Core Viewpoint - Vertiv is facing potential competition from Amazon in the cooling technology sector, which has led to a decline in its stock price by 7.3% following the news [1][2]. Group 1: Competition and Market Dynamics - Amazon is advancing in liquid cooling technology for its P6e-GB200 Ultra Servers, which enhances compute density and supports Nvidia Blackwell GPUs on AWS [3][4]. - The new custom liquid cooling system developed by Amazon was created in just 11 months and is now being deployed, indicating a significant move into the cooling technology space [4]. - Amazon has evaluated multiple liquid cooling solutions from other vendors but found them unsuitable for AWS, which may indirectly reference Vertiv [5]. Group 2: Implications for Vertiv - Vertiv's stock has increased approximately tenfold since 2022, largely benefiting from the AI boom, and it reported a 25% organic net sales growth in the first quarter [6]. - While Vertiv's near-term prospects appear solid, the entry of Amazon into the cooling technology market could pose challenges to its growth trajectory [6].

Financial Data and Key Metrics Changes - The fourth quarter net sales were $257.1 million, a decrease of 7% year-over-year but an increase of 7% sequentially from Q3 [32][42] - Adjusted loss from operations for the fourth quarter was $21.6 million, a decrease of $11.8 million from the previous fiscal year [33] - Fourth quarter adjusted EBITDA was a negative $7.1 million, down $12.4 million from the same period last year [35] - Full year net sales were $1.048 billion, a decrease of 6% from the previous fiscal year [42] Business Line Data and Key Metrics Changes - Record sales for power products in data center applications exceeded $80 million for the full year, almost double that of fiscal 2024 [13][42] - EV sales represented 20% of consolidated total sales, an increase from 14% year-over-year, but sequentially decreased by approximately 10% from Q3 [15] - The company expects a 10% to 15% decline in EV sales for fiscal 2026 due to weaker market demand and program delays [16] Market Data and Key Metrics Changes - The company experienced significant sales headwinds from the roll-off of major auto programs, particularly the GM center console and EV lighting programs [11][42] - The decline in sales was primarily driven by the impact of these program roll-offs, which had a combined year-over-year impact of $111 million [42] Company Strategy and Development Direction - The company is focused on improving operational execution and successfully launching a large pipeline of new programs, with 22 new programs launched in fiscal 2025 and another 30 expected in fiscal 2026 [18][19] - The transformation strategy aims to stabilize the organization and position it for future growth, particularly in data centers and EV markets [20][27] - The company plans to optimize its footprint and reevaluate its product portfolio to align with market opportunities [22][27] Management's Comments on Operating Environment and Future Outlook - Management indicated that fiscal 2026 will be a reset year due to EV program delays, particularly from Stellantis, but expects a return to growth in fiscal 2027 [7][10] - The company anticipates doubling its EBITDA in fiscal 2026 despite projected declining sales of approximately $100 million [10][28] - Management emphasized the importance of operational improvements and cost recovery actions in response to external challenges [16][17] Other Important Information - The company recorded $26 million in free cash flow for the quarter, marking the best quarter since Q4 of fiscal 2023 [8] - The company reduced both debt and net debt levels by $10 million from Q3 [17] - The board reduced the dividend, which was a strategic decision to provide more flexibility from a working capital perspective [92] Q&A Session Summary Question: How to understand the expected sales decline and EBITDA increase? - Management explained that operational improvements and the elimination of one-time expenses will contribute to the expected EBITDA increase despite declining sales [52][54] Question: What percentage of the new launches are EV platforms? - Approximately 50% of the new launches are related to EV platforms, with a significant focus on data center growth as well [56][74] Question: What is the status of Stellantis revenue expectations? - Management confirmed a significant reduction in expected revenue from Stellantis, with a $200 million swing from previous projections due to program delays [44][80] Question: What is the leverage waiver status? - The leverage covenants were relaxed through the next year, starting at 4.25 for Q4 of fiscal 2025 [62][64] Question: How much of the revenue decline is due to pricing? - The revenue decline is primarily due to program delays and cancellations, not pricing issues [100]

Methode Electronics (MEI) Q4 2025 Earnings Call July 10, 2025 11:00 AM ET Company ParticipantsRobert Cherry - VP - IRJonathan DeGaynor - CEO, President & DirectorLaura Kowalchik - CFOGary Prestopino - Managing DirectorConference Call ParticipantsLuke Junk - Senior Research AnalystJohn Franzreb - Senior Equity AnalystOperatorWelcome to the Methode Electronics Fourth Quarter Fiscal twenty twenty five Results Conference Call. At this time, all participants are in a listen only mode. A question and answer sessi ...

Financial Performance & Key Metrics - Q4 sales were $257 million, a decrease of $20 million year-over-year, but an increase of $17 million quarter-over-quarter[13, 26] - Adjusted loss from operations was $22 million, primarily due to $15 million in unplanned inventory adjustments[13] - Adjusted EBITDA was a negative $7 million[13] - Adjusted pre-tax loss was $29 million[13] - Adjusted EPS was a negative $0.77[13] - Free cash flow was $26 million, the highest level since FY23[10, 13] - Total debt remained at $318 million, while net debt decreased by $10 million to $214 million[13] - FY25 net sales were $1,048 million, compared to $1,115 million in FY24[13, 47] - FY25 Adjusted EBITDA was $43 million, compared to $55 million in FY24[13, 47] Business Segments & Market Trends - Data center power product sales reached a record of over $80 million in FY25, with similar or greater sales expected in FY26[11, 13] - xEV applications accounted for 20% of total consolidated net sales in both Q4 and FY25, up from 14% and 19% respectively in the prior year periods[13] Future Outlook & Guidance - FY26 sales guidance is in the range of $900 million to $1 billion[54, 56] - FY26 EBITDA guidance is in the range of $70 million to $80 million, representing a 100%+ increase despite ~$100 million lower sales[12, 54, 56]

