---
title: "GE Vernova Q3 2026: $29B of orders, paid for in advance"
description: "GE Vernova's third quarter of 2026 read from its 8-K and 10-Q: orders, segment margins, a third cash-guidance raise, and what down payments do to a DCF."
date: 2026-10-28
updated: 2026-10-28
tags: [earnings, industrials, valuation]
author: "Allen Yan"
image: https://sweetvaluelab.com/blog/img/c76b2480e9961b35.png
lang: en
canonical: https://sweetvaluelab.com/blog/ge-vernova-q3-2026-29b-of-orders-paid-for-in-advance
---

[GE Vernova](https://sweetvaluelab.com/stocks/gev) reported its third quarter of 2026 before the open on October 28: $29.3 billion of orders, $12.64 billion of revenue against a $12.0 billion consensus, and a fourth raise to its 2026 free cash flow guidance, now $16–17 billion. By 9:53 a.m. ET the stock was at $844.17, down 5.7% from the previous close. In this post I take the quarter apart against two baselines (the third quarter of 2025, and the second quarter of 2026), and then follow the one number that matters most for the valuation: how much of that cash customers paid before GE Vernova built anything.

## At a glance

- **Orders doubled.** $29.3 billion, up 96% organically, $21.8 billion of it at Power. That is 2.3 dollars of orders for every dollar of revenue.
- **Margins jumped.** Adjusted EBITDA margin 15.4%, against 8.1% a year ago and 11.3% last quarter.
- **The cash is mostly down payments.** Nine-month free cash flow was $15.3 billion. Customer down payments added $19.5 billion; everything else together took away $4.2 billion.
- **Above its model value.** Our DCF values the stock at $763.98 a share, so at $844.17 it is overvalued by 10% vs model. Holding down payments at their September level instead of their four-year average would add $141 a share.
- **A $9 billion grid deal.** Trench Group, a maker of high-voltage components, closing in late 2027.

## Q3 2026 in numbers, against last year and last quarter

From the [8-K press release](https://www.sec.gov/Archives/edgar/data/0001996810/000199681026000162/gevpressrelease3q26.htm) and the [Q3 10-Q](https://www.sec.gov/Archives/edgar/data/1996810/000199681026000163/gev-20260930.htm), both filed on October 28. The second-quarter figures are from the [Q2 press release](https://www.sec.gov/Archives/edgar/data/0001996810/000199681026000147/gevpressrelease2q26.htm).

**Income statement**

- **Orders** +96% organic to $29.3 billion (+21% Q/Q, from $24.2 billion).
- **Revenue** +27% Y/Y to $12.64 billion, +18% organic ($0.64 billion above a $12.0 billion consensus; +14% Q/Q).
- **Adjusted EBITDA** to $1.94 billion from $811 million. Margin 15.4%, +7.3pp Y/Y (+6.9pp organic) and +4.1pp Q/Q.
- **Net income** $1.29 billion, against $453 million a year ago and $649 million in the second quarter.
- **Diluted EPS** $4.81, against $1.64 a year ago and $2.47 last quarter ($0.81 above the $4.00 consensus that [Investing.com](https://finance.yahoo.com/markets/stocks/articles/ge-vernova-stock-gains-earnings-105934112.html) quotes without naming the provider).

One correction to the coverage. Several outlets called the $4.81 "adjusted EPS". GE Vernova does not report an adjusted EPS. The $4.81 is GAAP diluted earnings per share, the only EPS in the release.

**Segments**

| Segment | Orders | Orders, organic Y/Y | Revenue | Revenue Y/Y | EBITDA margin | Y/Y | Q/Q |
|---|---:|---:|---:|---:|---:|---:|---:|
| Power | $21.78B | +178% | $6.07B | +25% | 21.4% | +8.0pp | +2.6pp |
| Electrification | $5.37B | −9% | $3.86B | +51% | 19.1% | +4.0pp | +0.7pp |
| Wind | $2.14B | +16% | $2.74B | +4% | 2.6% | +4.9pp | +16.2pp |

**Cash and capital**

- **Cash from operations** $6.06 billion (Q3 2025: $980 million). **Free cash flow** $5.41 billion (Q3 2025: $732 million; +6% Q/Q).
- **Cash** about $16.8 billion at September 30, up about $4 billion in the quarter. Borrowings $2.8 billion, $2.6 billion of it notes issued in February.
- **Backlog** $196.7 billion of remaining performance obligations, up $20 billion in the quarter.
- **Buybacks** 1.7 million shares for $1.6 billion in the quarter (about $941 a share), and 1.4 million for $1.3 billion from October 1 to 23. The authorization doubled to $20 billion, with $10.1 billion left.

