Vertiv (VRT) Financials

Vertiv Holdings Co (NYSE: VRT) has shown a consistent improvement in its financial performance and position over the past four years, highlighted by growing revenues, improving profitability, and strengthening cash flows.

Key Positive Trends:

• Operating Revenue grew significantly from approximately $1.52 billion in Q1 2023 to $2.64 billion in Q2 2025, indicating strong top-line growth.
• Net Income has improved remarkably from a slight loss (-$5.9 million) in Q1 2024 to a solid profit of $324.2 million in Q2 2025, demonstrating enhanced profitability.
• Gross Profit increased substantially, rising from about $495 million in Q1 2023 to nearly $897 million in Q2 2025, reflecting improved cost management or favorable pricing.
• Operating Expenses have been controlled relative to revenue growth; although absolute expenses increased, the operating margin improved as indicated by rising operating income from $130 million in Q1 2023 to $442 million in Q2 2025.
• Cash & Equivalents grew from roughly $276 million in Q1 2023 to over $1.64 billion in Q2 2025, showing stronger liquidity and cash position.
• Net Cash from Operating Activities consistently increased, with $42 million in Q1 2023 rising to $323 million by Q2 2025, suggesting robust operating cash flow generation.
• Shareholders' equity increased from $1.55 billion in Q1 2023 to $3.13 billion in Q2 2025, a sign of strengthened financial health and retained earnings accumulation.
• Vertiv has been consistently paying dividends, with payments of roughly $9.3 million in Q1 2023 stable through 2025, which is attractive to dividend investors.
• Capital expenditures on property, plant, and equipment show ongoing investments (around $35 to $46 million quarterly), supporting growth and operational infrastructure.
• The company has managed to reduce net debt slightly through modest debt repayments, with regular repayments between $5 million and $85 million over recent quarters.

Neutral Factors:

• Interest expense remains significant (approx. $21 million to $46 million quarterly), reflecting ongoing debt service costs that need monitoring.
• Amortization expense remains steady (around $45 to $52 million), which is typical for intangible assets and affects net income but is non-cash.
• Changes in operating assets and liabilities have varied widely quarter to quarter, which could affect operating cash flows unpredictably.
• Shares outstanding have remained relatively stable, limiting dilution concerns, with around 380 million shares basic outstanding recently.

Potential Negative Aspects:

• Other operating expenses and restructuring charges, while relatively small, have occasional spikes that may indicate operational challenges or restructuring efforts.
• There have been periods with significant negative other income/(expense) impacting pre-tax income, such as a large negative $180 million in Q4 2024, which can hurt earnings volatility.
• The company has some accumulated deficit or retained losses in earlier years (negative retained earnings in earlier quarters of 2023), although this has improved recently.

Overall, Vertiv shows strong growth momentum, improved profitability, and solid cash flow generation, supported by healthy liquidity and manageable debt levels. Investors may find the company's upward trends in revenue and net income encouraging, but should watch for episodic swings in other income and operating expenses that may introduce volatility.