- Second quarter 2024 organic orders up 57% compared to second
quarter 2023, and up 37% on a trailing twelve-month basis
- Second quarter 2024 net sales of $1,953 million, 13% higher
than second quarter 2023 and organic net sales growth(1) of
14%
- Second quarter 2024 operating profit of $336 million, up 63%
from second quarter 2023, and adjusted operating profit(1) of $382
million, up 52% from second quarter 2023
- Adjusted operating margin(1) of 19.6%, up 510 basis points
compared to second quarter 2023
- Raising 2024 net sales guidance to $7,665 million at the
midpoint, $50 million higher than prior guidance
- Raising 2024 operating profit guidance to $1,256 million at the
midpoint and adjusted operating profit to $1,435 million at the
midpoint, an anticipated improvement of 36% compared to full year
2023
- Raising 2024 adjusted free cash flow guidance to $875 million
at the midpoint, $50 million higher than prior guidance
Vertiv Holdings Co (NYSE: VRT), a global provider of critical
digital infrastructure and continuity solutions, today reported
financial results for its second quarter ended June 30, 2024.
Vertiv reported second quarter 2024 net sales of $1,953 million, an
increase of $219 million, or 13%, compared to last year’s second
quarter. Organic orders (excluding foreign exchange) increased 57%
from last year’s second quarter and the book-to-bill ratio was 1.4x
in the second quarter. Orders for the trailing twelve-month period
ended June 30, 2024 were up 37% compared to the prior trailing
twelve-month period, demonstrating a strong market.
Second quarter 2024 operating profit of $336 million reflects an
increase of $130 million and adjusted operating profit of $382
million reflects an increase of $131 million, or 52%, compared to
second quarter 2023. Adjusted operating margin expanded 510 basis
points to 19.6% in the second quarter 2024 compared to second
quarter 2023, driven by benefits from increased volume, favorable
price-cost and manufacturing and procurement productivity partially
offset by investments in R&D and capacity to support
growth.
“Vertiv delivered another strong performance in the second
quarter with order growth again exceeding our expectations, rising
57% year-over-year and increasing 10% sequentially over an
exceptional first quarter,” said Giordano Albertazzi, Vertiv’s
Chief Executive Officer. “We continue to see increased scaling of
AI deployment and Vertiv has the capacity in place to seize this
pivotal moment while continuing to invest in capacity for the
future. Vertiv is the connective tissue between IT and facilities
in the data center, and we are just beginning to tap the tremendous
potential of our unique position in the industry as we leverage the
most complete portfolio of critical digital infrastructure
solutions across the entire thermal and power technology spectrum,
supported by over 3,750 field service engineers globally to help
our customers navigate this increasingly complex environment.”
Dave Cote, Vertiv’s Executive Chairman, added: “Significant
demand growth coupled with Vertiv’s unrelenting focus on
operational execution to benefit our customers is translating into
strong performance across the board with robust cash flow and
higher profitability, accelerating progress toward our long-term
target of 20%+ adjusted operating margin. These results reflect the
strides Gio and his team continue to make in instilling operational
excellence and a high-performance culture within the organization.
This is providing a strong foundation for continued growth and
long-term value creation for our shareholders.”
Adjusted Free Cash Flow(1) and
Liquidity
Net cash generated by operating activities in second quarter was
$378 million, an increase of $125 million from second quarter 2023
and adjusted free cash flow was $333 million, an increase of $106
million from second quarter 2023. Second quarter 2024 adjusted free
cash flow performance was driven by higher adjusted operating
profit and improvement in working capital management which were
partially offset by a $19 million increase in capital expenditures
to support growth.
Liquidity was $1.2 billion and borrowings under our ABL credit
facility remained at zero at the end of second quarter 2024. Net
leverage at the end of second quarter 2024 was 1.8x, within
Vertiv’s target net leverage range of 1.0x to 2.0x. Vertiv’s $2.1
billion term loan was repriced in June 2024, lowering our interest
rate by 61 basis points to Term SOFR + 200 basis points, resulting
in interest savings of approximately $13 million per year.
Updated Full Year and Third Quarter
2024 Guidance
Vertiv’s industry expertise, advanced technologies, global
capacity, scale, technology partnerships and service network are
key strengths that are uniquely aligned to the data center market
and AI acceleration. We believe Vertiv’s continued focus on
operational execution and high-performance culture will support our
outlook for 2024, which has been increased for all financial
measures.
Third Quarter 2024 Guidance
Net sales
$1,935M - $1,985M
Organic net sales growth(2)
12% - 16%
Adjusted operating profit(1)
$375M - $395M
Adjusted operating margin(2)
19.4% - 19.8%
Adjusted diluted EPS(1)
$0.65 - $0.69
Full Year 2024 Guidance
Net sales
$7,590M - $7,740M
Organic net sales growth(2)
12% - 14%
Adjusted operating profit(1)
$1,410M - $1,460M
Adjusted operating margin(2)
18.5% - 18.9%
Adjusted diluted EPS(1)
$2.47 - $2.53
Adjusted free cash flow(2)
$850M - $900M
(1)
This release contains certain non-GAAP
metrics. For reconciliations to the relevant GAAP measures and an
explanation of the non-GAAP measures and reasons for their use,
please refer to sections of this release entitled “Non-GAAP
Financial Measures” and “Reconciliation of GAAP and non-GAAP
Financial Measures.”
