GE Vernova Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nicole DeBlase - Deutsche Bank - Analyst : Good morning, guys. Can we start with the tariffs impact? I guess, can you talk about like what's embedded in $300 million, $400 million with respect to the impact on COGS on a gross basis versus the mitigation actions? And Scott and Ken, if you guys could talk a little more about what the mitigation focus is with respect to price versus G&A and if you expect to fully offset tariffs by the time we get to 2026. Thank you.

Question: Mark Strouse - JPMorgan - Analyst : Hey everybody. Good morning. Thanks for taking my questions. I wanted to start with the Power segment. Appreciate the update on the slot reservations. Are you able to provide more color on those 21 gigs by customer type, by geography? I know you've got a lot of different irons in the fire, but how much of that is coming from data centers, for example? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 11:30AM, GEV.N - Q1 2025 GE Vernova Inc Earnings Call

Question: Joe Ritchie - Goldman Sachs - Analyst : Good morning. Just quickly on both the slot reservation agreement and the 29 gigawatts that are already in your backlog, we often get the question on cancellation risk just given the gyrations that we're seeing, particularly from the data center market, can you maybe just talk about the stickiness and resiliency of both the backlog and the slot reservations?

Question: Christopher Dendrinos - RBC Capital Markets - Analyst : Good morning and thank you. I wanted to ask about pricing dynamics. Previously in December, you all had indicated that you're taking pricing on gas turbines. I'm curious what the environment is like today. Are you still able to push pricing further in gas and also in electrification? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 11:30AM, GEV.N - Q1 2025 GE Vernova Inc Earnings Call

Question: Christopher Dendrinos - RBC Capital Markets - Analyst : Thanks, Ken. Perfect.

Question: Andrew Percoco - Morgan Stanley - Analyst : Good morning, Scott. Thanks for taking the question and congrats on a strong start to the year. Scott, it doesn't sound like you're worried at all about the outlook. It sounds like you're still very confident in what you're seeing. But I'm just curious, since April 2, since the implementation of the tariffs, here's the market's getting a lot more worried about a recession, have you seen any change in behavior from your customers? I'm thinking particularly about the gas power business, maybe some of the co-located data centers versus the traditional regulated utilities. Has there been any change in cadence of conversation or appetite from customers as you've seen the world changed pretty dramatically in the last few weeks? And then maybe as a follow-up question to a prior question, are you changing at all your contract structure with these long lead time orders to maybe better protect yourself for future changes in tariff? I'm just wondering if there's any fundamental changes to the contract structure just given the world that we're living in. Thank you.

Question: Andrew Percoco - Morgan Stanley - Analyst : Thanks, Ken.

Question: Nigel Coe - Wolfe Research LLC - Analyst : Thanks for the question. Just want to stick with gas. I think, Scott, you mentioned that the minority of your reservations, data center, which is a bit surprising. So I'm just wondering maybe you could weigh in with your perspective on what you've seen in kind of your kind of front-loaded opportunity set for data centers as it relates to gas? And then what is kind of the key to getting the slot reservations into orders? Is it permitting, financing? And I know you said over the next 12 months or so, but just wondering what that looks like. Thanks.

Question: Julian Mitchell - Barclays - Analyst : Good morning. Maybe just wanted to start with the EBITDA margin guide. So you've got the Power and Electrification numbers on slide 9 for the year at sort of 13-ish percent at the high end for Electrification, the low end for Power. But I guess if I look at your Q1 results and your Q2 comments, it looks like the first half in both Power and Electrification, you should be at the full-year margin numbers. And normally, you get a half on half step-up in margins in those businesses in the second half. So I'm just trying to understand anything you'd call out and any sort of bridge items or anything that would imply less than normal seasonal ramp. Is it the tariff weighting coming in hard in Q3? Is it plant capacity, additional ramp-up costs in Power? How much is just natural contingency? Any color on that, please?

Question: Julien Dumoulin-Smith - Jefferies - Analyst : Good morning and thank you very much. Maybe following up on my namesake here a little bit. Just the FCF range, you've got about $0.5 billion for the $2.5 billion. You talk about $300 million to $400 million. Are there other mitigating impacts from a cash perspective, just to understand there, or was it just kind of an acceleration of the SG&A that we should be looking for at the back half of the year? And then related, if I can, your commentary on Wind certainly took a little bit of a tone lower here. On onshore specifically, how do you think about that especially given the top of the funnel seems to be slowing given the permitting regime of late? How do you think about the longer-term trends on that front?

Question: Andrew Obin - BofA Global Research - Analyst : Good morning. I think the EPA has been quite busy issuing directives and specifically with a focus on endangerment (inaudible). And I guess the question I have, when you talk to utilities, A, does this change their plans for spending? And specifically, do you see any changes to your expectations on what's happening on the ground on the actual permitting? Thank you.

Question: Andrew Kaplowitz - Citigroup - Analyst : Good morning, everyone. Thanks for fitting me in. Orders, as you said, in Electrification had a difficult comparison in Q1. But in the recent tests, you said that you'd expect a similar annualized growth rate in your equipment backlog in '25 as you saw in '24 and '23. Is that still what you expect, Scott? Can you update us on your capacity capability in Electrification? I know you didn't change '25 revenue guidance, but I know you've been pushing on the capacity of that segment. So if you could maybe update us on the potential increasing capacity that you can see as early as '26?