Order Backlog and Revenue Risks - The company's estimated combined order backlog was $5,526.7 million as of December 31, 2023, compared to $4,754.4 million in 2022, with the majority expected to be delivered within one year[81] - The company faces risks from long sales cycles and unpredictable customer orders, particularly large orders, which can cause significant revenue fluctuations from quarter to quarter[80] Market and Competitive Risks - The company's reliance on the growth of data center and communication networks means any decrease in demand for these networks could adversely affect its business and revenue[78][79] - The company operates in a highly competitive market, facing pressure from global competitors like Schneider Electric, Eaton Corporation, and Huawei[89][91] Customer and Contract Risks - Large customers, such as cloud/hyperscale and colocation data center providers, often demand more favorable contract terms, leading to downward pricing pressures[84] - Long-term, fixed-price contracts carry risks such as unanticipated technical problems, cost increases, and delays, which could result in excess costs and penalties[87][88] Government and Regulatory Risks - The company's government contracts are subject to audits, investigations, and potential penalties, which could limit revenue and increase risks[85][86] - The company is subject to evolving data privacy and data protection laws globally, such as GDPR, CPRA, and PIPL, with potential fines, regulatory investigations, and reputational damage for non-compliance[121] - International operations expose the company to legal compliance risks under anti-corruption laws like the U.S. FCPA, which could result in fines, penalties, and reputational harm[122][123] - The company is subject to governmental export and import controls, which could restrict business practices and result in penalties or loss of international market access[124] - Environmental, health, and safety regulations, such as EU RoHS and WEEE directives, could require significant compliance costs or changes to operations[132][133] Supply Chain and Operational Risks - Supply chain disruptions, including volatility in raw material prices and labor shortages, could adversely affect the company's operations and financial condition[92][94] - The company's failure to manage inventory effectively could lead to excess or obsolete inventory, increasing costs and reducing gross margins[94] - Disruption risks to global manufacturing facilities, including natural disasters, labor strikes, and political unrest, which could delay production and shipments[118] Technology and Innovation Risks - The company must anticipate technology shifts, such as the growth of artificial intelligence, to develop new products and services, or risk losing market share[95][96] - Potential product defects or vulnerabilities from third-party components, which could compromise customer network security and harm market perception[99] Cybersecurity and Information Systems Risks - Increased cybersecurity risks due to reliance on information systems and third-party services, potentially leading to revenue loss, increased expenses, and reputational damage[97] - Growing frequency and sophistication of information technology security threats, including unauthorized access to systems and data[98] - High costs and operational disruptions associated with implementing new information systems and enhancements[101] Financial and Debt Risks - The company has $2,118.1 million of senior secured indebtedness under the Term Loan Facility and $850.0 million of Senior Secured Notes due 2028[144] - The company's level of indebtedness could limit its ability to obtain additional financing for working capital, capital expenditures, and strategic acquisitions[145] - The company's ability to comply with debt covenants and restrictions may be affected by economic conditions, financial market factors, and competitive pressures, which are beyond its control[151] - The company's business plan depends on access to capital markets for funding, and any decline in corporate credit ratings could adversely impact its ability to access capital[152] Foreign Exchange and Commodity Risks - The company is exposed to foreign currency exchange rate fluctuations, which could adversely impact revenue growth, especially if the U.S. dollar strengthens against other currencies[140] - The company hedged portions of net investment in foreign subsidiaries against fluctuations in the European Euro and Chinese Yuan during 2023[255] - The company is exposed to commodity price fluctuations for raw materials such as steel, copper, aluminum, and electronic components[257] - The