(2)
This is a forward-looking non-GAAP
financial measure that cannot be reconciled for those reasons set
forth under “Non-GAAP Financial Measures” of this release.
Second Quarter 2024 Earnings Conference
Call
Vertiv’s management team will discuss the Company’s results
during a conference call on Wednesday, July 24, starting at 11 a.m.
Eastern Time. The call will contain forward-looking statements and
other material information regarding Vertiv’s financial and
operating results. A webcast of the live conference call will be
available for interested parties to listen to by going to the
Investor Relations section of the Company’s website at
investors.vertiv.com. A slide presentation will be available before
the call and will be posted to the website, also at
investors.vertiv.com. A replay of the conference call will also be
available for 30 days following the webcast.
About Vertiv Holdings Co
Vertiv (NYSE: VRT) brings together hardware, software, analytics
and ongoing services to enable its customers’ vital applications to
run continuously, perform optimally and grow with their business
needs. Vertiv solves the most important challenges facing today’s
data centers, communication networks and commercial and industrial
facilities with a portfolio of power, cooling and IT infrastructure
solutions and services that extends from the cloud to the edge of
the network. Headquartered in Westerville, Ohio, USA, Vertiv does
business in more than 130 countries. For more information, and for
the latest news and content from Vertiv, visit vertiv.com.
Category: Financial News
Non-GAAP Financial
Measures
Financial information included in this release has been prepared
in accordance with Generally Accepted Accounting Principles
(“GAAP”). Vertiv has included certain non-GAAP financial measures
in this news release, as indicated above, that may not be directly
comparable to other similarly titled measures used by other
companies and therefore may not be comparable among companies.
These non-GAAP financial measures include organic net sales growth
(including on a segment basis), adjusted operating profit, adjusted
operating margin, adjusted diluted EPS and adjusted free cash flow,
which management believes provides investors with useful
supplemental information to evaluate the Company’s ongoing
operations and to compare with past and future periods. Management
also uses certain non-GAAP measures internally for forecasting,
budgeting and measuring its operating performance. These measures
should be viewed as supplementing, and not as an alternative or
substitute for, the Company's financial results prepared in
accordance with GAAP. Pursuant to the requirements of Regulation G,
Vertiv has provided reconciliations of non-GAAP financial measures
to the most directly comparable GAAP financial measures.
Information reconciling certain forward-looking GAAP measures to
non-GAAP measures related to third quarter and full-year 2024
guidance, including organic net sales growth, adjusted free cash
flow and adjusted operating margin, is not available without
unreasonable effort due to high variability, complexity and
uncertainty with respect to forecasting and quantifying certain
amounts that are necessary for such reconciliations. For those
reasons, we are unable to compute the probable significance of the
unavailable information, which could have a potentially
unpredictable, and potentially significant, impact on our future
GAAP financial results.
See “Reconciliation of GAAP and Non-GAAP Financial Measures” in
this release for Vertiv’s reconciliations of non-GAAP financial
measures to the most directly comparable GAAP financial
measures.
Cautionary Note Concerning
Forward-Looking Statements
This news release, and other statements that Vertiv may make in
connection therewith, may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
with respect to Vertiv’s future financial or business performance,
strategies or expectations, and as such are not historical facts.
This includes, without limitation, statements regarding Vertiv’s
financial position, capital structure, indebtedness, business
strategy and plans, and objectives of Vertiv management for future
operations, as well as statements regarding growth, anticipated
demand for our products and services, and our business prospects
during 2024, as well as expected impacts from our pricing actions,
and our guidance for third quarter and full year 2024. These
statements constitute projections, forecasts and forward-looking
statements, and are not guarantees of performance. Vertiv cautions
that forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time. Such
statements can be identified by the fact that they do not relate
strictly to historical or current facts. When used in this news
release, words such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “strive,”
“would” and similar expressions may identify forward-looking
statements, but the absence of these words does not mean that a
statement is not forward-looking.
The forward-looking statements contained in this release are
based on current expectations and beliefs concerning future
developments and their potential effects on Vertiv. There can be no
assurance that future developments affecting Vertiv will be those
that Vertiv has anticipated. Vertiv undertakes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
may be required under applicable securities laws. These
forward-looking statements involve a number of risks, uncertainties
(some of which are beyond Vertiv’s control) or other assumptions
that may cause actual results or performance to be materially
different from those expressed or implied by these forward-looking
statements. Should one or more of these risks or uncertainties
materialize, or should any of the assumptions prove incorrect,
actual results may vary in material respects from those projected
in these forward-looking statements. Vertiv has previously
disclosed risk factors in its Securities and Exchange Commission
(“SEC”) reports, including those set forth in the Vertiv 2023
Annual Report on Form 10-K filed with the SEC on February 23, 2024.
