Vertiv(VRT)2024-07-26 20:35Financial Performance - Net sales for Q2 2024 were $1,952.8 million, a 12.6% increase from $1,734.1 million in Q2 2023[214] - Net income for Q2 2024 was $178.1 million, a 114.1% increase from $83.2 million in Q2 2023[214] - Comprehensive income for Q2 2024 was $151.8 million, a 64.5% increase from $92.3 million in Q2 2023[215] - Operating profit for Q2 2024 was $336.0 million, a 63.3% increase from $205.8 million in Q2 2023[214] - The company's diluted earnings per share for Q2 2024 were $0.46, a 109.1% increase from $0.22 in Q2 2023[214] - Net income for the six months ended June 30, 2024 was $172.2 million, compared to $133.5 million for the same period in 2023[217] - Operating profit for the Americas segment increased to $285.1 million for the three months ended June 30, 2024, from $191.7 million for the same period in 2023[243] - Total reportable segments' operating profit increased to $426.9 million for the three months ended June 30, 2024, from $309.8 million for the same period in 2023[243] - Net sales for the three months ended June 30, 2024, were $1,121.1 million, a 16.9% increase compared to $959.4 million in the same period in 2023[251] - Operating profit for the three months ended June 30, 2024, was $285.1 million, a 48.7% increase compared to $191.7 million in the same period in 2023[251] - Operating margin increased to 25.4% in Q2 2024, up from 20.0% in Q2 2023, driven by fixed cost leverage, procurement productivity improvements, and price realization[251][252] - Operating profit for the first six months of 2024 was $62.7 million, a $7.9 million increase compared to the same period in 2023, driven by higher sales volumes, improved price realization, and fixed cost leverage[255] Costs and Expenses - Vertiv's cost of sales for Q2 2024 was $1,211.6 million, a 6.3% increase from $1,140.1 million in Q2 2023[214] - The company's selling, general and administrative expenses for Q2 2024 were $363.8 million, an 11.1% increase from $327.6 million in Q2 2023[214] - SG&A expenses for the first six months of 2024 were $677.8 million, an increase of $41.5 million compared to the same period in 2023, primarily due to higher compensation costs, IT and R&D expenses, and professional service fees[253] - Income tax expense for the first six months of 2024 was $79.5 million, a $12.4 million increase compared to $67.1 million in the same period in 2023, driven by improved business results and changes in warrant liabilities[254] Cash Flow and Capital Expenditures - Net cash provided by operating activities was $515.9 million for the six months ended June 30, 2024, up from $295.6 million for the same period in 2023[217] - Capital expenditures were $69.9 million for the six months ended June 30, 2024, compared to $53.6 million for the same period in 2023[217] - Capital expenditures for the first six months of 2024 were $81.5 million, with full-year 2024 expectations set between $175 million and $200 million[256] Share Repurchases and Stock Performance - Vertiv repurchased 9,076,444 shares of its common stock in Q1 2024, with $2.4 billion remaining for additional share repurchases as of June 30, 2024[96] - Vertiv's Board of Directors approved a stock repurchase program of up to $3.0 billion through December 31, 2027[95] - The company repurchased $599.9 million worth of common stock during the six months ended June 30, 2024[217] - The company's stock price increased to $86.57 as of June 30, 2024, from $48.03 as of December 31, 2023[237] - The Vertiv Stockholder sold 20,000,000 shares of Class A common stock on August 8, 2023, reducing its ownership to less than 5% of the outstanding shares[261] Assets and Liabilities - Total current assets increased to $4,191.4 million as of June 30, 2024, up from $4,001.5 million at the end of 2023[216] - Accounts receivable increased to $2,218.8 million as of June 30, 2024, compared to $2,118.1 million at the end of 2023[216] - Inventories rose to $1,103.7 million as of June 30, 2024, up from $884.3 million at the end of 2023[216] - Total liabilities increased to $6,570.8 million as of June 30, 2024, compared to $5,983.6 million at the end of 2023[216] - Total cash, cash equivalents, and restricted cash decreased to $587.7 million as of June 30, 2024, from $788.6 million as of December 31, 2023[229] - Total inventories increased to $1,103.7 million as of June 30, 2024, from $884.3 million as of December 31, 2023[229] - Property, plant and equipment, net increased to $571.1 million as of June 30, 2024, from $560.1 million as of December 31, 2023[229] - The company's long-term debt fair value was $2,118.1 million as of June 30, 2024, compared to $2,107.5 million as of December 31, 2023[238] - Accumulated other comprehensive income (loss) was $(9.8) million as of June 30, 2024, compared to $(65.1) million for the six months ended June 30, 2024[239] Tax and Legal Matters - The company recorded a $10.1 million payment to the Mexican tax administration service (SAT) in Q1 2024, which it intends to seek reimbursement for[192] Revenue by Region - Total revenue for the six months ended June 30, 2024 was $3,255.2 million, with $1,821.7 million from the Americas, $708.8 million from Asia Pacific, and $724.7 million from Europe, Middle East & Africa[222] Hedging and Derivatives - The company has derivative instruments hedging foreign currency exchange rates with a notional amount of $81.0 million, resulting in a realized gain of $0.6 million for the three and six months ended June 30, 2024[234] - The company recognized mark-to-market losses of $0.3 million and $1.0 million for the three and six months ended June 30, 2024, respectively, related to economic hedges for aluminum and copper purchases[235] Credit Facility - The ABL Revolving Credit Facility was amended to increase the revolving loan commitments by $30.0 million, bringing the total loan commitment to $600.0 million[258]