Vertiv (NYSE:VRT) 2026 Conference Summary Company Overview - **Company**: Vertiv - **Industry**: Data Center Infrastructure Solutions Key Points and Arguments Technology and Market Positioning - Vertiv emphasizes its commitment to staying ahead in technology by maintaining close relationships with customers and technology partners, particularly with NVIDIA and hyperscalers [2][3] - The company is transitioning from point products to system-level solutions, focusing on interoperability and comprehensive infrastructure offerings [2][3] - Vertiv's infrastructure solutions, such as the Vertiv OneCore product, are designed to optimize data center performance and address customer needs for densification and capacity [2][3] Order Growth and Market Opportunities - Vertiv's order book is expected to grow, with projections indicating orders could exceed $18 billion in 2026, driven by a robust pipeline and increasing demand for high-density compute solutions [4][13] - The company is experiencing a shift towards more complex system-level orders, which enhances its share of wallet and total content per customer [6][9] - Q4 orders were significantly higher than previous quarters, indicating strong market demand and a potential continuation of this trend into 2026 [13][14] Regional Demand Insights - The Americas region showed strong order growth, particularly driven by AI deployments, while EMEA is experiencing a rebound in demand after a period of low orders [21][24] - APAC, particularly India, is also showing strong pipeline growth, although China is lagging in execution [24][25] Regulatory and Infrastructure Challenges - There is increasing scrutiny on data center power consumption and grid interoperability, leading to a focus on new power architectures and on-site power generation solutions [27][28] - Vertiv is developing products that enable customers to navigate regulatory challenges and optimize power usage, including battery energy storage systems [29][30] Product Development and Innovations - Vertiv is preparing to launch an 800-volt DC architecture portfolio in late 2026, addressing the industry's need for higher efficiency and capacity as data center demands increase [33][34] - The company is also innovating in thermal management, with products like the Vertiv Trim Cooler designed to handle varying cooling needs effectively [50][51] Competitive Landscape - The liquid cooling market is expected to grow significantly, with Vertiv continuing to invest in capacity and differentiation through system-level design and integration [67][69] - Vertiv's experience and scale in the market provide a competitive advantage over new entrants, particularly in large-scale liquid cooling deployments [72][73] Financial Outlook - Vertiv aims for a 30% incremental margin in 2026, supported by fixed cost leverage and a strong order pipeline [78][80] - The company is focused on growing its services market, which is expected to become a significant revenue driver as original equipment sales stabilize [55][56] Future Trends and Innovations - The rapid pace of technological change in the data center industry is a primary focus for Vertiv, as it seeks to keep infrastructure ahead of GPU advancements [87][88] - The potential for service revenue growth from the installed base is seen as a key differentiator for Vertiv's long-term strategy [88][89] Additional Important Insights - The shift towards 800-volt DC architecture is not just about efficiency but also about overcoming physical limitations of traditional power distribution systems [34][35] - The role of UPS systems is evolving, with a greater emphasis on energy storage and power management capabilities to support dynamic loads in AI data centers [40][42] - Vertiv's strategy includes addressing regulatory challenges through innovative solutions that enhance grid compatibility and operational efficiency [30][31]

Shares of Vertiv Holdings (NYSE: VRT) surged 20% higher this week through 11 a.m. Friday, according to data provided by S&P Global Market Intelligence. The stock hit a 52-week high $255.54 per share this week, more than doubling in one year. While the broader market is wrestling with fears of an artificial intelligence (AI) bubble, Vertiv Holdings just proved that the core physical systems powering up AI data centers are in higher demand than ever. Will AI create the world's first trillionaire? Our team j ...

February 12, 2026 12:00 PM GMT Vertiv Holdings Co. | North America M Idea Leaders Stay Ahead, PT to $285 | What's Changed | | | | --- | --- | --- | | Vertiv Holdings Co. (VRT.N) | From | To | | Price Target | $200.00 | $285.00 | Exhibit 1: VRT Americas Revenue has grown at just half the rate of US DC construction / Hyperscsler capex over the last 5yrs but the 2H25 order inflation suggests a catchup is coming. More importantly, we are confident in the durability of VRT topline growth behind its innovation le ...