These risk factors and those identified elsewhere in this release,
among others, could cause actual results to differ materially from
historical performance and include, but are not limited to: risks
relating to the continued growth of Vertiv’s customers’ markets;
disruption of Vertiv’s customers’ orders or Vertiv’s customers’
markets; less favorable contractual terms with large customers;
risks associated with governmental contracts; failure to mitigate
risks associated with long-term fixed price contracts; competition
in the infrastructure technologies industry; failure to obtain
performance and other guarantees from financial institutions;
failure to realize sales expected from Vertiv’s backlog of orders
and contracts; failure to properly manage Vertiv’s supply chain or
difficulties with third-party manufacturers; our ability to
forecast changes in prices, including due to inflation in material,
freight and/or labor costs, and timely implement measures necessary
to mitigate the impacts of any such changes; risks associated with
our significant backlog, including that the impacts of any measures
taken to mitigate inflation will not be reflected in our financial
statements immediately; failure to meet or anticipate technology
changes; risks associated with information technology disruption or
security; risks associated with the implementation and enhancement
of information systems; failure to realize the expected benefit
from any rationalization, restructuring and improvement efforts;
Vertiv’s ability to realize cost savings in connection with
Vertiv’s restructuring program; disruption of, or changes in,
Vertiv’s independent sales representatives, distributors and
original equipment manufacturers; changes to tax law; ongoing tax
audits; costs or liabilities associated with product liability; the
global scope of Vertiv’s operations; risks associated with Vertiv’s
sales and operations in emerging markets; risks associated with
future legislation and regulation of Vertiv’s customers’ markets
both in the United States and abroad; Vertiv’s ability to comply
with various laws and regulations and the costs associated with
legal compliance; adverse outcomes to any legal claims and
proceedings filed by or against Vertiv; risks associated with
current and potential litigation or claims against Vertiv; Vertiv’s
ability to protect or enforce its proprietary rights on which its
business depends; third party intellectual property infringement
claims; liabilities associated with environmental, health and
safety matters; failure to achieve environmental, social and
governance goals; failure to realize the value of goodwill and
intangible assets; exposure to fluctuations in foreign currency
exchange rates; exposure to increases in interest rates set by
central banking authorities; failure to maintain internal controls
over financial reporting; the unpredictability of Vertiv’s future
operational results, including the ability to grow and manage
growth profitably; potential net losses in future periods; Vertiv’s
level of indebtedness and the ability to incur additional
indebtedness; Vertiv’s ability to comply with the covenants and
restrictions contained in our credit agreements, including
restrictive covenants that restrict operational flexibility;
Vertiv’s ability to comply with the covenants and restrictions
contained in our credit agreements is not fully within our control;
Vertiv’s ability to access funding through capital markets; the
significant ownership and influence certain stockholders have over
Vertiv; resales of Vertiv’s securities may cause volatility in the
market price of our securities; Vertiv’s organizational documents
contain provisions that may discourage unsolicited takeover
proposals; Vertiv’s certificate of incorporation includes a forum
selection clause, which could discourage or limit stockholders’
ability to make a claim against it; the ability of Vertiv’s
subsidiaries to pay dividends; the ability of Vertiv to grow and
manage growth profitably, maintain relationships with customers and
suppliers and retain its management and key employees; Vertiv's
ability to manage the succession of its key employees; and factors
relating to the business, operations and financial performance of
Vertiv and its subsidiaries, including: global economic weakness
and uncertainty; Vertiv’s ability to attract, train and retain key
members of its leadership team and other qualified personnel; the
adequacy of Vertiv’s insurance coverage; a failure to benefit from
future corporate transactions; risks associated with Vertiv’s
limited history of operating as an independent company; and other
risks and uncertainties indicated in Vertiv’s SEC reports or
documents filed or to be filed with the SEC by Vertiv.
