What Vertiv (VRT) Said on Its Q3 Earnings Call

Key Points

• Vertiv’s Q3 2026 results exceeded guidance: Sales rose 61% year over year to approximately $4.3 billion, adjusted EPS increased 78% to $2.21, and adjusted operating margin expanded to 25.2%.
• The company raised its 2026 outlook to $14.65 billion in sales, $7.15 in adjusted EPS and $2.7 billion in free cash flow, supported by strong demand for data-center power, cooling and infrastructure systems.
• Vertiv is expanding global manufacturing capacity and expects significant above-market organic growth in 2027, while acquisitions added microgrid, power-control and fluid-management capabilities.

Vertiv NYSE: VRT reported third-quarter 2026 results that exceeded its guidance, as demand for data center power, cooling and infrastructure systems remained strong across regions. The company raised its full-year outlook for sales, profit and free cash flow while signaling continued above-market organic growth in 2027.

Chief Executive Officer Gio Albertazzi said net sales increased 61% from the prior-year quarter to approximately $4.3 billion. Organic sales rose about 55%, while acquisitions added 6 percentage points of growth. Adjusted diluted earnings per share increased 78% to $2.21, exceeding the midpoint of the company’s guidance by $0.41.

“Demand signals are clear and broad-based across technologies, customer types, and regions,” Albertazzi said. He added that third-quarter organic orders more than doubled from a year earlier, though the company said it does not plan to provide orders data going forward.

Profitability and cash flow improved

Adjusted operating profit rose 83% year over year to about $1.1 billion, while adjusted operating margin expanded 290 basis points to 25.2%. Chief Financial Officer Craig Chamberlin attributed the gains to higher volume, operating leverage and continued productivity improvements.

Adjusted free cash flow increased 50% to $652 million. The company ended the quarter with net leverage of negative 0.2 times, which Chamberlin said provides “significant strategic flexibility.”

• Americas net sales rose 75%, including 66% organic growth, to about $3 billion.
• Asia-Pacific net sales increased 50%, with 48% organic growth, to $779 million.
• Europe, Middle East and Africa sales rose 23%, including 19% organic growth, to $545 million.

Regional adjusted operating margins were 29.4% in the Americas, 17% in Asia-Pacific and 28% in EMEA. Chamberlin said Americas margins reflected strong operating leverage, while EMEA benefited from improved commercial execution and operational leverage.

Guidance raised for 2026

Vertiv raised its full-year 2026 sales outlook to $14.65 billion at the midpoint, an increase of $650 million from its prior forecast. The company expects approximately 38% organic sales growth for the year, plus 4% growth from acquisitions and 1% from favorable currency movements.

The company now expects adjusted diluted EPS of $7.15 for 2026, up approximately 70% from 2025 and $0.45 above its previous outlook. It projected adjusted operating profit of more than $3.5 billion, adjusted operating margin of 24%, and adjusted free cash flow of $2.7 billion.

For the fourth quarter, Vertiv forecast net sales of approximately $4.4 billion at the midpoint, representing 53% year-over-year growth. Organic sales are expected to increase about 50%, with growth in the mid-50% range in both the Americas and Asia-Pacific and in the low 20% range in EMEA. The company expects fourth-quarter adjusted EPS of $2.25 and adjusted operating margin of 25.8%.

Chamberlin said some revenue that had been delayed in the second quarter because of supply-chain-related execution issues was recognized in the third quarter. He estimated the recovery at roughly $100 million to $150 million. He said Vertiv is continuing to build factory resiliency and improve project-level execution.

Capacity expansion and data center technology

Albertazzi said the company is expanding manufacturing capacity globally to support backlog execution and customer demand. In the Americas, Vertiv announced new or expanded facilities across infrastructure solutions, power management, thermal management and rack systems. The company is also expanding its Slovakia campus, scaling Irish power facilities and expects to double chiller production capacity by year-end. Its new Johor, Malaysia, factory is operational.

The company also highlighted its work with NVIDIA, the DSX ecosystem and Polar Data Centers to reduce the time needed for AI data centers to become productive. Albertazzi said pre-engineered reference designs validated through digital twins can reduce design time by a factor of 10, while factory-built modular infrastructure can cut deployment time by up to half. He said the approach could result in up to 30% more cumulative AI token output during the first 12 months following project kickoff.

On power technology, Albertazzi said Vertiv’s 800-volt DC roadmap remains on track. He expects initial 800-volt DC-to-rack configurations to progress ahead of full native 800-volt DC systems. The latter are expected to begin generating revenue in 2027, with customer validation occurring that year and broader deployment anticipated in 2028.

Outlook for 2027 and acquisitions

Management said power availability, permitting, construction labor and other factors are pacing data center development, but Albertazzi said the company has not seen unusual or material project delays. He said customers generally begin procuring equipment when they expect projects can reach completion.

Vertiv expects continued significant above-market organic sales growth in 2027, supported by its backlog and pipeline. The company said its typical backlog coverage remains about 12 to 18 months and that order timing has not changed dramatically in recent quarters.

The company closed its acquisition of UtilityInnovation Group, adding microgrid, advanced power-control and behind-the-meter power-design capabilities. It also acquired King Environmental Services, expanding fluid-management and load-testing services in Europe.

Albertazzi said Vertiv will continue to invest in engineering, research and development, capacity, supply chain capabilities and services. “The demand environment remains strong heading into 2027,” he said, adding that the company believes it is positioned to gain market share.

About Vertiv (NYSE:VRT)

Vertiv Holdings Co NYSE: VRT designs, manufactures and services critical digital infrastructure that supports data centers, communication networks and other facilities requiring reliable power and environmental control. Its solutions are used by cloud and colocation providers, telecommunications companies, enterprises, industrial organizations and edge-computing operators.

The company's offerings include uninterruptible power supplies, power distribution and management systems, thermal-management and cooling equipment, integrated racks and enclosures, modular infrastructure, and monitoring and control software.

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