INNIO电话会确认Q3创纪录并上调全年EBITDA指引，但利好已在盘前和前一交易日大幅定价后反转

Innio (NASDAQ:INIO) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Innio achieved a record quarter with over $1 billion in quarterly revenue for the first time, marking a 57% year-over-year increase.
Adjusted EBITDA grew by 70% year-over-year, driven by increased operating leverage and a strong order backlog of $8 billion.
The company raised its full-year adjusted EBITDA guidance by $60 million to between $780 and $800 million, reflecting strong backlog and production ramp.
Significant strategic orders include a 620-megawatt follow-on from a data center developer and a 450-megawatt order from Liberty Energy for data centers in North America.
Innio’s technology is well-positioned for AI data center demand due to its modular deployment, low water usage, and strong environmental performance.
The company plans to expand its annual capacity from 3.5 gigawatts in 2025 to over 10 gigawatts by 2030.
Services revenue grew 20% year-over-year, with expectations for high single-digit growth in the coming years as the installed base expands.
Management emphasized a strong pipeline for future projects, with discussions and reservations extending into 2029-2031.
Full Transcript
OPERATOR
Good day, and thank you for standing by. Welcome to the Innio third quarter 2026 results webcast and conference call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star, one, and one on your telephone. You will then hear an automated message advising your hand is raised. If you join via device audio, click the Raise Hand button on your screen.
To withdraw your question, please press star, one, and one again or click the Lower Hand button. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Tim Furcillo, VP Investor Relations at Innio. Please go ahead.
Tim Furcillo (Vice President of Investor Relations)
Hello everyone, and welcome to Innio’s third quarter 2026 earnings call. My name is Tim Furcillo, Vice President of Investor Relations at Innio. I am joined by our CEO, Dr. Olaf Berlien, and our CFO, Dennis Schulze. With us in the room are also Martin Widner, leading global sales for data centers and power solutions at Innio, Andreas Eberharder, responsible for product management and marketing, and Carl Richards, heading Global Services. Let’s have a quick look at today’s agenda. First, Olaf and Dennis will present the third quarter results. Then you will have approximately 30 minutes for your questions. Please note that this conference call is being recorded today, October 27, 2026.
Before we get started, please do mind the disclaimer. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations of our non-GAAP measures to the most directly comparable GAAP measures can be found in our Form 10‑Q for the period ended September 30, 2026, our quarterly earnings release, and the corresponding presentation slides, all of which are available on our IR website. We will be making forward-looking statements about our business, market position, and future performance.
These statements are made only as of today’s date. We do not undertake any obligation to update these statements except as may be required by law. These statements involve known and unknown risks and uncertainties that may cause our actual results to differ materially from those anticipated or implied today. For additional information on risks and uncertainties, please refer to our SEC filings. Unless otherwise specified, all comparisons refer to Q3 2026 versus Q3 2025.
The remarks are presented using AI-generated voice replicas. The Q&A session will be conducted live with the CEO and CFO, and with that I will hand the call over to Olaf.
Dr. Olaf Berlien (President and CEO)
Thank you, Tim. Hello everyone, and welcome to Innio’s third quarter earnings call. Innio delivered a record quarter, exceeding $1 billion in quarterly revenue for the first time. Our teams continue to execute with great discipline, driving growth while improving productivity across the business. The market environment remains highly supportive. Our strong order momentum reflects long-term customer demand, with more than $6 billion in equipment order intake year to date.
As AI and data center expansion accelerates, the need for power continues to grow. Innio is well positioned to capture this opportunity with reliable, flexible, and sustainable power solutions, and we are expanding capacity to meet that demand. Just recently we reached an important milestone at our Waukesha site, assembling our first Jenbacher generator. With that, let’s turn to the key highlights of the quarter. Let me walk you through the key figures on the top of this page. First, record revenue: total revenue for the quarter was up 57% year over year. Second, profitable growth: adjusted EBITDA grew even faster than revenue, rising by 70% year over year, driven by increased operating leverage. Dennis will discuss this in more detail later. Third, disciplined execution: equipment revenue grew 86%, reflecting strong backlog conversion.