Forward-looking statements included in this news release speak
only as of the date of this news release or any earlier date
specified for such statements. All subsequent written or oral
forward-looking statements attributable to Vertiv or persons acting
on Vertiv’s behalf may be qualified in their entirety by this
Cautionary Note Concerning Forward-Looking Statements.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
Vertiv Holdings Co
(Dollars in millions except
for per share data)
Three months ended June 30,
2024
Three months ended June 30,
2023
Six months ended June 30,
2024
Six months ended June 30,
2023
Net sales
Net sales - products
$
1,555.2
$
1,360.4
$
2,825.5
$
2,546.9
Net sales - services
397.6
373.7
766.4
708.3
Net sales
1,952.8
1,734.1
3,591.9
3,255.2
Costs and expenses
Cost of sales - products
981.0
912.9
1,827.3
1,732.4
Cost of sales - services
230.6
227.2
457.0
433.3
Cost of sales
1,211.6
1,140.1
2,284.3
2,165.7
Operating expenses
Selling, general and administrative
expenses
363.8
327.6
677.8
636.3
Amortization of intangibles
45.8
45.4
91.8
90.6
Restructuring costs
(2.5
)
9.1
(2.2
)
22.2
Foreign currency (gain) loss, net
0.2
7.5
3.4
10.6
Other operating expense (income)
(2.1
)
(1.4
)
(1.8
)
(6.3
)
Operating profit (loss)
336.0
205.8
538.6
336.1
Interest expense, net
44.8
46.9
83.8
93.7
Loss on extinguishment of debt
1.1
—
1.1
—
Change in fair value of warrant
liabilities
25.4
46.0
202.0
41.8
Income (loss) before income
taxes
264.7
112.9
251.7
200.6
Income tax expense (benefit)
86.6
29.7
79.5
67.1
Net income (loss)
$
178.1
$
83.2
$
172.2
$
133.5
Earnings (loss) per share:
Basic
$
0.48
$
0.22
$
0.46
$
0.35
Diluted
$
0.46
$
0.22
$
0.44
$
0.35
Weighted-average shares outstanding:
Basic
374,734,093
379,938,365
376,934,638
379,039,072
Diluted
384,488,069
382,351,210
387,001,428
381,116,189
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
Vertiv Holdings Co
(Dollars in millions)
June 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
579.7
$
780.4
Accounts receivable, less allowances of
$26.9 and $29.1, respectively
2,218.8
2,118.1
Inventories
1,103.7
884.3
Other current assets
289.2
218.7
Total current assets
4,191.4
4,001.5
Property, plant and equipment,
net
571.1
560.1
Other assets:
Goodwill
1,321.9
1,330.3
Other intangible assets, net
1,577.6
1,672.9
Deferred income taxes
160.9
159.8
Right-of-use assets, net
180.0
173.5
Other
105.4
100.4
Total other assets
3,345.8
3,436.9
Total assets
$
8,108.3
$
7,998.5
LIABILITIES AND
EQUITY
Current liabilities:
Current portion of long-term debt
$
21.2
$
21.8
Current portion of warrant liabilities
397.0
—
Accounts payable
1,098.2
986.4
Deferred revenue
888.8
638.9
Accrued expenses and other liabilities
600.6
611.8
Income taxes
74.0
46.5
Total current liabilities
3,079.8
2,305.4
Long-term debt, net
2,913.7
2,919.1
Deferred income taxes
158.9
159.5
Warrant liabilities
—
195.0
Long-term lease liabilities
149.9
142.6
Other long-term liabilities
268.5
262.0
Total liabilities
6,570.8
5,983.6
Equity
Preferred stock, $0.0001 par value,
5,000,000 shares authorized, none issued and outstanding
—
—
Common stock, $0.0001 par value,
700,000,000 shares authorized, 375,113,127 and 381,788,876 shares
issued and outstanding at June 30, 2024 and December 31, 2023,
respectively
—
—
Additional paid-in capital
2,141.0
2,711.3
Accumulated deficit
(538.4
)
(691.9
)
Accumulated other comprehensive (loss)
income
(65.1
)
(4.5
)
Total equity
1,537.5
2,014.9
Total liabilities and equity
$
8,108.3
$
7,998.5
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Vertiv Holdings Co
(Dollars in millions)
Three months ended June 30,
2024
Three months ended June 30,
2023
Six months ended June 30,
2024
Six months ended June 30,
2023
Cash flows from operating
activities:
Net income (loss)
$
178.1
$
83.2
$
172.2
$
133.5
Adjustments to reconcile net income (loss)
to net cash provided by (used for) operating activities:
Depreciation
20.1
18.0
39.9
35.7
Amortization
48.3
49.3
97.2
98.2
Deferred income taxes
4.8
(1.8
)
(2.8
)
1.6
Amortization of debt discount and issuance
costs
2.0
2.0
4.1
4.7
Change in fair value of warrant
liabilities
25.4
46.0
202.0
41.8
Changes in operating working capital
96.1
51.4
(3.6
)
(35.5
)
Stock-based compensation
8.5
6.8
17.7
12.3
Other
(4.9
)
(1.3
)
(10.8
)
3.3
Net cash provided by (used for)
operating activities
378.4
253.6
515.9
295.6
Cash flows from investing
activities:
Capital expenditures
(34.1
)
(25.8
)
(69.9
)
(53.6
)
Investments in capitalized software
(10.9
)
(0.5
)
(11.6
)
(2.5
)
Proceeds from disposition of property,
plant and equipment
—
—
—
12.4
Net cash provided by (used for)