**Guidance for 2026**

| | Before (Jul 22) | Now (Oct 28) |
|---|---|---|
| Revenue | $45.5–46.5B | $46.5–47.5B |
| Adjusted EBITDA margin | 12–14% | 13.5–14.5% |
| Free cash flow | $11.5–12.5B | $16–17B |
| Power segment margin | 17–19% | 19–21% |
| Wind EBITDA losses | about $400M | $400–500M |

## How GE Vernova makes money, in three segments

This box is for readers new to the company. Old readers can skip it.

- **Power** sells gas turbines, steam and nuclear equipment, then services them for decades. It was 48% of the quarter's revenue and 62% of segment EBITDA ($1.30 billion of $2.11 billion).
- **Electrification** sells grid equipment: transformers, switchgear, HVDC systems. Prolec GE, a transformer maker bought in February, added most of its $945 million of acquired revenue.
- **Wind** builds onshore and offshore turbines. It lost money for most of the past three years.

## What changed this quarter, segment by segment

**Gas turbine prices rose faster than volume.** Power's EBITDA margin went from 13.4% to 21.4% in a year while revenue grew 25%. On the [call](https://in.investing.com/news/stock-market-news/earnings-call-transcript-ge-vernova-tops-q3-2026-forecasts-on-orders-and-cash-93CH-5660350), CEO Scott Strazik put numbers on the price, which the press release does not give: third-quarter gas equipment orders were priced more than 20% per kilowatt above the fourth quarter of 2025, and orders for all of 2026 should come in about 50% above 2025. He also said the company has sold delivery slots for 2032.

**The gas backlog is turning from reservations into orders.** In the quarter GE Vernova signed 11 GW (8 GW of slot reservations, 3 GW of firm orders), converted 13 GW of reservations into orders, and shipped 5 GW. Firm equipment backlog went from 53 GW to 64 GW; reservations fell from 63 GW to 58 GW. Together they reached 122 GW, against a target of at least 130 GW by year end. That target needs about 13 GW of signings in the fourth quarter after 11 GW in the third.

**Electrification's organic orders fell 9%.** The company blames last year's large synchronous condenser orders, and the reported number still rose 6% with Prolec in it. Book-to-bill was about 1.4 and equipment backlog grew 60% in a year to $42.2 billion ($5 billion of it from Prolec). The margin, 19.1%, is at the top of its 18–20% guide.

**Wind made money in the quarter and the year got worse.** Segment EBITDA was +$72 million, the first positive quarter of 2026. But the full-year loss guide widened from about $400 million to $400–500 million. The first three quarters already add to a $585 million loss (−$382 million, −$275 million, +$72 million). So the new guide implies a fourth-quarter profit of $85–185 million. In July the old guide implied $257 million of profit across the second half, so the expectation for the half fell by $0 to $100 million. The Vineyard Wind litigation is settled. CFO Ken Parks said the 2026–27 plan assumes flat North American wind volume.

## Free cash flow guidance, raised four times since December

![GE Vernova's 2026 free-cash-flow guidance at each report: $4.5–5.0B in December 2025, $5.0–5.5B on January 28, $6.5–7.5B on April 22, $11.5–12.5B on July 22 and $16–17B on October 28 2026, against guided adjusted EBITDA of about $6.6B (the October midpoints, $47B × 14%).](https://sweetvaluelab.com/blog/img/d179bd0d0a6a9924.svg "GE Vernova's 2026 free cash flow guide, from the five releases that gave it. The midpoint went from $4.75B in December 2025 to $16.5B on October 28, 2026; adjusted EBITDA at the October midpoints is about $6.6B.")

