Vertiv(US:VRT)2025-10-22 10:01markdown [Third Quarter 2025 Highlights](index=1&type=section&id=Third%20Quarter%202025%20Highlights) [Summary of Key Financial and Operational Achievements](index=1&type=section&id=Summary%20of%20Key%20Financial%20and%20Operational%20Achievements) Vertiv reported strong third-quarter 2025 results, with significant growth in net sales, operating profit, and orders, driven by increased market demand, particularly in AI-driven infrastructure Key Financial and Operational Achievements | Metric | Q3 2025 Value | Change YoY (%) | Change QoQ (%) | | :-------------------------- | :------------ | :--------- | :--------- | | Net Sales | $2,676 million | +29% | - | | Organic Orders | - | +60% | +20% | | TTM Organic Orders | - | +21% | - | | Book-to-bill ratio | ~1.4x | - | - | | Backlog | $9.5 billion | - | - | | Operating Profit | $517 million | +39% | - | | Adjusted Operating Profit | $596 million | +43% | - | | Adjusted Operating Margin | 22.3% | +220 bps | +380 bps | | Diluted EPS | $1.02 | +122% | - | | Adjusted Diluted EPS | $1.24 | +63% | - | - Strong sales growth was driven by **43% growth in Americas** and **20% growth in APAC**[2](index=2&type=chunk) - The company is investing more decisively in expanding manufacturing and services capacity and amplifying ER&D capabilities to meet strong industry demand, especially in AI-driven infrastructure[4](index=4&type=chunk) - Accelerated a restructuring program in EMEA to optimize and focus operations, anticipating improved market conditions in H2 2026[4](index=4&type=chunk) [Financial Performance Overview](index=9&type=section&id=Financial%20Performance%20Overview) [Consolidated Statements of Earnings (Loss)](index=9&type=section&id=Consolidated%20Statements%20of%20Earnings%20(Loss)) Vertiv reported substantial increases in net sales and profitability for both the third quarter and the nine months ended September 30, 2025, compared to the prior year periods, driven by growth in both product and service sales Consolidated Statements of Earnings (Loss) - Key Metrics | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9M 2025 ($M) | 9M 2024 ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | | Net Sales - Products | 2,214.4 | 1,653.7 | 6,030.1 | 4,479.2 | | Net Sales - Services | 461.4 | 419.8 | 1,319.8 | 1,186.2 | | **Total Net Sales** | **2,675.8** | **2,073.5** | **7,349.9** | **5,665.4** | | Cost of Sales - Products | 1,398.4 | 1,066.3 | 3,980.8 | 2,875.6 | | Cost of Sales - Services | 266.7 | 250.8 | 775.3 | 725.8 | | **Total Cost of Sales** | **1,665.1** | **1,317.1** | **4,756.1** | **3,601.4** | | Operating Profit (Loss) | 516.7 | 371.6 | 1,249.8 | 910.2 | | Net Income (Loss) | 398.5 | 176.6 | 887.2 | 348.8 | | Basic EPS | 1.04 | 0.47 | 2.33 | 0.93 | | Diluted EPS | 1.02 | 0.46 | 2.27 | 0.90 | - Operating profit increased by **39% in Q3 2025** and **37% for the nine months ended September 30, 2025**, compared to the prior year periods[24](index=24&type=chunk) - Net income more than doubled in Q3 2025, rising from **$176.6 million to $398.5 million**, and significantly increased for the nine-month period[24](index=24&type=chunk) [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) Vertiv's balance sheet shows growth in total assets, primarily driven by increases in cash, short-term investments, accounts receivable, and inventories, while maintaining a stable debt structure Consolidated Balance Sheets - Key Metrics | Metric | Sep 30, 2025 ($M) | Dec 31, 2024 ($M) | | :-------------------------- | :---------------- | :---------------- | | Cash and cash equivalents | 1,396.0 | 1,227.6 | | Short-term investments | 544.6 | — | | Accounts receivable, net | 2,810.7 | 2,362.7 | | Inventories | 1,437.1 | 1,244.4 | | **Total current assets** | **6,549.2** | **5,101.8** | | **Total assets** | **10,816.3** | **9,132.5** | | Accounts payable | 1,718.9 | 1,316.4 | | Deferred revenue | 1,131.9 | 1,063.3 | | **Total current liabilities** | **3,576.8** | **3,097.0** | | Long-term debt, net | 2,897.6 | 2,907.2 | | **Total liabilities** | **7,307.6** | **6,698.2** | | **Total equity** | **3,508.7** | **2,434.3** | - Total assets increased by **$1,683.8 million** from December 31, 2024, to September 30, 2025[26](index=26&type=chunk) - Total equity increased by **$1,074.4 million**, reflecting improved profitability and retained earnings[26](index=26&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Vertiv generated strong cash flow from operating activities in Q3 and YTD 2025, which was partially offset by significant investing activities, including capital expenditures and business acquisitions Consolidated Statements of Cash Flows - Key Activities | Cash Flow Activity | Q3 2025 ($M) | Q3 2024 ($M) | 9M 2025 ($M) | 9M 2024 ($M) | | :---------------------------------- | :----------- | :----------- | :----------- | :----------- | | Net cash from operating activities | 508.7 | 375.1 | 1,134.9 | 894.1 | | Net cash from investing activities | (709.9) | (39.2) | (892.7) | (120.7) | | Net cash from financing activities | (11.4) | (13.7) | (44.3) | (640.4) | | Increase (decrease) in cash | (211.8) | 329.7 | 212.0 | 128.8 | | Ending cash, cash equivalents and restricted cash | 1,444.2 | 917.4 | 1,444.2 | 917.4 | - Investing activities in Q3 2025 included **$45.2 million in capital expenditures**, **$1.5 million in capitalized software**, **$441.5 million in short-term investments**, and **$221.7 million for business acquisitions**[27](index=27&type=chunk) - Changes in operating working capital negatively impacted cash flow by **$45.5 million in Q3 2025**, primarily due to increases in accounts receivable and inventories, partially offset by increases in accounts payable[27](index=27&type=chunk) [Liquidity and Adjusted Free Cash Flow](index=2&type=section&id=Liquidity%20and%20Adjusted%20Free%20Cash%20Flow) [Liquidity and Adjusted Free Cash Flow Performance](index=2&type=section&id=Liquidity%20and%20Adjusted%20Free%20Cash%20Flow%20Performance) Vertiv demonstrated strong liquidity and adjusted free cash flow growth in Q3 2025, driven by higher operating profit and lower interest costs, with its credit rating upgraded reflecting robust financial health Liquidity and Adjusted Free Cash Flow | Metric | Q3 2025 Value | Change from Q3 2024 (%) | | :-------------------------------- | :------------ | :---------------------- | | Net cash generated by operating activities | $509 million | +36% | | Adjusted free cash flow | $462 million | +38% | | Liquidity (end of Q3 2025) | $2.7 billion | - | | Net leverage (end of Q3 2025) | ~0.5x | - | - Moody's Investors Service upgraded Vertiv's credit rating to **Ba1 from Ba2**, citing strong market position and consistent operational achievements[7](index=7&type=chunk) - Adjusted free cash flow growth was partially offset by increased taxes from higher profitability and capital investments[6](index=6&type=chunk) [Segment Performance Analysis](index=13&type=section&id=Segment%20Performance%20Analysis) [Regional Segment Results](index=13&type=section&id=Regional%20Segment%20Results) The Americas and APAC regions showed strong growth in net sales and adjusted operating profit for both Q3 and YTD 2025, while EMEA's net sales remained flat in Q3 with a decline in adjusted operating profit Regional Net Sales and Adjusted Operating Profit (Q3 2025 vs Q3 2024) | Region | Net Sales Q3 2025 ($M) | Net Sales Q3 2024 ($M) | Change (%) | Organic Change (%) | Adj. Op. Profit Q3 2025 ($M) | Adj. Op. Profit Q3 2024 ($M) | Change (%) | | :----- | :--------------------- | :--------------------- | :--- | :--------- | :--------------------------- | :--------------------------- | :--- | | AMER | 1,712.4 | 1,198.6 | 42.9% | 43.0% | 501.8 | 303.4 | 65.4% | | APAC | 519.8 | 432.4 | 20.2% | 21.3% | 68.5 | 44.1 | 55.3% | | EMEA | 443.6 | 442.5 | 0.2% | (4.0)% | 83.5 | 114.4 | (27.0)% | | Total | 2,675.8 | 2,073.5 | 29.0% | 28.4% | 595.6 | 416.9 | 42.9% | Regional Net Sales and Adjusted Operating Profit (9M 2025 vs 9M 2024) | Region | Net Sales 9M 2025 ($M) | Net Sales 9M 2024 ($M) | Change (%) | Organic Change (%) | Adj. Op. Profit 9M 2025 ($M) | Adj. Op. Profit 9M 2024 ($M) | Change (%) | | :----- | :--------------------- | :--------------------- | :--- | :--------- | :--------------------------- | :--------------------------- | :--- | | AMER | 4,500.0 | 3,244.7 | 38.7% | 39.0% | 1,146.1 | 776.3 | 47.6% | | APAC | 1,527.2 | 1,173.8 | 30.1% | 31.0% | 173.4 | 106.8 | 62.4% | | EMEA | 1,322.7 | 1,246.9 | 6.1% | 3.1% | 266.4 | 294.2 | (9.4)% | | Total | 7,349.9 | 5,665.4 | 29.7% | 29.4% | 1,421.6 | 1,047.3 | 35.7% | Adjusted Operating Margins by Region | Region | Q3 2025 (%) | Q3 2024 (%) | Change (%) | 9M 2025 (%) | 9M 2024 (%) | Change (%) | | :----- | :------ | :------ | :--- | :------ | :------ | :--- | | AMER | 29.3% | 25.3% | 4.0% | 25.5% | 23.9% | 1.6% | | APAC | 13.2% | 10.2% | 3.0% | 11.4% | 9.1% | 2.3% | | EMEA | 18.8% | 25.9% | (7.1)% | 20.1% | 23.6% | (3.5)% | | Vertiv | 22.3% | 20.1% | 2.2% | 19.3% | 18.5% | 0.8% | [Sales by Product and Service Offering](index=14&type=section&id=Sales%20by%20Product%20and%20Service%20Offering) Product sales significantly outpaced service and spares sales growth across all regions for both the third quarter and year-to-date 2025, with the Americas leading in product sales growth Sales by Product and Service Offering (Q3 2025 vs Q3 2024) | Region | Category | Q3 2025 ($M) | Q3 2024 ($M) | Change (%) | | :------- | :--------- | :----------- | :----------- | :--- | | Americas | Products | 1,426.6 | 957.0 | 49.1% | | | Services & spares | 285.8 | 241.6 | 18.3% | | Asia Pacific | Products | 392.7 | 313.9 | 25.1% | | | Services & spares | 127.1 | 118.5 | 7.3% | | EMEA | Products | 348.3 | 344.7 | 1.0% | | | Services & spares | 95.3 | 97.8 | (2.6)% | | **Total** | **Products** | **2,167.6** | **1,615.6** | **34.2%** | | | **Services & spares** | **508.2** | **457.9** | **11.0%** | Sales by Product and Service Offering (9M 2025 vs 9M 2024) | Region | Category | 9M 2025 ($M) | 9M 2024 ($M) | Change (%) | | :------- | :--------- | :----------- | :----------- | :--- | | Americas | Products | 3,705.7 | 2,565.2 | 44.5% | | | Services & spares | 794.3 | 679.5 | 16.9% | | Asia Pacific | Products | 1,150.5 | 831.0 | 38.4% | | | Services & spares | 376.7 | 342.8 | 9.9% | | EMEA | Products | 1,041.4 | 974.1 | 6.9% | | | Services & spares | 281.3 | 272.8 | 3.1% | | **Total** | **Products** | **5,897.6** | **4,370.3** | **34.9%** | | | **Services & spares** | **1,452.3** | **1,295.1** | **12.1%** | [Organic Growth by Product and Service Offering](index=15&type=section&id=Organic%20Growth%20by%20Product%20and%20Service%20Offering) Organic growth, excluding foreign currency exchange rate impacts, mirrored overall sales trends, with products showing stronger growth than services, particularly in the Americas and Asia Pacific Organic Growth by Product and Service Offering (Q3 2025) | Region | Category | Organic Growth ($M) | Organic Change (%) | | :------- | :--------- | :------------------ | :--------- | | Americas | Products | 471.1 | 49.2% | | | Services & spares | 43.8 | 18.1% | | Asia Pacific | Products | 82.4 | 26.3% | | | Services & spares | 9.6 | 8.1% | | EMEA | Products | (10.4) | (3.0)% | | | Services & spares | (7.3) | (7.5)% | | **Total** | **Products** | **543.1** | **33.6%** | | | **Services & spares** | **46.1** | **10.1%** | Organic Growth by Product and Service Offering (9M 2025) | Region | Category | Organic Growth ($M) | Organic Change (%) | | :------- | :--------- | :------------------ | :--------- | | Americas | Products | 1,148.1 | 44.8% | | | Services & spares | 117.5 | 17.3% | | Asia Pacific | Products | 326.1 | 39.2% | | | Services & spares | 37.4 | 10.9% | | EMEA | Products | 37.4 | 3.8% | | | Services & spares | 1.8 | 0.7% | | **Total** | **Products** | **1,511.6** | **34.6%** | | | **Services & spares** | **156.7** | **12.1%** | [Segment Operating Profit (Loss)](index=16&type=section&id=Segment%20Operating%20Profit%20(Loss)) The Americas segment was the primary driver of operating profit growth, while EMEA experienced a decline, and corporate costs also increased, impacting overall profitability Segment Operating Profit (Loss) | Segment | Q3 2025 ($M) | Q3 2024 ($M) | 9M 2025 ($M) | 9M 2024 ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | | Americas | 501.8 | 303.4 | 1,146.1 | 776.3 | | Asia Pacific | 68.5 | 44.1 | 173.4 | 106.8 | | Europe, Middle East & Africa | 83.5 | 114.4 | 266.4 | 294.2 | | Total