investing activities
(45.0
)
(26.3
)
(81.5
)
(43.7
)
Cash flows from financing
activities:
Borrowings from ABL revolving credit
facility and short-term borrowings
80.0
59.5
270.0
159.7
Repayments of ABL revolving credit
facility and short-term borrowings
(80.0
)
(284.5
)
(270.0
)
(394.7
)
Repayment of long-term debt
(5.3
)
(5.5
)
(10.6
)
(16.4
)
Dividend payment
(9.4
)
—
(18.7
)
—
Repurchase of common stock
—
—
(599.9
)
—
Exercise of employee stock options
9.2
7.8
23.6
10.0
Employee taxes paid from shares
withheld
(15.0
)
(2.4
)
(18.0
)
(2.5
)
Net cash provided by (used for)
financing activities
(20.5
)
(225.1
)
(623.6
)
(243.9
)
Effect of exchange rate changes on cash
and cash equivalents
(5.7
)
(2.8
)
(11.7
)
(1.0
)
Increase (decrease) in cash, cash
equivalents and restricted cash
307.2
(0.6
)
(200.9
)
7.0
Beginning cash, cash equivalents and
restricted cash
280.5
280.8
788.6
273.2
Ending cash, cash equivalents and
restricted cash
$
587.7
$
280.2
$
587.7
$
280.2
Changes in operating working
capital
Accounts receivable
$
(125.0
)
$
(184.2
)
$
(115.1
)
$
(274.3
)
Inventories
(117.6
)
(17.0
)
(224.1
)
(96.5
)
Other current assets
0.8
154.0
(30.9
)
152.8
Accounts payable
120.5
25.7
130.3
(36.6
)
Deferred revenue
154.7
17.1
254.7
161.3
Accrued expenses and other liabilities
60.1
44.0
(8.4
)
27.5
Income taxes
2.6
11.8
(10.1
)
30.3
Total changes in operating working
capital
$
96.1
$
51.4
$
(3.6
)
$
(35.5
)
Reconciliation of GAAP and non-GAAP Financial
Measures
To supplement this news release, we have included certain
non-GAAP financial measures in the format of performance metrics.
Management believes these non-GAAP financial measures provide
investors with additional meaningful financial information that
should be considered when assessing our underlying business
performance and trends. Further, management believes these non-GAAP
financial measures also enhance investors' ability to compare
period-to-period financial results. Non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, the
company's reported results prepared in accordance with GAAP. Our
non-GAAP financial measures do not represent a comprehensive basis
of accounting. Therefore, our non-GAAP financial measures may not
be comparable to similarly titled measures reported by other
companies. Reconciliations of each of these non-GAAP financial
measures to GAAP information are also included. Management uses
these non-GAAP financial measures in making financial, operating,
compensation and planning decisions and in evaluating the company's
performance. Disclosing these non-GAAP financial measures allows
investors and management to view our operating results excluding
the impact of items that are not reflective of the underlying
operating performance.
Vertiv’s non-GAAP financial measures include:
- Adjusted operating profit (loss), which represents operating
profit (loss), adjusted to exclude amortization of
intangibles;
- Adjusted operating margin, which represents adjusted operating
profit (loss) divided by net sales;
- Organic net sales growth, which represents the change in net
sales adjusted to exclude the impacts of foreign currency exchange
rate;
- Adjusted free cash flow, which represents net cash provided by
(used for) operating activities adjusted to exclude capital
expenditures, investments in capitalized software and include
proceeds from disposition of PP&E; and
- Adjusted diluted EPS, which represents diluted earnings per
share adjusted to exclude amortization of intangibles and change in
warranty liability.
Regional Segment Results
Three months ended June 30,
Six months ended June 30,
2024
2023
Δ
Δ%
Organic Δ%(2)
2024
2023
Δ
Δ%
Organic Δ%(2)
Net sales
(1)
Americas
$
1,121.1
$
959.4
$
161.7
16.9
%
17.2
%
$
2,046.1
$
1,821.7
$
224.4
12.3
%
12.4
%
APAC
409.1
395.8
13.3
3.4
%
5.7
%
741.4
708.8
32.6
4.6
%
7.2
%
EMEA
422.6
378.9
43.7
11.5
%
13.5
%
804.4
724.7
79.7
11.0
%
11.7
%
Total
$
1,952.8
$
1,734.1
$
218.7
12.6
%
13.7
%
$
3,591.9
$
3,255.2
$
336.7
10.3
%
11.1
%
Adjusted
operating profit (loss)(3)
Americas
$
285.1
$
191.7
$
93.4
48.7
%
$
472.9
$
337.5
$
135.4
40.1
%
APAC
32.3
38.2
(5.9
)
(15.4
)%
62.7
54.8
7.9
14.4
%
EMEA
109.5
79.9
29.6
37.0
%
179.8
126.0
53.8
42.7
%
Corporate (4)
(45.1
)
(58.6
)
13.5
(23.0
)%
(85.0
)
(91.6
)
6.6
(7.2
)%
Total
$
381.8
$
251.2
$
130.6
52.0
%
$
630.4
$
426.7
$
203.7
47.7
%
Adjusted
operating margins (5)
Americas
25.4
%
20.0
%
5.4
%
23.1
%
18.5
%
4.6
%
APAC
7.9
%
9.7
%
(1.8
)%
8.5
%
7.7
%
0.8
%
EMEA
25.9
%
21.1
%
4.8
%
22.4
%
17.4
%
5.0
%
Vertiv
19.6
%
14.5
%
5.1
%
17.6
%
13.1
%
4.5
%
(1)
Segment net sales are presented excluding
intercompany sales.