Let me emphasize our projects are progressing as planned with no delays or cancellations. And fourth, excellent revenue visibility: equipment order backlog reached $8 billion, up 142% year over year, with $2.2 billion in Q3 equipment orders. Our last 12-month book-to-bill ratio stands at 3.3 times. Building on this performance, we are raising our full-year adjusted EBITDA guidance by $60 million at the midpoint to between $780 and $800 million. Dennis will walk you through our outlook in more detail.
Later, on the next slide, I’ll highlight three major order milestones that reinforce this momentum. Starting on the left, a 620-megawatt follow-on order from a leading data center developer. We also entered into a long-term service agreement covering the first 500 megawatts of previously ordered capacity. In the center, we secured a 450-megawatt order from Liberty Energy to provide behind-the-meter power for large-scale data center projects in North America.
Delivery is scheduled for 2028. And on the right, we extended our strategic partnership with Aggreko through 2031. The agreement includes a minimum of 450 megawatts of Jenbacher engine capacity to be ordered and delivered by the end of 2027. It also includes access to agreed capacity levels for the remainder of the agreement and a multi-year service agreement for the existing fleet. Together, these commitments show that customers are building their long-term strategies around Innio and support sustained, profitable growth.
On the next slide, let’s take a closer look at Innio’s business. As a reminder, this slide, which we shared last quarter, shows our two business segments: Equipment and Services. On the bottom left, you can see Equipment represented 58% of revenue over the last 12 months, up 6 percentage points from full year 2025, with 67% of equipment order intake. Data centers offer a significant growth opportunity for Innio. At the same time, our long-standing core markets remain strong.
Services, on the bottom right, contributed 42% of revenue over the next decades. Our growing installed base is expected to generate attractive, recurring, high-margin revenue. The equipment backlog and the higher service intensity of data center applications provide further support for long-term, profitable Services growth. With that, let me explain how these two segments reinforce each other. Here you can see one of the key strengths of the Innio business model: our service flywheel. We shared this slide also last quarter, so let’s keep this short. On the left, equipment order intake increased from $3.9 billion in 2025 to $6.8 billion over the last 12 months. This drove our backlog to a record $8 billion, providing excellent revenue visibility. On the right, our expanding installed base delivered $1.5 billion in Services revenue in the last 12 months, and over its lifetime each engine generates around 2.5 times its original equipment EBITDA in Services EBITDA.
As our installed base grows, so does our long-term Services opportunity. Let’s now look at the next slide to see why AI data center customers choose Innio. Innio’s technology delivers a compelling value proposition for AI power. Let me remind you why customer demand for our solutions is so strong. There are six key reasons. First, our solutions allow for modular deployment, which shortens the time to power. Second, we have a proven technology with a large and global installed base of 44 gigawatts installed over decades.
Third, our solutions have the ability to follow rapid AI load swings. Fourth, we have competitive life-cycle costs. Fifth, our solutions have operational flexibility across multiple use cases. And sixth, we deliver strong environmental performance, including near-zero water consumption. This is part of a comprehensive sustainability strategy. For the fifth consecutive year, EcoVadis awarded us its Platinum rating, placing Innio among the top 1% of all companies assessed.
Let’s now look at where our solutions fit into the broader power value chain and the opportunities this creates for Innio. This slide illustrates the full energy value chain and highlights strong demand on both sides of the meter. On the left, in front of the meter, rising electricity demand and grid constraints drive the need for flexible power solutions that support grid stability. We expect our addressable Power Solutions market to grow by 30% annually through 2030.
Increased gas production is also expected to drive 14% annual growth in our addressable Compression market through 2030. On the right, behind the meter, rapid data center expansion fuels demand for fast, reliable on-site power independent of the grid. Here, we expect our addressable market to grow by 65% annually through 2028. For Innio, this creates a significant and sustained growth opportunity. Our success in data centers builds on decades of experience powering industrials, utilities, and gas infrastructure.
