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What were the key takeaways from Vertiv Holdings's earnings call?

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- **Revenue Surge**: Q3 organic sales +28% YoY, driven by Americas (+43%) and APAC (+21%). Full-year 2025 sales guidance raised to $10.2 billion.
- **Profitability Breakthrough**: Adjusted EPS of $1.24 (63% YoY), operating margin 22.3%, with incremental margin of 30% in Q3.
- **Backlog Explosion**: Total backlog $9.5 billion (+30% YoY), orders +60% YoY, and 1.4x book-to-bill ratio.
- **AI-Driven Growth**: $30 million restructuring program to accelerate EMEA recovery, and 20%+ R&D spend growth in 2026.
- **Tariff Mitigation**: Expected to offset current tariffs by Q1 2026, with free cash flow conversion at 95%.
- **Long-Term Vision**: Targeting 25%+ operating margin by 2029, with incremental margins in the 30-35% range.

**【Management Opening Remarks】**
- Vertiv delivered a record-breaking Q3 2025, exceeding all metrics and demonstrating strong execution across its strategy of AI-driven growth, operational excellence, and R&D investment.
- Executive Chairman Dave Cote emphasized the company's position as a leader in the digital transformation, citing its ability to stay ahead of market trends and customer needs.

**【CEO Commentary】**
- **Financial Highlights**: Adjusted diluted EPS of $1.24 (63% YoY growth), organic sales up 28%, and a 1.4x book-to-bill ratio.
- **Market Momentum**: Americas sales +43%, APAC +21%, with a trailing 12-month orders growth of 21%. Total backlog reached $9.5 billion (30% YoY).
- **Strategic Investments**: Accelerating R&D spend (+20%+ in 2026), capacity expansion in Americas, and $30 million restructuring program in EMEA to drive $20 million annualized savings.
- **Tariff Mitigation**: Expected to offset current tariff impacts by Q1 2026 through pricing and supply chain optimization.

**【CFO Financial Commentary】**
- **Profitability**: Adjusted operating profit of $596 million (43% YoY), margin of 22.3% (vs. 20.1% prior year). Incremental margin of ~30% in Q3.
- **Cash Flow**: Adjusted free cash flow of $462 million (38% YoY), with full-year guidance raised to $1.5 billion.
- **Guidance Update**: Full-year 2025 EPS raised to $4.10, net sales to $10.2 billion, and operating profit to $2.06 billion.
- **Margin Outlook**: Targeting 25%+ operating margin by 2029, with incremental margins in the 30-35% range.

**【Q&A Key Highlights】**
- **Order Growth Dynamics**: Q3 orders +60% YoY, driven by AI infrastructure projects. Backlog phasing aligns with historical patterns, with 12-18-month deployment timelines.
- **Services Growth**: Service revenue growth outpacing equipment, with 4,400+ field engineers and AI-enabled tools like Waylay for predictive maintenance.
- **EMEA Recovery**: EMEA sales down 4% in Q3 but expected to rebound in H2 2026 due to latent AI demand and restructuring efforts.
- **Capacity Expansion**: Accelerating manufacturing and service capacity in Americas, with new sites and existing facility expansions to meet 6-12-month demand visibility.
- **Tariff Impact**: Q4 guidance includes $30 million tariff-related headwinds, but mitigation strategies expected to offset impacts by Q1 2026.


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