reportable segments | 653.8 | 461.9 | 1,585.9 | 1,177.3 | | Corporate | (88.0) | (39.7) | (189.2) | (121.3) | | Amortization of intangibles | (48.2) | (45.3) | (141.1) | (137.1) | | **Operating profit (loss)** | **516.7** | **371.6** | **1,249.8** | **910.2** | - Corporate costs increased significantly from **$39.7 million in Q3 2024 to $88.0 million in Q3 2025**[38](index=38&type=chunk) [Outlook and Guidance](index=2&type=section&id=Outlook%20and%20Guidance) [Full Year and Fourth Quarter 2025 Guidance](index=2&type=section&id=Full%20Year%20and%20Fourth%20Quarter%202025%20Guidance) Vertiv is raising its full-year 2025 guidance across key financial metrics, reflecting sustained business momentum, strong backlog, and strategic investments to capitalize on market opportunities - Vertiv is strategically increasing ER&D investments and expanding production capacity to meet rising industry demand, with **2025 capital expenditures expected to be ~$250 million** and further expansion in 2026[8](index=8&type=chunk) Updated Full Year and Fourth Quarter 2025 Guidance (Midpoint) | Metric | Fourth Quarter 2025 Guidance | Full Year 2025 Guidance | | :-------------------------- | :--------------------------- | :---------------------- | | Net sales | $2,810M - $2,890M | $10,160M - $10,240M | | Organic net sales growth | 18% - 22% | 26% - 28% | | Adjusted operating profit | $620M - $660M | $2,040M - $2,080M | | Adjusted operating margin | 22.1% - 22.7% | 20.0% - 20.5% | | Adjusted diluted EPS | $1.23 - $1.29 | $4.07 - $4.13 | | Adjusted free cash flow | $470M - $530M | $1,470M - $1,530M | - The company increased its adjusted diluted EPS guidance from **$3.80 to $4.10**, adjusted operating profit from **$1,990 million to $2,060 million**, and adjusted free cash flow from **$1,400 million to $1,500 million** (all figures at midpoint of guidance)[9](index=9&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) [About Vertiv Holdings Co](index=4&type=section&id=About%20Vertiv%20Holdings%20Co) Vertiv Holdings Co is a global leader in critical digital infrastructure, providing hardware, software, analytics, and services to ensure continuous, optimal, and scalable operation of vital applications - Vertiv offers a portfolio of power, cooling, and IT infrastructure solutions and services, extending from the cloud to the edge of the network[14](index=14&type=chunk) - Headquartered in Westerville, Ohio, USA, Vertiv operates in **over 130 countries**[14](index=14&type=chunk) [Earnings Conference Call Details](index=4&type=section&id=Earnings%20Conference%20Call%20Details) Vertiv's management team will host a conference call to discuss the Q3 2025 results, with a webcast and slide presentation available on the company's investor relations website - The conference call was scheduled for Wednesday, October 22, at **11 a.m. Eastern Time**[13](index=13&type=chunk) - A webcast of the live call and a slide presentation are available on investors.vertiv.com, with a replay available for **30 days**[13](index=13&type=chunk) [Non-GAAP Financial Information](index=4&type=section&id=Non-GAAP%20Financial%20Information) [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Vertiv utilizes several non-GAAP financial measures to provide investors with supplemental information for evaluating ongoing operations and comparing financial results - Management believes these non-GAAP measures offer useful supplemental information for evaluating the Company's ongoing operations and comparing with past and future periods[15](index=15&type=chunk)[28](index=28&type=chunk) - **Adjusted operating profit (loss):** Operating profit (loss) adjusted to exclude amortization of intangibles and restructuring costs - **Adjusted operating margin:** Adjusted operating profit (loss) divided by net sales - **Organic net sales growth:** Change in net sales adjusted to exclude impacts of foreign currency exchange rates - **Adjusted free cash flow:** Net cash provided by (used for) operating activities adjusted to exclude capital expenditures and investments in capitalized software - **Adjusted diluted EPS:** Diluted earnings per share adjusted to exclude amortization of