Group 1 - The article highlights a buy rating for Vertiv Holdings Co (NYSE: VRT) based on robust earnings and favorable AI infrastructure trends [1] - Despite a fair valuation, the company is positioned well due to ongoing demand in the tech sector, particularly related to AI [1] - The analyst emphasizes the importance of core values such as excellence, integrity, transparency, and respect for long-term success in investment [1] Group 2 - The article does not provide any specific financial metrics or performance data for Vertiv Holdings Co [2] - There are no recommendations or advice regarding the suitability of investments for particular investors mentioned in the article [2] - The article clarifies that past performance is not indicative of future results, emphasizing the need for careful consideration in investment decisions [2]

Core Insights - Vertiv Holdings (VRT) reported strong second-quarter 2025 non-GAAP earnings of 95 cents per share, exceeding the Zacks Consensus Estimate by 14.46% and reflecting a year-over-year increase of 41.8% [1] - Net sales for the quarter reached $2.64 billion, a 35.1% increase year-over-year, also surpassing the Zacks Consensus Estimate by 11.86% [1] - The company experienced robust organic sales growth of 34% year-over-year [1] Financial Performance - Organic orders rose 11% year-over-year, with a book-to-bill ratio of approximately 1.2x, and a backlog of $8.5 billion, which is 21% higher than at the end of 2024 and up 7% from the end of Q1 2025 [3] - Product revenues, which accounted for 82.1% of total revenues, increased 39.3% year-over-year to $2.16 billion, while service revenues rose 18.7% to $472.1 million [4] - Revenue breakdown by region: - Americas: Revenues increased 42.9% year-over-year to $1.60 billion [4] - Asia and Pacific (APAC): Revenues increased 36.9% year-over-year to $560.2 million [5] - Europe, Middle East, and Africa (EMEA): Revenues increased 12.5% year-over-year to $475.6 million [6] Operating Details - Selling, general and administrative (SG&A) expenses rose 8.7% year-over-year to $395.6 million, but as a percentage of sales, they decreased by 360 basis points to 15% [7] - Adjusted operating profit increased 28.2% year-over-year to $489.3 million, with a non-GAAP operating margin of 18.5%, down 100 basis points year-over-year [7] Regional Performance - Adjusted operating profit by region: - Americas: Increased 34.9% year-over-year to $384.6 million [8] - EMEA: Decreased 4.8% year-over-year to $104.2 million [8] - APAC: Increased 83.3% year-over-year to $59.2 million [8] Balance Sheet and Cash Flow - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $1.64 billion, up from $1.47 billion at the end of Q1 2025 [9] - Long-term debt decreased slightly to $2.90 billion from $2.904 billion [9] - Cash flow from operating activities was $322.9 million, an increase from $303.3 million in the prior quarter, with free cash flow at $277 million [10] Future Guidance - For 2025, revenues are expected to be between $9.925 billion and $10.075 billion, with organic net sales growth projected at 23% to 25% [11] - Adjusted operating profit is anticipated to be between $1.950 billion and $2.030 billion, with an operating margin in the range of 19.7% to 20.3% [11] - For Q3 2025, revenues are expected to be between $2.510 billion and $2.590 billion, with organic net sales growth projected at 20% to 24% [12]

Core Insights - Vertiv Holdings Co reported better-than-expected second-quarter results, with earnings of 95 cents per share, surpassing the analyst consensus estimate of 83 cents per share, and quarterly sales of $2.64 billion, exceeding the estimate of $2.35 billion [1][2]. Financial Performance - The company raised its FY2025 adjusted EPS guidance from a range of $3.45-$3.65 to $3.75-$3.85 and increased its sales guidance from $9.325 billion-$9.575 billion to $9.925 billion-$10.075 billion [2]. - Vertiv experienced a 35% sales growth, indicating strong market demand and robust order momentum [3]. Strategic Positioning - The CEO highlighted the company's strategic investments in capacity expansion and innovation to meet the growing infrastructure needs, particularly in AI-enabled data centers [3]. - Following the earnings announcement, analysts adjusted their price targets for Vertiv, with Oppenheimer raising it from $140 to $151 and RBC Capital from $143 to $162, both maintaining an Outperform rating [4][9].

Core Insights - The article discusses the author's investment portfolio and insights into various stocks, emphasizing a unique perspective based on their background [1]. Group 1 - The author holds long positions in shares of major companies including Google (GOOG), Taiwan Semiconductor Manufacturing Company (TSM), Amazon (AMZN), and NVIDIA (NVDA) through stock ownership, options, or other derivatives [2]. - The analysis aims to provide contrasting views to other investors, highlighting the author's extensive experience in the field [1]. - The article is intended for informational purposes and encourages readers to conduct their own research before making investment decisions [3].

