Financial Data and Key Metrics Changes - Underlying EBIT earnings increased by 78% from 2023 to 2025, moving from $8 million to $32 million [21] - Revenue grew from $325 million to $427 million, driven by a $100 million increase in hyperscaler revenue over the two-year period [22][28] - Operating costs increased by only 15% over the same period, which is significantly lower than the revenue growth [23] Business Line Data and Key Metrics Changes - Revenue from hyperscalers rose from 31% to 47% of total revenue, reflecting strong growth in this segment [28] - The number of repurposed units doubled, indicating robust market growth [24] Market Data and Key Metrics Changes - The investment in AI data centers is projected to continue growing, with significant capital being allocated by major tech companies [10][11] - The competitive landscape consists of approximately 95% local providers, with only 5% being global competitors like Iron Mountain and SK Tes [12] Company Strategy and Development Direction - The company aims to remain capital light while expanding geographically and automating processes to scale efficiently [31] - Strategic partnerships and continuous innovation are emphasized to maintain a competitive edge in the rapidly evolving tech services market [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the hyperscaler market, driven by AI advancements and increasing demand for data center services [32] - The company is well-positioned to capture market share due to its diversified revenue streams and strong relationships with hyperscalers [32] Other Important Information - The company has a robust foundation with no single customer contributing more than 20% of total revenue, ensuring revenue diversification [18] - The company has been investing in scalable capacity, with an additional 50% to 60% capacity available in the U.S. [14] Q&A Session Summary Question: How should we think about the growth in hyperscalers influencing margins? - Management expects margins to increase as hyperscaler growth is paralleled with cost control and efficiency [33][34] Question: Is the hyperscaler segment a higher margin customer? - Management indicated that hyperscaler growth touches all three revenue streams, leading to increased service revenue and margins [36][39] Question: How do costs flex as the company scales? - The company has 50% to 60% capacity available in the U.S., with scaling achieved through adding shifts and automation where feasible [43] Question: Why do clients choose this company over competitors? - The company can move quickly and integrate closely with clients, providing customized services and maintaining high service levels [59][61] Question: What is the company's footprint and why Nashville? - Nashville was chosen for its logistical advantages, and the company has plans for growth in both the U.S. and Europe [64][68] Question: How does the company prevent disruption from competitors? - The company focuses on integrating systems with clients, making it difficult for them to switch providers [74][78]

Core Viewpoint - The AI and data center sector presents significant investment opportunities, with companies like Vertiv and nVent providing essential solutions and services that capitalize on the growing demand for data centers driven by AI applications [1]. Vertiv - Vertiv specializes in digital infrastructure for data centers and communication networks, offering products such as power management and thermal management solutions [2]. - The company has experienced a 10% increase in backlog from the end of 2024, indicating strong demand for data center investments [3]. - Following robust order and backlog growth, management raised the full-year organic revenue growth forecast to 18% from 16% [5]. - Despite maintaining profit margin guidance due to tariff uncertainties, free cash flow (FCF) is projected at $1.3 billion in 2025, with expectations of $1.65 billion and $1.79 billion in 2026 and 2027, respectively [6]. - With a market cap of $36.1 billion, Vertiv is expected to trade at 28 times and 22.5 times FCF in 2025 and 2026, respectively, which could be seen as a good value if AI/data center demand continues to rise [7]. nVent - nVent provides electrical connection and protection solutions, with a strategic focus on increasing exposure to data centers and power utilities [9]. - The acquisition of Avail Infrastructure Solutions for $975 million has resulted in infrastructure-related solutions now comprising 40% of nVent's portfolio, which is the fastest-growing segment [10]. - The company reported mid-teens growth in organic orders in Q1, driven by strong demand in data solutions [10]. - nVent raised its full-year sales guidance to organic growth of 5% to 7% and earnings growth guidance to 22% to 26%, reflecting positive performance despite anticipated tariff impacts [11]. - Analysts project earnings per share of $3.09 and $3.46 for 2025 and 2026, with FCF estimates of $406 million and $561 million, respectively, indicating attractive valuation multiples below 20 times earnings for 2025 and 17.4 times for 2026 [13].