Siemens Energy Flexes Financial Muscle as AI-Fueled Orders Push Backlog Past €150 Billion

Siemens Energy Q2 cash flow jumps 42%, plans €1B extra buybacks, record €154B backlog from AI orders, Gamesa narrows losses.

Siemens Energy is writing a two-part growth story this earnings season. On one side, a sudden gush of operating cash flow is giving management the firepower to accelerate shareholder payouts. On the other, an AI-driven orders boom has pushed the order book to a record €154 billion, reinforcing confidence in the company's long-term trajectory. Together, they paint a picture of a company that is generating capital faster than it can deploy it.

The second quarter of its 2025/26 fiscal year – January through March – delivered a 42% leap in pre-tax operating cash flow, hitting €1.98 billion. Siemens Energy credited hefty advance payments tied to new contracts, a byproduct of the same demand surge that is swelling its order intake. That liquidity is now being redirected to investors: the company plans to spend up to an additional €1 billion on share buybacks this fiscal year. The existing €2 billion repurchase tranche is nearly fully used, with only about €200 million left in the tank. The overarching €6 billion buyback programme, stretching to 2028, remains unchanged.

Total shareholder returns for the current fiscal year could reach €3.6 billion by the end of September. So far, roughly €2.4 billion has been returned, including €0.6 billion in dividends. The accelerated payout signals that management sees the cash flow momentum as durable, but it also raises the bar for future quarters.

Behind the financial engineering lies a business firing on all cylinders. Half-year revenue rose 5.7% to just under €20 billion, while net income climbed to €1.443 billion. Earnings per share from continuing operations improved to €1.68, more than doubling from €0.73 a year earlier. The second quarter alone contributed a net profit of €835 million, underscoring the acceleration in the period.

Order intake, however, steals the spotlight. Second-quarter orders surged nearly 30% to €17.7 billion, pushing the total backlog to a record €154 billion. The Gas Services division was the standout, collecting orders worth close to €9 billion, much of it from US data centres racing to power artificial intelligence workloads. The company is now taking in far more business than it can process, a dynamic that supports its upgraded revenue growth forecast of up to 16% for the full year.

Meanwhile, the long-troubled wind unit Siemens Gamesa is showing meaningful improvement. Its operating loss narrowed to €44 million in the second quarter, down sharply from nearly €250 million a year earlier. The division remains the key test of management’s credibility, but the narrowing loss offers the clearest sign yet that the turnaround is gaining traction.

The strong set of results has drawn a mixed reaction from the analyst community. JPMorgan raised its price target to €225, maintaining an overweight recommendation. Deutsche Bank lifted its target to €200, with analyst Gael de-Bray highlighting the improved earnings outlook and the new medium-term targets for 2030 that Siemens Energy plans to unveil in November. On the other side, Barclays holds a fair value estimate of just €110, and mwb research advises selling, arguing that the operational recovery is already priced into the stock.

The shares reflect that tug-of-war. On Thursday, the stock traded at €181.80, up 2.13% on the day, bringing its year-to-date advance to 48.05%. That follows a 141% gain over the past 12 months. After initially dipping on the earnings release – a classic "buy the rumour, sell the fact" pattern – the shares have stabilised well above their 200-day moving average. The 52-week high of €188, set in late February, is now back in sight.

With the cash pile growing and the backlog still swelling, the focus now shifts to execution. If the strong cash flow persists, Siemens Energy can fund both its buyback ambitions and its growth investments. Should inflows taper, the elevated expectations for the Gamesa turnaround and the AI-driven order cycle could quickly become a burden. For now, the company has the luxury of momentum – and the challenge of living up to it.