Vertiv Stock Up 27%. Google, Meta, Microsoft AI Spend To Drive Growth https://t.co/BUQmUaP2YC https://t.co/BUQmUaP2YC ...

Core Insights - Vertiv reported record GAAP revenue of $2,638 million for Q2 2025, exceeding analyst expectations of $2,353.9 million, driven by strong demand for data center solutions, particularly in the Americas and Asia Pacific regions [1][2] - Adjusted diluted earnings per share reached $0.95, surpassing the consensus estimate of $0.83, reflecting a year-over-year increase of 41.8% [2] - Despite strong sales growth, higher supply chain and tariff-related costs pressured adjusted operating margins, which fell to 18.5% from 19.6% year-over-year [2][10] Financial Performance - Revenue (GAAP) for Q2 2025 was $2,638 million, a 35.1% increase from $1,952.8 million in Q2 2024 [2] - Adjusted operating profit was $489.3 million, up 28.1% from $381.8 million in the previous year [2] - Adjusted free cash flow decreased by 17.7% to $277 million compared to the prior year [2][11] Regional Performance - The Americas segment saw net sales increase by 42.9%, driven by robust North American data center investment, with adjusted operating profit rising by 34.9% [6] - Asia Pacific net sales grew by 35.1% year-over-year, with adjusted operating profit jumping 83.3% [7] - EMEA region reported a 12.5% increase in net sales, with management noting robust growth in the pipeline [7] Strategic Focus - Vertiv is focusing on product innovation, particularly in AI and cloud deployments, while investing in its global supply chain and manufacturing [4][9] - The company aims to strengthen relationships with large data center operators and technology leaders to position itself as a reliable infrastructure partner [4] - A recent acquisition of Great Lakes Data Racks & Cabinets is expected to enhance its portfolio in high-density racks and enclosures [9] Future Outlook - For FY2025, Vertiv raised its financial outlook, expecting net sales between $9.93 billion and $10.08 billion, with organic growth of 23% to 25% [12] - Adjusted operating profit is projected to be between $1.95 billion and $2.03 billion, with adjusted earnings per share forecasted at $3.75 to $3.85 [12] - Q3 2025 projections include net sales of $2,510 million to $2,590 million and adjusted EPS between $0.94 and $1.00, with caution regarding potential impacts from proposed tariffs [13]

