On July 24, 2024, GE Vernova Inc (GEV, Financial) released its 8-K filing detailing the financial results for the second quarter ending June 30, 2024. GE Vernova, a global leader in the electric power industry, operates through three business segments: Power, Wind, and Electrification. The company provides products and services that generate, transfer, convert, and store electricity.
Performance Overview
GE Vernova reported total orders of $11.8 billion, exceeding revenue by 1.4 times. Total revenue for the quarter was $8.2 billion, reflecting a 1% increase year-over-year, and a 2% organic growth. The company achieved a net income of $1.3 billion, a significant improvement from the previous year's loss, resulting in a net income margin of 15.6%. Adjusted EBITDA stood at $0.5 billion, with an adjusted EBITDA margin of 6.4%. Cash from operating activities was $1.0 billion, leading to a positive free cash flow of $0.8 billion.
Segment Performance
Power: Orders increased by 30% organically, driven by Gas Power and Hydro Power equipment, with revenues rising by 10% organically. The segment's EBITDA margin improved to 13.8%, supported by higher Gas Power services and equipment.
Wind: Orders decreased by 44% organically, primarily due to a large Offshore Wind equipment order cancellation. Revenues declined by 20% organically, impacted by lower Onshore Wind deliveries. However, the segment's EBITDA margin improved to -5.7% from -10.0%.
Electrification: Orders decreased by 5% organically, but revenues grew by 19% organically, driven by Grid Solutions and Power Conversion. The segment's EBITDA margin increased to 7.2% from 2.1%.
Financial Achievements
GE Vernova's financial achievements include a substantial improvement in cash flow, with a $1.3 billion increase in free cash flow. The company also reported a $5.8 billion cash balance, up from $4.2 billion upon its spin-off from GE on April 2, 2024. Additionally, GE Vernova completed the sale of part of its Steam Power nuclear activities to Electricité de France S.A. (EDF), resulting in a pre-tax gain of $0.9 billion.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenues | $8.2B | $8.1B | +1% |
| Net Income | $1.3B | $(149)M | +1.4B |
| Adjusted EBITDA | $0.5B | $0.2B | +0.3B |
| Free Cash Flow | $0.8B | $(447)M | +1.3B |
Analysis and Commentary
GE Vernova's strong performance in the second quarter of 2024 is a testament to its strategic focus on improving safety, quality, delivery, and cost. The company's lean operating model and its emphasis on global electrification and decarbonization trends have driven demand for its products and services. The substantial cash flow improvement and margin expansion across all segments highlight the company's operational efficiency and financial health.
“GE Vernova delivered another strong quarter with EBITDA margin expansion across all segments and substantial cash improvement,” said GE Vernova CEO Scott Strazik. “Global electrification and decarbonization trends continue to drive demand for our products and services, and we are delivering value for our stakeholders.”
Looking ahead, GE Vernova has raised its full-year 2024 guidance, expecting revenue to trend towards the higher end of $34-$35 billion and adjusted EBITDA margin of 5%-7%. The company also anticipates free cash flow of $1.3-$1.7 billion, up from the previous estimate of $0.7-$1.1 billion.
“We’re very encouraged by our first half results as we execute on our strategy to deliver disciplined revenue growth with increased profitability and positive cash generation,” said GE Vernova CFO Ken Parks. “Based on our performance, we are now trending towards the higher end of our revenue guidance for 2024 and have increased our expectations for adjusted EBITDA margins and free cash flow.”
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from GE Vernova Inc for further details.