This diversified foundation gives us proven technology and an established network to support customers for the long term. We will now take a closer look at one of the most important drivers of behind-the-meter demand, the rapid build-out of AI data centers. Let’s move to the next page. The rapid growth in power demand is creating a major challenge for the U.S. electricity grid. Expanding the grid will take time, and capacity constraints are likely to persist. Let me highlight a few numbers that illustrate the scale of the problem. First, on the left, average grid connection waiting times have increased from less than two years between 2000 and 2007 to more than six years today.
And on the right, the U.S. could face a shortfall of up to 80 gigawatts of firm power capacity by 2030, increasing the risk of reliability problems. This creates a long-term opportunity for Innio. Our on-site power solutions allow customers to secure electricity without having to wait for the grid. And on the next slide, I will explain why gas engines are particularly well positioned to meet this demand. This slide summarizes why customers choose our gas engines. It compares our gas engines with simple-cycle gas turbines, combined-cycle gas turbines, and fuel cells across five key criteria: fast start and load following, part-load efficiency, low redundancy requirements, fast and flexible deployment, and capex. Gas engines offer a strong combination. They respond quickly to changing power demand, maintain high efficiency at part load, and allow customers to add capacity in modular steps.
They also require less capex than fuel cells. For AI data centers, this combination is particularly valuable. Customers need reliable power that can follow rapid load changes and scale with their growth while limiting upfront investments. On the next slide, let me double-click on one of the criteria that is becoming increasingly important: water usage. Water use is attracting growing attention, and our engines need almost none. On the left, U.S. media coverage highlights growing concerns about the water demands of data centers and their power supply. Water availability is an increasingly important issue across political parties in our largest market, the United States. On the right, the comparison shows our advantage: Jenbacher Type 6 engines use less than 0.1 liter of water per megawatt-hour, compared with approximately 200 liters for the turbines shown.
This near-zero water consumption is a clear advantage for customers, particularly where water availability is constrained. Turning to the next slide, we will bring these advantages together with the economics and long-term customer commitments. This slide shows how leading economics and proven performance translate into long-term customer commitments. Customer commitments provide the strongest evidence that Innio is being selected for lasting value beyond near-term equipment availability. Starting on the left—economics—Bloomberg New Energy Finance puts the levelized cost of electricity of gas engines at $103 per megawatt-hour.
This is the lowest cost among behind-the-meter technologies and 26% below fuel cells. In the middle—performance—customer and industry statements highlight our fast response to changing power demand and the reduced need for battery support. And on the right—customer commitments—customers are reserving capacity well into the future with non-cancelable, non-tradable slots. They are also signing multi-year supply agreements that anchor long-term relationships.
These commitments reflect Innio’s operational flexibility and extensive service network. Our service agreements cover major overhauls, extending engine lifetimes and supporting continued operation. And these advantages remain relevant even after customers connect to the grid. Let me explain why on the next slide. Even if grid access becomes available, there are compelling reasons for customers to choose behind-the-meter power solutions. Starting on the left, behind-the-meter solutions provide backup during grid disruptions and have the ability to adapt to rapidly changing AI loads. They also reduce exposure to grid charges and rising electricity costs. On the right, based on the assumptions shown, Bloomberg NEF puts the marginal generation cost of a gas engine at $43 per megawatt-hour.
That is 51% lower than the $89 for grid power. Together, these economic and operational advantages support continued engine operation long after grid connection. And this value proposition resonates across a broad and growing customer base. Let’s move to page number 16. What matters here is simple: our customer base is broadening, and our routes to market are becoming more diversified. On the left, you see two different routes to market. When we sell equipment directly to a customer, demand can naturally be more concentrated. But when we sell to energy-as-a-service companies, rental companies, and channel partners, the customer base becomes more diversified. Behind those partners is a broad range of end customers: leading hyperscalers, oil and gas companies, and critical infrastructure providers.
