VRT
T3Vertiv Holdings Co
OverviewVertiv Holdings Co designs, manufactures, and services critical digital infrastructure for data centers, communication networks, and industrial environments. Th
Vertiv Holdings Co designs, manufactures, and services critical digital infrastructure for data centers, communication networks, and industrial environments. They provide power, cooling, racks, and monitoring systems, with roughly 80% products and 20% services. Vertiv primarily sells to hyperscale data center operators and telecom firms, enabling the essential infrastructure behind AI and digital services.
- What They Do (Plain English & Analogies)
- Vertiv is like the unsung hero behind the digital world, providing all the essential gear and services that keep data centers, communication networks, and industrial facilities running smoothly, 24/7. Think of it this way: if a data center is a giant brain processing information, Vertiv provides the 'life support system' – the power, the cooling, and the physical structures that house all the sensitive computer equipment. They make sure the servers don't overheat, that there's always electricity flowing, and that everything is organized and protected. This is crucial for everything from your online banking and streaming videos to the complex calculations powering artificial intelligence.
- Very Brief History
- Vertiv's roots trace back to 1946 with the founding of Capitol Refrigeration Industries by Ralph Liebert in Columbus, Ohio, which later became Liebert Corporation in 1965, focusing on precision cooling for computer rooms. The company expanded into power management and was acquired by Emerson Electric in 2000, becoming Emerson Network Power. In 2016, it was spun off from Emerson and rebranded as Vertiv, becoming an independent entity. Vertiv then went public on the New York Stock Exchange (NYSE: VRT) in February 2020 through a merger with a special purpose acquisition company.
- "Street Stereotype"
- Vertiv is generally perceived by investors and analysts as a leading industrial play on the massive buildout of AI data centers. It's seen as a critical enabler of next-generation computing, with strong demand driven by hyperscale cloud and AI giants.
- Subsidiaries On Linked In*
- {"subsidiaries":[]}
- Customer Sectors & Example Clients
- Vertiv serves a broad range of business-to-business (B2B) clients across various sectors. Their primary customers are in data centers, including hyperscale cloud service providers and large colocation operators. They also serve telecommunications companies for 5G rollouts and edge computing networks, as well as commercial and industrial environments. Other sectors include social media, financial services, healthcare, transportation, retail, education, and government industries. Specific examples mentioned include Ecodata Center in Sweden and a partnership with C Power Energy. Historically, IBM was an early client. Companies actively evaluating Vertiv applications include Delta M, Eaton, and Boston College.
- New Customers / Segments They'Re Targeting
- Vertiv is actively targeting customers building out infrastructure for Artificial Intelligence (AI) and high-density computing. This includes hyperscale cloud providers and colocation facilities that require advanced thermal management solutions, such as liquid cooling, and integrated, prefabricated data center solutions. They are also focusing on the 'bring your own power' concept for data centers, which involves micro-grids and energy storage systems.
- Supply Chain And Sourcing Geographies
- Vertiv employs a regionalized footprint and multi-sourcing strategies to strengthen its supply chain resilience. They are expanding their global manufacturing and service footprint, with significant strategic capacity investments across both manufacturing and services. Specifically, they are expanding capacity organically across multiple sites globally, particularly in the Americas. This includes manufacturing expansions in the United States (Ironton, Ohio; Pelzer, South Carolina; Anderson, South Carolina; Pennsylvania), Mexico (Mexicali), Slovakia, United Arab Emirates, Ireland, and Northern Ireland.
- Sales Geographies And Expansion Plans
- Vertiv currently sells its products and services worldwide, with primary sales geographies including the Americas, Asia Pacific (APAC), and Europe, the Middle East, and Africa (EMEA). The company is seeing strong momentum in the Americas and positive market dynamics in APAC, with Rest of Asia, India, and China showing encouraging pipeline movement. In EMEA, they anticipate a return to year-over-year sales growth in the second half of 2026, driven by improving market sentiment and accelerating opportunity generation. While there are no explicit plans to expand into entirely new *geographies*, Vertiv is focused on strengthening its presence and capacity within these existing regions to meet accelerating demand.