company has transactional foreign currency exposures and uses one-month foreign exchange forwards to mitigate risks[255] Legal and Intellectual Property Risks - The company faces risks from legal claims and proceedings, which could result in costly settlements, disruptions, and adverse effects on business operations[126] - Intellectual property challenges, including third-party claims of infringement, could lead to costly litigation, redesign of products, or cessation of certain activities[127][130] ESG and Reputation Risks - Increasing scrutiny on ESG-related metrics and goals could impact the company's reputation and financial condition if expectations are not met[136][137] Acquisitions and Integration Risks - Potential failure to realize benefits from acquisitions, such as the E&I Engineering acquisition, due to integration challenges and unanticipated liabilities[114][115] Global Economic and Political Risks - The invasion of Ukraine by Russia and resulting sanctions have caused increased inflation, market disruptions, and volatility in commodity prices, particularly in the U.S. and Europe, potentially impacting the company's financial condition and operating results[119] - Global operations in emerging markets pose risks such as economic instability, currency fluctuations, and regulatory compliance challenges[109][110] - Changes in U.S. or foreign trade policies, including tariffs, could increase product costs and reduce competitiveness, potentially impacting demand and profitability[125] Financial Reporting and Internal Controls - The company's internal control over financial reporting was effective as of December 31, 2023, but past material weaknesses indicate potential future risks[142] Stockholder and Governance Risks - The Vertiv Stockholder owns approximately 2.1% of the company's outstanding Class A common stock as of February 16, 2024, giving it significant influence over corporate actions[154] - The Vertiv Stockholder's interests may not align with the company's interests, potentially leading to decisions or transactions that other stockholders may not approve[155] Interest Rate and Hedging Risks - The company entered into interest rate swap agreements with a notional amount of $1,000.0 million to mitigate interest rate risk until the Term Loan matures in 2027[256] - A 100 basis point increase in interest rates would increase annual net interest expense by $11.2 million as of December 31, 2023[256] Financial Statements and Reporting - Additional information on market risks is detailed in "Note 12 - Financial Instruments and Risk Management" within the Notes to Consolidated Financial Statements[258] - The Consolidated Financial Statements and accompanying Notes are filed under "Item 15. Exhibits, Financial Statement Schedules" in the Annual Report[258] - The Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements are listed under "Item 15. Exhibits, Financial Statement Schedules"[259] Liquidity and Capital Risks - Cash and cash equivalents increased to $780.4 million as of December 31, 2023, compared to $260.6 million in 2022[256] - The company has $554.0 million of undrawn commitments under the ABL Revolving Credit Facility, subject to borrowing base and other conditions[144] - The company's ability to pay dividends depends on the financial condition and liquidity of its subsidiaries[159] Tax and Economic Risks - Variability in effective tax rate due to changes in domestic and global tax provisions, potentially impacting financial performance[105] - The company faces risks from global macroeconomic conditions, including supply chain constraints, inflation, and labor shortages[162] Warrants and Dilution Risks - The company has 5,266,667 outstanding Warrants for Class A common stock as of December 31, 2023, which could result in dilution and increased shares eligible for resale[160] Goodwill and Intangible Assets - Total goodwill and net intangible assets as of December 31, 2023, amounted to $3,003.2 million, representing approximately 38% of the company's total assets[139] Restructuring and Efficiency Risks - Risks from rationalization and restructuring efforts, including potential failure to achieve expected cost reductions and efficiency improvements[103] Sales and Distribution Risks - Dependence on independent sales representatives and distributors, with potential adverse effects on revenue and gross margins if their financial condition weakens[104] Internet and Technology Regulation Risks - Future legislation and regulation governing Internet-related services and technologies could disrupt the company's customer markets, leading to declines in sales volume and prices[120]