Core Viewpoint - Vertiv's stock surged nearly 25% following the announcement of exceptional quarterly results, driven by a significant increase in organic orders and a strong backlog, indicating a robust market position in the AI infrastructure sector [1][4][6]. Group 1: Financial Performance - In Q4 2025, Vertiv reported a staggering 252% year-over-year increase in organic orders, with a backlog reaching $15 billion, more than double from the previous year [6][21]. - The company's order-to-bill ratio stood at 2.9, suggesting that for every $1 of revenue, there were nearly $3 in new orders [6][24]. - Adjusted diluted EPS for 2026 is projected at $6.02, representing a 43% increase, with organic sales expected to grow by 28% to approximately $13.5 billion [7][36]. Group 2: Market Dynamics - The Americas remain the core growth engine, with a projected organic growth rate of over 30% for 2026, following a 46% increase in 2025 [8][36]. - Despite a 14% decline in sales in the EMEA region in Q4, management noted signs of recovery, likening the market sentiment to a spring being released [8][22]. - The Asia-Pacific region experienced a 9% decline, but growth is anticipated in India and other areas, with a moderate growth rate expected in China [8][23]. Group 3: Strategic Decisions - Vertiv announced a significant increase in capital expenditures from 2-3% of sales to 3-4% by 2026 to support capacity expansion [10][26]. - The company will cease quarterly disclosures of actual orders and backlog data, opting to provide this information annually to reduce short-term volatility and focus on long-term delivery capabilities [11][24]. - CEO Gio Albertazzi emphasized the importance of the CDU (Cooling Distribution Unit) in complex thermal management systems, asserting its irreplaceability amid technological debates [9][10]. Group 4: Competitive Positioning - Vertiv's leadership in liquid cooling technology is underscored by its ability to manage complex thermal systems, which is increasingly critical as AI infrastructure demands grow [9][10]. - The company is actively expanding its service capabilities, with a 25% year-over-year increase in lifecycle service orders, enhancing its competitive advantage [29][100]. - The acquisition of PurgeRite has strengthened Vertiv's fluid management capabilities, crucial for modern data centers and AI facilities [29][100].

Core Insights - Vertiv has reported an exceptional quarterly performance driven by a surge in organic orders, which increased by 252% year-over-year and 117% quarter-over-quarter, leading to a backlog of $15 billion, more than double the previous year [2][4][19] - The company has provided an ambitious financial outlook for 2026, projecting adjusted diluted EPS of $6.02, representing a 43% increase, and organic sales growth of 28% to approximately $13.5 billion [5][6][30] - The management emphasized that the data center construction supercycle is still in its early stages, and Vertiv's market position is strengthening [2][4] Order Growth - The organic order volume for Q4 2025 reached a staggering 252% year-over-year, with a book-to-bill ratio of 2.9, indicating strong demand [4][19] - The backlog has reached $15 billion, reflecting a robust market confidence in Vertiv's delivery capabilities [4][19] - CEO Gio Albertazzi dismissed concerns about potential irregularities in order patterns, asserting that the large orders are a result of customer trust in Vertiv's capabilities [4][19] 2026 Financial Guidance - Vertiv expects adjusted diluted EPS for 2026 to be $6.02, indicating a 43% growth, with organic sales projected to grow by 28% [5][6][30] - The Americas market is anticipated to be the primary growth engine, with an expected sales growth rate of over 30% [7][30] - The company plans to increase capital expenditures from 2%-3% of sales to 3%-4% by 2026 to support this growth [8][20] Regional Performance - The Americas region showed a remarkable organic growth of 46% in 2025, while EMEA experienced a 14% decline, though signs of recovery are noted [7][18][30] - Management expressed optimism about the EMEA market, likening its recovery to a spring being released, indicating improved market sentiment [7][18] - The Asia-Pacific region saw a 9% decline, but growth is expected to accelerate in India and other areas [18][30] Technology and Market Position - Vertiv defended its position in thermal management, emphasizing the continued necessity of CDU (Cooling Distribution Unit) despite advancements in chip temperature tolerance [7][8] - The company is focusing on expanding its capacity and enhancing its product offerings, including integrated solutions like OneCore and SmartRun [21][22] - The service segment is a key competitive advantage, with lifecycle service orders growing over 25% year-over-year [23][86] Operational Strategy - Vertiv plans to cease quarterly reporting of actual orders and backlog data, opting to disclose this information annually to reduce volatility and focus on long-term delivery capabilities [8][9][19] - The company is actively expanding its production capacity and collaborating closely with suppliers to manage material inflation pressures [20][30] - The management is confident in converting the backlog into revenue and EPS growth, with a focus on operational efficiency and strategic investments [30][54]