- How Key Themes May Help/Hurt
- Vertiv is significantly impacted by the 'Fiscal Spend '25: HVAC' theme, as it provides thermal management products, including advanced liquid cooling and chilled water systems, which are critical for data centers. Fiscal-driven reindustrialization, energy transition incentives, and data center infrastructure spending directly boost demand for Vertiv's solutions. The 'AI '24: DC Infra & Automation' and 'AI '25: Data Center Power & Servers' themes are central to Vertiv's growth. The unprecedented demand for servers, storage, and power/cooling driven by AI, coupled with rising rack density and the need for efficient power and cooling, creates substantial opportunities for Vertiv. The shift towards automation and integrated solutions also aligns with their offerings. However, these themes also present risks, such as geopolitical tensions disrupting supply chains, intensifying competition, potential regulatory changes impacting data center operations, and the inherent lumpiness of hyperscaler capital expenditure cycles. Vertiv actively addresses these challenges through tariff countermeasures and multi-sourcing strategies.
3 Main Long-Term Bull Details
- Dominant Position in AI Data Center Buildout: Vertiv is a primary beneficiary of the accelerating AI data center buildout, with strong demand for its critical digital infrastructure, particularly liquid cooling solutions for high-density AI chips. This is translating into record orders and an expanding backlog.
- Expanding Total Addressable Market (TAM) with Integrated Solutions: The company is expanding its TAM through innovations like liquid cooling, white-space systems, and 800V DC power, and by offering integrated, prefabricated solutions such as 'SmartRun' and 'Vertiv 1 core'. These solutions simplify deployment and increase efficiency for customers, deepening their reliance on Vertiv.
- Strong Financial Performance and Operational Execution: Vertiv has demonstrated robust organic growth, expanding margins, and strong free cash flow generation. Management has consistently raised guidance and is committed to significant investments in capacity expansion, R&D, and strategic acquisitions to support future growth and maintain competitive advantages.
3 Main Long-Term Bear Details
- Tariff and Supply Chain Volatility: Ongoing tariff headwinds, supply chain complexity, and labor constraints remain real challenges that could cap near-term margin upside and impact operational efficiency, despite Vertiv's mitigation efforts.
- Regional Disparities and Market Cyclicality: While overall demand is strong, regional sales can be uneven, as seen with EMEA's organic sales decline in Q1 2026, with recovery only expected in the second half. Hyperscaler capital expenditure cycles can also be lumpy, potentially leading to pauses or shifts in orders.
- Intense Competition and Commoditization Risk: Vertiv operates in a highly competitive environment with large, diversified players like Schneider Electric and Eaton, as well as specialized firms. The rapid evolution of technology, particularly in liquid cooling, requires continuous R&D investment, and there's a risk of commoditization in certain product areas if hyperscalers exert significant pricing pressure.
- Competitors And Differentiation
- Vertiv's main competitors include large industrial conglomerates and specialized firms. Key competitors are Schneider Electric (particularly its Secure Power division), Eaton Corporation, Legrand, Siemens, Huawei, and Stulz. Other competitors include Mitsubishi Electric, Generac Holdings, SMA Solar Technology, ZTE, Danvest, Flexenclosure, PFISTERER, APC, Vergnet, Eltek, Emerson, Nationwide Power, Danfoss, United Technologies, Bloom Energy, GE Vernova, Serve Robotics, and Tecogen. Vertiv differentiates itself by delivering product systems, integrated solutions, and services that scale, excelling in solving the technical complexity of modern data centers. They emphasize their competitive advantages in prefabrication and the convergence of solutions into optimized systems like 'Vertiv 1 core' and 'SmartRun'. Vertiv also focuses on innovation in high-density cooling and energy efficiency, crucial for AI deployments, and holds significant market share in thermal management and power distribution.
- Recent Performance & What The Market'S Focused On
- Vertiv reported a very strong start to 2026. In Q1 2026, net sales were up 30% year-over-year to $2.65 billion, with organic sales growing 23%. Adjusted operating margin expanded to 20.8%, and adjusted diluted EPS was $1.17, up 83% year-over-year. Adjusted free cash flow significantly increased to $653 million. The company raised its full-year 2026 guidance, now expecting net sales of $13.75 billion and adjusted diluted EPS of $6.35 at the midpoint. The market is focused on Vertiv's ability to sustain its strong organic growth, particularly with the anticipated recovery in EMEA in the second half of 2026. Investors are also closely watching the execution of tariff mitigation strategies, the scaling of services, the impact of capacity investments, and the company's advancements in liquid cooling and 800-volt architecture for AI data centers. Capital deployment, including M&A and R&D, is also a key area of interest.