Vertiv Holdings Co (NYSE:VRT) Q4 FY2023 Earnings Conference Call February 21, 2024 11:00 AM ET Company Participants Dave Cote - Executive Chairman Giordano Albertazzi - Chief Executive Officer David Fallon - Chief Financial Officer Lynne Maxeiner - VP of Investor Relations Conference Call Participants Andrew Obin - Bank of America Lance Vitanza - TD Cowen Nigel Coe - Wolfe Research Amit Daryanani - Evercore Scott Davis - Melius Research Jeff Sprague - Vertical Research Nicole DeBlase - Deutsche Bank Mark ...

Non-GAAP financial measures – full year results | --- | --- | --- | |-------------------------------------------------------------------------------------------------------------------------|---------|----------| | Reconciliation of Net cash provided by (used for) operating activities to Adjusted Free Cash Flow \n($M \| FULL YEAR ) | FY23 | FY22 | | Net cash provided by (used for) operating activities | $900.5 | $(152.8) | | Less: Capital expenditures | (127.9) | (100.0) | | Less: Investments in capitalized ...

Vertiv Holdings Co. (VRT) came out with quarterly earnings of $0.56 per share, beating the Zacks Consensus Estimate of $0.54 per share. This compares to earnings of $0.28 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.70%. A quarter ago, it was expected that this company would post earnings of $0.44 per share when it actually produced earnings of $0.52, delivering a surprise of 18.18%.Over the last four quarters, the compan ...

COLUMBUS, Ohio--(BUSINESS WIRE)--Vertiv Holdings Co (NYSE: VRT), a global provider of critical digital infrastructure and continuity solutions, today reported financial results for its fourth quarter and full year ended December 31, 2023. Vertiv reported fourth quarter 2023 net sales of $1,865 million, an increase of $211 million, or 13%, compared to fourth quarter 2022 and a 12% organic net sales(1) increase, which excludes the impact of foreign currency. The book-to-bill ratio was 1.3x in the fourth quart ...

Vertiv Holdings (VRT) is set to report fourth-quarter 2023 results on Feb 21, before market open.The company projects fourth-quarter revenues in the band of $1.83-$1.85 billion. The Zacks Consensus Estimate for the top line is currently pegged at $1.89 billion, indicating an improvement of 14.1% year over year.Vertiv expects adjusted earnings per share between 48 cents and 52 cents. The consensus mark is pegged at 54 cents per share, implying a whopping 92.86% improvement from the year-ago quarter’s figure. ...

