How long is the backlog for turbines and grid equipment, and what will it earn?

Thesis

GE Vernova sits at the choke point of the U.S. power build-out. It makes the large gas turbines that utilities and data center developers are queuing to buy, the transformers, switchgear and high-voltage gear that connect them, and a wind business in repair mode. How long the backlog lasts, and what margin it carries when it ships, decide the story.

The backlog is long. Total backlog ended Q3 2026 at $197 billion, up $20 billion in one quarter. In gas, equipment backlog plus slot reservation agreements (SRAs, deposit-backed placeholders for future turbine production) reached 122 GW, and the company shipped 5 GW in the quarter. At that run rate the firm equipment backlog of 64 GW covers about three years of shipments, and the full 122 GW covers about six (our arithmetic on the same release). On the Q3 call management said it sold multiple slots for 2032 delivery.

Price is doing most of the work on earnings. Management expects full-year 2026 gas order pricing per kilowatt to be about 50% above 2025. Power segment EBITDA margin reached 21.4% in Q3, against 13.4% a year earlier. Electrification reached 19.1%. Wind earned $72 million in Q3, its first profitable quarter of 2026 after segment EBITDA losses of $382 million in Q1 and $275 million in Q2.

The stock does not trade as if the story is settled. The market value was $227.1 billion at the October 30, 2026 close ($857.87 a share times 264.7 million shares outstanding at September 30, 2026), and the shares closed 27% below the June 30, 2026 closing high of $1,174.86 (our arithmetic), even after a quarter in which orders rose 96% organically. Investors are debating durability: whether reservations convert, whether per-kilowatt pricing holds once rivals add capacity, and whether free cash flow built on customer deposits reverses.

Company History

GE Vernova is the former power and energy arm of General Electric. The most consequential step in its lineage was the 2015 purchase of Alstom’s power and grid businesses. GE called it its largest-ever industrial acquisition, with the price adjusted at close to €9.7 billion (about $10.6 billion) from the €12.35 billion agreed in 2014. That deal supplied the grid business, now part of Electrification, and a large share of the steam and gas installed base.

The business spent years as a weak earner inside GE. In 2023, its last full year before separation, GE Vernova reported revenue of $33.2 billion, adjusted EBITDA of $807 million and a net loss of $474 million. Wind lost $1,033 million at the segment EBITDA level that year.

GE completed the spin-off on April 2, 2024, distributing all GE Vernova shares to GE stockholders; the remaining GE became GE Aerospace, and GE Vernova began trading on the NYSE as an independent company that day. The company started life with $4.2 billion of cash and a share count of 274 million at the spin. Independence changed the operating posture. In 2024, revenue rose to $34.9 billion, adjusted EBITDA reached $2.0 billion (a 5.8% margin) and free cash flow was $1.7 billion.

2025 was the year the order book turned. Orders were $59.3 billion, revenue was $38.1 billion, and adjusted EBITDA margin rose to 8.4%. Net income of $4.9 billion included a $2.9 billion tax benefit from releasing a U.S. valuation allowance, so it overstates operating earnings.

The company announced on October 21, 2025 that it would buy the other half of its Prolec GE transformer joint venture from Xignux for $5.275 billion, and it completed the purchase on February 2, 2026. The nine-month 2026 results include a $3,992 million pre-tax gain from remeasuring the stake it already held. In October 2026 it announced a $9.0 billion deal for Trench Group, a maker of high-voltage components. In August, Fitch upgraded the company to A- from BBB+.

Product

GE Vernova reports three segments. The 10-K describes Power, Wind and Electrification as the operating lines, each selling equipment and then servicing it for decades.

Power

Power covers Gas Power, Nuclear Power, Hydro Power and Steam Power. Gas is the engine. At year-end 2025 the installed base was about 7,000 gas turbines, of which about 1,800 sit under long-term service agreements with an average remaining life of about 10 years. The company’s fleet generates about 25% of the world’s electricity. The flagship large turbine is the HA class: 126 units were in the installed base and 51 more were in remaining performance obligations at year-end 2025.

Q3 orders included 55 heavy-duty units (21 of them HA) and 57 aeroderivative units, the smaller jet-derived machines that data center developers use for fast, on-site power. Power orders in the quarter were $21.8 billion, up 178%.

