Siemens Energy Sees Demand Surge for AI and Grid Gear, Yet a Revenue Shortfall Tempers Enthusiasm

Siemens Energy's Q2 orders surged 30% to €17.75B, net profit rose 66%, and cash flow forecast doubled to €8B, but a revenue miss caused shares to drop 9% from their record high.

Siemens Energy posted a blockbuster quarter that saw order intake smash analysts’ expectations, net profit jump by two-thirds, and management double its cash-flow target. But the market’s focus on a revenue miss sent shares sliding, highlighting how high expectations had already been priced into the stock after a year of relentless gains.

The industrial group booked €17.75 billion in new orders in the three months to March 31, roughly 13% above the consensus forecast of €15.64 billion and a near-30% increase year-on-year. The book-to-bill ratio hit 1.72, while the total order backlog swelled to a record €154 billion. Around a quarter of gas turbine orders now come from powering data centres, with the Americas region driving much of the momentum – order intake there doubled in the first half of the fiscal year.

Yet the euphoria was tempered by a top-line disappointment. Comparable revenue rose 8.9% to €10.29 billion, falling short of the €10.84 billion analysts had projected. Currency headwinds, notably a softer US dollar, clipped around 550 basis points from the headline figure. The stock, which had already climbed roughly 40% since the start of the year and more than doubled over twelve months, lost ground as profit-taking set in. At €171.68, it now trades about 9% below its April record high.

Profit explosion and cash generation

Net profit soared 66% to €835 million, lifting diluted earnings per share from €0.50 to €0.89. The free cash flow before taxes reached €2 billion in the quarter alone, pushing the first-half total to €4.8 billion, buoyed by advance payments from customers in the Gas Services and Grid Technologies divisions.

That cash strength underpinned a sharp upgrade to the full-year outlook. Siemens Energy now targets comparable revenue growth of 14% to 16% (previously 11% to 13%), an adjusted earnings margin of 10% to 12%, and net profit of around €4 billion. The free cash flow before taxes forecast was doubled to about €8 billion, up from an earlier range of €4 billion to €5 billion. Management also accelerated the share buyback programme by up to €1 billion and, following approval at the annual general meeting, will pay a dividend of €0.70 per share.

Wind unit nears inflection point

The long-troubled wind turbine subsidiary Siemens Gamesa narrowed its quarterly loss to €44 million from €249 million a year earlier, keeping it on track to reach breakeven by the fourth quarter as planned. Chief Executive Christian Bruch stressed that the direction of travel is now firmly positive.

Grid Technologies, meanwhile, continues to stand out as the group’s star performer. Its order intake surged 41.5% to €7 billion, in part thanks to an HVDC subsea project in the Baltic Sea worth over €1 billion and surging transformer demand from the US. The division’s order backlog climbed to €49 billion, and its adjusted margin exceeded 17%. Bruch expects transformer and switchgear capacity will need to rise by roughly 50% by 2030, noting that Grid Technologies booked nearly €2 billion in data-centre-related orders in the first half alone. The unit’s full-year revenue growth target was lifted to 25%–27% with an 18%–20% margin.

Analysts hold firm as visibility extends

Despite the post-release share dip, analysts retained their bullish stance. RBC and JPMorgan reiterated buy ratings with price targets of €200, pointing to the structural demand tailwinds in the energy market. Jefferies was more cautious, keeping a €164 target, but praised the cash-flow performance.

Chief Financial Officer Maria Ferraro offered additional reassurance on visibility: about 93% of second-half 2026 revenue is already covered by the order book, and coverage for fiscal 2027 stands just under 80%. In November, alongside the full-year results, management intends to unveil new medium-term targets for 2030, providing a clearer roadmap for a company that has become a key beneficiary of the AI-driven energy infrastructure boom.