Financial Data and Key Metrics Changes - Vertiv reported a strong fourth quarter and full year 2025, with adjusted diluted EPS of $1.36, up 37% year-over-year, and adjusted operating profit of $668 million, up 33% from the prior year [9][23]. - The company achieved a trailing twelve-month organic orders growth of 81%, with fourth quarter orders up 152% year-over-year and a book-to-bill ratio of 2.9 times [8][11]. - Adjusted free cash flow for the full year was approximately $1.9 billion, with a conversion rate of 115% [9][28]. Business Line Data and Key Metrics Changes - In the Americas, sales were up 50%, with 46% organic growth, driven by strong demand across products and customer segments [25]. - APAC sales were down 10%, with a 9% organic decline, primarily due to macroeconomic conditions in China [25]. - EMEA sales decreased by 8%, with a 14% organic decline, but the company expects a return to sales growth in the second half of 2026 [26]. Market Data and Key Metrics Changes - The Americas market continues to be the primary growth engine, with expectations of high 30% sales growth [10]. - EMEA is showing signs of recovery, with improved market sentiment and pipeline growth [10]. - APAC is experiencing robust growth outside of China, particularly in India and the rest of Asia [11]. Company Strategy and Development Direction - Vertiv is focused on engineering innovation, capacity expansion, and deep customer partnerships, which are translating into strong results [5][6]. - The company is committed to maintaining a competitive edge through technological advancements and service capabilities, particularly in AI-driven infrastructure [6][17]. - Vertiv plans to increase capital expenditures to 3-4% of sales in 2026 to support growth [15][29]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capture significant market opportunities and maintain strong performance in 2026 and beyond [13][33]. - The company anticipates adjusted diluted EPS of $6.02 for 2026, representing 43% growth at the midpoint, with net sales projected at $13.5 billion [29][31]. - Management highlighted the importance of addressing operational bottlenecks to convert backlog into revenue effectively [60]. Other Important Information - The company is experiencing favorable pricing conditions, with 2025 pricing exceeding inflation and expectations for the same in 2026 [14]. - Vertiv's service portfolio is a critical competitive advantage, with lifecycle services orders growing over 25% year-on-year [17][18]. Q&A Session Summary Question: Insights on order values and potential increases - Management indicated that the current framework for dollar per megawatt remains valid, with technology complexity potentially increasing order values over time [39][41]. Question: Unusual large projects in Q4 - Management confirmed that while there were large orders, they reflect market demand rather than unusual incentives or anomalies [50][52]. Question: Operational steps to convert backlog into revenue - Management emphasized ongoing capacity expansion and productivity improvements as key steps to convert backlog into sales [60][62]. Question: Changes in permitting bottlenecks in Europe - Management noted an acceleration of investment in EMEA, with improved market sentiment and expanding pipelines [67][68]. Question: Visibility into future workflows from customer relationships - Management highlighted the importance of strong relationships with data center leaders, allowing for advanced R&D and technology alignment [73][75].