Part I - Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents Vertiv's unaudited condensed consolidated financial statements for the periods ended June 30, 2025, including detailed statements of earnings, comprehensive income, balance sheets, cash flows, and accompanying notes [Condensed Consolidated Statements of Earnings (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20%28Loss%29) The company reported significant growth in net sales and net income for both Q2 and H1 2025, with Q2 2025 net sales rising to **$2,638.1 million** and net income to **$324.2 million** Q2 and H1 2025 vs 2024 Earnings Performance | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $2,638.1M | $1,952.8M | +35.1% | $4,674.1M | $3,591.9M | +30.1% | | **Operating Profit** | $442.4M | $336.0M | +31.7% | $733.1M | $538.6M | +36.1% | | **Net Income** | $324.2M | $178.1M | +82.0% | $488.7M | $172.2M | +183.8% | | **Diluted EPS** | $0.83 | $0.46 | +80.4% | $1.25 | $0.44 | +184.1% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income for Q2 2025 significantly increased to **$444.6 million**, driven by higher net income and a substantial positive foreign currency translation adjustment Comprehensive Income Comparison (in millions) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $324.2 | $178.1 | $488.7 | $172.2 | | **Other Comprehensive Income (Loss)** | $120.4 | $(26.3) | $194.0 | $(60.6) | | **Comprehensive Income** | $444.6 | $151.8 | $682.7 | $111.6 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$10,406.2 million** from **$9,132.5 million** at year-end 2024, with total equity also rising significantly to **$3,125.4 million** Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $6,302.0 | $5,101.8 | | **Total Assets** | $10,406.2 | $9,132.5 | | **Total Current Liabilities** | $3,614.5 | $3,097.0 | | **Total Liabilities** | $7,280.8 | $6,698.2 | | **Total Equity** | $3,125.4 | $2,434.3 | - Cash and cash equivalents increased to **$1,640.8 million** from **$1,227.6 million** at the end of 2024[15](index=15&type=chunk) - Retained earnings became positive at **$222.0 million**, a significant improvement from a deficit of **$(238.3) million** at year-end 2024[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for H1 2025 was strong at **$626.2 million**, while financing activities used a modest **$32.9 million** due to the absence of large stock repurchases Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Operating Activities** | $626.2 | $519.0 | | **Investing Activities** | $(182.8) | $(81.5) | | **Financing Activities** | $(32.9) | $(626.7) | | **Increase (Decrease) in Cash** | $423.8 | $(200.9) | - The significant decrease in cash used for financing activities in H1 2025 is primarily because there were no common stock repurchases, compared to **$599.9 million** in repurchases in H1 2024[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed explanations of the company's accounting policies and financial results, covering revenue disaggregation, debt structure, segment performance, legal contingencies, and a subsequent acquisition event - Vertiv provides mission-critical digital infrastructure technologies and services for data centers, communication networks, and commercial/industrial environments across three segments: Americas; Asia Pacific; and Europe, Middle East & Africa[25](index=25&type=chunk) - The company adopted ASU 2023-07 for segment reporting, which required expanded disclosure of segment information on an interim basis[29](index=29&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 financial results, highlighting a **35.1%** increase in Q2 net sales driven by strong volume growth, capacity expansion, and a strong liquidity position to fund operations and a planned acquisition - Key business trends include ongoing capacity expansion, investments in AI-related products and solutions, and expansion of the thermal management portfolio to meet growing demand[101](index=101&type=chunk) - The company is actively managing risks from trade uncertainty and tariffs by pursuing a supply chain strategy of supplier and geographic resilience, including adding regional sourcing and manufacturing capabilities[98](index=98&type=chunk)[99](index=99&type=chunk) Q2 2025 vs Q2 2024 Performance Summary | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $2,638.1M | $1,952.8M | +35.1% | | **Gross Profit** | $896.6M | $741.2M | +21.0% | | **Operating Profit** | $442.4M | $336.0M | +31.7% | | **Net Income** | $324.2M | $178.1M | +82.0% | [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Vertiv's Q2 2025 net sales increased **35.1%** year-over-year to **$2,638.1 million**, driven by higher sales volumes, while gross margin declined to **34.0%** due to product/service mix and tariffs - Q2 2025 net sales growth of **35.1%** was primarily driven by higher sales volumes, with product sales increasing by **$601.6 million** and Services & Spares sales by **$83.7 million**[103](index=103&type=chunk) - Gross margin for Q2 2025 decreased to **34.0%** from **38.0%** in Q2 2024, primarily due to the mix of product and service sales and the impact of tariffs[105](index=105&type=chunk) - Interest expense for Q2 2025 decreased by **52.5%** to **$21.3 million**, mainly due to reduced interest rates from Term Loan amendments and higher interest income[109](index=109&type=chunk) - For the six months ended June 30, 2025, net income increased by **183.8%** to **$488.7 million** compared to the same period in 2024[119](index=119&type=chunk) [Business Segments](index=28&type=section&id=Business%20Segments) In Q2 2025, all segments reported strong sales growth, with the Americas leading with a **42.9%** increase in net sales to **$1,602.3 million**, despite a slight operating margin decrease Q2 2025 Segment Performance | Segment | Net Sales | YoY Change | Operating Profit | Margin | | :--- | :--- | :--- | :--- | :--- | | **Americas** | $1,602.3M | +42.9% | $384.6M | 24.0% | | **Asia Pacific** | $560.2M | +36.9% | $59.2M | 10.6% | | **EMEA** | $475.6M | +12.5% | $104.2M | 21.9% | [Capital Resources and Liquidity](index=33&type=section&id=Capital%20Resources%20and%20Liquidity) The company's liquidity position remains strong with **$1,640.8 million** in cash and equivalents and **$783.0 million** available under its ABL Revolving Credit Facility, sufficient to fund operations and planned acquisitions - As of June 30, 2025, the company had **$1,640.8 million** in cash and cash equivalents and **$783.0 million** of availability under its ABL Revolving Credit Facility[140](index=140&type=chunk) - Net cash provided by operating activities for the first six months of 2025 was **$626.2 million**, an increase of **20.7%** from the prior year[143](index=143&type=chunk)[144](index=144&type=chunk) - The company expects full-year 2025 capital expenditures (including capitalized software) to be between **$250.0 million** and **$300.0 million**[137](index=137&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes in its quantitative and qualitative market risk disclosures from those described in its 2024 Form 10-K - There have been no material changes in market risk disclosures since the 2024 Form 10-K[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[150](index=150&type=chunk)[151](index=151&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[152](index=152&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) Vertiv is involved in a putative securities class action lawsuit and related shareholder derivative lawsuits, and has received subpoenas from the SEC and U.S. Attorney's Office concerning these allegations - A putative securities class action (In re Vertiv Holdings Co Securities Litigation, 22-cv-3572) is pending, alleging false statements between February 2021 and February 2022[155](index=155&type=chunk) - In November 2023, the company received a subpoena from the SEC and a parallel request from the U.S. Attorney's Office for the Southern District of New York related to the allegations in the class action lawsuit[158](index=158&type=chunk) - Consolidated shareholder derivative lawsuits (In re Vertiv Holdings Co Stockholder Derivative Litigation) are stayed pending the outcome of the motion to dismiss in the securities class action[156](index=156&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The company reports that its risk factors have not materially changed from those disclosed in its Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes to the company's risk factors since the filing of the 2024 Form 10-K[162](index=162&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or share repurchases during 2025, with **$2.4 billion** remaining available for repurchase under the current authorization - The company made no share repurchases during 2025[166](index=166&type=chunk) - As of June 30, 2025, **$2.4 billion** was available for repurchase under the company's stock repurchase program, which is authorized through December 31, 2027[165](index=165&type=chunk)[166](index=166&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) The company reports that no director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the second quarter[170](index=170&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including a Transition and Consulting Agreement, CEO and CFO certifications, and financial data in Inline XBRL format - Exhibits filed include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[173](index=173&type=chunk)

