Vertiv NYSE: VRT raised its full-year 2026 outlook after reporting second-quarter growth in sales, profit and cash flow, supported by demand for data center infrastructure across the Americas and Asia-Pacific.
Chief Executive Officer Gio Albertazzi said second-quarter net sales increased 24% from a year earlier to $3.274 billion. Organic sales rose 18%, while acquisitions added 5 percentage points of growth and favorable foreign exchange added 1 percentage point.
Adjusted operating profit rose 51% year over year to $738 million, while adjusted operating margin expanded 410 basis points to 22.6%. Adjusted diluted earnings per share increased 60% to $1.52, exceeding the company’s guidance by $0.12, according to Chief Financial Officer Craig Chamberlin.
“Strong quarter, EPS, margin, profit, and cash convincingly strong,” Albertazzi said, adding that the company was confident in second-half execution and its backlog.
Cash flow and regional results
Vertiv generated $925 million in adjusted free cash flow during the quarter, a 234% increase from the prior-year period. Chamberlin attributed the improvement to higher operating profit, working-capital performance, project milestone collections and lower cash interest expense, partly offset by higher cash taxes and capital expenditures.
The company ended the quarter with net leverage of negative 0.1 times, or a net cash position. Deferred revenue increased as customers made initial project payments and milestone payments on large infrastructure projects, Chamberlin said.
- Americas: Net sales increased 29% to $2.071 billion, including 21% organic growth. The region’s adjusted operating margin expanded 360 basis points.
- Asia-Pacific: Net sales rose 29% to $720 million, including 26% organic growth. Adjusted operating margin increased 270 basis points.
- EMEA: Net sales increased 2% to $484 million, though organic sales declined 2%. Adjusted operating margin expanded 380 basis points.
Albertazzi said EMEA market conditions were strengthening and that the company expects the region to return to organic sales growth in the second half of 2026. Chamberlin said the second-quarter margin comparison also benefited from the prior-year impact of execution challenges in Ireland.
Timing shifts tied to large projects
Management said second-quarter revenue included minor timing shifts related primarily to the execution of large, multi-phase projects and temporary supply-chain dynamics. The effects were reflected principally in the Americas, and Vertiv expects the associated delays to resolve during the second half.
Albertazzi described the issue as a matter of increasing complexity rather than a disruption. Large deployments can involve multiple Vertiv factories, internal supply chains and external suppliers, he said. The company is gaining experience in coordinating these projects and has built prudence into its second-half assumptions.
“The complexity doesn’t go away,” Albertazzi said. “But our ability to handle that complexity is certainly accelerating very strong.”
Chamberlin said Vertiv’s guidance does not assume that all project execution factors align perfectly. He said the company has accounted for the possibility that some supply-chain congestion could continue even as it improves its operational execution.
Higher full-year outlook
For the third quarter, Vertiv forecast net sales of $3.75 billion at the midpoint, up 40% from the prior-year period, and adjusted diluted EPS of $1.80, up 45%. The company expects adjusted operating profit of $918 million and an adjusted operating margin of 24.5%.
For the full year, the company increased its midpoint outlook for net sales by $250 million to $14 billion, representing expected growth of 37% from 2025. It now expects organic sales growth of 31%, with acquisitions contributing 5 percentage points and currency contributing 1 percentage point.
- Adjusted diluted EPS is projected at $6.70 at the midpoint, up 60% from 2025 and $0.35 above prior guidance.
- Adjusted operating profit is expected to reach $3.325 billion, up about 59% year over year.
- Adjusted operating margin is forecast at 23.8%, up about 340 basis points from 2025.
- Adjusted free cash flow is expected to total $2.5 billion, up 32% from 2025.
The company expects capital expenditures to reach the high end of its range, at about 4% of 2026 sales, as it expands global capacity and capabilities for 2027. Albertazzi cited capacity additions in Johor, Malaysia; the Americas; and Europe.
Technology roadmap and acquisitions
Vertiv said it expects multiple power architectures to coexist as data center power density increases, including AC-based systems and systems using 800-volt direct current. The company said a medium-voltage AC architecture delivering 800V DC at rack and pod level is under customer validation in 2026, with deployment plans for 2027.
A separate 800V DC architecture at the data-hall level is in development, with customer validation planned for 2027 and deployment planned for 2028. Albertazzi said Vertiv expects its content opportunity per megawatt to increase as the powertrain becomes more complex.
The company also highlighted a collaboration with NVIDIA and Visionbay.ai, Foxconn’s AI supercomputing business unit, at a site in Kaohsiung, Taiwan. Vertiv said it was awarded power, thermal and services work for Taiwan’s first AI data center featuring NVIDIA GB300, and is collaborating on an AI data center using 800V DC architecture at the rack and pod level featuring NVIDIA Vera Rubin.
During the quarter, Vertiv closed its acquisitions of ThermoKey, which expands heat-rejection capabilities, and Strategic Thermal Labs, which adds server-side liquid cooling and cold-plate expertise. Albertazzi said the additions expand the company’s thermal offerings from heat rejection through direct-to-chip liquid cooling.
Executive Chairman Dave Cote said Vertiv’s position in the data center infrastructure market and its investments in technology were supporting its outlook. “We have a great position in a good industry and continue to execute very well,” Cote said.
About Vertiv (NYSE:VRT)
Vertiv is a global provider of critical digital infrastructure and continuity solutions for data centers, communication networks and commercial and industrial environments. Headquartered in Columbus, Ohio, the company designs, manufactures and services equipment and software that support power availability, thermal management and IT infrastructure management for a broad set of end markets, including hyperscale and enterprise data centers, colocation providers, telecom operators and industrial customers.
The company's product portfolio includes uninterruptible power supplies (UPS), power distribution units (PDUs), battery and DC power systems, precision cooling and thermal management equipment, racks and enclosures, and integrated modular infrastructure.
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