Strong Q3 For Vertiv: Revenue Rises 19%, But Stock Takes A Hit

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

Net sales rose 19% year-over-year to $2.074 billion, beating the consensus of $1.977 billion. Organic orders (excluding foreign exchange) rose 17%.

Adjusted operating profit surged 41% to $417 million, with the margin expanding 310 basis points to 20.1%, driven by higher volumes and favorable commercial execution.

Adjusted EPS stood at $0.76, beating the consensus of $0.69.

Operating cash flow reached $375 million, and adjusted free cash flow stood at $336 million in the quarter. Liquidity stood at $1.5 billion with no borrowings under the ABL credit facility at the end of the quarter.

Giordano Albertazzi, Chief Executive Officer, said, “Vertiv’s strong performance in the third quarter was driven by robust underlying demand for our critical digital infrastructure products and services, our continued and unrelenting focus on strong operational execution and Vertiv’s unique market position in enabling artificial intelligence and other critical applications for the data center.”

”We are very encouraged by the acceleration of liquid cooling revenue, which is a visible contributor to our third quarter results, despite a yet immature market. Pipelines continue to grow.”

Outlook: For FY24, Vertiv raised guidance for revenue to $7.78 billion – $7.83 billion (from $7.59 billion – $7.74 billion earlier) vs. consensus of $7.725 billion and adjusted EPS to $2.66 – $2.70 (from $2.47 – $2.53) vs. consensus of $2.49.

For the fourth quarter, Vertiv expects revenue of $2.115 billion – $2.165 billion (vs. $1.88 billion estimate) and adjusted EPS of $0.80 – $0.84 (vs. consensus of $0.61).

The company projects organic sales growth for 2025 to accelerate beyond the 14% growth seen in 2024.

Investors can gain exposure to the stock via TCW Transform Systems ETF NETZ and Professionally Managed Portfolios Otter Creek Focus Strategy ETF OCFS.

Price Action: VRT shares are down 7.63% at $103.89 premarket at the last check Wednesday.

Photo: courtesy Vertiv

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