Vertiv Holdings Co (VRT) Q3 2025 Earnings Summary

Executive Summary

Vertiv delivered a high‑quality beat vs its own Q3 guide: revenue $2.68B (+29% y/y), GAAP EPS $1.02, adjusted EPS $1.24 (+63% y/y), adjusted operating profit $596M (22.3% margin), and orders up ~60% y/y; backlog rose to $9.5B with ~1.4x book‑to‑bill .
Management raised FY25 guidance across all key metrics: net sales to $10.16–$10.24B, adjusted OP to $2.04–$2.08B, adjusted EPS to $4.07–$4.13, and FCF to $1.47–$1.53B; also issued Q4 guide with revenue $2.81–$2.89B and adj. EPS $1.23–$1.29 .
The quarter’s upside was driven by Americas strength (+43% y/y), APAC (+20% y/y), operating leverage and productivity; tariffs remained a headwind but were mitigated faster than expected; EMEA remained muted and is undergoing restructuring (Q3 restructuring cost $31M) .
Stock catalysts: accelerating AI‑driven demand (orders +60% y/y; backlog +30% y/y to $9.5B), FY raise, and management’s outlook to materially offset tariff impacts by exit Q1’26; offsets include EMEA softness and tariff volatility .

What Went Well and What Went Wrong

What Went Well

Orders and backlog acceleration: Q3 organic orders +~60% y/y and +20% q/q; book‑to‑bill ~1.4x; backlog increased to $9.5B, providing strong visibility into 2026 .
Margin execution and guide beat: Adjusted operating margin 22.3% (+220 bps y/y; +380 bps q/q), with operational leverage and productivity more than offsetting tariffs; adjusted OP exceeded guide by ~$86M (management commentary) .
Americas momentum and services positioning: Americas sales +43% y/y with 400 bps margin expansion; management reiterated services as a “superpower” and accretive, scaling headcount (~4,400–4,500 field engineers) .
Management tone: “blown the doors off of every single metric” and “more excited now than ever,” underscoring confidence in multi‑year AI cycle and Vertiv’s strategy .

What Went Wrong

Tariff headwinds: Tariffs remained a drag on margins and contribution, and Q4 margin was guided ~100 bps below earlier framing due to new Section 232 tariffs and accelerated fixed‑cost investments .
EMEA softness: EMEA net sales were flat (+0.2% y/y) with negative organic growth (‑4%) and margins well below prior year; restructuring commenced (~$30.7M cost in Q3) to prepare for a 2H’26 regional recovery .
Q2 inefficiencies still a backdrop: Though addressed faster than expected by Q3, management reiterated prior quarter’s tariff‑mitigation supply‑chain rework and execution challenges; the team is still completing mitigations into Q4/Q1’26 .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Sales ($USD Millions)	$2,073.5	$2,036.0	$2,638.1	$2,675.8
GAAP Operating Profit ($M)	$371.6	$290.7	$442.4	$516.7
Operating Margin %	17.9%	14.3%	16.8%	19.3%
Adjusted Operating Profit ($M)	$416.9	$336.7	$489.3	$595.6
Adjusted Operating Margin %	20.1%	16.5%	18.5%	22.3%
GAAP Diluted EPS ($)	$0.46	$0.42	$0.83	$1.02
Adjusted Diluted EPS ($)	$0.76	$0.64	$0.95	$1.24
Adjusted Free Cash Flow ($M)	$335.9	$264.5	$277.0	$462.0

Segment mix and margins (Q3 2025 vs Q3 2024):

Region Net Sales and Adjusted Margins

Region	Net Sales Q3’24 ($M)	Net Sales Q3’25 ($M)	YoY %	Adj. Margin Q3’24	Adj. Margin Q3’25
Americas	1,198.6	1,712.4	42.9%	25.3%	29.3%
APAC	432.4	519.8	20.2%	10.2%	13.2%
EMEA	442.5	443.6	0.2%	25.9%	18.8%
Total	2,073.5	2,675.8	29.0%	20.1%	22.3%

Product vs Services Mix (Q3)

Category	Q3 2024 ($M)	Q3 2025 ($M)	YoY Δ
Products	1,615.6	2,167.6	+$552.0
Services & Spares	457.9	508.2	+$50.3
Total	2,073.5	2,675.8	+$602.3