Financial Data and Key Metrics Changes - Adjusted diluted earnings per share (EPS) was $0.95, up approximately 42% year-on-year, primarily driven by higher adjusted operating profit [12][29] - Organic sales grew 34% year-on-year, with strong performance in the Americas (up mid-40s) and APAC (up mid-30s), while EMEA delivered high single-digit growth [13][30] - Adjusted operating profit was $489 million, up 28% year-on-year, with an adjusted operating margin of 18.5%, approximately 110 basis points lower than the prior year due to tariffs [15][30] - Free cash flow for Q2 was $277 million, down year-on-year, but adjusted free cash flow for the first half was $542 million, a robust growth of 24% year-on-year [16][32] - Full-year adjusted free cash flow guidance raised to $1.4 billion, with net sales guidance increased by $550 million to $10 billion [17][37] Business Line Data and Key Metrics Changes - Americas organic sales increased by 43%, driven by strength in colocation and hyperscale markets, with an adjusted operating margin of 24% [32] - APAC saw a 37% organic sales increase, with margin expansion to 10.6% [32] - EMEA's organic sales grew 7%, but the region is expected to be flat for the full year due to operational execution challenges and investments in fixed costs [34][35] Market Data and Key Metrics Changes - The backlog stands strong at $8.5 billion, up 21% year-on-year and 7% sequentially from Q1, supporting increased guidance for the year [18] - The regulatory environment is becoming more conducive to AI infrastructure investment, positively impacting customer discussions and pipeline [19][110] Company Strategy and Development Direction - The company maintains a strategy of driving growth through organic expansion and strategic acquisitions, with a robust M&A pipeline [10] - Recent acquisition of Great Lakes is expected to enhance the company's capabilities in high-end rack solutions and AI infrastructure [26] - Ongoing investments in R&D and capacity expansion are aimed at staying ahead of market demand and delivering innovative solutions [11][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and future trajectory, highlighting the digital revolution and the fundamental role of data centers [10] - The company anticipates that operational inefficiencies and execution challenges will be resolved by year-end, leading to improved margins in 2026 [31][102] - The management is optimistic about the growth trajectory and market share gains, particularly in the context of AI infrastructure [40][130] Other Important Information - The company plans to change how it communicates orders, providing projected full-year orders rather than quarterly orders to better align with business operations [19] - The tariff situation remains dynamic, with ongoing countermeasures being executed to mitigate impacts [20][21] Q&A Session Summary Question: Margin expectations for 2026 - Management believes that 2026 could be a more normal year for margins, with a positive long-term trajectory expected [48] Question: Strength in backlog and order duration - Backlog duration remains similar to historical trends, with some customers seeking earlier deliveries, indicating a healthy demand [52][53] Question: Impact of tariffs and inflation on pricing - Management indicated that they have the commercial leverage to recover tariffs, despite delays in converting orders to sales [57] Question: Win rates and procurement changes among hyperscalers - Win rates remain stable, with no significant changes in procurement methods among hyperscalers [66][68] Question: Operational inefficiencies - Inefficiencies are attributed to tariff transitions and the need for new sources, compounded by significant growth [75][78] Question: Growth rates for thermal service contracts - Management expects strong growth in thermal service contracts, particularly related to liquid cooling systems [88] Question: Evolution of product offerings for data centers - The company is evolving its product footprint to accommodate higher voltage power distribution and increasing rack density [92][94] Question: Gross margin expectations - Management expects gross margins to improve in Q4 due to operational leverage and resolution of inefficiencies [102][121] Question: Capital allocation priorities post-acquisition - M&A will remain a key part of the capital allocation strategy, with a strong process and active pipeline in place [136]

