Vertiv Announces Expansion of Manufacturing Capacity Spanning Infrastructure Solutions, Power, and Rack Systems, to Meet Rising Demand Accessibility StatementSkip Navigation New and expanded Americas manufacturing facilities to support high-density applications with solutions to drive speed of deployment and scalable infrastructure. COLUMBUS, Ohio, March 24, 2026 /PRNewswire/ -- Vertiv (NYSE: VRT), a global leader in critical digital infrastructure, today announced four new or expanding manufacturing facili ...

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]

Core Viewpoint - Vertiv (VRT) and Super Micro Computer (SMCI) are key players in the AI infrastructure market, which is expected to exceed $200 billion in spending by 2028, presenting significant investment opportunities for both companies [1]. Company Performance - Vertiv shares have declined 24.2% year-to-date (YTD), while Super Micro Computer shares have increased by 21.7%. Since the 90-day tariff pause on April 9, VRT shares have appreciated 18.3%, compared to SMCI's 1.1% [2]. Vertiv (VRT) Analysis - Vertiv's extensive product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbar, and modular solutions. Organic orders grew approximately 20% in the trailing 12 months, with a book-to-bill ratio of 1.4 for Q1 2025, indicating strong prospects. The backlog increased by 10% sequentially and 25% year-over-year to $7.9 billion [5]. - In March, Vertiv launched four new systems, enhancing capabilities in infrastructure management, modular deployment, advanced thermal management, and DC power distribution [6]. - Strong capital expenditure plans by hyperscalers for data center expansion are favorable for Vertiv. The company expects net sales for 2025 to be between $9.325 billion and $9.575 billion, up from the previous guidance of $9.13 billion to $9.28 billion. The Zacks Consensus Estimate for VRT's 2025 revenues is $9.23 billion, reflecting a year-over-year growth of 15.14% [7]. Super Micro Computer (SMCI) Analysis - Super Micro Computer is experiencing growth due to the increasing deployment of AI and HPC workloads, with rising demand for its high-performance and energy-efficient servers as data centers expand [9]. - The company leads the Direct Liquid Cooling (DLC) market, having shipped over 3,000 DLC racks in 2024, which is approximately 70% of the global DLC market. SMCI is rapidly expanding its production facilities across Malaysia, Taiwan, Europe, and the United States [10]. - Super Micro Computer has a growing partner base, including Intel and AMD, and utilizes Intel Gaudi 3 accelerators for scalable AI tasks. Its H14 Series servers leverage AMD's EPYC 9005 CPUs and GPU-Accelerated Systems utilize AMD's Instinct MI325X GPUs [11]. Earnings Estimates - The Zacks Consensus Estimate for Vertiv's 2025 earnings is $3.55 per share, down by 1.11% over the past 30 days, indicating a 24.56% increase over 2024's reported figure [12]. - For Super Micro Computer, the consensus estimate for fiscal 2025 earnings has declined by 1.2% to $2.52 per share over the past 30 days, suggesting a 14.03% growth over fiscal 2024 [13]. Earnings Quality - Vertiv has consistently beaten the Zacks Consensus Estimate in the trailing four quarters, with an average surprise of 10.42%. In contrast, Super Micro Computer has beaten estimates twice and missed once, with a negative surprise of 1.82% [14]. Valuation Comparison - Both companies are considered overvalued, with a Value Score of D. Vertiv shares are trading at a forward 12-month Price/Earnings ratio of 22.57X, while Super Micro Computer's ratio is 11.84X, indicating that SMCI is cheaper than VRT [14][15]. Conclusion - Super Micro Computer benefits from strong momentum from data center and cloud computing clients and is less exposed to tariff concerns compared to Vertiv. Currently, SMCI holds a Zacks Rank 1 (Strong Buy), making it a stronger investment choice compared to Vertiv, which has a Zacks Rank 3 (Hold) [18].