Siemens Energy (LON:0SEA) raised its fiscal 2026 outlook after reporting record quarterly orders, a record backlog and stronger cash generation in its fiscal second quarter, with management pointing to robust demand across gas turbines and grid equipment, particularly in the United States.
President and CEO Christian Bruch said Siemens Energy delivered “another strong quarter,” citing execution on the company’s backlog, capacity expansion and management of geopolitical risks. Orders reached EUR 17.7 billion in the quarter, which the company described as a record. The order backlog rose to EUR 154 billion, also a record, with Bruch saying backlog margins increased across all businesses.
Profit before special items was EUR 1.164 billion, representing an 11.3% margin, up 220 basis points from the prior-year quarter. Net income rose to EUR 835 million, an increase of more than EUR 330 million year over year. Free cash flow before tax reached EUR 2 billion in the quarter and EUR 4.8 billion for the first half of fiscal 2026.
Guidance Raised Across Key Metrics
Siemens Energy raised its full-year fiscal 2026 outlook, citing strong first-half performance and continued market demand. The company now expects comparable revenue growth of 14% to 16%, up from its previous forecast of 11% to 13%. It also raised its expected profit margin before special items to 10% to 12%, from 9% to 11% previously.
Ferraro said Siemens Energy now expects net income of around EUR 4 billion, compared with the prior range of EUR 3 billion to EUR 4 billion. Free cash flow before tax guidance was increased to around EUR 8 billion from the previous range of EUR 4 billion to EUR 5 billion.
The company also plans to accelerate its share buyback program. Ferraro said the first EUR 2 billion tranche of the previously announced EUR 6 billion program is “substantially completed,” with approximately 11.6 million shares repurchased since March 2026 at an average price of EUR 157.1. Siemens Energy expects additional repurchases of up to EUR 1 billion in the current fiscal year. Including the EUR 0.6 billion dividend paid in March, expected shareholder returns for fiscal 2026 are approximately EUR 3.6 billion.
Gas Services Posts Record Orders
Gas Services delivered EUR 8.9 billion in orders, up 32% year over year and the highest quarterly order intake for the segment. The book-to-bill ratio was 2.55, and the segment backlog rose to EUR 66 billion. Bruch said demand was strong in the Middle East, Europe and the U.S., with U.S. demand “largely driven by data centers” and supported by “excellent pricing conditions.”
The segment booked 77 turbine orders in the quarter, including 26 large, 45 medium and six small turbines, representing 12 gigawatts of new turbine orders. Bruch said 5 gigawatts of order intake was related to data centers, bringing total data center-related commitments to 24 gigawatts, including orders and reservations.
Siemens Energy converted 9 gigawatts of reservation agreements into firm orders during the quarter and ended the period with 27 gigawatts of reservation agreements. Bruch said the company expects total commitments to reach 90 to 100 gigawatts by fiscal year-end.
Gas Services revenue increased 15% year over year, supported by 47% comparable growth in new units. Service revenue was slightly below the prior year, and Ferraro said the service share of revenue fell to 57% from 67% a year earlier due to the stronger new unit mix. Profit before special items was EUR 552 million.
Grid Technologies Drives Upgrade
Grid Technologies was a major driver of the upgraded outlook. Orders increased 42% year over year to EUR 7 billion, supported by a large high-voltage direct current project in the Baltic Sea with a volume of more than EUR 1 billion and strong transformer demand, particularly from the U.S. The segment’s book-to-bill ratio was 2.28, and its backlog rose to EUR 49 billion.
Revenue in Grid Technologies was EUR 3.1 billion, up 12% year over year. Profit before special items was EUR 524 million, representing a 17.1% margin. Siemens Energy raised the segment’s fiscal 2026 comparable revenue growth guidance to 25% to 27%, from 19% to 21%, and lifted its margin guidance to 18% to 20%, from 16% to 18%.
Bruch said Grid Technologies is benefiting from electrification, grid replacement, renewable integration and data center demand. He said the business booked nearly EUR 2 billion of data center orders in the first half of fiscal 2026. Siemens Energy expects transformer and switchgear capacity to increase by around 50% between 2026 and 2030.
The company is also expanding digital grid offerings. Bruch highlighted the launch of Noedra, a software suite for grid cybersecurity, real-time transmission optimization, substation digitization and strategic grid planning. He also cited a Grid AI Lab in Orlando developed with customers and partners including NVIDIA, saying it is intended to support digital twins, predictive models and real-time grid insights.
Siemens Gamesa Losses Narrow
Siemens Gamesa continued to show improvement, though the wind business remained loss-making. Orders were EUR 846 million, slightly above the prior quarter and mainly driven by onshore new units, including orders for the SG 7.0 platform. The segment recorded no material offshore order in the quarter.
Revenue increased slightly year over year due to growth in offshore. Profit before special items improved to negative EUR 44 million, compared with negative EUR 249 million a year earlier. The margin improved to negative 1.7% from negative 9.2%.
Ferraro said the improvement reflected better productivity, increased cost efficiency in offshore and progress in the service business across the fleet. Free cash flow before tax was negative EUR 654 million, partly due to quality-related cash outflows. Siemens Energy maintained its expectation that Siemens Gamesa will reach break-even on profit before special items for the fiscal year.
Management Points to Strong Demand, Capacity Expansion
During the analyst Q&A, Bruch cautioned against reading too much into quarterly fluctuations in gas turbine orders, saying the business remains “not a quarter-by-quarter business” and that orders can be lumpy. He said Siemens Energy continues to see an “elevated level” of gas turbine demand and is focused on building a diversified backlog across regions and customer segments.
Asked about data center demand, Bruch said the company has not seen broad cancellations, though some customers are shifting between sites based on permitting and approval timelines. He said Siemens Energy is also working with customers on combinations of frame sizes and availability, including medium-size gas turbines, to address urgent demand.
Ferraro said backlog coverage for the second half of fiscal 2026 is approximately 93%, and fiscal 2027 coverage is “just shy of 80%.” She also said Siemens Energy intends to provide new midterm targets for fiscal 2030 with its full-year results in November.
Bruch closed the call by saying it is “a great time to be in the energy industry,” adding that factory expansion progress has been positive and that the company will continue executing on capacity growth.
About Siemens Energy (LON:0SEA)
Siemens Energy AG operates as an energy technology company worldwide. It operates through Gas Services, Grid Technologies, Transformation of Industry, and Siemens Gamesa segments. The company provides gas and steam turbines, generators, and heat pumps, as well as performance enhancement, maintenance, customer training, and professional consulting services for central and distributed power generation; and high voltage direct current transmission systems, offshore windfarm grid connections, transformers, flexible alternating current transmission systems, high voltage substations, air and gas-insulated switchgears, digital grid solutions and components, and storage solutions.