- Revenue Segments And Estimated Mix
- Critical Digital Infrastructure Technology Products — Mix: ~81.5%; Source: FY2025 data, search result [22]; Trend: Strong growth, particularly driven by AI infrastructure demand.
- Services and Spares — Mix: ~18.5%; Source: FY2025 data, search result [22]; Trend: Growing, with strong operational leverage and increasing installed base capture.
- Product Brands
- Vertiv
- Liebert
- NetSure
- Geist
- E&I
- Powerbar
- Avocent
- Albér
- Energy Labs
- ERS
- Vertiv 1 core
- SmartRun
Bull / Bear DetailsVertiv remains the leading industrial beneficiary of the accelerating AI data-center buildout, demonstrated by robust Q1 2026 results and significantly raised f
Thesis
Vertiv remains the leading industrial beneficiary of the accelerating AI data-center buildout, demonstrated by robust Q1 2026 results and significantly raised full-year guidance. The thesis hinges on sustaining strong organic growth, expanding market share through advanced thermal and power solutions, and continued margin expansion driven by operational discipline and effective tariff mitigation. (Updated: 2026-04-24)
Bull case
Vertiv delivered a very strong Q1 2026, with adjusted EPS up 82.8% year-over-year and net sales rising 30.1% to $2.65 billion, surpassing analyst expectations. The company also significantly raised its full-year 2026 guidance for adjusted EPS and net sales, reflecting robust, broad-based demand, particularly in the Americas (44% organic growth), and strong pipeline momentum for AI-driven infrastructure spending.
The company is strategically expanding its market opportunity through advanced solutions and M&A. This includes significant investments in capacity for liquid cooling, 800V DC power (launches H2 2026), and integrated prefab systems like SmartRun, which are critical for high-density AI workloads. Recent strategic acquisitions further bolster thermal management and structural fabrication capabilities.
Vertiv is demonstrating strong operational leverage and pricing power, with Q1 adjusted operating margin at 20.8%, expanding 430 basis points year-over-year. The full-year adjusted operating margin guidance has been raised to 23.3%, and management expects to be price/cost positive for 2026, effectively mitigating tariff impacts and driving substantial operating profit growth.
Bear case
Despite management's confidence in mitigation, tariffs, supply chain complexity, and labor constraints remain real challenges that could introduce volatility and potentially cap near-term margin upside. While countermeasures are in place, the dynamic trade environment presents ongoing execution risks.
EMEA organic sales were down 29% in Q1 2026, a significant decline, which could limit global diversification and overall growth if the anticipated second-half recovery is weaker or further delayed. While management expresses strong conviction for recovery, the Q1 performance highlights regional vulnerability.
The stock is currently trading at a significant premium with a 74.9x P/E ratio, notably above its estimated DCF fair value, suggesting high future growth expectations may be priced in. Any potential slowdown in hyperscaler AI spending or increased insourcing by large customers could trigger a sharp multiple compression.
Bull / Bear Case
- Bear Case
- Despite management's confidence in mitigation, tariffs, supply chain complexity, and labor constraints remain real challenges that could introduce volatility and potentially cap near-term margin upside. While countermeasures are in place, the dynamic trade environment presents ongoing execution risks. EMEA organic sales were down 29% in Q1 2026, a significant decline, which could limit global diversification and overall growth if the anticipated second-half recovery is weaker or further delayed. The stock is currently trading at a significant premium with a 74.9x P/E ratio, notably above its estimated DCF fair value, suggesting high future growth expectations may be priced in. Any potential slowdown in hyperscaler AI spending or increased insourcing by large customers could trigger a sharp multiple compression.