Services are the annuity. Services backlog is $93 billion, and management estimates each gigawatt of HA turbines generates about $0.5 billion of high-margin services revenue over 20 years.

Nuclear is a small but strategic line. The 10-K reports an agreement to deploy small modular reactor technology that it describes as the first commercial contract of its kind in North America, with design work done through joint ventures with Hitachi.

Electrification

Electrification houses Power Transmission, Grid Systems Integration, Power Conversion & Storage and Grid Automation & Software, plus Prolec GE since February 2026. It sells transformers, switchgear, synchronous condensers and conversion equipment to utilities, grid operators and data centers. Q3 revenue was $3.9 billion, up 51%, of which acquisitions contributed $945 million. Equipment backlog was $42.2 billion, up 60% year over year including $5 billion from Prolec GE. Q3 book-to-bill was about 1.4.

Data centers are a growing slice. Electrification data center orders were about $1.4 billion in Q3 and more than $6 billion year to date.

Wind

Wind spans Onshore Wind, Offshore Wind and LM Wind Power blades. The installed base is about 59,000 onshore turbines, and the U.S. is about 60% of onshore equipment remaining performance obligations. In 2025 Wind revenue was $9.1 billion with a segment EBITDA loss of $598 million. The Vineyard Wind dispute was resolved in Q3 with what management called a very modest P&L effect. The CEO says one more year of offshore execution remains in the North Sea.

Market

Customer

Gas Power sells to about 100 customers in 25 countries. Roughly 80% are traditional buyers such as utilities and independent producers, and about 20% are data center developers. That mix matters for risk. The speculative edge of demand is a minority of the gas book, while the core is regulated and contracted capacity.

Electrification skews toward utilities, transmission operators and industrial users, with data centers a rising share. Wind’s customers are utility-scale developers, concentrated in North American onshore repowering, where orders rose 16% organically in Q3.

The customer behavior that drives this memo is how buyers reserve. A slot reservation agreement locks a production position in exchange for a deposit, and it converts into a binding order later. In Q3 the company converted 13 GW of reservations into orders while signing 8 GW of new reservations and 3 GW of firm orders. Reservations fell from 63 GW to 58 GW while equipment backlog rose from 53 GW to 64 GW. The CEO described the crossover, with firm backlog now larger than the reservation balance, as an inflection point. Management also said there was no change in cash terms required to secure equipment.

Market Size

Pure market-size estimates for turbines and grid gear are scarce in primary sources, so we size the market from what competitors and customers have committed. GE Vernova’s own nine-month 2026 orders sum to about $71.9 billion across segments ($48.5 billion Power, $18.8 billion Electrification, $4.6 billion Wind, our arithmetic from the release), against $59.3 billion for all of 2025.

Gas turbine supply is concentrated. GE Vernova has 122 GW of backlog and reservations. In August 2026 Mitsubishi Heavy Industries reported a large-frame backlog of 35 GW, up from 23 GW a year earlier. Siemens Energy carried a group order backlog of €162 billion at the end of its fiscal Q3 2026, which includes grid and wind as well as gas.

Wood Mackenzie said in April 2026 that gas turbine lead times had reached six years and forecast turbine prices of $600 per kW by the end of 2027, a 195% increase since 2019. That is a third-party market estimate, not a company disclosure. A BNP Paribas analyst’s estimates, relayed by Utility Dive after the Q2 2026 results, put heavy-duty turbines near $790 per kW and HA-class combined-cycle near $950 per kW. The two sources use different bases and neither is a company figure, so we treat price per kW as a direction, not a level.

Competition

Competitive Landscape

The 10-K says demand for electric power equipment and services exceeds available capacity, and that this is attracting new entrants. Wood Mackenzie names GE Vernova, Siemens Energy and Mitsubishi Heavy Industries as original equipment manufacturers (OEMs) expanding production capacity for large gas turbines. All three are adding capacity, and all three are selling into the same supply-constrained market.

For the backlog question, capacity is the swing factor. GE Vernova said in July 2026 that it was on track for 20 GW of annual gas turbine output from Q3 2026, with 24 GW in 2028 and 30 GW in 2030. Faster capacity shortens the backlog but also loosens the scarcity that supports pricing. The company’s own risk factors note that it bases capacity decisions partly on reservations and deposits, and that it could be over-invested if demand slips.