(2)
Organic basis is adjusted to exclude
foreign currency exchange rate impact.
(3)
Adjusted operating profit (loss) is only
adjusted at the Corporate segment. There are no adjustments at the
reportable segment level between operating profit (loss) and
adjusted operating profit (loss).
(4)
Corporate costs consist of headquarters
management costs, stock-based compensation, other incentive
compensation, asset impairments and costs that support centralized
global functions including Finance, Treasury, Risk Management,
Strategy & Marketing, and Legal.
(5)
Adjusted operating margins calculated as
adjusted operating profit (loss) divided by net sales.
Sales by product and service
offering
Three months ended June 30,
2024
2023
Δ
Δ %
Americas:
Products(1)
$
892.1
$
751.5
$
140.6
18.7
%
Services & spares
229.0
207.9
21.1
10.1
%
$
1,121.1
$
959.4
$
161.7
16.9
%
Asia Pacific:
Products(1)
$
293.1
$
285.7
$
7.4
2.6
%
Services & spares
116.0
110.1
5.9
5.4
%
$
409.1
$
395.8
$
13.3
3.4
%
EMEA:
Products(1)
$
332.1
$
292.7
$
39.4
13.5
%
Services & spares
90.5
86.2
4.3
5.0
%
$
422.6
$
378.9
$
43.7
11.5
%
Total:
Products(1)
$
1,517.3
$
1,329.9
$
187.4
14.1
%
Services & spares
435.5
404.2
31.3
7.7
%
$
1,952.8
$
1,734.1
$
218.7
12.6
%
(1) Refer to Exhibit 99.2 to
Vertiv’s current report on Form 8-K filed on February 21, 2024 for
a fiscal year 2023 summary of changes made to conform with the
current year presentation of sales by product and service
offering.
Six months ended June 30,
2024
2023
Δ
Δ %
Americas:
Products(1)
$
1,608.2
$
1,425.4
$
182.8
12.8
%
Services & spares
437.9
396.3
41.6
10.5
%
$
2,046.1
$
1,821.7
$
224.4
12.3
%
Asia Pacific:
Products(1)
$
517.1
$
494.6
$
22.5
4.5
%
Services & spares
224.3
214.2
10.1
4.7
%
$
741.4
$
708.8
$
32.6
4.6
%
EMEA:
Products(1)
$
629.4
$
560.4
$
69.0
12.3
%
Services & spares
175.0
164.3
10.7
6.5
%
$
804.4
$
724.7
$
79.7
11.0
%
Total:
Products(1)
$
2,754.7
$
2,480.4
$
274.3
11.1
%
Services & spares
837.2
774.8
62.4
8.1
%
$
3,591.9
$
3,255.2
$
336.7
10.3
%
(1) Refer to Exhibit 99.2 to Vertiv’s
current report on Form 8-K filed on February 21, 2024 for a fiscal
year 2023 summary of changes made to conform with the current year
presentation of sales by product and service offering.
Organic growth by product and service
offering
Three months ended June 30,
2024
Net Sales Δ
FX Δ
Organic growth
Organic Δ %(1)
Americas:
Products(2)
$
140.6
$
5.9
$
146.5
19.5
%
Services & spares
21.1
(2.8
)
18.3
8.8
%
$
161.7
$
3.1
$
164.8
17.2
%
Asia Pacific:
Products(2)
$
7.4
$
6.9
$
14.3
5.0
%
Services & spares
5.9
2.2
8.1
7.4
%
$
13.3
$
9.1
$
22.4
5.7
%
EMEA:
Products(2)
$
39.4
$
3.8
$
43.2
14.8
%
Services & spares
4.3
3.6
7.9
9.2
%
$
43.7
$
7.4
$
51.1
13.5
%
Total:
Products(2)
$
187.4
$
16.6
$
204.0
15.3
%
Services & spares
31.3
3.0
34.3
8.5
%
$
218.7
$
19.6
$
238.3
13.7
%
(1) Organic growth percentage
change is calculated as organic growth divided by net sales for the
three months ended June 30, 2023.
(2) Refer to Exhibit 99.2 to
Vertiv’s current report on Form 8-K filed on February 21, 2024 for
a fiscal year 2023 summary of changes made to conform with the
current year presentation of sales by product and service
offering.
Six months ended June 30,
2024
Net Sales Δ
FX Δ
Organic growth
Organic Δ %(1)
Americas:
Products(2)
$
182.8
$
6.4
$
189.2
13.3
%
Services & spares
41.6
(4.7
)
36.9
9.3
%
$
224.4
$
1.7
$
226.1
12.4
%
Asia Pacific:
Products(2)
$
22.5
$
13.0
$
35.5
7.2
%
Services & spares
10.1
5.4
15.5
7.2
%
$
32.6
$
18.4
$
51.0
7.2
%
EMEA:
Products(2)
$
69.0
$
(0.9
)
$
68.1
12.2
%
Services & spares
10.7
6.1
16.8
10.2
%
$
79.7
$
5.2
$
84.9
11.7
%
Total:
Products(2)
$
274.3
$
18.5
$
292.8
11.8
%
Services & spares
62.4
6.8
69.2
8.9
%
$
336.7
$
25.3
$
362.0
11.1
%
(1) Organic growth percentage
change is calculated as organic growth divided by net sales for the
six months ended June 30, 2023.