- Bull Case
- Vertiv delivered a very strong Q1 2026, with adjusted EPS up 82.8% year-over-year and net sales rising 30.1% to $2.65 billion, surpassing analyst expectations. The company significantly raised its full-year 2026 guidance for adjusted EPS and net sales, reflecting robust, broad-based demand, particularly in the Americas (44% organic growth), and strong pipeline momentum for AI-driven infrastructure spending. Vertiv is strategically expanding its market opportunity through advanced solutions and M&A, including significant investments in capacity for liquid cooling, 800V DC power, and integrated prefab systems like SmartRun. Operational leverage and pricing power are driving margin expansion, with Q1 adjusted operating margin at 20.8% and full-year guidance raised to 23.3%.
- More Compelling & Why
- Bear. The current P/E ratio of 74.9x is significantly rich, implying that substantial future growth and flawless execution are already priced in. Any deviation from these high expectations, such as a weaker-than-anticipated EMEA recovery or increased tariff impact, could trigger a sharp multiple compression. My view would flip if Vertiv consistently delivered organic growth significantly above current guidance (e.g., 35-40% YoY) combined with further margin expansion, or if the stock price corrected, bringing the P/E closer to industry averages.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| EMEA Organic Sales Growth Turnaround | EMEA's return to positive year-over-year organic sales growth would validate management's conviction, alleviate a key bear point, and demonstrate global market strength beyond the Americas, supporting overall revenue diversification and sustained growth. | Vertiv's reported organic sales growth rate for the EMEA region in its Q2 2026 and Q3 2026 earnings releases. Specifically, monitor for a positive year-over-year organic growth percentage. | Bullish: EMEA organic sales growth turns positive (e.g., >0% YoY) in the second half of 2026, confirming the 'uncoiling spring' narrative and contributing to full-year flat organic growth guidance. | Vertiv's Q2 and Q3 2026 earnings releases and conference calls. Q2 earnings are typically released in late July/early August, and Q3 earnings in late October/early November. | Industry reports on data center capacity and AI infrastructure build-out in Europe (e.g., CBRE, JLL data center market reports). | S&P Global Market Intelligence: Data center construction project tracking in EMEA. |
| Thermal Key Acquisition Closing and Integration Progress | The successful closing and integration of the Thermal Key acquisition will enhance Vertiv's thermal management portfolio, particularly with dry coolers for complex AI data center heat rejection, strengthening its competitive position and technology base. | An official press release announcing the definitive closing of the Thermal Key acquisition. Subsequent commentary on integration progress and expected revenue/synergy contributions in future earnings calls. | Bullish: The acquisition closes as anticipated ('in a few months' from the Q1 2026 call), with positive updates on integration and strategic benefits. | Vertiv's press releases, SEC filings (e.g., 8-K for acquisition closing), and Q2/Q3 2026 earnings calls. | News articles or industry reports discussing M&A activity in the data center thermal management space. | MergerMarket: M&A deal tracking and analysis for industrial technology sectors. |
| New Capacity Coming Online and Impact on Output | Increased manufacturing and service capacity, particularly in the Americas, is critical to meet the robust demand from AI data centers, convert the strong backlog into revenue, and sustain high organic growth rates. | Management commentary in Q2 and Q3 2026 earnings calls regarding the timing and impact of new capacity becoming operational, specifically mentioning increased production output, improved delivery times, or reduced lead times. | Bullish: Management confirms new capacity is operational and contributing to increased output or improved delivery times in the second half of 2026, supporting accelerated growth. | Vertiv's Q2 and Q3 2026 earnings releases and conference calls. | Local news reports or press releases from Vertiv regarding new facility openings or expansions in key manufacturing regions, particularly the Americas. | Thinknum: Manufacturing job postings in key Vertiv locations (e.g., Columbus, Ohio; Pelzer, SC) showing sustained growth. |
