Core Insights - Vertiv Holdings Co reported better-than-expected third-quarter fiscal 2025 results, with net sales rising 29% year-over-year to $2.68 billion, surpassing the consensus of $2.56 billion. Adjusted EPS was $1.24, exceeding the consensus of $0.99 [1] Financial Performance - For fiscal 2025, Vertiv raised its adjusted EPS guidance to $4.07–$4.13, up from $3.75–$3.85, and above the $3.81 consensus estimate. The company also increased its 2025 sales outlook to $10.16 billion–$10.24 billion, compared to the previous range of $9.93 billion–$10.08 billion and estimates of $10.04 billion [2] - For the fourth quarter, Vertiv expects adjusted EPS of $1.23–$1.29, slightly above the street view of $1.24, and revenue of $2.81–$2.89 billion, ahead of the $2.78 billion forecast [2] Strategic Initiatives - Giordano Albertazzi, Vertiv's CEO, mentioned an accelerated restructuring program in EMEA to optimize operations and strengthen the company's ability to capitalize on improving market conditions expected in the second half of 2026 [3] Analyst Ratings - Following the earnings announcement, Morgan Stanley analyst Chris Snyder maintained an Overweight rating on Vertiv and raised the price target from $165 to $200. Barclays analyst Julian Mitchell maintained an Equal-Weight rating and raised the price target from $145 to $170 [5]

Core Insights - Vertiv Holdings Co (NYSE: VRT) reported its Q3 2025 results, marking a significant achievement in its strategy to capitalize on the global AI and datacenter growth [1] Financial Performance - The company continues to demonstrate strong performance metrics, positioning itself as a structural winner in the expanding AI and datacenter sectors [1] Investment Position - The analysis indicates a beneficial long position in VRT shares, highlighting confidence in the company's future prospects [2]

Financial Performance - Net sales for Q3 2025 reached $2,675.8 million, a 29.0% increase from $2,073.5 million in Q3 2024, driven by higher sales volumes and positive foreign currency impacts[105]. - Net income for Q3 2025 was $398.5 million, a substantial increase of 125.7% from $176.6 million in Q3 2024, reflecting strong operational performance[104]. - Net sales for the third quarter of 2025 were $1,712.4 million, an increase of $513.8 million or 42.9% compared to the third quarter of 2024[114]. - For the first nine months of 2025, net sales reached $7,349.9 million, a 29.7% increase from $5,665.4 million in the same period of 2024[121]. - Asia Pacific net sales reached $1,527.2 million for the first nine months of 2025, an increase of $353.4 million or 30.1% compared to the same period in 2024, driven primarily by growth in India[133]. - Europe, Middle East & Africa net sales were $1,322.7 million, a $75.8 million increase or 6.1% from the prior year, positively impacted by foreign currency by approximately $36.6 million[135]. Profitability - Gross profit for Q3 2025 was $1,010.7 million, representing 37.8% of sales, compared to $756.4 million or 36.5% of sales in Q3 2024, indicating margin expansion due to product and service sales mix[107]. - Operating profit for the Americas segment in the third quarter of 2025 was $501.8 million, an increase of $198.4 million or 65.4% from the previous year[115]. - Operating profit for the Asia Pacific segment was $68.5 million, reflecting a 55.3% increase compared to the same period in 2024[117]. - Operating profit in Asia Pacific was $173.4 million, up $66.6 million or 62.4% year-over-year, with a margin increase to 11.4% from 9.1%[134]. - Operating profit in Europe, Middle East & Africa decreased to $266.4 million, down $27.8 million or 9.4%, with a margin decline to 20.1% from 23.6%[136]. - Gross profit for the first nine months of 2025 was $2,593.8 million, representing 35.3% of sales, compared to 36.4% in the prior year[124]. Expenses and Costs - Selling, general and administrative expenses (SG&A) increased to $414.3 million in Q3 2025, up $79.7 million from Q3 2024, with SG&A as a percentage of sales decreasing to 15.5% from 16.1%[108]. - Total corporate and other costs rose to $88.9 million in the third quarter of 2025, an increase of $43.9 million primarily due to restructuring costs[120]. - Selling, general and administrative expenses increased to $1,156.2 million, a 14.2% rise compared to the first nine months of 2024[125]. - Total corporate and other costs increased to $195.0 million in the first nine months of 2025, up $65.0 million primarily due to a $32.7 million rise in restructuring costs[137]. Cash Flow and Investments - Net cash provided by operating activities was $1,134.9 million, a $240.8 million increase or 26.9% compared to the first nine months of 2024[144]. - Net cash used for investing activities was $892.7 million, significantly higher than $120.7 million in the same period last year, driven by short-term investments and business acquisitions[146]. - Net cash used for financing activities decreased to $44.3 million from $640.4 million, primarily due to a $599.9 million reduction in common share repurchases[147]. - As of September 30, 2025, the company had $1,396.0 million in cash and cash equivalents and $544.6 million in short-term investments, with $782.8 million available under the ABL Revolving Credit Facility[142]. Strategic Initiatives - The company expanded its manufacturing capacity, doubling production for switchgear, busbar, and integrated solutions since late 2021, and opened new facilities in Pune, India, and Pelzer, South Carolina in 2024[103]. - The acquisition of Great Lakes for approximately $200 million, completed on August 20, 2025, enhances the company's capabilities in integrated infrastructure solutions for data centers[103]. - The company is investing in the expansion of its thermal management portfolio to meet growing demands driven by AI workloads, focusing on optimizing performance and power utilization[103]. - The company is actively pursuing a supply chain strategy to enhance resilience amid global trade and economic uncertainties, including regional sourcing and manufacturing capabilities[100]. Interest and Restructuring - Interest expense decreased to $22.8 million in Q3 2025, down 36.5% from $35.9 million in Q3 2024, reflecting improved financial management[104]. - Restructuring costs rose to $30.7 million in Q3 2025, a significant increase of 387.3% compared to $6.3 million in Q3 2024, indicating ongoing operational adjustments[104]. - Interest expense, net, decreased to $69.4 million in the first nine months of 2025, down $50.3 million or 42.0% from the previous year[128].