Competitors

Siemens Energy

The closest peer across gas, grid and wind. In fiscal Q3 2026 it booked orders of €17.9 billion, a book-to-bill of 1.57, and revenue of €11.4 billion. Profit before special items was €1.6 billion, versus €497 million a year earlier, and Siemens Gamesa posted its first positive result since fiscal 2022. Its wind unit has returned to a profit, which GE Vernova’s Wind segment has done for only one quarter, and its grid business competes directly with Electrification.

Mitsubishi Heavy Industries

The third large-frame gas supplier. It booked 35 large-frame turbines totaling 16 GW in fiscal 2025 and a further 10 in its first fiscal quarter of 2026, with deliveries scheduled for 2028 to 2030. It plans to double production capacity relative to 2024 levels. Its backlog is about 29% the size of GE Vernova’s reserved and ordered gas volume (35 GW against 122 GW, our arithmetic). The two figures are dated differently, and Mitsubishi’s count may not treat reservations the way GE Vernova does.

Hitachi Energy, Schneider Electric, ABB and Eaton

In grid equipment, the 10-K names Hitachi Energy, Siemens Energy, Siemens, Schneider Electric, Mitsubishi Electric and ABB as competitors. Eaton, a data center power peer, had a market value of $143.7 billion on the same date. We do not have comparable order data from these companies in primary sources, so we do not compare backlogs.

Wind and nuclear rivals

In wind, the 10-K lists Vestas, Siemens Gamesa, Nordex, Envision and Goldwind. In nuclear, it lists Westinghouse, Framatome and Rolls-Royce.

Business Model

GE Vernova sells equipment, collects cash early through deposits and milestone payments, and then services what it installed. In Q3 2026, equipment revenue was $8.3 billion (up 42%) and services revenue was $4.3 billion (up 5%). Equipment is growing far faster, so the revenue mix is shifting toward first-sale equipment, while the services backlog of $93 billion grows more slowly at 14% year over year.

Pricing reaches the income statement with a lag. Management said better-priced equipment began shipping in the second half of 2026, from orders that started in the second half of 2024. Q3 gas equipment orders were priced more than 20% above Q4 2025 orders, helped by turbine mix and a larger share of aeroderivatives. The company expects Q4 2026 price per kilowatt to be lower than Q3 on fewer aeroderivatives and more 50-hertz units. Management attributed the lower figure to mix.

Backlog margin is the leading indicator. The CFO said equipment backlog margin continues to expand on favorable price and disciplined underwriting. In Power, management expects backlog margin to grow substantially more in 2026 than in 2025, with the figure due on the January call. In Electrification it expects a jump-off point of about 20% margin in the second half of 2026.

Working capital is the second leg. Q3 cash from operations was $6.1 billion, helped by a $5.3 billion working capital benefit that came mainly from down payments on orders and reservations. Those deposits fund capacity and buybacks, and they unwind when turbines ship.

Financials

Q3 2026 (quarter ended September 30, 2026) was the strongest quarter since the spin. Revenue was $12.6 billion, up 27% (18% organic). Adjusted EBITDA was $1.9 billion at a 15.4% margin, versus 8.1% a year earlier. Net income was $1.3 billion and diluted EPS $4.81. Free cash flow was $5.4 billion, and the quarter-end cash balance was $16.8 billion.

Nine-month 2026 revenue was $33.1 billion (22% growth) with a 12.4% adjusted EBITDA margin. Nine-month net income of $6.7 billion is inflated by the Prolec remeasurement gain described above, so adjusted EBITDA of $4.1 billion is the cleaner profit measure.

By segment, in Q3:

Power. Revenue $6.1 billion, segment EBITDA $1,297 million, margin 21.4%, up 800 basis points. Organic margin expansion was 830 basis points on the call’s account.

Electrification. Revenue $3.9 billion, segment EBITDA $739 million, margin 19.1%. Organic margin was 17.9%, so acquisitions lifted the reported figure.

Wind. Revenue $2.7 billion, segment EBITDA $72 million. Nine-month Wind EBITDA is still a $585 million loss.

The raised 2026 guidance (given October 28, 2026) is revenue of $46.5 billion to $47.5 billion, adjusted EBITDA margin of 13.5% to 14.5%, free cash flow of $16 billion to $17 billion, Power segment margin of 19% to 21%, Electrification revenue of $14.5 billion to $15.0 billion and a Wind segment loss of $400 million to $500 million. Free cash flow guidance was lifted from $11.5 billion to $12.5 billion three months earlier.

