01—Abstract
Summary
Summary of the 8-K filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.
GE Vernova (GEV) reported first-quarter 2024 results on April 25, 2024, its first quarterly report as an independent company following its April 2, 2024 spin-off from GE.
Total revenue rose 6% to $7.26Ba (5% organically), led by Services, which grew 9%. Orders were flat at $9.7B, with orders exceeding revenue, which supported continued backlog growth. Net loss narrowed to $(106)M from $(346)M, and GAAP EPS improved to $(0.47) from $(1.15).
Adjusted EBITDA swung to a positive $189Mb from $(185)M, a 2.6% margin, up 530 bps. Margin expansion was broad-based. Power revenue grew 6% with segment EBITDA margin of 8.6%, up 400 bps, and orders rose 25% on strong heavy-duty and aeroderivative gas turbine demand.
Wind orders fell 40%c as North American onshore customers worked through siting and permitting, though the segment's margin improved to (10.6)% and onshore wind turned positive for a third consecutive quarter. Electrification revenue grew 24% on Grid Solutions strength, and its margin reached 4.0%, though orders declined 7% against a non-repeat of large HVDC awards. Cash flow remained negative in the seasonally weak first quarter, with operating cash use of $(444)M and free cash flow of $(661)M, both improved year over year.
Management reaffirmed full-year 2024 guidance of $34d-35B revenue, high-end mid-single-digit adjusted EBITDA margin, and $0.7-1.1B free cash flow, and expects cash generation to improve each quarter. Investors should note that the 2024 outlook still depends on a sharp cash-flow ramp, and that the Wind segment remains a drag on results.
02—Key points
Key Highlights
- Revenue of $7.26B, up 6% (5% organic), with Services up 9% and all segments showing growth in services
- Adjusted EBITDA turned positive at $189M (2.6% margin) versus $(185)M a year earlier, a 530 bps improvement
- Total orders were flat at $9.7B, with Power orders up 25% offsetting a 40% decline in Wind orders and a 7% decline in Electrification orders
- Power segment EBITDA margin expanded 400 bps to 8.6%; Electrification margin rose 630 bps to 4.0%; Wind margin improved 420 bps to (10.6)%
- Free cash flow was $(661)M, an improvement of $153M year over year, but remains seasonally negative in Q1
- 2024 guidance reaffirmed: revenue $34-35B, free cash flow $0.7-1.1B, and cash from operations $1.5-1.9B
- Net loss attributable to GE Vernova narrowed to $(130)M; GAAP EPS of $(0.47) versus $(1.15) prior year
03—Questions
Frequently Asked Questions
Did GE Vernova's first-quarter results show improving profitability?
Yes. Adjusted EBITDA swung from $(185)M to $189M, and the margin expanded 530 bps to 2.6%. Every segment improved its EBITDA margin, driven by price, productivity, cost management, and higher volume. GAAP net loss also narrowed from $(346)M to $(106)M.
Is the company's cash generation on track for 2024?
Management reaffirmed full-year free cash flow guidance of $0.7-1.1B and operating cash flow of $1.5-1.9B. Q1 was negative, with free cash flow of $(661)M, but management expects cash generation to improve meaningfully each quarter, in line with typical seasonality. Investors should watch whether the back-half ramp materializes.
Why did Wind orders decline so sharply?
Wind orders fell 40% to $1.1B, mainly because North American onshore customers are still working through siting and permitting. Revenue fell 6%, and Wind EBITDA remains negative at $(173)M, although the segment is approaching profitability and onshore wind has been positive for three consecutive quarters.
What is driving the strength in the Power segment?
Power orders rose 25% to $5.0B on increased heavy-duty (HA) and aeroderivative gas turbine demand, and the company booked orders for eight HA units. Revenue grew 6%, led by higher gas power services with more outages and stronger pricing. Segment EBITDA margin reached 8.6%, up 400 bps.
Does the company have a strong balance sheet following the spin-off?
Cash, cash equivalents, and restricted cash rose to $3.26B from $1.55B at year-end 2023, largely from $2.0B in net transfers from Parent before the spin. Management says it remains committed to an investment-grade balance sheet. Total equity attributable to GE Vernova increased to $8.97B.
04—Continue