Vertiv Holdings Co (VRT) Q4 2024 Earnings Summary

Executive Summary

Q4 2024 delivered a broad-based beat versus prior guidance: net sales $2.35B (+26% YoY), adjusted operating profit $504M (+53% YoY), and adjusted EPS $0.99 (+77% YoY); adjusted operating margin expanded 380 bps to 21.5% driven by volume, price/cost, and productivity .
Americas TTM organic orders rose ~50% with strong hyperscale and colocation demand, while total company TTM organic orders grew ~30%; backlog-to-sales ratio reached 78%, supporting 2025 revenue trajectory .
FY 2025 guidance raised vs November investor event: net sales $9.125–$9.275B (midpoint +$75M vs November), adjusted EPS $3.50–$3.60, adjusted operating profit $1.91–$1.96B, and adjusted FCF $1.275–$1.325B; Q1 2025 adjusted EPS guide $0.57–$0.63 .
Stock catalysts: continued AI-driven demand, visible 2025 growth across regions (Americas low-20s, APAC low-teens, EMEA high single digits), liquid cooling ramp, and power portfolio integration; management emphasized strong pipeline and resilience to tariff scenarios .

What Went Well and What Went Wrong

What Went Well
- Significant beats vs Q4 guidance across top line and profitability: sales >$200M above midpoint, adjusted operating margin +110 bps vs guidance, and adjusted FCF +$135M vs guidance .
- Robust regional performance: EMEA organic sales +33% with margin expansion; Americas adjusted margin +420 bps to 25.6%; APAC grew +27% organically with improving margins .
- Strategic narrative: CEO underscored AI proliferation driving more data centers and reaffirmed 5-year framework; Exec Chairman highlighted “continued outperformance” despite market noise; strong balance sheet optionality (buybacks, dividend, M&A) .
What Went Wrong
- EMEA orders timing pushed to 2025; management acknowledged regulatory and slower decision-making dynamics, reducing near-term order prints despite strong pipelines .
- GAAP diluted EPS $0.38 reflected warrant liability fair value changes and nonrecurring tax items; headline GAAP earnings masked underlying operational strength and required adjustments to reflect core performance .
- Estimate data are unavailable via S&P Global for consensus comparison; internal guidance and execution serve as primary anchors for performance assessments this quarter (see Estimates Context) [GetEstimates error].

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$1,952.8	$2,073.5	$2,346.4
GAAP Diluted EPS ($)	$0.46	$0.46	$0.38
Adjusted Diluted EPS ($)	$0.67	$0.76	$0.99
Operating Profit ($USD Millions)	$336.0	$371.6	$457.2
Adjusted Operating Profit ($USD Millions)	$381.8	$416.9	$504.3
Operating Margin (%)	17.2%	17.9%	19.5%
Adjusted Operating Margin (%)	19.6%	20.1%	21.5%

YoY comparison (Q4 2024 vs Q4 2023)

Metric	Q4 2023	Q4 2024
Revenue ($USD Millions)	$1,865.4	$2,346.4
GAAP Diluted EPS ($)	$0.60	$0.38
Adjusted Diluted EPS ($)	$0.56	$0.99
Operating Profit ($USD Millions)	$285.2	$457.2
Adjusted Operating Profit ($USD Millions)	$330.4	$504.3
Operating Margin (%)	15.3%	19.5%
Adjusted Operating Margin (%)	17.7%	21.5%

Segment breakdown (Q4 2024 vs Q4 2023)

Segment	Net Sales Q4’23 ($MM)	Net Sales Q4’24 ($MM)	Adjusted OP Q4’23 ($MM)	Adjusted OP Q4’24 ($MM)	Adjusted Margin Q4’23 (%)	Adjusted Margin Q4’24 (%)
Americas	$1,019.6	$1,255.9	$218.4	$321.5	21.4%	25.6%
APAC	$430.4	$544.0	$42.9	$68.4	10.0%	12.6%
EMEA	$415.4	$546.5	$95.0	$145.2	22.9%	26.6%
Total	$1,865.4	$2,346.4	$330.4	$504.3	17.7%	21.5%

