Vertiv Thrives In AI Era With Strong Backlog, Analyst Says

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]