Vertiv — 2026Q3 earnings
reported 2026-07-29
EPS $1.52 vs $1.43 est — beat
next session +2.0% (close 2026-07-29 → 2026-07-30)
Source
8-K filing ↗Summary
Vertiv beat its own guidance on profit, margin and EPS while revenue came in softer than planned, and the release and the call agree on why: deliveries, not demand. Growth was mostly organic, margin expansion held net of tariffs, and cash conversion left the company in a net cash position. Full-year guidance was raised across every key metric rather than reaffirmed, and the release grounds that raise in the demand environment, growing pipelines and the capacity expansions underway. The open question the quarter leaves is the second-half ramp, and management's answer was a learning curve on executing projects of unprecedented size, plus a guide it says is deliberately not built on everything going right.
Earnings call
Earnings call webcast ↗Review
From the report
The quality of the quarter sat in the mix rather than the headline: most of the growth was organic, the margin expansion came from price-cost and productivity net of tariffs, and cash conversion turned the balance sheet to a net cash position — and guidance was raised across every key metric rather than reaffirmed. The same release names its own blemish, attributing the revenue timing to supply-chain congestion and multi-phase project execution rather than to demand.
-
The headline growth was mostly earned rather than bought: of the 24% increase in net sales to $3,274 million, 18% was organic, with 5% from acquisitions and 1% from currency. show quote
“Vertiv reported second quarter net sales of $3,274 million, an increase of $636 million, or 24%, compared to second quarter 2025, reflecting 18% organic sales growth, a 5% contribution from acquisitions, and a 1% benefit from favorable foreign currency translation.”
source ↗ -
Profit outgrew sales for reasons the company names as repeatable rather than lucky: adjusted operating margin of 22.6% expanded 410 basis points on execution, productivity and favorable price-cost — and the release states that price-cost was favorable inclusive of tariffs and the countermeasures against them, not before them. show quote
“Adjusted operating margin was 22.6%, up 410 basis points compared to second quarter 2025, driven by operational execution, continued strong productivity, and favorable price-cost, inclusive of tariff impacts and associated countermeasures.”
source ↗ -
The release names the blemish inside its own good quarter and, in the same breath, classifies it as a delivery constraint rather than a demand one — the demand environment, pipelines and capacity additions are what it cites as the basis for raising the sales guide. show quote
“Second quarter revenue reflected minor timing shifts, primarily due to temporary supply chain congestion and multi-phased project execution as deployments scale in size and complexity. The strong demand environment, growing pipelines, and the continual capacity expansions underway to serve customers give Vertiv the confidence to raise full year net sales guidance, along with increases to other associated financial metrics.”
source ↗ -
Cash was the quarter's standout and it changed the balance sheet, not just the quarter: operating cash flow of $1,100 million and adjusted free cash flow of $925 million grew 241% and 234%, and Vertiv ended the quarter in a net cash position. show quote
“Operating cash flow of $1,100 million and adjusted free cash flow of $925 million, an increase of 241% and 234%, respectively, compared to prior year second quarter. Achieved a net cash position at the end of second quarter 2026.”
source ↗ -
Guidance was raised rather than merely reaffirmed, and the raise reaches the bottom line: full-year adjusted diluted EPS is now guided to $6.65 to $6.75, a 60% midpoint increase, with GAAP diluted EPS of $5.82 to $5.92. show quote
“Expects full year 2026 diluted EPS of $5.82 to $5.92 and adjusted diluted EPS of $6.65 to $6.75, a midpoint increase of 72% and 60%, respectively, compared to full year 2025.”
source ↗
From the call
Management measured the quarter against its own guidance rather than the Street, and answered the first analyst question about the timing shifts with a learning curve on executing projects of unprecedented complexity — while stating that the second-half guide deliberately leaves room for that learning curve to be imperfect. The cash performance was traced to customer money arriving ahead of revenue.
-
The benchmark management chose on the call was its own guidance, and the outperformance landed in profit and margin rather than revenue: adjusted operating profit of $738 million came in $28 million above the guidance midpoint and adjusted operating margin of 22.6% came in 140 basis points above guidance. show quote
“Moving to adjusted operating profit. We delivered $738 million that is up $249 million or 51% versus prior year, and $28 million above the midpoint of our guidance. Adjusted operating margin of 22.6% expanded 410 basis points year-over-year and came in 140 basis points above guidance.”
source ↗ -
The organic growth was regionally lopsided in a way the headline hides: the Americas and APAC carried it while EMEA was still slightly negative organically in the quarter. show quote
“By regions, Americas grew 21% organically APAC grew 26% organically, and EMEA was down 2% organically.”
source ↗ -
The first analyst question went straight to whether the complexity behind the timing shifts is a permanent drag; the CEO answered with a learning curve on execution, and located the difficulty in the projects being the first at this scale rather than in anything structural. show quote
“Now clearly, like everything, and like we have done so far, there is a learning curve. I am pleased with the speed at which we are progressing in this learning curve. And this learning curve is a learning curve of the execution. On this complexity.”
source ↗ -
In the same answer the CEO said the second-half guide is deliberately not set to a best case, and described the margin of safety in it explicitly — a rare thing for management to volunteer about its own guidance. show quote
“So, if you think about our h 2 guidance, we are not assuming all stars align. We have a wiggle room for, this progress on the learning curve not to be perfect.”
source ↗ -
Asked what drove the cash performance, the CFO traced it to customer money arriving ahead of revenue, describing the deferred-revenue build as advance deposits at order placement plus milestone payments as large projects are delivered. show quote
“our deferred revenue is a read through in terms of those advanced deposits on orders, but it is also ongoing deposits as we go through the milestones of delivering those larger projects.”
source ↗
as of 2026-09-17