GE Vernova (NYSE:GEV) Q4 2025 Earnings call January 28, 2026 07:30 AM ET Company ParticipantsKenneth Parks - CFOMichael Lapides - VP of Investor RelationsScott Strazik - CEOConference Call ParticipantsNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystOperatorGood day, ladies and gentlemen, and welcome to GE Vernova's fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. ...

GE Vernova (NYSE:GEV) Q4 2025 Earnings call January 28, 2026 07:30 AM ET Company ParticipantsKenneth Parks - CFOMichael Lapides - VP of Investor RelationsScott Strazik - CEOConference Call ParticipantsNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystNone - AnalystOperatorGood day, ladies and gentlemen, and welcome to GE Vernova's fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. ...

GE Vernova (NYSE:GEV) Q4 2025 Earnings call January 28, 2026 07:30 AM ET Speaker2Good day, ladies and gentlemen, and welcome to GE Vernova's fourth quarter and full year 2025 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 conferenc ...

Clayton Allison, portfolio manager at Prime Capital Financial, is joining us now. And we've seen tech lead and lead and lead and AI has been the talk and the capex spending. And now I use Jensen Wong's quote about infrastructure buildout being the largest in human history.Um, is tech going to lead in 2026 in your opinion. Well, first off, thanks Nicole for having me. And it's hard to say which sector is going to lead in 2026, but obviously the mega caps are comprised primarily of tech names.A lot of those b ...

Summary of Key Takeaways from Sieyuan and Huaming Conference Call Industry Overview - The conference focused on the AI Robotics and Power sector, specifically the companies Sieyuan and Huaming, highlighting their performance and outlook in the context of the domestic and overseas markets [1][2]. Core Insights 1. **Domestic Revenue Resilience**: - Sieyuan and Huaming expect stable domestic revenue growth driven by grid-led demand, with a projected 40% cumulative investment growth in the 15th Five-Year Plan compared to the 14th, translating to a 6% CAGR from 2025 to 2030 [1]. - Off-grid investment is anticipated to decline, particularly affecting Huaming, which expects a drop in off-grid revenue in 2026 [1][2]. 2. **Overseas Market Dynamics**: - Both companies benefit from better pricing structures in overseas markets due to higher entry barriers and tighter supply conditions, which support their product mix [1][5]. - Sieyuan's overseas strategy includes expanding into renewable energy sectors and enhancing market share among industrial customers [2]. 3. **Margin Pressures**: - Both companies face slight margin pressures due to rising raw material costs, particularly copper, which constitutes about 10% of tap changers' COGS and approximately 30% of transformer COGS [1][6]. - The impact of raw material price hikes is considered manageable through design optimization and material substitution rather than price increases [1][6]. 4. **Capital Expenditure Plans**: - Sieyuan has completed recent investments in new plants and production lines, focusing on ramping up production and improving yield and utilization [7]. - Future capital expenditures will primarily be for maintenance and efficiency upgrades, with potential capacity expansion in Saudi Arabia driven by local content requirements [7]. 5. **Competitive Advantages**: - Sieyuan maintains its competitive edge through early overseas expansion and cumulative execution capabilities, including local sales networks and service teams [8]. Additional Important Points 1. **Pricing Stability**: - Price increases are not expected in the domestic market due to competitive pressures, while overseas pricing remains higher due to supply constraints [3][5][13]. 2. **Raw Material Management**: - Huaming has secured a year’s supply of copper, mitigating short-term price fluctuations, and is exploring aluminum substitution for copper in transformers [14]. 3. **Capacity Management**: - Current growth can be achieved through incremental measures rather than new construction, with potential to increase capacity by 10-20% through extended working hours [15]. 4. **Market Outlook**: - The outlook for the 15th Five-Year Plan is slightly better than previous expectations, with grid investment seen as a key area for broader infrastructure and industrial investment [9][10]. 5. **Geographic Diversification**: - Huaming has expanded its reach to around 130 countries, with Europe being the largest market, driven by energy transition investments [11][12]. Risks and Methodology - Sieyuan's target price is based on a 2028E P/E of 25x, with risks including overseas execution challenges and potential margin declines [16]. - Huaming's target price is based on a 2028E P/E of 22x, with risks related to share gains and domestic revenue growth [17].