Record Power Product Sales for Data Centers for Quarter and Full YearPositive Free Cash Flow for Quarter; Highest Quarter Since Fiscal 2023Total and Net Debt Reduced from Fiscal 2025 Third QuarterFiscal 2026 EBITDA Expected to Improve Over 100%Corporate Actions AnnouncedBoard of Directors Declares Quarterly Dividend of $0.07 CHICAGO, July 09, 2025 (GLOBE NEWSWIRE) -- Methode Electronics, Inc. (NYSE: MEI), a leading global supplier of custom-engineered solutions for user interface, lighting, and power distri ...

Johnson Controls International plc (NYSE: JCI ) looks well set up for solid revenue growth and margin expansion from here. The company’s sitting on a record $14 billion backlog, with strong order momentum, especially in faster-growing areas like data centers andI have over 15 years of experience investing and have provided research services to mid-sized hedge funds with assets under management between $100 and $500 million. I also have had a brief stint as a sell-side analyst. I am now focusing primarily on ...

Core Insights - Sterling Infrastructure, Inc. is strategically focusing on high-value infrastructure projects, which is enhancing its margin profile and earnings quality [1] - The company reported a gross margin of 22% in Q1 2025, an increase of 400 basis points from the previous year [1][9] - The E-Infrastructure segment's adjusted operating margins expanded nearly 618 basis points year over year to 23.2%, driven by a focus on mission-critical projects like data centers [1][9] Company Strategy - Sterling's disciplined project selection strategy prioritizes large, complex builds, allowing it to avoid lower-margin work [2] - The shift towards aviation and rail projects in Transportation Solutions, along with reduced exposure to low-bid heavy highway work, has contributed to margin expansion [2] Future Outlook - The company expects full-year infrastructure growth supported by a multi-year backlog visibility, with the E-Infrastructure segment holding a backlog of $1.2 billion [3] - The total pipeline is nearing $2 billion when including future phase work, weighted towards higher-margin projects, indicating potential for sustained profitability [3] Industry Context - Competitors like Quanta Services, Inc. and EMCOR Group, Inc. are also focusing on high-return sectors such as data centers and transportation [5] - Quanta Services reported a 12-month backlog of $16.37 billion as of March 31, 2025, reflecting growing demand for electric grid upgrades and AI-driven infrastructure needs [6] - EMCOR Group's U.S. Electrical Construction and Facilities Services segment reported an operating margin of 12.5%, while the U.S. Mechanical Construction and Facilities Services segment posted an operating margin of 11.9% [7] Performance Metrics - Sterling's stock has gained 107.9% in the past three months, outperforming the Zacks Engineering - R and D Services industry's growth of 48% [8] - The company is currently trading at a price-to-earnings ratio of 26.14X, compared to the industry's average of 21.56X [11] - The Zacks Consensus Estimate for Sterling's EPS indicates year-over-year growth of 41.2% and 10.1% for 2025 and 2026, respectively [13]

Group 1 - Vertiv's shares increased by 19% in June, driven by positive news from partners like Nvidia, alleviating concerns over data center capital spending slowdown [1] - The debate between bulls and bears highlights differing views on the sustainability of AI and data center spending, with bears anticipating a correction and bulls believing spending is still in early stages [2][3] - Vertiv raised its full-year 2025 sales guidance to a range of $9.325 billion to $9.575 billion, indicating confidence in future performance despite a flat year-over-year order book in Q4 2024 [4] Group 2 - Nvidia reported a 73% year-over-year increase in data center-related revenue in Q1 2026, suggesting strong underlying market growth [7] - Vertiv's products are not subject to the same export control regulations as Nvidia, although rising costs from sourcing in Mexico and China pose challenges [8] - Overall, the confirmation of ongoing growth in Vertiv's end markets positively impacted its stock performance in June, positioning it well to benefit from the data center spending boom [9]

Core Insights - Prologis Inc. (PLD) shares have increased by 10.3% over the past three months, outperforming the industry growth of 6.3% [1][8] - The company is strategically positioned in high-demand industrial real estate markets, benefiting from its portfolio located near major distribution hubs [3][4] Company Performance - Prologis has shown strong operating performance due to solid demand for its strategically located facilities [3] - The company reported $811 million in acquisitions and $925 million in development stabilization in Q1 2025, with a significant portion being build-to-suit projects [4][8] - The Zacks Consensus Estimate for Prologis' 2025 FFO per share has increased to $5.70, indicating positive analyst sentiment [2] Financial Position - Prologis maintains a robust balance sheet with $6.52 billion in liquidity and a weighted average interest rate of 3.2% on its debt [8][9] - The company has an A-rated credit rating, allowing it to borrow at favorable rates [9] - Prologis has demonstrated a commitment to dividend payouts, with a five-year annualized growth rate of 13.71% [10]

In 2021, Google set a lofty goal of achieving net-zero carbon emissions by 2030. Yet in the years since then, the company has moved in the opposite direction as it invests in energy-intensive artificial intelligence. In its latest sustainability report, Google said its carbon emissions had increased 51% between 2019 and 2024. New research aims to debunk even that enormous figure and provide context to Google's sustainability reports, painting a bleaker picture. A report authored by non-profit advocacy group ...