Financial Data and Key Metrics Changes - Vertiv reported a strong fourth quarter and full year 2025, with adjusted diluted EPS of $1.36, up 37% year-over-year, and adjusted operating profit of $668 million, up 33% from the prior year [9][23]. - The company achieved a trailing twelve-month organic orders growth of 81%, with fourth quarter orders up 152% year-over-year and a book-to-bill ratio of 2.9 times [8][11]. - Adjusted free cash flow for the full year was approximately $1.9 billion, with a conversion rate of 115% [9][28]. Business Line Data and Key Metrics Changes - In the Americas, sales were up 50%, with 46% organic growth, driven by broad-based strength across products and customer segments [25]. - APAC sales were down 10%, with a 9% organic decline, primarily due to macroeconomic conditions in China [25]. - EMEA sales were down 8%, with a 14% organic decline, but the company expects a return to sales growth in the second half of 2026 [25][26]. Market Data and Key Metrics Changes - The Americas market continues to be the primary growth engine, with expectations of high 30% sales growth [10]. - EMEA is showing signs of recovery, with improved market sentiment and pipeline growth [10][26]. - APAC is experiencing robust growth outside of China, particularly in India and the rest of Asia [10][11]. Company Strategy and Development Direction - Vertiv is focused on engineering innovation, capacity expansion, and deep customer partnerships, which are translating into strong results [5][6]. - The company is committed to maintaining a competitive edge through technological advancements and service capabilities, particularly in AI-driven infrastructure [6][18]. - Vertiv plans to increase capital expenditures to 3-4% of sales in 2026 to support growth [15][29]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capture significant market opportunities and maintain strong performance in 2026 and beyond [5][33]. - The company anticipates adjusted diluted EPS of $6.02 for 2026, representing 43% growth at the midpoint, with net sales projected at $13.5 billion [28][29]. - Management highlighted the importance of addressing operational bottlenecks to convert backlog into revenue effectively [58]. Other Important Information - The company will no longer report actual orders or backlog with quarterly earnings to reduce volatility in performance representation [12]. - Pricing has remained favorable, exceeding inflation in 2025, and is expected to continue in 2026 [14]. Q&A Session Summary Question: Insights on order values and CapEx impact - Management indicated that the current framework for dollar per megawatt remains valid, with no significant anomalies in order sizes [39][40]. - CapEx is expected to correlate with growth, moving to 3-4% of sales, which will support revenue growth [41][42]. Question: Unusual large projects in Q4 - Management confirmed that while there were large orders, they reflect market demand rather than unusual incentives [49][50]. Question: Operational steps to convert backlog into revenue - Management is focused on capacity expansion and productivity improvements to convert backlog into sales effectively [58][60]. Question: Changes in EMEA and Asia markets - Management noted improved market sentiment in EMEA and attributed current challenges in Asia to general market conditions rather than competitive dynamics [66][68]. Question: Visibility into future workflows from customer relationships - Management emphasized the importance of strong relationships with customers to anticipate future technology needs and align R&D efforts accordingly [71][73].

