Vertiv Holding (VRT)
Description
Vertiv Holding Inc provides mission-critical digital infrastructure technologies and life-cycle services for data centers, communication networks and commercial/industrial environments. Its offerings include power management products, thermal management systems, integrated rack solutions, modular infrastructure and monitoring/control software.
Historical Reports
Financial Information
- Report Date
- 2025-04-30
- Report Period
- Q1 2025
- Debt
- $29,417 million
- Debt History
- Debt decreased by approximately 0.18% since December 2024
- Debt Trend
- Decreasing
Profit Information
- Profit
- $1,645 million
- Profit History
- Net income improved from ~$0.8 million in Q1 2024 to $1,645 million in Q1 2025 (over 200,000% increase)
- Profit Trend
- Increasing
Detailed Report
Vertiv Holding – Q1 2025 Financial Analysis
Report Date: 2025-04-30
Period Covered: Quarterly period ended March 31, 2025
Form Type: 10-Q
1. Executive Summary
- Vertiv delivered record Q1 2025 performance driven by strong demand for power and thermal management solutions across all regions.
- Net sales rose 24.2% YoY to $20.36 billion; gross margin expanded to 33.7%.
- Operating profit climbed 43.5% YoY to $2.91 billion; net income surged to $1.65 billion vs. breakeven in Q1 2024.
- Generated $3.03 billion of operating cash flow; ended quarter with $14.7 billion of cash and equivalents.
2. Profit & Loss Analysis
| Metric | Q1 2025 | Q1 2024 | % Change |
|---|---|---|---|
| Net Sales | $20,360 M | $16,391 M | +24.2% |
| Gross Profit | $6,865 M | $5,664 M | +21.2% |
| Gross Margin | 33.7% | 34.6% | –0.9 pp |
| Operating Profit | $2,907 M | $2,026 M | +43.5% |
| Net Income | $1,645 M | ~$0.8 M | +>200,000% |
| Diluted EPS | $0.42 | $0.002 | +20,900% |
Drivers of Outperformance
- Volume growth: Product sales up 30.1% YoY, service revenues up 6.3% YoY.
- Price realization and improved procurement yielded incremental margin.
- Leverage of fixed costs in high-growth segments (Americas, Asia-Pacific).
- Reduced interest expense (–35.1% YoY) following term-loan repricing.
- No private-warrant mark-to-market losses in Q1 2025 vs. $1.77 B loss in Q1 2024.
Headwinds
- Currency translation unfavorably impacted sales by $174 M.
- Restructuring charges of $104 M to optimize global footprint.
3. Debt & Liquidity
- Total Debt Outstanding: $29,417 M (Term Loan $20,917 M; 2028 Notes $8,500 M).
- Debt Change: Down 0.18% vs. $29,470 M at December 31, 2024.
- Cash & Equivalents: $14,673 M; net debt ~$14,744 M.
- Operating Cash Flow: +$3,033 M; CapEx $365 M; free cash flow >$2.6 B.
- Liquidity: ABL facility undrawn with $7.8 B availability; strong cash cushion.
4. Pros and Cons
Pros
- Robust top-line growth across all regions; strong backlog in high-performance computing.
- Margin expansion from volume leverage, pricing, and operational efficiencies.
- Strong free cash generation supports debt reduction and shareholder returns.
- Strategic capacity expansions in India, SC (USA) to meet regional demand.
- AI and data-center buildouts accelerate equipment and service sales.
Cons
- Elevated leverage remains at ~2.5x net debt/EBITDA; refinancing risk in 2027/2028.
- Exposure to tariffs, supply chain disruptions, and foreign currency volatility.
- Restructuring and integration costs could continue into next quarters.
- Macroeconomic uncertainties (inflation, interest rates, global trade tensions).
Report prepared by a financial analyst based on Vertiv Holding’s Q1 2025 Form 10-Q.
Statistics Breakdown
Segment & Revenue Breakdown
By Geography (Net Sales Q1 2025)
- Americas: $11,853 M (+28.1% YoY)
- Asia-Pacific: $4,472 M (+34.6% YoY)
- EMEA (Europe, Middle East, Africa): $4,035 M (+5.7% YoY)
By Offering (Q1 2025 vs Q1 2024)
| Category | Q1 2025 ($M) | Q1 2024 ($M) | % Change |
|---|---|---|---|
| Product | 16,497 | 12,703 | +29.9% |
| Service | 3,863 | 3,688 | +4.7% |
Timing of Revenue Recognition
- Point in Time: $16,050 M (product)
- Over Time: $4,310 M (service & spare parts)
Segment Operating Profit & Margin (Q1 2025)
| Segment | Op. Profit ($M) | Margin |
|---|---|---|
| Americas | 2,597 | 21.9% |
| Asia-Pac | 457 | 10.2% |
| EMEA | 787 | 19.5% |
| Corporate* | (474) | – |
| Total | 2,907 | 14.3% |
*Corporate costs include HQ, R&D, treasury, legal, and eliminations.
Company Direction Insights
Growth Trajectory & Financial Health
Vertiv has demonstrated a strong rebound from last year’s non-cash warrant losses and modest profitability, delivering robust organic revenue growth coupled with margin expansion. High free cash flow generation and a net debt-to-EBITDA ratio near 2.5x provide flexibility for deleveraging and strategic investments.
Opportunities
- Accelerating global data-center builds, edge computing and 5G rollouts drive continued demand for power and thermal management systems.
- AI/High-Performance Compute segment expansion; Vertiv’s differentiated liquid cooling solutions position it well in this high-growth market.
- Ongoing portfolio enhancements and capacity expansions in key regions (India, USA) to capture share.
Risks & Challenges
- Refinancing risk: $20.9 B term loan maturing 2027 and $8.5 B notes due 2028.
- Macroeconomic headwinds: rising interest rates, potential slowdown in capex budgets.
- Tariff volatility and currency swings could pressure margins and sales in emerging markets.
- Execution risk on cost-structure optimization and integration of ongoing restructuring programs.
Outlook Management expects full-year 2025 CapEx (including software) of $2.5–$3.0 billion and continued operating cash flow generation to support debt reduction. Vertiv’s technology leadership and global scale underpin a positive long-term growth trajectory, while maintaining vigilant financial discipline to navigate near-term market uncertainties.