| Investor Day Multiyear Outlook Update | The Investor Day provides a platform for management to detail its updated multiyear outlook, strategy, and technology roadmap, offering critical long-term visibility and potentially reinforcing confidence in sustained growth and margin expansion. | Key takeaways from Vertiv's Investor Day on May 19-20, 2026, specifically any updates to multiyear revenue growth targets, adjusted operating margin goals (e.g., reaffirmation of 25% by 2029 or acceleration), and strategic initiatives. | Bullish: Reaffirmation or upward revision of long-term financial targets (e.g., 25% adjusted operating margin by 2029, sustained high organic growth) and clear articulation of a compelling technology roadmap. | Vertiv's Investor Day presentation materials and webcast (May 19-20, 2026) available on their investor relations website. | Financial news outlets (e.g., Bloomberg, Reuters, Wall Street Journal) covering the Investor Day event and analyst summaries. | AlphaSense/Tegus: Transcripts and summaries of the Investor Day presentation and Q&A. |
| 800-volt Architecture Portfolio Launch | The launch of 800-volt solutions is crucial for Vertiv to maintain its leadership in power management for high-density AI compute environments, expanding its total addressable market and securing future revenue streams as the industry transitions. | Official company announcements or press releases in the second half of 2026 detailing the launch of 800-volt architecture products, including specific product names, features, and target availability. | Bullish: Successful launch of the 800-volt portfolio in the second half of 2026 as planned, with positive customer feedback or initial orders. | Vertiv's press releases, investor relations website, and technology/product announcements in the second half of 2026. | Industry trade publications (e.g., Data Center Frontier, DCD) covering new power architecture developments and Vertiv's role. | Gartner/IDC reports: Market share and adoption rates of 800V DC power solutions in data centers. |
Key Reported Metrics
| Metric | Why It Matters | Last Period |
|---|---|---|
| Adjusted Operating Margin | This metric tests Vertiv's ability to offset tariffs, manage costs, and reinvest efficiently while maintaining pricing power and operating leverage, crucial for its long-term target. | 26.1% |
| Net Sales Growth | This is a core indicator of AI data-center buildout demand. Investors will watch if Vertiv can sustain strong top-line growth as comparable periods become more challenging. | 30% |
| EMEA Organic Sales Growth | EMEA's recovery is crucial for global diversification and signals the 'uncoiling' of demand in a region with a significant shortage of AI-capable data center capacity. | -29% |
Key QuestionsWill Vertiv achieve its guided acceleration in organic revenue growth in the second half of 2026, particularly with the anticipated recovery in EMEA and new cap
Will Vertiv achieve its guided acceleration in organic revenue growth in the second half of 2026, particularly with the anticipated recovery in EMEA and new capacity coming online?
- Question 2
Can Vertiv sustain its adjusted operating margin expansion towards its full-year guidance of 23.3%, effectively offsetting tariff impacts and managing the costs associated with significant capacity investments?
- Question 3
Will the strong pipeline and elongated backlog translate into consistent order conversion and sustained demand for Vertiv's expanded capacity, validating the multi-year AI infrastructure build-out thesis?
Earnings Transcript Summary
· 2026Q1 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **Capacity Expansion**: Management is heavily investing in expanding manufacturing and service capacity globally, particularly in the Americas, to meet accelerating demand for data centers and AI infrastructure. 2. **Supply Chain Resilience and Tariff Mitigation**: Vertiv is focused on strengthening its supply chain through multi-sourcing strategies and proactively managing commodities and components to maintain stability despite evolving trade dynamics and tensions, including mitigating tariff exposures. 3. **Execution and Operational Discipline**: Management emphasizes strong execution in a rapid growth environment, balancing aggressive growth and market share gains with operational discipline and cost management. | The overall takeaway from the call is that Vertiv had a very strong first quarter in 2026, driven by robust demand in the data center and AI infrastructure markets, particularly in the Americas. Management expressed high confidence in the business trajectory, raising full-year guidance for adjusted diluted EPS, net sales, and adjusted operating profit. The tone of the call was highly positive and confident, with management emphasizing strong execution, strategic investments in capacity and technology, and effective navigation of market challenges like tariffs and supply chain complexities. | In Q4 2025, Americas organic sales growth was 46%. APAC organic sales were down 9%. EMEA organic sales were down 14%. | 1. **Prefab Market Importance and TAM**: Analysts inquired about the importance of the prefab market and its Total Addressable Market (TAM). Management responded that prefabrication is crucial for speed (time to token), alleviates construction site challenges, addresses talent scarcity, and allows for the convergence of solutions