Broader routes to market mean more end customers across more markets. Many of these engines are installed on site to power data centers. The underlying need for power extends beyond any individual intermediary, and our engines are designed to serve these sites for decades. The strength of our technology puts us in a privileged position, allowing us to be highly selective when choosing customers. We prioritize customers that have either secured long-term offtake agreements with hyperscalers or frontier AI labs, or have a clear line of sight to securing such agreements.
We can also confirm that we have not allocated any meaningful volumes to NIO cloud operators. Let’s move on to the right-hand side, where we show how our equipment order intake is evolving. Our largest customer accounted for approximately 20% of order intake in 2024 and 41% in 2025. In our preliminary near-term outlook, the largest customer share is approximately 21%. Innio’s growth is built on a broad base of strong customers and partners, backed by firm orders and long-term commitments.
With that, let me hand over to Denis for the financial discussion.
Tim Furcillo (Vice President of Investor Relations)
Before we open the line, I ask everyone to ask just one question so we can get to as many people as possible. Operator, please open the line for questions.
OPERATOR
Thank you. To ask a question you will need to press star one and one on your telephone or, if you have joined via device audio, click the raise hand button and wait for your name to be announced. To withdraw your question, please press star one and one again or click the lower hand button. We are now going to take our first question, and this question comes from David Acaro from Morgan Stanley. Please go ahead.
David Acaro (Analyst)
Oh hi, good morning, good afternoon. Thanks so much for taking my question. Let me see, how do you expect orders to trend after 3/4 now? Very strong order patterns here. Great to see. How do you expect orders to trend through the rest of the year and then, when you consider lot reservations that you have, how far out are you reserved at this point? Where are customers, you know, incrementally putting in reservations down the margin?
Dr. Olaf Berlien (President and CEO)
Thanks, David, for the question. Yeah, let me start and then maybe we add Martin and Dennis if I forget something. I think we have still a very strong pipeline, so I do not see any slowdown for the next years. I’m talking with customers about projects in ’29, ’30, and already with ’31. So in this case it’s a strong pipeline for the next years and it’s a combination of firm orders and slot reservations, and this brings us really for strong years ahead.
Martin
Yeah, maybe to add, Olaf, on the slot reservations. As Olaf said, we have a line of sight up to ’29, ’30, ’31. Slot reservations are already signed for that period of time. We still have capacity available for ’29 and ’30 as capacity will be released, and with that our slot reservations will turn into orders between six months from now and 18 months from now, depending on how far out they are for the reserve timing.
David Acaro (Analyst)
Okay, great.
Dr. Olaf Berlien (President and CEO)
I hope that answered the question.
David Acaro (Analyst)
Very helpful.
Dr. Olaf Berlien (President and CEO)
Thanks, David.
Tim Furcillo (Vice President of Investor Relations)
Thanks, David.
OPERATOR
Thank you. We are now going to take our next question, and this one comes from Joe Richie from Goldman Sachs. Please go ahead.
Joe Richie (Analyst)
Hey, good afternoon, everybody. Good afternoon. Hi, Joe. How’s it. So my first question, or I guess my only question, is you take a look at your dollar per kilowatt that came through equipment revenue this quarter. It was roughly around $650 per kilowatt. That’s a really big ramp from the second quarter. Recognize that part of that is going to be pricing. Part of it is probably going to be mixing up into your containerized solution. Can you just maybe unpack that number for us to some degree?
Like how much of it was just mix versus pricing, and then is that a good jumping-off point as we progress beyond Q3?
Adrian Dennis
Let me take that one. We obviously don’t deconstruct the number since we’re not giving separate revenue numbers for the container and for the equipment. But I think it’s a fair assumption to say that the majority of the increase is really scope-driven as we are increasing our deliveries into the data center market, which comes at higher containerization levels. So there’s a lot of scope into that increase. At the same point in time, margin is increasing.
To reconfirm the joint understanding here, we are increasing the margin for the container itself. We are increasing the margin for the equipment piece, so for the engine in itself, and overall you will see the mix effect that is residing to the numbers that we are looking at. In terms of your question of if this is the right starting point, I would say overall containerization ratio has been pretty strong in Q3, but overall for the next couple of quarters on average this is a good starting point to take it up with. There might be some swings up and down based on the concrete cutoffs and the deals delivered in each respective quarter. But you should definitely look forward to see numbers north of 600 going forward. I hope that answers the question, Joe.