Core Insights - GE Vernova (GEV) is actively engaging with OpenAI to establish infrastructure deals that are crucial for the future of artificial intelligence [1] - The demand for electrical infrastructure is surging due to the growth of AI models and data centers, positioning GE Vernova as a key supplier [2] Group 1: Business Performance - GE Vernova has secured $900 million in electrical equipment orders from hyperscalers in the first three quarters of 2025, compared to $600 million for the entire year of 2024 [3] - Despite a 55% increase in power equipment orders, GEV stock declined after Q3 results due to the company not raising its 2025 forecast, disappointing some investors [6] - The stock has returned over 350% to shareholders since spinning off from GE in March 2024 [5] Group 2: Strategic Positioning - The relationship with hyperscalers is characterized as "co-creation," focusing on integrated solutions from power generation to server racks, which establishes a strong competitive advantage [4] - GE Vernova has effectively sold out of its power generation equipment through 2028, indicating strong demand but also capacity challenges [9] Group 3: Market Outlook - Wall Street analysts maintain a positive long-term outlook for GEV, with an average price target of $786, approximately 22% above current levels [7] - The onshore wind business may face a revenue decline of 10% to 15% next year if order softness continues, with margins potentially decreasing from high single digits to mid-single digits [6]

Core Insights - GE Vernova is positioned to benefit from the cyclical growth in the energy sector, with significant stock performance compared to its peers [4] - The company operates three main segments: Power, Electrification, and Wind, with Power being the largest contributor to orders [4][5] Segment Performance - The Electrification segment is experiencing growth despite its reliance on large, irregular projects [1] - The Power segment's growth is driven by increased demand for gas turbines and recurring service revenues from plant maintenance and upgrades [2][3] - The Wind segment faced challenges due to project delays and supply chain issues but showed growth in onshore wind services in the latest quarter [6] Future Projections - GE Vernova anticipates organic revenue growth of 6%-7% for the Power segment in 2025, with expectations of 16%-18% growth in 2026 and high-teens CAGR through 2028 [7] - The Electrification segment is projected to trend toward 25% growth in 2025 and approximately 20% in 2026, also maintaining high-teens CAGR through 2028 [7] - The Wind segment is expected to see a decline in organic revenue by high single digits in 2025, with plans to right-size the business and improve margins [9] Financial Outlook - Total revenue is expected to increase from $36 billion in 2025 to $52 billion by 2028, with adjusted EBITDA margins expanding from 8% to 20% [10] - Free cash flow is projected to rise from $3.5 billion to $4.0 billion in 2025, with a cumulative total exceeding $22 billion from 2025 to 2028 [10] Valuation and Stock Performance - GE Vernova's enterprise value is $166.1 billion, trading at 31 times its projected adjusted EBITDA for 2026, which may be justified by strong growth rates [12] - If the company meets analysts' expectations for 2027, its stock could rise by more than 50% over the next 12 months, outperforming the S&P 500 [13]

Group 1: Manufacturing Investment and Economic Drivers - A combination of policy incentives and sustained demand for semiconductors and components related to the data center boom is expected to drive manufacturing investment growth in the upcoming year [1] - The Trump administration's AI Action Plan aims to facilitate the construction of data centers and semiconductor fabrication sites by removing regulatory barriers and expediting permits [8] - The National Defense Authorization Act has approved billions for defense-related manufacturing and emerging technologies, indicating strong government support for the sector [9] Group 2: Tariff Impact and Legal Uncertainty - Ongoing tariff uncertainty has led to decreased U.S. manufacturing activity, reaching its lowest point in December 2025, as reported by the Institute for Supply Management [5] - The U.S. Supreme Court is set to make a decision regarding the legality of tariffs imposed under the International Emergency Economic Powers Act, which could significantly impact manufacturers [3][2] - Manufacturers have been forced to raise prices, modify operations, and implement layoffs due to the pressures of tariffs and trade uncertainty [4] Group 3: Workforce Development and Skills Gap - The manufacturing industry faces a significant talent skills gap, with projections indicating a need for up to 3.8 million new workers by 2033 [17] - The Department of Labor is investing millions into state workforce development programs focused on advanced manufacturing, with $98 million recently announced for education and training [15] - Companies like GE Aerospace Foundation and others are committing funds to training programs aimed at increasing the number of skilled workers in the U.S. [16] Group 4: Technological Advancements and AI Adoption - U.S. manufacturers are increasingly turning to artificial intelligence to reduce costs and enhance production efficiency amid ongoing trade uncertainties [6][19] - The adoption of agentic AI is expected to generate up to $650 billion in additional revenue across industries by 2030, with automation potentially yielding up to 50% in cost savings [22] - A survey indicates that about 22% of manufacturers plan to utilize physical AI by 2027, highlighting a trend towards advanced robotics in manufacturing [23] Group 5: Mergers and Acquisitions Activity - Two-thirds of U.S. business leaders are planning to engage in more mergers and acquisitions in the coming year, driven by interest rate cuts and lower taxes [12] - Despite uncertainties from tariffs and government actions, dealmakers are adapting to the "new normal" and proceeding with M&A activities [13]