In December 2025 GE Vernova expected $4.5–5.0 billion of free cash flow in 2026. It is now guiding to $16–17 billion. The [January release](https://www.sec.gov/Archives/edgar/data/1996810/000199681026000012/gevpressrelease4q25.htm) moved it to $5.0–5.5 billion, April to $6.5–7.5 billion, July to $11.5–12.5 billion.

The guided adjusted EBITDA has not moved nearly as far. At the October midpoints ($47 billion of revenue at a 14% margin) it is about $6.6 billion. Free cash flow at $16.5 billion is 2.5 times that. A company does not make 2.5 dollars of cash for every dollar of operating profit from its operations, so the difference has to be coming from somewhere on the balance sheet.

## Where the cash came from: customers paying before delivery

The 10-Q says where. Cash from operations for the nine months was $16.7 billion, and it "included a $17.0 billion inflow from changes in working capital". Capital spending was $1.4 billion. Free cash flow was $15.3 billion.

![Waterfall of GE Vernova's nine months to September 30, 2026: customer down payments +$19.5B, payables +$1.5B, inventories −$2.1B, receivables −$1.7B, other working capital −$0.2B, everything else in operating cash flow −$0.3B, capital spending −$1.4B, free cash flow $15.3B.](https://sweetvaluelab.com/blog/img/07ead672ea3afde1.svg "Nine months to September 30, 2026, from the 10-Q. Contract liabilities (down payments on orders and slot reservations) added $19.5B; the rest of operations, after taxes and a $0.9B pension payment, came to −$0.3B, and capital spending to −$1.4B.")

The line doing the work is "contract liabilities and current deferred income": money a customer has paid for equipment it has not received. It stood at $25.8 billion on December 31, 2025 and $45.7 billion on September 30, 2026. Power's share went from $16.5 billion to $33.2 billion in nine months. The 10-Q attributes the increase to "down payments on orders and slot reservation agreements at Power, and down payments at Electrification".

Put the other way: without the down payments, the nine months' operations and capital spending used about $4.2 billion of cash. Part of that is one-off. The company paid $2.2 billion more in taxes than a year earlier and $0.9 billion into pension plans. Add both back and the rest of operations and capital spending still come to about −$1.1 billion.

That is a real economic advantage. A turbine maker that is paid in advance funds its own inventory and owes no interest on the money. But it is cash for turbines GE Vernova still has to build, and it reaches the income statement only as the turbines ship.

## Down payments in the DCF: 186 days assumed, 378 days today

The [site's DCF for GE Vernova](https://sweetvaluelab.com/stocks/gev/valuation/dcf) (five years of forecasts, then perpetual growth) values the stock at $763.98 a share in the October 28 snapshot. The inputs: a 9.04% discount rate (the [10-year Treasury](https://sweetvaluelab.com/tools/yield-curve) at 4.99%, a 4.14% equity risk premium, beta 0.98), revenue from the analysts' consensus ($46.3 billion for 2026, then about 14% a year through 2030), and 4% growth after 2030. The terminal value is 84% of the enterprise value, which is normal for a company growing this fast and makes the result sensitive to everything after year five. If the [DCF primer](https://sweetvaluelab.com/blog/what-is-a-dcf) is new to you, it walks through the same arithmetic on a smaller example.

Working capital is where the down payments come in. The model sets each working-capital line as a number of days of revenue (or of costs) and holds it there. For customer advances it uses the average of the last four annual balance sheets: 146, 166, 184 and 247 days, so 186 days.

![Bar chart of GE Vernova's contract liabilities in days of trailing twelve-month revenue: 146 in 2022, 166 in 2023, 184 in 2024, 247 in 2025, then 295, 352 and 378 at the ends of the first three quarters of 2026; a dashed line marks the DCF's 186 days.](https://sweetvaluelab.com/blog/img/77f619e4e6da0227.svg "Contract liabilities and deferred income divided by trailing twelve-month revenue, times 365. 378 days at September 30, 2026 ($45.7B on $44.0B of revenue) against the 186 days the DCF assumes.")