Joe Richie (Analyst)
Yes, perfect. Thank you.
OPERATOR
Thank you. Our next question comes from the line of Chris Dendrinos from RBC Capital Markets. Please go ahead.
Chris Dendrinos (Analyst)
Yeah, good afternoon, and congratulations on the strong quarter. You know, I wanted to dial in a bit more to the structure of the relationships with your data center customers and your energy-as-a-service kind of customers that are servicing those data centers. And I guess specifically, can you speak to the average attach rate of the long-term service agreements, and do these agreements kind of extend beyond, you know, that first major or first equipment major equipment overhaul?
Could it be like a multi-lifespan agreement? Thanks.
Dr. Olaf Berlien (President and CEO)
Thanks, Christopher. So I would say Martin will start, and maybe Carl, you can add if something from service we should add.
Martin
Good morning. Yeah. So our contracts and our full-service contracts we are able to sign and negotiate with our customers from the data centers, from the co-locators, and from the energy-as-a-service providers are including the major overhaul. Not all of them, but the majority is including the major overhaul and reach 10 years and even up to 15 years. But as you asked, Christopher, there’s no real difference between the data center direct customer, energy-as-a-service customer, or the rental fleet customer. We all have the same long-term service contracts with these customers. And maybe to add, which I forgot before, the reason for that is that when we sign the new unit contract with them there is a back to back. Normally when they sign then with us the service agreement, they have a back to back.
Back to back majority is at the moment 15 years with their end customers. So that allows them, of course, to sign with us a long-term service agreement going further out of the major overhaul.
Dr. Olaf Berlien (President and CEO)
I hope that answered the question, Christopher.
Chris Dendrinos (Analyst)
Yes. Yeah. Thank you very much.
OPERATOR
Thank you. We are now going to take our next question, and this one is from Mark Strauss from JP Morgan. Please go ahead.
Mark Strauss (Analyst)
Yes, good afternoon. Thank you for taking our questions. So I appreciate the new slide on page 24. Curious if you can also kind of talk about the service margins, at least directionally speaking. I mean it sounds like at least with the ASPs going higher that we should expect margins to go higher as well. I’m just curious, though, kind of directionally, is that slightly higher, materially higher over time? And if you can kind of provide some color around that maybe around kind of customers.
We’re hearing some feedback that customers might be looking to self-perform some more of this. What you’re seeing there: is some of that self-performance maybe in some of the lower-margin parts of service, like the EPC work? Just kind of anything directionally speaking on margins would be great. Thank you.
Dr. Olaf Berlien (President and CEO)
Okay, so Carl, maybe you start on the margin. First of all, Mark, thank you for the question. I think you mean page 22. You see the margin expansion in service from 29 in last year now to 31.1 this quarter in ’26. I think it’s this, but Carl, maybe—
Carl Richards (Heading Global Services)
I think it’s a combination for you. So overall we see for the near term moderate positive margin developments because, of course, we continue to invest into ramping up our service infrastructure as well. Then as we look further out, and that’s probably what you’re referring to on page 24, as the minor overhauls then take a stronger share in the service business, this will then be the time where we see stronger increases of margins. So that’s— and that’s probably also answering the second part of your question, which was around, okay, where do we expect part of the services to potentially be covered by our customers?
The scope that would potentially be covered outside is the labor scope, and it’s typically lower margin than the parts scope. So that’s why, as Dennis also pointed out on the page earlier, service business is very sticky in the most important portion of it, which is the parts business.
Dr. Olaf Berlien (President and CEO)
I hope that answered the question, Mark.
Mark Strauss (Analyst)
Yes it did. Thank you, Olaf. Thank you, Tim.
Tim Furcillo (Vice President of Investor Relations)
Thanks, Mark.