(2) Refer to Exhibit 99.2 to
Vertiv’s current report on Form 8-K filed on February 21, 2024 for
a fiscal year 2023 summary of changes made to conform with the
current year presentation of sales by product and service
offering.
Segment operating profit (loss)
Operating profit
(loss)
Three months ended June 30,
2024
Three months ended June 30,
2023
Six months ended June 30,
2024
Six months ended June 30,
2023
Americas
$
285.1
$
191.7
$
472.9
$
337.5
Asia Pacific
32.3
38.2
62.7
54.8
EMEA
109.5
79.9
179.8
126.0
Total reportable segments
426.9
309.8
715.4
518.3
Foreign currency gain (loss)
(0.2
)
(7.5
)
(3.4
)
(10.6
)
Corporate and other
(44.9
)
(51.1
)
(81.6
)
(81.0
)
Total corporate, other and
eliminations
(45.1
)
(58.6
)
(85.0
)
(91.6
)
Amortization of intangibles
(45.8
)
(45.4
)
(91.8
)
(90.6
)
Operating profit (loss)
$
336.0
$
205.8
$
538.6
$
336.1
Reconciliation of net cash provided by
(used for) operating activities to adjusted free cash flow
Three months ended June 30,
2024
Three months ended June 30,
2023
Six months ended June 30,
2024
Six months ended June 30,
2023
Net cash provided by (used for) operating
activities
$
378.4
$
253.6
$
515.9
$
295.6
Capital expenditures
(34.1
)
(25.8
)
(69.9
)
(53.6
)
Investments in capitalized software
(10.9
)
(0.5
)
(11.6
)
(2.5
)
Proceeds from disposition of PP&E
—
—
—
12.4
Adjusted free cash flow
$
333.4
$
227.3
$
434.4
$
251.9
Reconciliation from operating profit
(loss) to adjusted operating profit (loss)
Three months ended June 30,
2024
Three months ended June 30,
2023
Six months ended June 30,
2024
Six months ended June 30,
2023
Operating profit (loss)
$
336.0
$
205.8
$
538.6
$
336.1
Amortization of intangibles
45.8
45.4
91.8
90.6
Adjusted operating profit
(loss)
$
381.8
$
251.2
$
630.4
$
426.7
Reconciliation from operating margin to
adjusted operating margin
Three months ended June 30,
2024
Three months ended June 30,
2023
Δ
Six months ended June 30,
2024
Six months ended June 30,
2023
Δ
Vertiv net sales
$
1,952.8
$
1,734.1
$
218.7
$
3,591.9
$
3,255.2
$
336.7
Vertiv operating profit (loss)
336.0
205.8
130.2
538.6
336.1
202.5
Vertiv operating margin
17.2
%
11.9
%
5.3
%
15.0
%
10.3
%
4.7
%
Amortization of intangibles
$
45.8
$
45.4
$
0.4
$
91.8
$
90.6
$
1.2
Vertiv adjusted operating profit
(loss)
381.8
251.2
130.6
630.4
426.7
203.7
Vertiv adjusted operating
margin
19.6
%
14.5
%
5.1
%
17.6
%
13.1
%
4.5
%
Reconciliation of Diluted EPS to Adjusted Diluted EPS
Three months
ended June 30, 2024
Operating profit
(loss)
Interest expense, net
Loss on extinguishment of
debt
Change in warrant
liability
Income tax expense
(benefit)
Net income (loss)
Diluted EPS (1)
GAAP
$
336.0
$
44.8
$
1.1
$
25.4
$
86.6
$
178.1
$
0.46
Amortization of intangibles
45.8
—
—
—
—
45.8
0.12
Change in warrant liability
—
—
—
(25.4
)
(9.1
)
34.5
0.09
Non-GAAP Adjusted
$
381.8
$
44.8
$
1.1
$
—
$
77.5
$
258.4
$
0.67
Diluted Shares (in millions)
384.5
(1)
Diluted EPS and adjusted diluted EPS is
based on 384.5 million shares (includes 374.7 million basic shares
and 9.8 million potential dilutive stock options and restricted
stock units). We believe that this presentation is more
representative of operating results by removing the impact of
warrant liability accounting and the associated impact on diluted
EPS.