At September 30 the balance was $45.67 billion on $44.04 billion of trailing revenue (the four quarters to September), which is 378 days ($45.67B ÷ $44.04B × 365).

Why the number of days matters: once the days are fixed, every new dollar of revenue brings in days ÷ 365 of advance with it. The cash flow from advances in a year is therefore:

```
cash from advances(t) = (days ÷ 365) × (revenue(t) − revenue(t−1))
```

Take 2027 in the model. Revenue grows from $46.33 billion to $53.11 billion, a $6.78 billion increase.

```
at 186 days:  186 ÷ 365 = 0.510;  0.510 × $6.78B = $3.45B
at 378 days:  378 ÷ 365 = 1.036;  1.036 × $6.78B = $7.02B
difference:   (378 − 186) ÷ 365 = 0.526;  0.526 × $6.78B = $3.57B more cash in 2027
```

Do that for every forecast year, discount each at 9.04%, and carry the 2031 difference into the terminal value. Each assumption gives a value per share:

| Advances held at | Days | Value per share | Price $844.17 against it |
|---|---:|---:|---:|
| The model's four-year average | 186 | $763.98 | 10% above |
| The 2025 year-end level | 247 | $808.80 | 4% above |
| The September 30, 2026 level | 378 | $904.98 | 7% below |

The model only counts the change in advances that growth produces. It does not count a change in the level itself. That rule is on purpose: when a company moves a balance from one line to another, a model that counted level changes would book it as a year of cash flow. [ExxonMobil](https://sweetvaluelab.com/stocks/xom) moved its accrued liabilities into payables in 2025, and an earlier version of the model read that as a year of cash. For GE Vernova the same rule cuts both ways. The model never credits the $19.5 billion of down payments that arrived this year. It also never charges the company for handing it back.

## Two readings of the down payments, with a number for each

**The reading in which the advances stay.** Gas slots are sold into 2032, prices per kilowatt are still rising, and a customer who wants a turbine in 2030 pays now to hold a place. As long as the queue lasts, advances stay at a year or more of revenue and grow with it. That is the 378-day row: $905 a share, against $844.17.

**The reading in which they unwind.** A down payment gets used up as the turbine ships. The 10-Q says 33% of the $104.1 billion of equipment backlog is to be recognized within a year and 60% within two. If new orders slow to the pace of shipments, the advances shrink while revenue is still being booked, and the cash goes the other way. A return from 378 days to the 2025 level of 247 days, on about $47 billion of revenue, means:

```
(378 − 247) ÷ 365 × $47B = 0.359 × $47B = $16.9B of cash that does not come in
$16.9B ÷ 276M shares = about $61 a share, before discounting
```

That is the 247-day row's territory: $809 a share. Neither reading is the model's. The model sits below both, because it assumes the advances fall back to the 2022–2025 average and treats that fall as costing nothing.

One more thing in the model, and I will not pretend it is right. The DCF's 2026 operating margin is 18.0% (an EBITDA margin of 19.7%), above the company's 13.5–14.5% adjusted EBITDA guide. It then drops to 12.6% in 2027 before climbing to 20.8% by 2030. The path comes from applying the analysts' estimated change in margin to the last filed margin (3.6% in 2025, before Power's price increases showed up), and the 2027 dip looks like an artifact of the estimates. It works against the working-capital assumption: too high on margin in 2026, too low on advances. I have not tested how much the two offset each other, and changing either rule would apply to every company the DCF values, so it goes through the calibration set before it touches this page.

The September balance sheet will also lift the model's net cash once the quarterly row reaches it: from $8.8 billion at the end of 2025 to about $14.0 billion ($16.8 billion of cash less $2.8 billion of notes). That is about $19 a share.

## Trench Group, $9 billion for grid components

GE Vernova agreed to buy Trench Group for $9.0 billion (at 1.12 dollars to the euro), closing in late 2027 after regulatory approvals. Trench makes bushings, instrument transformers and coils for high-voltage lines, components that sit inside other companies' transformers and HVDC stations. On the call, Parks said Trench expects about $1.4 billion of revenue in 2026 and about $2 billion in 2028 at a 36% adjusted EBITDA margin, so roughly $0.72 billion of EBITDA. The price is about 13 times that. Half is paid in cash, half with about $4.5 billion of new debt. Nothing about it touches the model before the deal closes.