Core Insights - Vertiv Holdings Co delivered a strong quarter, surpassing Wall Street expectations due to increased data center demand and orders [1] - The company raised its full-year revenue, profit, and cash flow guidance, reflecting ongoing momentum in AI-driven infrastructure [1] Financial Performance - Reported revenue was $2.7 billion, exceeding the Street's estimate of $2.69 billion, while adjusted EPS was $1.24, significantly above the consensus of 98 cents [3][4] - The strong EPS upside was attributed to a 3% revenue increase and a 240 basis point higher operating margin than estimated, with adjusted operating profit at $596 million, surpassing the Street's projection of $519 million [4] Backlog Growth - Organic orders surged 60% year-over-year, implying $3.7 billion in orders for the quarter, supported by a robust backlog of $9.5 billion, which grew 30% year-over-year [5] Outlook - Vertiv raised its full-year 2025 revenue, operating margin (to a 20.2% midpoint), and adjusted EPS guidance, with fourth quarter revenue and EPS guidance exceeding Street estimates [6] - However, fourth quarter EBIT and margin guidance fell slightly below consensus due to tariff and EMEA challenges [6] Investor Focus - Key focus areas for investors include sustained order trends, achieving a 25% margin by 2029, competitive dynamics, and capital allocation strategy [7] - Potential downside risks include challenges to revenue growth from shifts in the data center market and margin pressures from tariffs or competitive activity [7]

Core Insights - Vertiv reported strong third-quarter earnings, exceeding analyst expectations with adjusted earnings of $1.24 per share on sales of $2.68 billion, compared to expectations of 98 cents per share on $2.58 billion in sales [2][3] - The company experienced a significant increase in orders, with a 60% year-over-year growth and a 20% sequential increase from the second quarter [2] - For the current quarter, Vertiv anticipates adjusted earnings of $1.26 per share on sales of $2.85 billion, slightly above analyst projections [3] Financial Performance - Vertiv's third-quarter sales grew by 29% year-over-year, reflecting strong market demand and a robust competitive position [4] - The company built a significant backlog, indicating future growth potential [4] Market Position - Vertiv is recognized as a leader in the Electrical-Power/Equipment industry, tied for first place with nVent Electric, both holding an IBD Composite Rating of 99 [4][5] - The company is featured on three IBD lists: IBD 50, Big Cap 20, and Leaderboard, highlighting its strong market presence [5]

Core Insights - Vertiv Holdings Co. reported strong financial results, with an EPS of $1.24, exceeding estimates and showcasing significant growth [2][6] - The company's revenue reached approximately $2.68 billion, surpassing expectations and indicating a solid market position [3][6] - The growth is largely driven by the AI-driven market, with a 29% increase in net sales year-over-year [4][6] Financial Performance - The EPS of $1.24 represents a 24% earnings surprise compared to the estimated $0.98 [2] - Revenue of $2.68 billion reflects a 3.6% increase over estimates and a rise from $2.07 billion in the same quarter last year [3] - The Americas region saw a 43% increase in sales, while the APAC region experienced a 20% increase [4] Market Dynamics - The AI-driven market has significantly contributed to Vertiv's growth, with a 60% year-over-year surge in organic orders [4] - The company operates within the Zacks Computers - IT Services industry, competing with major firms in delivering innovative IT solutions [1] Financial Metrics - Vertiv has a price-to-earnings (P/E) ratio of approximately 82.09, indicating a high valuation relative to its earnings [5] - The debt-to-equity ratio stands at about 1.02, suggesting a balanced approach to financing [5] - A current ratio of 1.74 demonstrates a solid liquidity position, ensuring the company can meet short-term obligations [5]