into optimized systems like 'One Core,' which helps Vertiv capture more of the TAM. 2. **Acceleration of Organic Growth in H2 2026**: Analysts questioned the levers driving the anticipated step-up in organic growth in the second half of 2026. Management attributed this to new capacity coming online in H2, a significant load of backlog from strong Q4 orders, and expected accelerated growth in both APAC and EMEA in the second half. 3. **Service Growth, Field Organization, and Margin Complexion**: Analysts asked about the ability of the service organization to grow at the current pace and the implications for margins. Management expressed satisfaction with the trajectory of both project and life cycle services, highlighting a strong local presence complemented by dedicated teams for large data center deployments. They also noted heavy investment in growing the service population and stated that incremental margins for services are expected to be similar to the overall company's 30-35% range. | Overall organic sales were up 23% year-on-year. From a regional perspective, Americas organic growth was 44%, APAC organic growth was 12%, while EMEA organic growth was down 29%. |
Transcript Tidbits
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| Vertiv is still in the early stage of the infrastructure build out for AI, which is expanding their eligible market. Their competitive advantages are compounding, making them more important to customers' technology roadmaps as they deliver scalable product systems, integrated solutions, and services. The prefabrication of solutions, such as the Vertiv technology solution, helps capture more of the total addressable market. Strategic acquisitions, like the one strengthening fluid management and liquid cooling capabilities, enhance their system-level services offering. The anticipated acquisition of Thermal Key will expand their thermal management portfolio with heat exchange know-how and dry coolers, addressing the increasing complexity of heat rejection for AI data centers. Additionally, B, market structures, brings custom engineered structural fabrication capabilities to accelerate the delivery of manufactured and converged infrastructure solutions at scale. EMEA is noted as being part of the AI story, with customer projects like Ecodata Center in Sweden supporting demanding AI workloads. The concept of 'bring your own power' is seen as an integral part of data center design, creating opportunities due to increased system complexity and potential content for Vertiv. The transition to 800-volt architecture is expected to be an important portion of the total market from 2027 onwards, with Vertiv on track for second-half 2026 portfolio launches. Liquid cooling applications are expanding beyond just chips to a much bigger array of electronics across the entire IT stack, presenting further opportunities. Vertiv offers a robust liquid cooling portfolio, including the ability to provide optimized solutions for specific silicon types and customize to customer needs. The SmartRun solution, which integrates white space infrastructure, power distribution, and liquid cooling, is described as extremely successful and changing industry practices. | Vertiv's competitive advantages are compounding, making them more important to customers' technology roadmaps as they deliver scalable product systems, integrated solutions, and services. Challenges like tariffs, supply chain complexity, and labor constraints are manageable and raise the bar in ways that favor established players like Vertiv. The company believes it is 'ahead of the pack' in prefabrication because it provides technology, not just integration. Vertiv's long-standing customer relationships and partnerships create a significant competitive advantage that is difficult to replicate. The company believes it has the 'most robust' liquid cooling portfolio. | Customer conversations indicate increased urgency, larger scale deployments, and growing technical complexity in the industry, creating opportunities for companies like Vertiv that can solve these challenges. The industry is still in the early stages of the AI infrastructure build-out. There is robust growth in demand for data centers, leading to significant investments in capacity expansion, supply chain, and engineering capabilities. Speed, or 'time to token,' is essential in the market, with prefabrication alleviating challenges on construction sites and addressing the scarcity of skilled trade resources. There is a significant shortage of data center capacity, particularly for AI-capable data centers, in EMEA and Europe. Hyperscale, colocation, and new cloud deployments continue to be the biggest drivers globally. While enterprise adoption of AI is starting, its visible impact on growth as an independent driver is likely still some time away, with much activity happening at the colocation level. The concept of 'bring your own power' is here to stay