Vertiv Holdings Co Q4 FY2024 earnings call

• Dave Cote emphasized strong fourth quarter execution, beating sales guidance, and positive order trends, especially in Americas' hyper and colo markets. - Giordano Albertazzi discussed strong trailing twelve-month orders (30%), Americas TTM organic orders up 50%, backlog up 30% year-on-year, supply chain resilience strengthening, and acquisitions like BSE. - David Fallon detailed fourth-quarter financial results, including adjusted EPS of $0.99 (77% higher than prior year Q4), organic sales growth of ~27%, adjusted operating profit of $504 million (53% higher than prior year), and improved working capital with trade working capital as a percentage of annualized fourth-quarter sales declining to 13.1% at year-end.

Americas: Organic sales up 25%, adjusted operating margin expanded 420 basis points to 25.6% driven by commercial execution and operational leverage. APAC: Organic sales increased 27%, with strength throughout the region including China (upper teens growth from prior year's Q4) and strong growth in India and rest of Asia due to AI penetration; adjusted operating margin increased 260 basis points. EMEA: Organic sales increased 33%, driven by strong demand from colocation and hyperscale customers across several product lines (notably Switchgear); adjusted operating margin increased 370 basis points with benefits from operational leverage and productivity.

• 2025 Outlook: Adjusted EPS expected to be $3.55 at midpoint (25% higher than 2024), sales projected at $9.2 billion midpoint (despite ~$125 million FX headwind), adjusted operating profit up 25% to $1.935 billion. - First-quarter 2025: Expected adjusted EPS $0.60 (up 40% from prior year Q1), organic sales up 19% (offset by ~$30 million FX headwind), adjusted operating profit $325 million, margin 16.9%. - Long-term: Confidence in achieving 25% margin by 2029, focus on growth investment, share repurchase (with $2.4 billion remaining under board authorization), and dividend increase (50% increase to $0.15 annually in November, expecting to double over five-year period).

• Supply chain uncertainties and potential tariff impacts, with economic uncertainty in regions like China.

Q: Gio, you mentioned the timing of orders in EMEA influenced your Q4 result. Can you give us more color on the European weaknesses?

A: EMEA had some project activity shift to 2025, but pipelines are strong and positive about outlook.

Q: Amit Daryanani asked about Vertiv's opportunity longer term on inferencing and custom silicon.

A: Agnostic to inference vs training, well-positioned in high dense and different infrastructure types, and agnostic to silicon suppliers.

Q: Steve Tusa inquired about revenue overdrive in Q4 and first-quarter seasonality.

A: First quarter has strong guidance, 19% organic growth, and no disconnect with customer spending pipelines.

Q: Nigel Coe asked about EMEA outlook and capital deployments.

A: EMEA pipeline strong, projects pushing to 2025, capital deployments focused on value-creating M&A and opportunistic buybacks.

Q: Jeff Sprague asked about tariff playbook and total available market capture.

A: Wait for clarity on tariffs, and capture within $2.75 to $3.5 million per megawatt range.

Q: Mark Delaney asked about top-line shape and supply chain.

A: Sequential revenue increases each quarter, supply chain supporting growth plans.