One implication is easy to miss. Nine-month free cash flow was $15.3 billion, so the full-year range implies only about $0.7 billion to $1.7 billion in Q4 (our arithmetic). That reads as a conservative setup or as an expected working capital reversal, and the January call should say which.

The longer-dated frame comes from the Q4 2025 release in January 2026. The 2028 outlook calls for revenue of $56 billion, adjusted EBITDA margin of 20%, a Power segment margin of 22%, an Electrification margin of 22%, a Wind margin of 6% and cumulative 2025 to 2028 free cash flow of at least $24 billion. Free cash flow of $3.7 billion in 2025 and $15.3 billion in the first nine months of 2026 sums to $19.0 billion (our arithmetic), so cumulative delivery is running ahead. The Q1, Q2 and Q3 2026 releases do not restate or revise the 2028 targets, and on the Q3 call management said it would set a date for a Capital Markets Day at the January call to produce a 2030 financial guide.

Capital returns have scaled with cash. The company has repurchased 15.6 million shares for $9.9 billion since December 2024, an average of about $635 per share. In October it raised the authorization to $20 billion, leaving $10.1 billion. The quarterly dividend is $0.50 per share. The company is also investing: it commits $6 billion of capital spending over 2025 to 2028 and $5 billion of R&D.

Valuation

At the October 30, 2026 close of $857.87 a share and 264.7 million shares outstanding at September 30, 2026 (the 10-Q cover page), GE Vernova had a market capitalization of $227.1 billion (our arithmetic). Subtracting $16.8 billion of cash and adding $2.8 billion of borrowings gives an enterprise value of about $213.1 billion, before $1.2 billion of noncontrolling interests. The shares have traded between $530.16 and $1,195.94 over the past 52 weeks, and the stock fell 10.6% on October 22, six days before earnings.

Against company guidance, the arithmetic is as follows (our calculations from the sources named, not forecasts). On the midpoint of 2026 revenue guidance of $47.0 billion, enterprise value is about 4.5 times sales. On the 14.0% midpoint of the adjusted EBITDA margin guide, implied EBITDA is about $6.6 billion and enterprise value is about 32 times that. On the January 2028 outlook of $56 billion revenue at a 20% margin, implied EBITDA is $11.2 billion and the multiple falls to about 19 times. The multiple compresses quickly if the 2028 targets hold, and it does not if margin conversion stalls.

On cash, the market value is about 13.8 times the midpoint of $16 billion to $17 billion 2026 free cash flow guidance. That multiple flatters the stock, because 2026 cash includes deposits that will unwind. The trailing price-to-earnings ratio is about 22.5, from the $857.87 close and diluted earnings per share of $24.81 for the first nine months of 2026 plus $13.39 for the fourth quarter of 2025 (our arithmetic). It is distorted by the Prolec and tax gains.

The Trench price offers a private-market comparison. GE Vernova agreed to pay $9.0 billion, about 13 times 2028 EBITDA before synergies, for a business the company expects to run at about 36% EBITDA margin in 2028. On the 2028 outlook above, GE Vernova itself trades at about 19 times, a higher multiple than the 13 times it agreed to pay for Trench (our arithmetic).

For history, the market value has risen from $35.7 billion on March 27, 2024, the earliest date on the data provider’s page and a few days before the April 2 spin, to $227.1 billion now. The share price closed at $950.49 on September 30, 2026, so the October decline was 9.7% (our arithmetic).

Key Opportunities

Price converting into margin

Orders priced in 2025 and 2026 at much higher per-kilowatt levels have yet to flow through revenue. The 2026 pricing is about 50% above 2025, and the equipment backlog of 64 GW ships at the current pace of 5 GW per quarter. Power’s 2028 margin target of 22% is less than 1 point above the 21.4% reported in Q3, which suggests either conservatism or an expectation that mix and price normalize. If backlog margins in January come in as management signals, the 2028 target looks reachable early.