and is an important part of the data center equation, especially in the U.S. The industry is seeing a gradual and partial shift towards converged systems, though point-to-point product activity remains. The liquid cooling part of the industry is maturing, with some practices stabilizing, though these continue to evolve. | Vertiv expects a strong year ahead and strong years in the future. The company is raising its full-year guidance, now expecting adjusted diluted EPS of $6.35, up 51% from 2025, and adjusted operating profit of $3.2 billion, up 53% from 2025. Adjusted operating margin is projected to be 23.3%, 190 basis points higher than 2025. Orders are anticipated to be up year-over-year, reflecting sustained market demand. EMEA is expected to return to year-over-year sales growth in the second half of 2026, a conviction embedded in the guidance. China is also showing encouraging pipeline movement. Vertiv expects positive price costs in 2026, including the impact of tariffs and countermeasures, and believes its strategic capacity investments will position it well for current and future demand. For Q2 2026, adjusted diluted EPS is projected at $1.40 (midpoint), up 47% year-over-year, with net sales at $3.35 billion (midpoint), reflecting 27% growth. Adjusted operating profit for Q2 is guided to $710 million (midpoint), a 45% increase, with adjusted operating margins at 21.2% (midpoint), up 270 basis points. Vertiv expects to materially offset unfavorable margin impact from tariffs in Q2. Full-year 2026 net sales guidance is updated to $13.75 billion (midpoint), reflecting 34% growth. Organic growth rates are expected to be high 30s in Americas, mid-20s in APAC, and flat in EMEA. The adjusted operating profit midpoint is $3.2 billion, $160 million higher than prior guidance. Full-year adjusted operating margin is guided to 23.3% (midpoint), an expansion of 290 basis points from 2025. Adjusted free cash flow guidance is maintained at $2.2 billion (midpoint), up 17% year-over-year. The company is confident in its strong trajectory and significant opportunities. | HVAC: | AI-Driven Energy Mgmt, Grid Modernization & Infra | The momentum we're seeing across the business is strong. The urgency has increased. The scale deployment is larger, and the technical complexity is creating opportunities for companies that can solve [indiscernible], which is exactly where we excel. We're seeing broad-based strength, and that tells you something about the depth of demand and our ability to capture it. We're still in the early stage of the infrastructure build out for AI. Our competitive advantages are compounding. Gio and the team are executing very well in this rapid growth environment, balancing aggressive growth and share gain with operational discipline. Q1 was very strong with organic sales up 23% year-on-year. Adjusted operating margin came in at 20.8%, up 430 basis points year-on-year, and 180 basis points above our guidance. Our pipeline momentum continues to be strong. Americas continues to show remarkable strength. In EMEA, the spring continues to uncoil. We're seeing improving market sentiment throughout the quarter with momentum building. Rest of Asia and India are showing convincingly strong pipelines and dynamics with robust momentum building. We are accelerating our strategic capacity investments to meet the demand we are seeing. We continue to see very robust growth in demand for data centers. We exited the quarter with net leverage of 0.2x, providing us with significant strategic flexibility. Our first quarter results were strong testaments to Vertiv's execution capabilities and the momentum continuing to build in our markets. The demand environment is robust and we are very well positioned to carry that forward. We have raised our 2026 guidance, reflecting our confidence in the trajectory of the business and opportunities ahead. Achieving investment-grade credit ratings and inclusion in the S&P 500 are meaningful milestones. SmartRun is extremely successful, and I think we have done our part again to change the way the industry works. We are confident ever about where Vertiv is headed. The trajectory is strong. The opportunities are significant, and we are well positioned to capture them. | Tariffs, supply chain, complexity, labor constraints. These are real. EMEA was down 29% organically. Organic growth came in below quarterly guidance, primarily due to timing. EMEA. Net sales were $321 million, down 29% organically. We believe this is a temporary reflection of softer orders that we saw in Q2 and Q3 of 2025. We saw a step down in margins here year-over-year due to operating deleverage. Quarter-over-quarter, there is a little bit of a headwind as we bring on capacity. | Vertiv is experiencing 'labor constraints' and a 'scarcity of talent trade resources'. The company is 'scaling our people and service capacity vigorously and [ convincingly ], across all service technologies and regions' and is 'growing our services population', with more details to be provided in May. |
