (GEV) delivered another robust quarter that reinforced its position at the center of the power infrastructure buildout driven by surging data center energy demand. The company’s Q3 report topped expectations across the board, underscoring continued strength in gas turbines and electrification equipment, two of the most critical components of the ongoing AI-driven data center expansion. Orders surged 55% year over year to $14.6 billion, with revenue climbing 12% to $10 billion and adjusted EBITDA of $811 million, beating Wall Street forecasts of $787 million. Management reaffirmed its 2025 outlook, citing confidence that revenue will finish near the high end of the $36–$37 billion range as utilities and hyperscalers race to secure reliable baseload power capacity.

GE Vernova also used the quarter to make a strategically significant move with its planned full acquisition of Prolec GE, a grid equipment joint venture it previously shared 50-50 with Mexico’s Xignux. The $5.3 billion transaction—funded equally with cash and debt—will give GEV full control over one of North America’s leading transformer manufacturers, a critical bottleneck in the data center and utility supply chain. Prolec GE generates roughly $3 billion in annual revenue at a robust 25% adjusted EBITDA margin, and management expects double-digit growth in the coming years as demand for transformers and high-voltage infrastructure accelerates. The deal, slated to close by mid-2026 pending regulatory approval, directly enhances the Electrification segment—the company’s fastest-growing division—and positions GE Vernova as the most vertically integrated grid equipment supplier in the Western Hemisphere. Analysts noted that this move not only strengthens GEV’s competitive moat but also deepens its exposure to the high-margin, capacity-constrained market for data center and transmission-grade power components, providing a steady long-term growth and pricing tailwind.

The quarter’s performance reflected a broad-based demand recovery across GEV’s Power and Electrification segments, offsetting residual softness in Wind. CEO Scott Strazik said demand for gas turbines, grid equipment, and related services remains “exceptionally strong” and continues to accelerate alongside global electrification and decarbonization initiatives. The company highlighted $16 billion of backlog growth year-to-date, driven largely by data center power buildouts and energy transition projects. GEV’s backlog of gas power equipment and slot reservations rose from 55 to 62 gigawatts sequentially, while its electrification backlog climbed to roughly $26 billion. These figures underscore the company’s expanding footprint in the high-demand grid infrastructure and generation segments supporting AI and industrial electrification.

Segment performance showed Power and Electrification as the twin growth engines. Power segment orders jumped 50% year over year to $7.8 billion, and revenue rose 15% to $4.8 billion, led by gas turbine deliveries and project commissions. Gas Power alone booked 12 gigawatts of new contracts, converted 7 GW of reservations into firm orders, and shipped 4 GW of equipment during the quarter. Power’s EBITDA margin expanded by 140 basis points to 13.3%, reflecting stronger pricing, higher productivity, and operating leverage from increased volume. In contrast, the Wind segment continued to lag, with revenue down 8% due to lower equipment deliveries and the nonrecurrence of a prior offshore project settlement. Even so, Wind EBITDA losses narrowed materially, and margins improved by nearly 900 basis points as management focused on profitability and repowering projects in the Onshore business.

The Electrification segment was the clear standout, benefitting from unprecedented grid investment tied to data center buildouts and industrial power expansion. Orders more than doubled to $5.1 billion, while revenue climbed 35% year over year to $2.6 billion. Segment EBITDA margin expanded nearly 500 basis points to roughly 14%, driven by strong pricing and execution. Demand was particularly strong in North America, the Middle East, and Europe—highlighted by $1.6 billion in new orders for synchronous condensers in Saudi Arabia and rapid traction in U.S. grid equipment sales. To strengthen this position, GEV announced it will acquire the remaining 50% of Prolec GE, its joint venture with Xignux, for $5.3 billion, expanding capacity in transformers and grid infrastructure—areas seeing enormous pull from hyperscale and utility-scale customers.

Margins and cash flow both trended in the right direction. Adjusted EBITDA margin reached 8.1%, up from 7% a year ago, while free cash flow came in at $700 million despite higher CapEx tied to factory expansion. Year-to-date, the company has generated $2.4 billion in free cash flow and maintains a healthy $7.9 billion cash balance. CFO Ken Parks noted that improved cash linearity allowed GEV to repurchase 1.1 million shares ($700 million) and pay $1.2 billion in dividends so far in 2025. Management expects free cash flow to reach $3–$3.5 billion for the full year, reaffirming prior guidance and signaling continued financial flexibility to invest in both growth and shareholder returns.

GE Vernova’s reaffirmed guidance reflects confidence in its positioning within a structural upcycle for electricity demand. For 2025, the company projects adjusted EBITDA margins of 8%–9% and organic revenue growth toward the top end of prior targets. Power segment margins are expected to hold near 14%–15%, while Electrification is trending higher at 14%–15% versus prior forecasts of 13%–15%. Wind remains the primary drag, with organic revenue projected to fall high single digits and EBITDA losses around $400 million, but the improvement trajectory is intact. Management also guided that tariff and inflation impacts should be limited to the lower end of $300–$400 million thanks to pricing and supply chain mitigation.

On the market side, GEV stock rose about 0.9% premarket to $590 following the report but remains down roughly 5% in October, reflecting consolidation after a strong summer rally. The stock has retreated from highs near $677 and sits below its 50-day moving average after a reversal earlier this month, mirroring weakness across the broader energy infrastructure complex. Analysts, however, remain upbeat on GEV’s long-term outlook. William Blair reiterated that GE Vernova is “the best name in the AI power industry,” while Morgan Stanley recently wrote that the company is entering one of the strongest and longest electricity investment cycles in history. With a deep order book, rising margins, and a decisive move to expand its grid and generation capacity, GEV remains one of the most pivotal plays in the global data center and electrification buildout.

In short, GE Vernova’s Q3 results confirm it is executing from a position of strength—outpacing expectations, expanding margins, and capturing the surging demand for reliable, scalable power. The macro winds are firmly at its back, and as long as the AI and industrial electrification wave continues, the company’s long-term runway looks as powerful as the turbines it builds.