Key KPIs and balance sheet

KPI	Q1 2025	Q2 2025	Q3 2025
Book‑to‑Bill	~1.4x	~1.2x	~1.4x
Backlog	$7.9B	$8.5B	$9.5B
Organic Orders Growth (y/y)	~13%	~15%	~60%
Orders Growth (q/q)	~21%	~11%	~20%
TTM Organic Orders Growth	~20%	~11%	21%
Adjusted FCF ($M)	264.5	277.0	462.0
Net Leverage	~0.8x	~0.6x	~0.5x
Liquidity	$2.3B	$2.5B	$2.7B

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY 2025	$9.925B – $10.075B	$10.160B – $10.240B	Raised
Organic Net Sales Growth	FY 2025	23% – 25%	26% – 28%	Raised
Adjusted Operating Profit	FY 2025	$1.95B – $2.03B	$2.04B – $2.08B	Raised
Adjusted Operating Margin	FY 2025	19.7% – 20.3%	20.0% – 20.5%	Raised
Adjusted Diluted EPS	FY 2025	$3.75 – $3.85	$4.07 – $4.13	Raised
Adjusted Free Cash Flow	FY 2025	$1.375B – $1.425B	$1.470B – $1.530B	Raised
Capital Expenditures	FY 2025	~$250–$300M	~$250M	Refined (lower end)
Net Sales	Q4 2025	N/A	$2.810B – $2.890B	New
Adjusted Operating Profit	Q4 2025	N/A	$620M – $660M	New
Adjusted Operating Margin	Q4 2025	N/A	22.1% – 22.7%	New
Adjusted Diluted EPS	Q4 2025	N/A	$1.23 – $1.29	New
Adjusted Free Cash Flow	Q4 2025	N/A	$470M – $530M	New

Notes: Guidance reflects tariff rates active as of Oct 20, 2025 and excludes potential future changes; certain forward‑looking non‑GAAP reconciliations are unavailable .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/Technology initiatives	Q1: NVIDIA GB200/GB300 NVL72 ref designs; AI deployments accelerating . Q2: AI demand driving Americas/APAC growth .	800V DC portfolio planned H2’26; collaboration with NVIDIA’s 2027 “Robin Ultra” platform; continued tech leadership emphasis .	Strengthening
Supply chain & tariffs	Q1: Tariffs fluid; mitigation into 2026 . Q2: Tariff impacts and mitigation costs crimped margins; actions underway .	Faster mitigation in Q3; still headwind; expect to materially offset by exit Q1’26; Q4 margin framed lower due to new tariffs and fixed-cost acceleration .	Improving but volatile
Services	Not a major focus in Q1; Q2 steady contribution .	Called a “superpower,” accretive; scaling to ~4,400–4,500 field engineers; services to accelerate with installed base density .	Rising
Regional trends	Q1: EMEA +6% y/y; APAC +35%; AMER +28% . Q2: EMEA +12.5% y/y; AMER +42.9%; APAC +36.9% .	Q3: AMER +42.9% y/y; APAC +20.2%; EMEA +0.2% (‑4% organic); restructuring to position for 2H’26 recovery .	Mixed (EMEA weak)
Capacity/CapEx	Q1: Capex ~$275M plan . Q2: Expanding capacity; capex $250–300M .	Expanded capacity focus in Americas; prefer expansions at existing sites (3–15 months to first output) ; 2025 capex ~$250M; 2026 expansion expected .	Accelerating
R&D execution	Ongoing investments; NVIDIA partnerships .	ER&D to grow >20% in 2026; aim to stay multiple GPU generations ahead .	Accelerating
Competitive/technology landscape	—	Management welcomes innovation (microfluidics, 800V DC); TAM per MW now $3.0–$3.5M; competitive field consolidating in thermal/liquid cooling .	Favorable positioning

Management Commentary

“We delivered strong sales growth of 29% and built significant backlog… enabling our customers’ most advanced infrastructure needs at scale.” — CEO Giordano Albertazzi .
“We exceeded guidance across all metrics in a very convincing way… I’m more excited now than ever.” — Executive Chairman Dave Cote .
“Adjusted operating margin of 22.3%… aided by operational leverage… addressing supply chain inefficiencies more quickly than expected just three months ago.” — CFO David Fallon .
“We expect to materially offset [tariff] impacts as we exit Q1 2026, while optimizing our supply chain and manufacturing footprint.” — CEO Giordano Albertazzi .
“Our 800‑volt DC portfolio, planned for release in the second half of 2026, aligns directly with NVIDIA’s 2027 rollout… We’re collaborating closely with NVIDIA.” — CEO Giordano Albertazzi .