Revenue Performance - For Q1 2020, total revenue was $897.3 million, with products contributing $590.9 million and services & spares contributing $306.4 million[3]. - In Q2 2020, total revenue increased to $1,005.7 million, with products at $693.8 million and services & spares at $311.9 million[3]. - Q3 2020 saw total revenue of $1,162.0 million, with products generating $821.0 million and services & spares at $341.0 million[3]. - For Q4 2020, total revenue reached $1,305.6 million, with products at $947.8 million and services & spares at $357.8 million[4]. - In 2020, total revenue was $4,370.6 million, with products contributing $3,053.5 million and services & spares at $1,317.1 million[4]. - For Q1 2021, total revenue was $1,098.4 million, with products at $777.8 million and services & spares at $320.6 million[5]. - In Q2 2021, total revenue increased to $1,260.3 million, with products at $897.1 million and services & spares at $363.2 million[6]. - For the year ended December 31, 2021, total revenue was $4,998.1 million, with products contributing $3,559.4 million and services & spares at $1,438.7 million[6]. - Total revenue for the fiscal year 2022 reached $5,691.5 million, with critical infrastructure & solutions contributing $3,475.3 million[11]. - For Q1 2023, total revenue was $1,521.1 million, with critical infrastructure & solutions generating $954.7 million[12]. - In Q2 2023, total revenue increased to $1,734.1 million, driven by critical infrastructure & solutions at $1,121.2 million[13]. - Q3 2023 saw total revenue rise to $1,742.6 million, with critical infrastructure & solutions accounting for $1,138.3 million[13]. - The company projects total revenue for the fiscal year 2023 to be $6,863.2 million, with critical infrastructure & solutions expected to contribute $4,449.1 million[13]. Operating Profit and Margins - The adjusted operating profit for the fourth quarter of 2021 was $93.9 million, reflecting a decline compared to previous quarters[18]. - The company reported a total adjusted operating profit of $471.0 million for the full year 2021, indicating a decrease from the previous year[18]. - In fiscal year 2022, the total adjusted operating profit was $439.2 million, with quarterly profits of $12.5 million, $82.0 million, $134.2 million, and $210.5 million respectively[20]. - For fiscal year 2023, the total adjusted operating profit is projected to be $1,053.5 million, with quarterly profits of $175.5 million, $251.2 million, $296.4 million, and $330.4 million respectively[24]. - The Americas segment contributed $426.1 million to adjusted operating profit in 2022, increasing to $958.8 million in 2023[20][24]. - The Asia Pacific segment's adjusted operating profit rose from $274.4 million in 2022 to $248.5 million in 2023[20][24]. - The Europe, Middle East & Africa segment's adjusted operating profit increased from $234.6 million in 2022 to $380.0 million in 2023[20][24]. - The adjusted operating margin for the Americas segment improved from 8.7% in 2022 to 19.8% in 2023[21][25]. - The adjusted operating margin for the Asia Pacific segment was 11.0% in 2022 and decreased to 9.6% in 2023[21][25]. - The adjusted operating margin for the Europe, Middle East & Africa segment increased from 11.5% in 2022 to 20.0% in 2023[21][25]. Segment Performance - The Americas region generated $2,560.5 million in critical infrastructure & solutions for the fiscal year 2023, representing a significant portion of total revenue[13]. - In 2020, the Americas segment reported an adjusted operating profit of $344.6 million, while Asia Pacific and Europe, Middle East & Africa reported $111.4 million and $40.6 million respectively, totaling $496.6 million for all reportable segments[15]. - The adjusted operating margin for the Americas in 2020 was 16.9%, with Asia Pacific at 8.1% and Europe, Middle East & Africa at 4.2%[15]. - For the fiscal year 2021, the Americas segment's adjusted operating profit decreased to $441.2 million, while Asia Pacific and Europe, Middle East & Africa reported $253.4 million and $217.6 million respectively, totaling $912.2 million for all reportable segments[17]. - The adjusted operating margin for the Americas in 2021 was 12.2%, with Asia Pacific at 9.9% and Europe, Middle East & Africa at 12.1%[18]. Cost and Losses - The total corporate, other, and eliminations for 2020 amounted to a loss of $457.4 million, while in 2021, it was a loss of $508.0 million[17]. - Foreign currency losses for 2020 totaled $26.0 million, while in 2021, it was a loss of $3.2 million[17]. - The company incurred merger and acquisition costs of $48.1 million in 2021, which impacted the adjusted operating profit[18]. - Foreign currency losses totaled $3.7 million in 2022 and are projected to be $16.0 million in 2023[20][24]. - Corporate and other expenses were $492.2 million in 2022 and are expected to be $517.8 million in 2023[20][24]. Revenue Reporting Changes - The company will reclassify certain prior period amounts starting in 2024 to align with leadership's review of results and operations[1]. - The previously reported revenue by product and service offering will combine critical infrastructure & solutions and integrated rack solutions, which will be managed collectively as products[2]. - The updated disclosure indicates a shift in revenue reporting, combining critical infrastructure & solutions with integrated rack solutions under products[11]. - The company plans to reallocate centralized costs to respective business segments starting in 2024, which may impact future financial reporting[14].

The most recent trading session ended with Vertiv Holdings Co. (VRT) standing at $62.97, reflecting a +0.21% shift from the previouse trading day's closing. The stock outpaced the S&P 500's daily loss of 0.48%. Meanwhile, the Dow experienced a drop of 0.37%, and the technology-dominated Nasdaq saw a decrease of 0.82%.Coming into today, shares of the company had gained 23.48% in the past month. In that same time, the Computer and Technology sector gained 8.1%, while the S&P 500 gained 5.3%.The investment com ...

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