Financial Data and Key Metrics Changes - Adjusted diluted earnings per share (EPS) was $0.95, up approximately 42% from Q2 2024, primarily driven by higher adjusted operating profit [9][27] - Organic sales grew 34% year-on-year, with strong performance in The Americas (up mid-40s) and APAC (up mid-30s), while EMEA delivered high single-digit growth [10][28] - Adjusted operating profit was $489 million, up 28% year-on-year, with an adjusted operating margin of 18.5%, approximately 110 basis points lower than the prior year due to tariffs [12][28] - Free cash flow for Q2 was $277 million, lower year-on-year, but adjusted free cash flow for the first half was $542 million, a robust growth of 24% year-on-year [13][30] - Full-year adjusted free cash flow guidance raised to $1.4 billion, with net sales guidance increased by $550 million to $10 billion [14][36] Business Line Data and Key Metrics Changes - Americas organic sales increased by 43%, driven by strength in colocation and hyperscale markets, with an adjusted operating margin of 24% [30] - APAC saw a 37% organic sales increase, with margin expansion to 10.6% [30] - EMEA's organic sales grew 7%, but are expected to be flat for the full year due to operational execution challenges and investments in fixed costs [31][32] Market Data and Key Metrics Changes - Q2 orders were up approximately 15% from Q2 2024 and up 11% sequentially from Q1 2025, with a trailing twelve-month organic orders growth of 11% [11][15] - Backlog stood at $8.5 billion, up 21% year-on-year and 7% sequentially from Q1, supporting increased guidance for the year [15][36] Company Strategy and Development Direction - The company continues to focus on organic expansion and strategic acquisitions to extend market leadership, with the recent acquisition of Great Lakes showcasing this approach [7][24] - Investments in R&D and capacity expansion are aimed at staying ahead of market demand and delivering innovative solutions [8][18] - The company is adapting to a changing regulatory environment that is becoming more conducive to AI infrastructure investment [16][104] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on long-term opportunities in the digital revolution and data center market [6][8] - The operational challenges faced in Q2 are expected to be resolved by year-end, with a projected adjusted operating margin improvement in Q4 [29][96] - The company anticipates continued strong growth in 2025, raising guidance for adjusted diluted EPS and net sales [14][35] Other Important Information - The company plans to communicate projected full-year orders rather than quarterly orders starting from Q4 2025 to better align with business operations [16] - The tariff situation remains dynamic, with ongoing countermeasures being executed to mitigate impacts [17][18] Q&A Session Summary Question: Margin expectations for 2026 - Management believes that 2026 could be a more normal year for margins, with a positive long-term trajectory expected [44][45] Question: Strength in backlog and order duration - Backlog duration remains similar to historical trends, with some customers seeking earlier deliveries, indicating a healthy demand [48][50] Question: Tariffs and inflation recovery - The company has commercial leverage to recover tariffs, and relationships with hyperscalers are strong, allowing for co-engineering opportunities [54][56] Question: Win rates and procurement changes - Win rates remain stable, with no significant changes in how hyperscalers procure equipment [62][66] Question: Operational inefficiencies - Inefficiencies are attributed to tariff transitions and the need for increased capacity to meet growth demands, with expectations for normalization [74][78] Question: Growth rates for thermal service contracts - Liquid cooling is expected to drive growth in thermal service contracts, as the complexity of systems increases [83][85] Question: Current product footprint evolution - The company is evolving its product offerings to accommodate higher voltage power distribution and increasing rack density [88][90] Question: Free cash flow allocation - Free cash flow will be prioritized for strategic acquisitions, with a strong process in place for capital allocation [129][131] Question: Modular and prefab solutions trend - There is an acceleration in modular business, with prefabrication of technology being a key focus for the company [134][135]

Second Quarter 2025 Results July 30, 2025 Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv may make in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to Vertiv's future financial or business performance, strategies or expectations, and as such are not historical facts. This includes, without limitation, statements regarding Vertiv's financial posi ...