Vertiv Rides AI Boom To 26% Sales Growth, But Stock Slips On Mixed Outlook

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

Net sales rose 26% year-over-year to $2.346 billion, beating the consensus of $2.151 billion.

Organic orders (excluding FX) for the TTM ended December 2024 rose ~30% YoY, led by strong demand in the hyperscale and colocation data center market.

Adjusted operating profit surged 53% Y/Y to $504 million, with the margin expanding 380 basis points to 21.5%, aided by higher volumes, strong commercial execution, and manufacturing and procurement efficiencies.

Adjusted EPS stood at $0.99, beating the consensus of $0.82.

Giordano Albertazzi, Vertiv’s Chief Executive Officer, said, “Vertiv’s commitment to customer collaboration and innovation is setting the pace for what’s possible. But there’s still more to be done. Efficiency of compute has always been core to the industry.”

”As technology advances to unlock the full potential of AI applications, it becomes more broadly accessible to everyone. With that accessibility comes a broader, more pervasive use of AI technology which we believe would generate more data and therefore require more data centers.”

Operating cash flow reached $425 million, and adjusted free cash flow stood at $362 million in the quarter.

Liquidity stood at $2.0 billion with no borrowings under the ABL credit facility at the end of the quarter.

Outlook: For FY25, Vertiv sees revenue of $9.125 billion – $9.275 billion vs. consensus of $9.148 billion and adjusted EPS of $3.50 – $3.60 vs. consensus of $3.56.

For the first quarter, Vertiv expects revenue of $1.900 billion- $1.950 billion (vs. $1.904 billion estimate) and adjusted EPS of $0.57 – $0.63 (vs. consensus of $0.64).

The company projects 2025 organic net sales growth of 15% – 17%.

Investors can gain exposure to the stock via TCW Transform Systems ETF PWRDand AdvisorShares Trust AdvisorShares HVAC and Industrials ETF HVAC.

Price Action: VRT shares are down 7.12% at $114.48 at the last check Wednesday.

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