In This Article:
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EPS: Up 49% to $0.64, driven by increased AOP.
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Organic Net Sales: Increased by 25%.
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Book-to-Bill Ratio: 1.4 times in Q1.
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Trailing 12-Month Organic Orders Growth: 20%.
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Adjusted Operating Profit: $337 million, up 35% from prior year.
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Adjusted Free Cash Flow: $265 million, up 162% year-on-year.
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Net Leverage: 0.8 times.
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Adjusted Operating Margin: Expanded by 130 basis points.
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Full Year Sales Growth Guidance: Raised to 18%.
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Adjusted Operating Margin Guidance: Reduced to 20.5% at the midpoint due to tariffs.
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Adjusted Diluted EPS Guidance: Maintained at $3.55 at the midpoint.
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Backlog: Expanded to $7.9 billion, up $1.6 billion year-over-year.
Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Vertiv Holdings Co (NYSE:VRT) reported a strong first quarter with EPS up 49% to $0.64, driven by increased adjusted operating profit.
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Organic net sales grew by 25%, indicating that the company is outperforming market growth.
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The company achieved a book-to-bill ratio of 1.4 times, reflecting strong demand and order growth.
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Adjusted free cash flow was $265 million, up 162% year-over-year, showcasing strong cash generation.
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Vertiv Holdings Co (NYSE:VRT) raised its full-year sales growth guidance to 18%, demonstrating confidence in continued market demand.
Negative Points
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The tariff situation remains fluid and poses a significant challenge, with potential negative impacts on operating margins.
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EMEA region's growth lagged behind the Americas and APAC, primarily due to slower AI infrastructure build.
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The company faces uncertainty in mitigating the impact of tariffs, which could affect profitability.
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There is a potential headwind for free cash flow in the next quarter due to accelerated collections in Q1.
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Despite strong performance, the company has not engaged in share repurchases, raising questions about capital allocation priorities.
Q & A Highlights
Q: How do you see the mitigation efforts for tariffs phasing in through 2025, and is repricing of contracts part of the strategy? A: Giordano Albertazzi, CEO, explained that the impact of countermeasures will compound as the year progresses. The strategy includes price actions on new contracts and existing backlog where needed, as well as supply chain reconfiguration. David Fallon, CFO, added that the net impact of tariffs is expected to sequentially decline as the year progresses, with the goal of achieving tariff neutrality by year-end.
Q: What is driving the impressive order performance, and how durable is this growth? A: Giordano Albertazzi, CEO, stated that the growth is driven by expanding pipelines, which are growing sequentially and providing more visibility into the future. The company focuses on long-term trajectory rather than short-term fluctuations, and the current pipeline velocity is stable, indicating durable growth.