Product vs Services mix (Q4 2024 vs Q4 2023)

Metric	Q4 2023	Q4 2024
Products Net Sales ($MM)	$1,441.5	$1,874.9
Services & Spares Net Sales ($MM)	$423.9	$471.5
Total Net Sales ($MM)	$1,865.4	$2,346.4

KPIs and Cash

KPI	Q2 2024	Q3 2024	Q4 2024
TTM Organic Orders Growth (%)	~37%	~37%	~30%
Backlog	—	$7.4B	Backlog-to-sales ratio 78%
Adjusted Free Cash Flow ($MM)	$333.4	$335.9	$361.8
Operating Cash Flow ($MM)	$378.4	$375.1	$425.2
Net Leverage (x)	~1.8x	1.4x	~1.0x
Liquidity ($B)	$1.2	$1.5	$2.0

Notes on non-GAAP adjustments: Adjusted EPS excludes amortization of intangibles and changes in warrant liability; Q4’24 adjusted EPS reconciliation: GAAP diluted $0.38, add amortization $0.12, remove warrant liability effect $0.56, nonrecurring tax benefit $(0.07), resulting in adjusted $0.99 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($B)	Q4 2024	$2.115–$2.165B (10/23 update)	Actual $2.346B	Raised vs guidance (beat)
Adjusted Operating Profit ($MM)	Q4 2024	$427–$447	Actual $504	Raised vs guidance (beat)
Adjusted Diluted EPS ($)	Q4 2024	$0.80–$0.84	Actual $0.99	Raised vs guidance (beat)
Net Sales ($B)	Q1 2025	—	$1.900–$1.950	New
Adjusted Operating Profit ($MM)	Q1 2025	—	$315–$335	New
Adjusted Diluted EPS ($)	Q1 2025	—	$0.57–$0.63	New
Adjusted Operating Margin (%)	Q1 2025	—	16.7%–17.1%	New
Net Sales ($B)	FY 2025	November investor event (midpoint lower by ~$0.075B)	$9.125–$9.275	Raised (midpoint +$75M)
Adjusted Operating Profit ($MM)	FY 2025	—	$1,910–$1,960	Maintained/Confirmed higher level
Adjusted Diluted EPS ($)	FY 2025	—	$3.50–$3.60	Maintained/Confirmed
Adjusted Free Cash Flow ($MM)	FY 2025	—	$1,275–$1,325	New
Capex ($MM)	FY 2025	—	~$275 (~3% of sales)	New
Interest Expense ($MM)	FY 2025	—	$125	New detail
Tax Expense ($MM)	FY 2025	—	$460 (GAAP) / $420 (Adj)	New detail
Dividend	2025	—	$0.0375 per share (declared Mar 27, 2025 pay date)	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
AI/Technology Initiatives	Emphasis on liquid cooling leadership, NVIDIA collaboration, TAM per MW $2.75–$3.5M; ramping liquid cooling capacity 45x; services as “super power”	CEO: AI adoption expanding access, driving data growth and data centers; reiterates 5-year framework; continued hyperscale/colo strength	Strengthening; broader AI accessibility and densification tailwinds
Supply Chain Resilience	Multi-sourcing, geographic diversity, Pelzer IMS facility; price/cost positive stance	Added U.S. manufacturing footprint expansion; tariff playbooks ready; price/cost positive in 2025	Resilient; proactive tariff mitigation
Tariffs/Macro	Expect inflation persistence; price/cost governance	Tariff outlook fluid; scenarios prepared; disclosure limited but emphasis on preparedness	Watchful; prepared
Product Performance	Liquid cooling accelerating; EMEA switchgear strength; broad power and thermal demand	Power portfolio focus; integrated systems (power conversion/distribution + thermal) to simplify and future-proof	Expanding integration; broader system wins
Regional Trends	Americas leading, EMEA strong, APAC cautious on China but improving; backlog $7.4B	Americas orders “extraordinarily strong”; EMEA orders timing shifted to 2025; APAC growth with cautious China outlook	Americas strength; EMEA timing shift; APAC steady
R&D and ER&D	Increased ER&D, capacity investments; technology-led acquisitions (CoolTera)	ER&D increased by $50M; BSE acquisition (chiller/heat reuse) to support high-density compute	Continued investment
Services / Lifecycle	Embedded crews (Compass), global network of ~4,000 service engineers	Launch of global Liquid Cooling Services portfolio for AI/HPC lifecycle management	Scaling services; higher criticality

