Vertiv Holdings Co

What they do

Vertiv designs, manufactures, sells, installs and services power management, thermal management, switchgear, busbar, racks, integrated modular solutions and IT management software under brands including Vertiv, Liebert, NetSure, Geist, Energy Labs, ERS, Alb r and Avocent. It operates engineering, manufacturing, sales and service locations in more than 40 countries and reports results in three geographic segments: the Americas, Asia Pacific, and Europe, Middle East & Africa. It sells primarily to data center, cloud/hyperscale, communication network and enterprise customers, supported by a global services network providing lifecycle management, predictive analytics and professional services. It became publicly traded on the NYSE under the ticker VRT on February 7, 2020.

Revenue drivers

• Americas segment — Largest reporting segment; 62% of 2025 net sales, up from 56% in 2024, as US data center and AI compute demand grew fastest in this region.
• Asia Pacific segment — 20% of 2025 net sales, down from 22% in 2024, covering power, thermal and integrated solutions across the region.
• Europe, Middle East & Africa segment — 18% of 2025 net sales, down from 22% in 2024, serving data center, communication and commercial/industrial customers.
• New order backlog — Estimated combined backlog was $15.0 billion at December 31, 2025 versus $7.2 billion at December 31, 2024, giving visibility over future revenue recognition.

Recent performance

Second quarter 2026 net sales were $3,274 million, up 24% year over year, reflecting 18% organic growth, a 5% acquisition contribution and a 1% FX benefit. Operating profit rose 44% to $638 million and adjusted operating profit rose 51% to $738 million, with adjusted operating margin of 22.6%, up 410 basis points. Diluted EPS grew 53% to $1.27 and adjusted diluted EPS grew 60% to $1.52. Operating cash flow was $1,100 million and adjusted free cash flow was $925 million, up 241% and 234% respectively, and the company ended the quarter with $5.6 billion of liquidity and a net cash position.

Strategy

Vertiv is investing ahead of demand, expanding manufacturing capacity and accelerating strategic investments to serve a strengthening pipeline that management describes as a structural, long-duration shift in technology infrastructure. It emphasizes first-to-market designs for next-generation rack-scale AI compute, spanning air-cooled and liquid-cooled thermal management, power management, busbar and integrated modular solutions. Capital expenditures for full year 2026 are expected at approximately 4.0% of revenue, described as the high end of the range. Growth is also partly inorganic, with acquisitions contributing 5 percentage points of second quarter revenue growth. Management frames the global services and lifecycle management network as a recurring, installed-base-driven complement to equipment sales.

Risks

• Concentrated AI/data center demand — A substantial portion of revenue depends on continued growth of customers' data center and communication infrastructure, and the 10-K cites shifts in the level or focus of AI spending or building capacity in excess of demand as factors that could cut demand.
• Backlog conversion uncertainty — The $15.0 billion backlog may not convert to sales as expected; the company lists long sales cycles, unpredictable order placement or cancellation, and failure to realize sales expected from backlog as risks.
• Large-customer contract leverage and fixed prices — The company cites less leverage with large customer contract terms and failure to mitigate risks associated with long-term fixed price contracts.
• Supply chain and production costs — Second quarter revenue reflected minor timing shifts from temporary supply chain congestion, and the company flags failure to properly manage production cost changes and supply chain.

Outlook

For full year 2026, management guides to net sales of approximately $14,000 million and organic sales growth of 31% at the midpoint, versus full year 2025. It guides diluted EPS of $5.82 to $5.92 and adjusted diluted EPS of $6.65 to $6.75 — midpoint increases of 72% and 60% respectively over 2025. Management says the data center market continues to show strong momentum with demand fundamentals reinforcing a durable growth environment, and it is further accelerating capacity expansion and strategic investments.