Financial Data and Key Metrics Changes - Adjusted diluted EPS for Q3 reached $1.24, up approximately 63% year-over-year, driven by higher adjusted operating profit [8][14] - Q3 organic sales grew 28%, with the Americas up 43% and APAC up 21%, while EMEA declined 4% [8][14] - Adjusted operating profit was $596 million, up 43% year-on-year, with an adjusted operating margin of 22.3% [9][14] - Adjusted free cash flow of $462 million was up 38%, translating to approximately 95% free cash flow conversion [9][16] - The total backlog now stands at $9.5 billion, up about 30% year-on-year and 12% sequentially [10] Business Line Data and Key Metrics Changes - The Americas segment delivered strong organic growth of 43%, driven by accelerated AI demand across product lines [16] - APAC saw 21% organic growth, supported by AI infrastructure demand [16] - EMEA experienced a 4% decline in organic sales, but expectations for recovery are set for the second half of 2026 [17][21] Market Data and Key Metrics Changes - The overall market growth is accelerating, particularly in the colo cloud segment, which is the fastest-growing area [8] - The company reported a trailing 12-month organic orders growth of about 21%, with Q3 orders up 60% year-over-year [8][9] Company Strategy and Development Direction - The company is focused on maintaining technology leadership through R&D investments and operational excellence [4][6] - A restructuring program is being implemented in EMEA to prepare for future growth, with an expected annualized benefit of approximately $20 million starting in 2026 [17] - The company plans to accelerate investments in supply chain and services capabilities to meet evolving customer needs [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a multi-year period of significant growth and value creation, driven by digital transformation and AI demand [6][22] - The company anticipates continued significant organic sales growth in 2026, supported by a substantial backlog and a healthy pipeline [22][24] - Management acknowledged the dynamic nature of tariffs but is optimistic about mitigating their impacts by Q1 2026 [22][23] Other Important Information - The company is committed to maintaining a robust free cash flow, providing strategic flexibility for future investments [23] - The engineering and R&D spending is expected to grow by over 20% in 2026 to stay ahead of industry demands [24] Q&A Session Summary Question: What is driving the order uptake and when will big announcements translate into orders? - Management indicated that strong market conditions, technology evolution, and reliable execution are driving order growth, but the timing of large customer announcements translating into orders can vary [29][31] Question: Can you provide more color on the services opportunity and its margin structure? - Management highlighted that the service business is a unique competitive advantage and is expected to catch up with product growth, generating recurring revenue [37][39] Question: What is the outlook for margins and the impact of tariffs? - Management confirmed that the long-term margin target of 25% by 2029 remains intact, with expectations for incremental margins in the 30%-35% range [46][50] Question: How is the company preparing for growth in EMEA? - Management expressed confidence in a sales acceleration in EMEA and noted that operational inefficiencies are being addressed to improve margins [94][95] Question: What is the competitive environment and how is the company responding to innovations? - Management emphasized the importance of innovation and maintaining a competitive edge through continuous investment in technology [110][111]