OPERATOR
Thank you. We are now going to take our next question, and this one is from David Ridley Lane from Bank of America. Please go ahead.
David Ridley Lane (Analyst)
Yes, thank you. This is David Ridley Lane on for Andrew Oban. Very much appreciate the additional disclosure that you have not allocated meaningful capacity to NeoClouds. Could you also just describe your credit underwriting in taking slot reservation agreements? Any additional disclosure you can— understand obviously the last couple of weeks in credit markets have focused extensively on credit risk around new data center developers. Any additional disclosure you can give for investors to have more comfort in the quality of your backlog, the 19 gigawatts.
Thank you.
Dr. Olaf Berlien (President and CEO)
Yeah, maybe I give the answer together with Martin. As I said in my remarks, we do not have orders with NeoClouds, so we are not involved in their financial issues or risk from this point of view because we are dealing with the biggest hyperscalers and with the colocations, and they have already their financing. So in this case there is, from our point of view, not this credit risk because, as I said, we do not have business with NeoCloud providers.
But Martin, maybe you add on.
Martin
Good morning, David. Yeah, as Olaf said, we are not working with NeoCloud providers. We are working with hyperscalers, co-locators, energy-as-a-service companies. You saw Aggreko as a rental company and as well IPPs. We usually do not work with land developers, as I already specified or mentioned here last time, the last earnings call, and the NeoClouds very often work with land developers. And the reason we are not working with them is because they are very far away from the end customer, and when they order the equipment there is normally no back to back.
And we are very careful, which we mentioned throughout all the time here, we are very careful with giving the orders and as well slot reservations to customers where we see that there is already a back to back, or there is a very strong side of having a back to back contract with, at the end, the hyperscaler. And due to that, so far we never worked with them. So both on slot reservations and definitely not on firm backlog orders.
Dr. Olaf Berlien (President and CEO)
David, Andrew, is it answered your question or should we—
David Ridley Lane (Analyst)
No. Thank you very much. Really appreciate it. Thank you.
Dr. Olaf Berlien (President and CEO)
Thanks, David.
Tim Furcillo (Vice President of Investor Relations)
Thanks, David. Thanks, Andrew.
OPERATOR
Thank you. We are now taking one more question, and this one comes from Ben Kahlo from Baird. Please go ahead.
Ben Kahlo (Analyst at Baird)
Hey, good day, guys. Congrats on the results. Could you maybe just take a step back? Could you talk to just some of the new state rules around data centers and then how your Jenbacher solution plays into that? If you’re seeing more orders because you outlined your water usage, taking away from turbines or others, if you’re displacing anyone out in the field, and then just maybe if you could just highlight different states where you’re seeing strength in the marketplace.
Thank you guys very much.
Dr. Olaf Berlien (President and CEO)
Yeah, thank you very much. As I said in the beginning of my speech, we do not have any cancellation or delay in any project, so we are not affected from any issues, what you explained. Most of our customer base is in Texas, and all the projects are up and running and have approval. And in this case I do not have any customer— I’m looking now to Martin in his eyes. Did you have any discussion with one of the customers which are affected from the issue?
I think before you answer, the second part was really that I put this chart in order to make it really clear we clearly need more or less no water. I have to say very limited, a minimum of 0.1 liter, because it’s a circular system like in a car. So that means we have no water usage. And I think that’s one of the biggest advantages in comparison to a turbine, which needs up to 200 liters. And in this case we are a preferred solution for that. But back to Martin, any customers you have seen or discussing with problems with permission?
No, of course, we all have seen, or you all have seen, the announcement regarding permitting, etc. So far our projects are not canceled at all, not postponed at all. There was a one-week postponement of one project and now it gets resolved again. So every building continues, everything is fine there, and the other data centers and the other engines are commissioned. Our main projects, Ben, as you said, are still in Texas, in Virginia, in Ohio, New York, New Jersey.
So I would say many, many states in the United States. The concern about water usage, to be honest, I like because it favors our technology. I would say we have more requests for our technology than even before. And so with that, we are not affected so far at all by these new regulations.