## The stock on earnings days, four reports in 2026

| Report | Close the day before | Close (Oct 28: 9:53 a.m.) | Move |
|---|---:|---:|---:|
| Q4 2025, Jan 28 | $692.70 | $711.59 | +2.7% |
| Q1 2026, Apr 22 | $991.30 | $1,127.56 | +13.7% |
| Q2 2026, Jul 22 | $1,078.81 | $985.03 | −8.7% |
| Q3 2026, Oct 28 | $895.08 | $844.17 | −5.7% |

Before the open the stock was up between 0.6% (Investing.com) and 2.5% (Yahoo Finance), depending on when the quote was taken. It turned lower after the open. Two things are on the record. The stock had risen 9.8% in the two sessions before the report, from $815.00 on October 23 to $895.08 on October 27. And in July a raise to free cash flow guidance of similar size met an 8.7% drop. Why stocks sometimes fall on a beat is the subject of [an earlier post](https://sweetvaluelab.com/blog/why-do-stocks-fall-after-beating-earnings). The stock is 29% below its 52-week high of $1,195.94.

## What would change these numbers

- **Down payments at December 31.** The 10-K in early 2027 gives the year-end contract-liability balance. Above 350 days on growing revenue, the 378-day reading holds. Below 300 days while shipments rise, the unwinding has begun.
- **Reservations against firm orders.** Reservations fell from 63 GW to 58 GW this quarter while firm backlog rose. If new reservations also slow in the fourth quarter (the 130 GW target needs about 13 GW of signings), the inflow of new down payments slows with them.
- **The January call.** Strazik deferred margin-in-backlog figures and 2027 guidance to January. The 2027 free cash flow guide set against 2027 EBITDA will show how much of the advance is expected to repeat.
- **Wind's fourth quarter.** The guide implies $85–185 million of profit. A loss would mean the full-year range was too narrow again.

## Takeaway

Power's margin rose 8 points in a year and orders doubled. The free cash flow is another matter: $19.5 billion of the nine months' $15.3 billion was customers' down payments. How long will customers keep paying a year ahead for turbines?

## Sources and data

- GE Vernova, [Q3 2026 press release (8-K exhibit)](https://www.sec.gov/Archives/edgar/data/0001996810/000199681026000162/gevpressrelease3q26.htm), October 28, 2026.
- GE Vernova, [Form 10-Q for the quarter ended September 30, 2026](https://www.sec.gov/Archives/edgar/data/1996810/000199681026000163/gev-20260930.htm), filed October 28, 2026: contract liabilities (Note 9), remaining performance obligations, operating cash flow.
- GE Vernova, [Q2 2026 press release](https://www.sec.gov/Archives/edgar/data/0001996810/000199681026000147/gevpressrelease2q26.htm), July 22, 2026, and [Q4 2025 press release](https://www.sec.gov/Archives/edgar/data/1996810/000199681026000012/gevpressrelease4q25.htm), January 28, 2026.
- Investing.com, [Q3 2026 earnings call transcript](https://in.investing.com/news/stock-market-news/earnings-call-transcript-ge-vernova-tops-q3-2026-forecasts-on-orders-and-cash-93CH-5660350), October 28, 2026: gas pricing per kilowatt, Trench Group terms, Wind outlook.
- Yahoo Finance / Investing.com, [GE Vernova stock gains on earnings beat](https://finance.yahoo.com/markets/stocks/articles/ge-vernova-stock-gains-earnings-105934112.html), October 28, 2026: EPS and revenue consensus.
- SweetValueLab, [GE Vernova stock page](https://sweetvaluelab.com/stocks/gev) and [DCF model page](https://sweetvaluelab.com/stocks/gev/valuation/dcf), snapshot of October 28, 2026 (price as of the October 27 close). Intraday price of $844.17 from FMP at 9:53 a.m. ET, October 28.