Financial Data and Key Metrics Changes - Adjusted diluted EPS for Q3 was $1.24, up approximately 63% year over year, driven by higher adjusted operating profit [8][14] - Q3 organic sales grew 28%, with the Americas up 43% and APAC up 21%, while EMEA declined 4% [8][14] - Adjusted operating profit reached $596 million, up 43% year on year, with a margin of 22.3% [9][14] - Adjusted free cash flow was $462 million, up 38%, translating to approximately 95% free cash flow conversion [16] Business Line Data and Key Metrics Changes - The Americas segment delivered strong organic growth of 43%, driven by accelerated AI demand [16][17] - APAC saw 21% organic growth, supported by AI infrastructure demand [16] - EMEA experienced a 4% decline in organic sales, but there are expectations for recovery in the second half of 2026 [17][18] Market Data and Key Metrics Changes - The overall market growth is accelerating, particularly in the colo cloud segment, which is the fastest-growing area [8] - The total backlog now stands at $9.5 billion, up about 30% year on year and 12% sequentially, indicating strong visibility into 2026 [10][21] Company Strategy and Development Direction - The company is focused on maintaining technology leadership through R&D investments and operational excellence [4][6] - A restructuring program is being implemented in EMEA to prepare for future growth, although acceleration may not occur until the second half of 2026 [10][17] - The company plans to accelerate investments in supply chain and services capabilities to meet evolving customer needs [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a multi-year period of significant growth and value creation, driven by digital transformation and AI demand [6][22] - The company anticipates continued significant organic sales growth in 2026, supported by a substantial backlog and market indicators [22][24] - Tariffs are viewed as a dynamic input cost, with mitigation strategies in place to offset their impacts [11][22] Other Important Information - The company is raising full-year guidance for adjusted EPS, net sales, adjusted operating profit, and adjusted free cash flow [20][21] - The engineering and R&D spending is expected to grow by over 20% in 2026 to maintain competitive advantage [24] Q&A Session Summary Question: What is driving the order uptake and when will big announcements flow into orders for Vertiv? - Management indicated that strong market conditions, technology evolution, and reliable execution are driving order growth, but the timing of large customer announcements translating into orders can vary [29][31] Question: Can you provide more color on the services opportunity and its margin structure? - Management emphasized that the service business is a unique competitive advantage and is expected to catch up as product systems grow, with a strong focus on technology and customer experience [37][39] Question: What is the outlook for EMEA margins and the path back to mid-20s? - Management stated that a combination of sales acceleration and restructuring efforts will facilitate improved margins in EMEA, with expectations for significant improvement in Q4 [91][92] Question: How does the company view the competitive environment and recent innovations? - Management expressed confidence in their innovation capabilities and the importance of staying ahead in the market, viewing recent innovations as opportunities rather than threats [108]

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Financial Data and Key Metrics Changes - Adjusted diluted EPS for Q3 2025 was $1.24, up approximately 63% year over year, driven by higher adjusted operating profit [7][13] - Q3 organic sales grew 28%, with the Americas up 43% and APAC up 21%, while EMEA declined 4% [7][13] - Adjusted operating profit reached $596 million, up 43% year on year, with a margin of 22.3% [9][13] - Adjusted free cash flow was $462 million, up 38%, reflecting strong operating performance [9][16] - Total backlog increased to $9.5 billion, up about 30% year on year and 12% sequentially [10][13] Business Line Data and Key Metrics Changes - The Americas segment delivered strong organic growth of 43%, driven by accelerated AI demand across product lines [16] - APAC saw 21% organic growth, supported by AI infrastructure demand [16] - EMEA experienced a 4% decline in organic sales, but expectations for recovery are set for the second half of 2026 [17][19] Market Data and Key Metrics Changes - The overall market growth is accelerating, particularly in the colo cloud segment, which is the fastest-growing area [8] - The company reported a trailing 12-month organic orders growth of about 21%, with Q3 orders up 60% year over year [7][9] Company Strategy and Development Direction - The company is focused on maintaining technology leadership through consistent R&D investments and operational excellence [4][5] - A restructuring program is being implemented in EMEA to prepare for future growth, with an expected annualized benefit of approximately $20 million starting in 2026 [17] - The company plans to accelerate investments in supply chain and services capabilities to meet evolving customer needs [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a multi-year period of significant growth and value creation, driven by digital transformation and AI demand [5][21] - The company anticipates continued organic sales growth in 2026, supported by a substantial backlog and a healthy pipeline [21][24] - Tariffs are viewed as a dynamic input cost, with mitigation strategies in place to offset their impacts [11][22] Other Important Information - The company is raising its full-year guidance for adjusted EPS, net sales, adjusted operating profit, and adjusted free cash flow [19][20] - The adjusted operating margin target for 2029 remains at 25%, with expectations for incremental margins in the 30% to 35% range [19][63] Q&A Session Summary Question: What is driving the order uptake and when will big announcements flow into orders for Vertiv? - Management indicated that order growth is driven by a strong market and technology evolution, with large players expanding their backlogs [28][30] Question: Can you provide more color on the services opportunity and its margin structure? - Management emphasized the service business as a unique competitive advantage, generating recurring revenue, and expected to accelerate as product systems grow [34][36] Question: What is the outlook for EMEA margins and the path back to mid-20s? - Management stated that a combination of sales acceleration and restructuring efforts would facilitate improved operating leverage and margins in EMEA [66] Question: How does the competitive environment affect Vertiv's market position? - Management expressed confidence in their innovation-driven approach, stating that they are at the forefront of industry advancements and maintain strong competitive advantages [82][84]