Ben Kahlo (Analyst at Baird)
Thank you guys.
Dr. Olaf Berlien (President and CEO)
Did it answer the question?
Ben Kahlo (Analyst at Baird)
Yeah, it did.
Dr. Olaf Berlien (President and CEO)
Thank you very much. Very good.
OPERATOR
Thank you. We are now taking the next question. This one is from Andy Kaplowitz from Citigroup. Please go ahead.
Andy Kaplowitz (Analyst)
Good morning everyone.
Dr. Olaf Berlien (President and CEO)
Good morning.
Andy Kaplowitz (Analyst)
Services revenue has very consistently grown at over 20% this year and that’s really without help from your recent data center equipment order. So how should we think about service going into next year? Can services start this type of growth just given the high utilization of your installed base and our continued high volume of transaction work?
Adrian Dennis
Thanks, Andy. Dennis speaking. As mentioned beforehand, the service business is a very steady, stable, and steadily evolving business. We are adding to the installed base on a consistent basis, but we are adding a lot of young fleet. So the development that we are seeing for the next couple of years actually is unchanged. It should on average be high single-digit growth. This year has been a particularly good year, exaggerating our expectations, and going for the next couple of years I see high single-digit growth before it really kicks up in the early 2030s.
This view is unchanged.
Andy Kaplowitz (Analyst)
Appreciate that, Dennis.
Adrian Dennis
Thanks, Andy. Welcome, Andy.
OPERATOR
Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone or click the raise hand button on your device screen. We will now take one more question, and this question is from Moses Sutton at BNP Paribas. Please go ahead.
Moses Sutton (Analyst)
Thanks for taking my question. Congrats on this quarter. Service intensity, if I could return to that—in slide 24 it’s helpful that you show over 50,000 per megawatt-year estimated for the 19 gigawatts of backlog and slots. Is this equivalent to year-one service pricing? And essentially, that type of number, when we look at it through a given project, is subject to its annual inflation as the service contract progresses. And I know that there are minor and major overhauls in there as well.
So how do we think about that over 50,000—if it’s an average over the lifetime pre-inflation adjustment. Anything that helps frame that. Thank you.
Dr. Olaf Berlien (President and CEO)
Thanks, Moses. I think maybe Dennis and Carl could answer that.
Adrian Dennis
I’ll give it a kick, and then, Carl, you jump in if there’s something missing. So first of all, yes, service intensity is going to increase, and what you saw is completely correct. It’s north of 50k per megawatt per year for what we are seeing in the 19 gigawatts backlog and reserves. So going forward it’s going to increase. It’s again a blend. As you remember, I mentioned numbers of north of 70 to certain data center projects, and other projects might be smaller, but overall the data center intensity is obviously driving this number up.
This is an average over the signed contract life cycle, or the expected contract life cycle, of the engines delivered. So this is the average for the 10 or 15 years ahead, and this is growing into it as the right side of the page is showing. So, out of the box, the first year is then going to be slower before it’s really kicking in, and on average we are getting to this number. So the good years that are following with year 5 and then year 10 and in between are adding more than the 50, whilst at the beginning, as always, it’s starting slower.
Carl Richards (Heading Global Services)
I think that’s exactly it. And then you asked, I think, about pricing as well and indexation, and the pricing shown here, or the value of $50,000 on average per year, that’s today’s value. So that’s not inflated. Yeah. So you should see if there’s inflation out there, we are indexing our contract, and we are going to see indexed-up pricing going forward.
Adrian Dennis
Moses, did this answer your question?
Moses Sutton (Analyst)
Yeah, very helpful, thank you.
Adrian Dennis
Very good. Thank you. See you later.
OPERATOR
Thank you. We have one more question, but I will hand back to Olaf for closing remarks.
Dr. Olaf Berlien (President and CEO)
Yeah, thanks for dialing in and I’m looking forward to see and to meet you. If you have any additional questions, please get in contact with Tim or with Dennis and me, of course. And yeah, hope to see you soon.
OPERATOR
Thank you. Thank you. Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.
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