Q&A Highlights

Orders cadence: Orders +60% y/y driven by market strength, Vertiv’s scaling capability, and value proposition; large hyperscaler program announcements flow to Vertiv orders in phased POs aligned to build‑outs .
Services economics: Services are accretive and recurring; scaling capacity and headcount (~4,400–4,500 engineers), with rigorous KPI discipline on SLAs and on‑site response .
Incremental margins path: Long‑term 30–35% incrementals remain intact; tariffs the main 2025 headwind but expected to be materially offset exiting Q1’26; path to 25% adjusted OP margin by 2029 still valid .
Q4 margin framing: Sequential margin roughly flat vs Q3; about half of the ~100 bps reset vs prior framing from new tariffs, half from accelerated fixed‑cost investments to support growth .
EMEA recovery: Q3 likely margin low point; expect improved Q4 with better operating leverage and mitigation of inefficiencies; broader regional reacceleration targeted 2H’26 .
Capacity timing: Prefers expansions at existing sites; time to first unit ranges from ~3–5 months (line reconfig) to ~9–15 months (larger expansions) .
Competitive tech: Microfluidics and 800V DC seen as opportunities; Vertiv’s total system leadership preserves/increases content; TAM per MW now ~$3.0–$3.5M .

Estimates Context

S&P Global consensus for Q3 2025 EPS and revenue was unavailable in our dataset at the time of analysis; therefore, beat/miss vs Street consensus cannot be determined here. Instead, results significantly exceeded the company’s Q3 guidance issued July 30, 2025 (Adj. EPS $0.94–$1.00; Adj. OP $490–$530M; sales $2.51–$2.59B) versus actuals Adj. EPS $1.24, Adj. OP $595.6M, sales $2.676B .
The FY25 raise (Adj. EPS to $4.07–$4.13; sales to $10.16–$10.24B) likely necessitates upward Street revisions, especially on revenue, EBIT and FCF trajectories, with tariff assumptions a sensitivity into Q4/Q1’26 .

Key Takeaways for Investors

Accelerating AI‑driven cycle: Orders +60% y/y, backlog to $9.5B and book‑to‑bill ~1.4x underscore durable multi‑year demand visibility; Vertiv’s participation should expand with services and system content .
Execution regained momentum: Adjusted margin expanded to 22.3% with faster‑than‑planned mitigation of Q2 inefficiencies; Q4 margin held roughly flat despite new tariffs and step‑up growth investments .
Americas engine + services flywheel: Americas +43% y/y and services accretion suggest mix supports structurally higher margins through the cycle .
FY25 raise de‑risks near‑term numbers: FY guide lifted across sales, margins, EPS, and FCF; 95% FCF conversion and ~0.5x net leverage provide optionality for capacity, ER&D and M&A .
Watch EMEA and tariffs: EMEA remains the principal overhang but restructuring is underway; management expects material tariff offsets by exit Q1’26—delivery on this is a key proof point into 1H’26 .
Technology roadmap a differentiator: 800V DC (H2’26) and NVIDIA collaboration reinforce Vertiv’s system‑level leadership; TAM/MW expanding to ~$3.0–$3.5M supports content and margin durability .
Near‑term trading setup: Momentum narrative (orders/backlog/FY raise) vs. tariff/EMEA noise; print‑to‑print, Q4 guide implies continued high‑20s y/y EPS growth and >22% adj. margin despite headwinds .

Additional Relevant Q3 Press Releases

Quarterly dividend declared ($0.0375 per share; payable Sep 25, 2025) .
Strategic actions supporting growth during Q3: Completed acquisition of Great Lakes Data Racks & Cabinets (Aug 20, 2025) and acquired AI software leader Waylay NV (Aug 26, 2025), bolstering white‑space and AI analytics capabilities .

Appendix: Company Guidance Detail (as issued Oct 22, 2025)

Q4 2025: Net sales $2.81–$2.89B; organic growth 18–22%; adj. OP $620–$660M; adj. margin 22.1–22.7%; adj. EPS $1.23–$1.29; adj. FCF $470–$530M .
FY 2025: Net sales $10.16–$10.24B; organic growth 26–28%; adj. OP $2.04–$2.08B; adj. margin 20.0–20.5%; adj. EPS $4.07–$4.13; adj. FCF $1.47–$1.53B .

Citations: 8‑K/press release and transcript as referenced above.