intangibles, restructuring costs, net non-recurring tax adjustments, term loan amendment expense, and change in warranty liability - Reconciliation of certain forward-looking GAAP to non-GAAP measures for guidance is not available without unreasonable effort due to high variability and uncertainty[16](index=16&type=chunk) [Reconciliation of GAAP and Non-GAAP Financial Measures (Q3 2025 & Q3 2024)](index=16&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Financial%20Measures%20(Q3%202025%20%26%20Q3%202024)) Detailed reconciliations are provided for key non-GAAP metrics, illustrating the adjustments made from GAAP figures for both the three and nine months ended September 30, 2025 and 2024 Reconciliation of Net Cash from Operating Activities to Adjusted Free Cash Flow | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9M 2025 ($M) | 9M 2024 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Net cash provided by (used for) operating activities | 508.7 | 375.1 | 1,134.9 | 894.1 | | Capital expenditures | (45.2) | (36.4) | (126.7) | (106.3) | | Investments in capitalized software | (1.5) | (2.8) | (4.7) | (14.4) | | **Adjusted free cash flow** | **462.0** | **335.9** | **1,003.5** | **773.4** | Reconciliation from Operating Profit (Loss) to Adjusted Operating Profit (Loss) | Metric | Q3 2025 ($M) | Q3 2024 ($M) | 9M 2025 ($M) | 9M 2024 ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | | Operating profit (loss) | 516.7 | 371.6 | 1,249.8 | 910.2 | | Amortization of intangibles | 48.2 | 45.3 | 141.1 | 137.1 | | Restructuring costs | 30.7 | — | 30.7 | — | | **Adjusted operating profit (loss)** | **595.6** | **416.9** | **1,421.6** | **1,047.3** | Reconciliation of Diluted EPS to Adjusted Diluted EPS (Q3 2025) | Metric | GAAP Diluted EPS ($) | Adjustments ($) | Non-GAAP Adjusted Diluted EPS ($) | | :-------------------------- | :--------------- | :---------- | :---------------------------- | | Q3 2025 | $1.02 | Amortization of intangibles: $0.12, Restructuring costs: $0.08, Term loan amendment expense: $0.02 | $1.24 | [Reconciliation of 2025 Adjusted Guidance](index=18&type=section&id=Reconciliation%20of%202025%20Adjusted%20Guidance) The report provides a reconciliation of GAAP Diluted EPS to Adjusted Diluted EPS for the fourth quarter and full year 2025 guidance, detailing the specific adjustments made Reconciliation of Diluted EPS to Adjusted Diluted EPS (Q4 2025 Guidance) | Metric | GAAP Diluted EPS ($) | Adjustments ($) | Non-GAAP Adjusted Diluted EPS ($) | | :-------------------------- | :--------------- | :---------- | :---------------------------- | | Q4 2025 | $1.14 | Amortization of intangibles: $0.12 | $1.26 | Reconciliation of Diluted EPS to Adjusted Diluted EPS (Full Year 2025 Guidance) | Metric | GAAP Diluted EPS ($) | Adjustments ($) | Non-GAAP Adjusted Diluted EPS ($) | | :-------------------------- | :--------------- | :---------- | :---------------------------- | | Full Year 2025 | $3.41 | Amortization of intangibles: $0.49, Restructuring costs: $0.08, Non-recurring tax adjustment: $0.10, Term loan amendment expense: $0.02 | $4.10 | - Guidance reflects tariff rates active on October 20, 2025, and does not account for proposed tariffs that may become effective later[49](index=49&type=chunk) [Cautionary Note Concerning Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Concerning%20Forward-Looking%20Statements) [Risks and Uncertainties](index=4&type=section&id=Risks%20and%20Uncertainties) This section serves as a standard disclaimer, highlighting that statements regarding future performance, strategies, or expectations are forward-looking and subject to numerous assumptions, risks, and uncertainties - Forward-looking statements are not guarantees of performance and are subject to risks and uncertainties that change over time[18](index=18&type=chunk)[20](index=20&type=chunk) - Key risk factors include continued growth of customer markets, long sales cycles, failure to realize sales from backlog, supply chain management issues, competition, IT disruption, and global economic weakness[20](index=20&type=chunk) - Vertiv undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws[20](index=20&type=chunk)