Management Commentary

“Efficiency of compute has always been core… broader, more pervasive use of AI… require more data and therefore require more data centers… we are reaffirming the five-year financial framework” — CEO Giordano Albertazzi .
“Again, orders are quite strong for us… [Americas] extraordinarily strong… we can manage continued outperformance of the company when it comes to sales, earnings and cash flow” — Executive Chairman Dave Cote .
“Adjusted operating margin of 21.5%, up 380 basis points… provides a very strong foundation for 2025… adjusted free cash flow… $362M” — CFO Dave Fallon .
“We have… playbooks aimed at strategically mitigating some of the tariff impacts… expanded… U.S. manufacturing footprint” — CEO Giordano Albertazzi .

Q&A Highlights

Orders/pipeline: Management emphasized trailing-12 order growth remains healthy despite quarterly lumpiness; Americas orders notably strong; EMEA timing shifted into 2025 but pipelines robust .
Tariffs and supply chain: Playbooks prepared; increased U.S. manufacturing; refused to quantify exact exposures but confident in mitigation .
AI inference/custom silicon: “Agnostic” to inference vs training; densification supports Vertiv across liquid and air cooling and power; silicon mix (NVIDIA vs custom) does not change load/density needs .
2025 cadence: Sequential increases each quarter anticipated; Q1 revenue as percent of full-year slightly higher vs 2024; supply chain readiness supportive (including Blackwell) .
Capital deployment: Opportunistic buybacks remain; strong balance sheet enables M&A; dividend increased at November and ongoing plans to double over 5-year period .

Estimates Context

S&P Global consensus estimates were unavailable due to API limits during retrieval. Values could not be fetched.
In lieu of consensus, the company materially exceeded its own Q4 guidance on sales, adjusted operating profit, margin, and adjusted EPS, indicating likely upward pressure on Street estimates for FY 2025 absent contrary revisions .

Key Takeaways for Investors

Q4 demonstrated operational leverage and commercial execution with adjusted margins at 21.5% and a beat vs guidance; this underpins confidence in FY 2025 margin targets (~21%) and long-term ambition (25% by 2029) .
Americas hyperscale/colo demand is a core driver; EMEA 2024 revenue strong but orders timing deferred to 2025—watch for EMEA pickup through the year per pipeline commentary .
Vertiv’s integrated power plus thermal systems and expanding liquid cooling services create defensible differentiation in AI-dense data center builds, supporting share gains and content per megawatt .
Balance sheet flexibility (net leverage ~1.0x, liquidity $2.0B) enables organic/inorganic growth, buybacks (authorization remaining), and dividend growth, supporting total-return profiles .
2025 guide raised vs November: midpoint sales +$75M despite ~$125M FX headwind; management expects sequential growth each quarter—positive for near-term sentiment .
Monitoring items: tariff policy outcomes (mitigation plans in place), China macro in APAC (cautious), and EMEA project timing; none change the medium-term AI-driven secular trajectory per management .
Actionable: Position for continued estimate and guidance momentum if EMEA orders normalize and Americas strength persists; watch for services monetization scaling in liquid cooling lifecycle .