Vertiv's Focus On AI Drives Q2 Revenue and Profit Growth, Guidance Boost & More

Vertiv Holdings Co VRT shares are trading lower after the company reported second-quarter FY24 results.

Net sales rose 13% Y/Y to $1.953 billion, beating the consensus of $1.939 billion. Organic orders (excluding foreign exchange) rose 57% Y/Y in the quarter. The book-to-bill ratio stood at 1.4x in the quarter.

Adjusted EPS stood at $0.67, beating the consensus of $0.57.

Adjusted operating profit surged 52% year-over-year to $382 million, with the margin expanding 510 basis points to 19.6%, driven by higher volumes, favorable price-cost dynamics, and productivity improvements, though partially offset by increased R&D and capacity investments.

Operating cash flow reached $378 million, and adjusted free cash flow stood at $333 million in the quarter.

Giordano Albertazzi, Chief Executive Officer, said, “We continue to see increased scaling of AI deployment and Vertiv has the capacity in place to seize this pivotal moment while continuing to invest in capacity for the future.”

Liquidity stood at $1.2 billion with no borrowings under the ABL credit facility at the end of the quarter.

Dave Cote, Vertiv’s Executive Chairman, added: “Significant demand growth coupled with Vertiv’s unrelenting focus on operational execution to benefit our customers is translating into strong performance across the board with robust cash flow and higher profitability, accelerating progress toward our long-term target of 20%+ adjusted operating margin.”

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Outlook: For FY24, Vertiv raised guidance for revenue to $7.59 billion – $7.74 billion (from $7.54 billion – $7.69 billion earlier) vs. consensus of $7.69 billion and adjusted EPS to $2.47 – $2.53 (from $2.29-$2.35 earlier) vs. consensus of $2.39.

For the third quarter, Vertiv expects revenue of $1.935 billion- $1.985 billion (vs. $1.971 billion estimate) and adjusted EPS of $0.65 – $0.69 (vs. consensus of $0.63).

Investors can gain exposure to the stock via Alger Mid Cap 40 ETF FRTY and Professionally Managed Portfolios Otter Creek Focus Strategy ETF OCFS.

Price Action: VRT shares are down 8.53% at $83.24 at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: courtesy Vertiv