Summary of Key Points from the Earnings Call on Tariff Mitigation Strategies Industry Overview - The discussion revolves around the impact of tariffs on various sectors, particularly focusing on how companies are adapting to these challenges in the current economic environment. The effective tariff rate is expected to remain around 15% in the near term, with potential changes depending on the Supreme Court's decision regarding IEEPA tariffs [1][10]. Core Insights and Arguments 1. **Tariff Policy Uncertainty**: The Supreme Court's decision on IEEPA tariffs could significantly alter the tariff landscape, raising questions about future tariff policies and potential refunds of collected revenues [1][2][10]. 2. **Mitigation Strategies**: Companies are employing five key strategies to mitigate tariff impacts: - **Pricing Power**: Companies are increasingly passing costs onto consumers, with pricing power becoming the most mentioned strategy [3][4][16]. - **Supplier Negotiation**: Firms are negotiating with suppliers to share the burden of tariff costs, particularly those with high order volumes [16]. - **Redirecting Products**: Multinational companies are redirecting goods to markets without tariffs, such as moving products from China to Europe [16]. - **Stockpiling Inventory**: Companies are building inventory ahead of potential tariffs, although this strategy is less favored due to associated costs [16]. - **Diversifying Supply Chains**: Companies are reorganizing supply chains under strategies like China+1, nearshoring, or reshoring to reduce reliance on tariff-affected regions [16]. 3. **Sentiment Analysis**: Management teams in healthcare, industrials, and IT express the highest confidence in mitigating tariff risks, while consumer staples and communication services show lower sentiment scores [5][21]. 4. **Trends in Strategy Implementation**: There has been a decrease in mentions of tariff mitigation strategies, indicating a potential peak in tariff pressures and increased confidence in existing strategies [4][20]. Pricing power has overtaken supply chain diversification as the primary strategy mentioned by companies [20]. 5. **Sector-Specific Insights**: - **Industrials and Consumer Discretionary**: These sectors have the highest mentions of pricing power and are actively negotiating with suppliers [20][35]. - **Healthcare**: This sector has seen a significant decrease in mentions of mitigation strategies, indicating a shift in focus or confidence [27]. Additional Important Insights - **Impact of Inventory Levels**: Depleting inventory stockpiles in sectors like consumer discretionary and industrials may be driving companies to rely more on pricing power as a mitigation strategy [35][39]. - **Long-Term Strategy Shifts**: Some companies are shifting their focus from immediate supply chain diversification to long-term goals due to the high costs and complexities involved [33]. - **Illustrative Company Examples**: Various companies, such as Carrier Global, Newell Brands, and Whirlpool, have shared insights on their specific strategies and the impacts of tariffs on their operations [54][57][59]. Conclusion - The current economic environment presents ongoing challenges due to tariffs, but companies are adapting through a combination of pricing strategies, supplier negotiations, and supply chain diversification. The sentiment across sectors varies, with industrials and healthcare showing differing levels of confidence in their ability to manage tariff impacts.

Shenzhen-listed Sieyuan Electric, a grid-equipment maker whose shares have surged about 665 per cent over the past five years, is planning a secondary listing in Hong Kong. The move would give Sieyuan, already a favourite among overseas investors, more direct access to international capital as it pushes into global markets amid rising demand for grid upgrades driven by data centres and artificial intelligence. The company said on Monday night it plans to issue new H shares equal to no more than 15 per c ...