Grid scale through Prolec and Trench

Electrification is the faster-growing earnings pool. Equipment backlog is $42.2 billion, management describes a jump-off margin of about 20% in the second half of 2026, and the Trench deal adds about $5 billion of backlog and framework agreements, with 2026 revenue of $1.4 billion heading toward $2 billion by 2028. Management says about $900 million of U.S. transformer orders this year will be built in GE Vernova’s global factories, which was not possible before full Prolec ownership. Closing is expected in late 2027.

Services annuity and capacity

Each HA gigawatt carries about $0.5 billion of services revenue over 20 years. With 21 HA turbines ordered in Q3 alone, the services backlog of $93 billion is set to grow. A move from 20 GW to 30 GW of annual capacity by 2030 would convert more of the reserved volume into revenue each year, if demand holds.

Key Risks

Reservations are not binding orders

The 10-K warns that counterparties may not place orders equal to their reservation amount or at all. Reservations still account for 58 GW of the 122 GW headline, about 48% (our arithmetic). The conversion rate so far is good, as 13 GW converted in Q3, but the book has not been tested by a demand shock. A slowdown in data center buildout, a change in utility rate cases or a financing squeeze would show up first in SRA conversions.

Cash flow built on deposits

Free cash flow of $15.3 billion in nine months includes a $5.3 billion working capital benefit in Q3 alone. Deposits are a timing benefit and do not add to earnings. If order growth slows, the benefit reverses, and the stock’s cash flow multiple rises accordingly. The Q4 guidance implied by the full-year range already points to a sharp deceleration.

Pricing peak and rival capacity

Q4 per-kilowatt pricing is guided below Q3, Siemens Energy and Mitsubishi are each building capacity. Wood Mackenzie still forecasts prices rising to $600 per kW by the end of 2027, so that source does not expect a plateau. Higher prices still attract capacity and push buyers to look at alternatives. Backlog already priced supports margins as it ships, but the slots for 2031 and 2032 delivery that are still being sold will carry whatever pricing the market supports when they are contracted.

Wind and offshore execution

Wind has lost money in every period covered here: $1,033 million in 2023, $588 million in 2024, $598 million in 2025, and $585 million in the first nine months of 2026. Guidance calls for a full-year loss of $400 million to $500 million, which requires Q4 to be profitable. The 2028 target of a 6% margin depends on the North Sea projects finishing on schedule and on U.S. onshore repowering.

Integration and valuation volatility

Prolec integration is expected to be substantially complete before Trench closes, and Trench adds a second large deal about a year after the Prolec announcement. The shares move sharply on news, with a fall of 10.6% in a single session in October. Even with the 2028 targets reached, the multiple is not cheap, so a miss on any pillar would be priced fast.

What Would Prove Us Wrong

Our thesis is that GE Vernova’s backlog is long, repriced and converting at rising margin. These are the observable events that would show it is not.

1. Gas backlog plus reservations ends 2026 below the company’s own 130 GW target. This would show up in the Q4 2026 report due in January 2027. A miss would indicate that new reservations are arriving more slowly than existing ones convert.
2. Full-year 2026 Power segment EBITDA margin finishes below the 19% low end of guidance, or the Power backlog margin disclosed in January 2027 does not exceed the 2025 figure. Either result would mean price is not converting into margin as management says.
3. Full-year 2026 free cash flow comes in below $16 billion, or gas price per kW in the first half of 2027 averages below 2026 full-year pricing. The first would signal a harder working capital reversal and the second that the pricing peak has passed.
4. Wind segment EBITDA loss for full-year 2026 exceeds $500 million, or full-year 2026 Electrification segment margin finishes below 18%, the low end of the 2026 range.

Summary

GE Vernova ended Q3 2026 with $197 billion of backlog, 122 GW of gas equipment under backlog or reservation, and a Power margin of 21.4%. Firm gas equipment covers about three years at today’s shipment rate, and reserved slots now reach 2032. Price per kilowatt is roughly 50% above last year and has not yet fully reached the income statement. Management guides Electrification toward a jump-off margin near 20% and Power toward 22% by 2028.

The weak points are specific. Reservations are not orders, cash flow includes deposits that will reverse, Q4 pricing per kilowatt is guided lower, and Wind still loses money. At $227.1 billion of market value on October 30, 2026, the stock is about 19 times the implied 2028 EBITDA from company targets and about 32 times 2026 implied EBITDA, so the valuation already assumes most of the margin path is delivered. The January 2027 call, with backlog margin and the year-end gigawatt count, is the next hard test.