Financial Data and Key Metrics Changes - The company reported a strong performance in Q4 2025, with organic orders up 152% year-over-year and 117% sequentially, leading to a trailing twelve-month organic orders growth of 81% [6][10] - Q4 organic net sales increased by 19%, primarily driven by a 46% organic growth in the Americas, while APAC and EMEA saw declines of 9% and 14% respectively [6][20] - Adjusted operating margin for Q4 was 23.2%, up 170 basis points from Q4 2024, with adjusted operating profit reaching $668 million, a 33% increase from the prior year [7][20] - Adjusted diluted EPS for Q4 was $1.36, up 37% year-over-year, exceeding prior guidance by $0.10 [20] - For the full year 2025, adjusted diluted EPS was $4.20, up 47%, with net sales of $10.2 billion reflecting 26% organic growth [24] Business Line Data and Key Metrics Changes - In the Americas, sales were up 50% with 46% organic growth, driven by strong demand across products and customer segments [22] - APAC sales decreased by 10%, with a 9% organic decline primarily due to macroeconomic conditions in China [22] - EMEA sales were down 8%, with a 14% organic decline, but the company expects a return to sales growth in the second half of 2026 [23] Market Data and Key Metrics Changes - The backlog stood at $15 billion, more than double the previous year, with a book-to-bill ratio of 2.9 times [6][10] - The company anticipates continued strength in the Americas, projecting high 30% sales growth, while APAC is expected to grow in the mid-20% range, and EMEA is projected to be flat to down mid-single digits [26] Company Strategy and Development Direction - The company is focused on engineering innovation, capacity expansion, and deep customer partnerships, which are translating into strong results [4][5] - The company is committed to maintaining a competitive edge through technology leadership and operational capabilities, with a focus on capturing growth opportunities in the AI-driven infrastructure build-out [4][5] - The service portfolio is highlighted as a critical competitive advantage, with lifecycle services orders growing over 25% year-on-year [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capture significant portions of the growing pipeline, with pricing expected to exceed inflation in 2026 [12] - The company is actively managing inflationary pressures through pricing mechanisms and collaboration with suppliers [13] - Management is optimistic about the market's recovery, particularly in EMEA, and expects to see continued growth in 2026 [9][23] Other Important Information - The company plans to increase capital expenditures to 3-4% of sales in 2026, up from the historical 2-3% [13][26] - Adjusted free cash flow for the full year was approximately $1.9 billion, up 66%, providing flexibility for investments and shareholder returns [25] Q&A Session Summary Question: On the dollar value of the orders and content creep - Management indicated that the current framework of $3 million-$3.5 million per megawatt remains valid, with technology complexity potentially increasing order values over time [36][37] Question: On large projects and unusual orders in Q4 - Management confirmed that while there were large orders, they are consistent with market demand and not due to any unusual incentives [49][50] Question: On operational steps to convert backlog into revenues - Management emphasized a two-pronged approach of capacity expansion through CapEx and productivity improvements to effectively convert backlog into sales [60][62] Question: On EMEA market conditions and China - Management noted improved market sentiment in EMEA, with pipelines expanding, while the situation in China is attributed to general market conditions rather than competitive dynamics [70][71] Question: On service organization and headcount - Management reported an increase in service headcount, approaching 5,000 field personnel, to support the growing install base and service demands [97][99] Question: On backlog and deferred revenue inflows - Management clarified that deferred revenue balances are influenced by the type and mix of orders, with efforts to secure down payments and progress payments [113][116]

Group 1 - The company announced the establishment of a joint venture, Hangzhou Huayu Thermal Control Technology Co., Ltd., to expand its liquid cooling business and enhance market competitiveness [1][2] - The registered capital of the joint venture is RMB 10 million, with the company's subsidiary contributing RMB 5.4 million (54% stake), while partners Yichen Youzan and Gaoshan Yuan contribute RMB 4.5 million (45%) and RMB 100,000 (1%) respectively [1] - This investment is a strategic move to leverage the trend of data center cooling technology upgrades and to build core capabilities in the industry [2] Group 2 - Liquid cooling technology is essential for achieving green and low-carbon data centers, ensuring stable operation and improving energy efficiency [2] - The company aims to integrate this key technology into its existing product matrix, enhancing its comprehensive solution capabilities in data centers and backup power systems [2] - This initiative signifies the company's ongoing strategy to strengthen its competitive edge in critical areas and improve customer value through more efficient and reliable infrastructure support [2]

Company Overview - Vertiv Holdings Co (NYSE:VRT) specializes in designing, manufacturing, and managing power and cooling systems for data centers and digital networks, along with providing services to ensure these systems operate efficiently [3]. Market Sentiment - The current market sentiment towards data center stocks, including Vertiv, is cautious, as indicated by Jim Cramer's commentary that the market does not favor data center investments at this moment [3]. Earnings Outlook - There is potential for a strong earnings report from Vertiv, with Cramer suggesting it could be a "monster quarter," but the overall reception will depend on market mood [1]. Competitive Position - Despite concerns about competition from newer technologies, such as NVIDIA's chips, Cramer believes that Vertiv's products, particularly the Liebert system, will remain essential in the data center ecosystem [3]. Investment Considerations - While Vertiv is recognized for its potential, there are suggestions that certain AI stocks may present greater upside potential with less downside risk, indicating a competitive investment landscape [4].