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

- **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.


Vertiv (VRT)-22 Oct 25-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

VRT

VRT fundamentals

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