Three months
ended June 30, 2023
Operating profit
(loss)
Interest expense, net
Change in warrant
liability
Income tax expense
Net income (loss)
Diluted EPS (1)
GAAP
$
205.8
$
46.9
$
46.0
$
29.7
$
83.2
$
0.22
Amortization of intangibles
45.4
—
—
—
45.4
0.12
Change in warrant liability
—
—
(46.0
)
—
46.0
0.12
Non-GAAP Adjusted
$
251.2
$
46.9
$
—
$
29.7
$
174.6
$
0.46
Diluted Shares (in millions)
382.4
(1)
Diluted EPS and adjusted diluted EPS based
on 382.4 million shares (includes 379.9 million basic shares and
2.4 million potential dilutive stock options and restricted stock
units). We believe that this presentation is more representative of
operating results by removing the impact of warrant liability
accounting and the associated impact on diluted EPS.
Six months ended
June 30, 2024
Operating profit
(loss)
Interest expense, net
Loss on extinguishment of
debt
Change in warrant
liability
Income tax expense
(benefit)
Net income (loss)
Diluted EPS (1)
GAAP
$
538.6
$
83.8
$
1.1
$
202.0
$
79.5
$
172.2
$
0.44
Amortization of intangibles
91.8
—
—
—
—
91.8
0.24
Change in warrant liability
—
—
—
(202.0
)
38.8
163.2
0.42
Non-GAAP Adjusted
$
630.4
$
83.8
$
1.1
$
—
$
118.3
$
427.2
$
1.10
Diluted Shares (in millions)
387.0
(1)
Diluted EPS and adjusted diluted EPS is
based on 387.0 million shares (includes 376.9 million basic shares
and 10.1 million potential dilutive stock options and restricted
stock units). We believe that this presentation is more
representative of operating results by removing the impact of
warrant liability accounting and the associated impact on diluted
EPS.
Six months ended
June 30, 2023
Operating profit
(loss)
Interest expense, net
Change in warrant
liability
Income tax expense
(benefit)
Net income (loss)
Diluted EPS (1)
GAAP
$
336.1
$
93.7
$
41.8
$
67.1
$
133.5
$
0.35
Amortization of intangibles
90.6
—
—
—
90.6
0.24
Change in warrant liability
—
—
(41.8
)
—
41.8
0.11
Non-GAAP Adjusted
$
426.7
$
93.7
$
—
$
67.1
$
265.9
$
0.70
Diluted Shares (in millions)
381.1
(1)
Diluted EPS and adjusted diluted EPS based
on 381.1 million shares (includes 379.0 million basic shares and
2.1 million potential dilutive stock options and restricted stock
units). We believe that this presentation is more representative of
operating results by removing the impact of warrant liability
accounting and the associated impact on diluted EPS.
Vertiv Holdings Co
2024 Adjusted Guidance
Reconciliation of Diluted EPS
to Adjusted Diluted EPS (1)
Third Quarter 2024
Operating profit
(loss)
Interest expense, net
Income tax expense
Net income (loss)
Diluted EPS (2)
GAAP
$
341.0
$
41.0
$
104.0
$
196.0
$
0.51
Amortization of intangibles
44.0
—
—
44.0
0.11
Change in warrant liability
—
—
(20.0
)
20.0
0.05
Non-GAAP Adjusted
$
385.0
$
41.0
$
84.0
$
260.0
$
0.67
Diluted Shares (in millions)
385.0
Full Year 2024
Operating profit
(loss)
Interest expense, net
Change in warrant
liability
Income tax expense
Net income (loss)
Diluted EPS (3)
GAAP
$
1,256.0
$
165.0
$
202.0
$
301.0
$
588.0
$
1.52
Amortization of intangibles
179.0
—
—
—
179.0
0.46
Change in warrant liability
—
—
(202.0
)
—
202.0
0.52
Non-GAAP Adjusted
$
1,435.0
$
165.0
$
—
$
301.0
$
969.0
$
2.50
Diluted Shares (in millions)
387.0
(1)
Information reconciling certain
forward-looking GAAP measures to non-GAAP measures related to FY
2024 guidance, including organic net sales growth, adjusted
operating margin and adjusted free cash flow, is not available
without unreasonable effort due to high variability, complexity and
uncertainty with respect to forecasting and quantifying certain
amounts that are necessary for such reconciliations. For the same
reasons, we are unable to compute the probable significance of the
unavailable information, which could have a potentially
unpredictable, and potentially significant, impact on our future
GAAP financial results.
(2)
Diluted EPS and adjusted diluted EPS based
on 385.0 million shares (includes 375.0 million basic shares and a
weighted average 10.0 million potential dilutive stock options and
restricted stock units).
(3)
Diluted EPS and adjusted diluted EPS based
on 387.0 million shares (includes 377.0 million basic shares and a
weighted average 10.0 million potential dilutive stock options and
restricted stock units).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240723199943/en/
For investor inquiries, please contact: Lynne Maxeiner
Vice President, Global Treasury & Investor Relations Vertiv T
+1 614-841-6776 E: lynne.maxeiner@vertiv.com
For media inquiries, please contact: Peter Poulos
FleishmanHillard for Vertiv T +1 646-284-4991 E:
peter.poulos@fleishman.com
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