Notes
| Date | Comment | Comment Type | Comment Sentiment | Link | IS CHANGE | Price Reaction |
|---|---|---|---|---|---|---|
| 2025-10-22 | Vertiv posted another strong quarter—sales +28% YoY, margins 22.3%, orders +60% YoY, backlog $9.5B—showing powerful AI data-center demand and solid execution. Management raised full-year guidance and reaffirmed 25% LT margin goals. Stock initially jumped but faded w/ market as investors digested tariff uncertainty, EMEA softness, and heavy reinvestment tempering near-term margin upside. | Earnings Transcript | Mixed | +8.43% (vs SPY: +5.82%) | ||
| 2025-09-10 | Vertiv reiterated strong AI-driven demand and a growing pipeline extending into 2026–27, clarified that liquid cooling will represent about one-third of total cooling TAM, and highlighted new prefab and white-space opportunities. Margins, tariff mitigation, and long-term visibility were reaffirmed. No new guidance or surprises. | Conference Presentation | Neutral | |||
| 2025-09-09 | Vertiv added color on accelerating neocloud demand, enterprise AI potential, shorter lead times, strong service scaling, and $12B deployable capital for M&A—reinforcing execution strength and long-term growth visibility. | Conference Presentation | Neutral | |||
| 2025-07-30 | Vertiv beat on sales and EPS, raised full-year guidance, and highlighted strong AI-driven demand, backlog, and new opportunities in white-space integration and prefabrication. However, tariff-related inefficiencies, margin pressure, and reduced order transparency tempered enthusiasm. Investors viewed the quarter as solid but priced-in, leading to a mixed-to-slightly-negative stock reaction despite strong fundamentals. | Earnings Transcript | Mixed | -0.78% (vs SPY: +1.35%) | ||
| 2026-04-22 | Vertiv reported strong Q1 2026 results, with organic sales up 23% and significant margin expansion, driven by robust AI-related demand, particularly in the Americas. The company raised its full-year guidance, citing strong pipeline momentum and capacity investments. The market reacted positively, with the stock outperforming the SPY by over 2% post-earnings, reflecting confidence in Vertiv's execution and growth trajectory. | Earnings Transcript | Neutral | False | +2.98% (vs SPY: +2.36%) |
Upcoming Events
| Catalyst ID | Estimated Timing | Estimated Date Start | Estimated Date End | Catalyst | Why It Matters | Ticker Or Theme Specific | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|
| VRT_b01bf2f8 | second half | 2026-07-01 | 2026-12-31 | EMEA returning to year-over-year sales growth. | A recovery in EMEA sales would validate management's confidence in the region's demand trajectory, contributing to overall revenue growth and mitigating concerns about regional weakness. | Ticker | 2026-04-22 | earnings_transcript |
| VRT_6f11cf23 | a lot of that capacity start to hit us in the second half | 2026-07-01 | 2026-12-31 | Realization of benefits from accelerated strategic capacity investments. | Successful capacity expansion is critical to meet the strong demand for data center infrastructure, enabling Vertiv to convert its robust pipeline into higher sales and maintain market leadership. | Ticker | 2026-04-22 | earnings_transcript |
| VRT_c7ea5f9b | continue to materially offset those | 2026-04-01 | 2026-12-31 | Successful mitigation of tariff exposures, including recent changes under Section 122 and 232. | Effective tariff countermeasures are essential for protecting Vertiv's adjusted operating margins and achieving its profitability guidance amidst evolving trade dynamics. | Ticker | 2026-04-22 | earnings_transcript |
| VRT_4a2d227d | 19th and 20th of May in Greenville, South Carolina | 2026-05-19 | 2026-05-20 | Vertiv's 2026 Investor Conference, including an updated multiyear outlook and technology session. | This event will provide updated long-term financial targets, strategic insights, and details on technology and capacity expansion, which could significantly influence investor sentiment and valuation. | Ticker | 2026-04-22 | earnings_transcript |
| VRT_af10a162 | anticipated to close in a few months | 2026-07-01 | 2026-09-30 | Closing of the Thermal Key acquisition. | The acquisition is expected to expand Vertiv's thermal management portfolio and enhance capabilities for AI data centers, potentially driving revenue growth and strengthening its competitive position in a critical market segment. | Ticker | 2026-04-22 | earnings_transcript |
| VRT_eaa28596 | second half this year launches of portfolio | 2026-07-01 | 2026-12-31 | Launch of Vertiv's 800-volt architecture product portfolio. | The successful introduction of 800-volt products is crucial for Vertiv to maintain its leadership and capture market share in the rapidly evolving high-density AI data center segment, expanding its addressable market. | Ticker | 2026-04-22 | earnings_transcript |