Vestas Raises Full-Year Guidance After Q2 Earnings Surge 46%
The Danish wind turbine manufacturer reported a 9.4% EBIT margin and announced a €400 million share buyback as profitability improvements accelerate across onshore and offshore divisions.
Strong Quarter Drives Guidance Increase
Vestas Wind Systems A/S reported sharply improved second-quarter results and raised its full-year outlook, citing strong execution across both its onshore and offshore wind businesses.
The Danish wind turbine manufacturer posted revenue of €4.7 billion for the quarter, up 26% year-on-year, driven by 37% growth in its Power Solutions segment (earnings call, 2026-08-12). EBIT margin reached 9.4%, representing an improvement of nearly 8 percentage points compared to the prior year period.
Earnings per share rose 46% to €1.1, "one of the highest levels in the history of Vestas," according to CEO Henrik Andersen (earnings call, 2026-08-12). The company announced a €400 million share buyback program beginning August 13 and running through December 16.
Power Solutions Margin Reaches 10.4%
The Power Solutions segment delivered particularly strong results, with EBIT margin of 10.4% in the quarter, up more than 10 percentage points year-on-year. CFO Jakob Wegge-Larsen attributed the improvement to "operating leverage, outstanding project executions and lower-than-expected project costs" in both onshore and offshore operations (earnings call, 2026-08-12).
Order intake totaled 3.3 gigawatts, a 67% increase year-on-year, driven by commercial activity in Europe, the Middle East, Africa, and the Americas. The company reported no offshore orders in the quarter, though management noted that offshore orders arrive intermittently and "will be lumpy" (earnings call, 2026-08-12).
Average selling price on new orders was €1 million per megawatt, reflecting what the company described as a "good mix of project scope and geography" with a stable overall pricing environment (earnings call, 2026-08-12). The Power Solutions order backlog stood at €36 billion at quarter-end.
Service Recovery Progressing
The Service segment saw its order backlog increase to €40.9 billion, up €5 billion compared to a year ago, including a €1.3 billion uplift from indexation. Active service contracts reached 166 gigawatts, an increase of 2 gigawatts quarter-over-quarter.
Service revenue declined 5% year-on-year to generate an EBIT margin of 16.6%. Management said the decrease reflected the ongoing recovery plan's focus on reducing costs and resetting commercial terms, while expressing satisfaction with contract renewal rates.
Path to 10% EBIT Margin
With the raised guidance implying a midpoint EBIT margin of approximately 8% for the full year, Andersen reaffirmed the company's longer-term target of 10% or above. "We might now be at 8%, but that doesn't satisfy us. We still have the 10% target, and we will work towards that diligently," he said (earnings call, 2026-08-12).
The company identified four key levers to reach the target: offshore ramp-up and cost reduction, service operational recovery targeting a 25% EBIT margin, quality improvements to reduce warranty costs, and continued onshore operational leverage.
SG&A costs improved to 7% of revenue on a trailing twelve-month basis, down 0.4 percentage points year-over-year, as the company scales while implementing its operating model reset program.
This article was generated by MarginX from the earnings call on 2026-08-12. It is not investment advice.