Vertiv (NYSE:VRT) management said the company closed 2025 with what it described as strong execution in the fourth quarter and for the full year, driven by accelerating AI-related infrastructure demand and continued strength in data centers. Executives highlighted surging order activity, expanding backlog, margin gains, and robust free cash flow, while also outlining a step-up in capacity investment to support growth.
Fourth-quarter results and order momentum
CEO Gio Albertazzi said fourth-quarter organic orders rose 152% year over year and increased 117% sequentially, with strength “all regions, all markets.” Trailing twelve-month organic order growth was 81%, and the company posted a 2.9x book-to-bill ratio. Vertiv ended the quarter with $15 billion of backlog, which Albertazzi said was more than double the prior year and up 57% sequentially.
New CFO Craig Chamberlin said the quarter’s adjusted diluted EPS was $0.10 above prior guidance, citing strong operational performance and exceptional volume growth in the Americas. Chamberlin also pointed to productivity gains and “favorable price cost execution” as drivers of margin expansion, noting incremental margins of 31% for the quarter.
Regional performance: Americas strength offsets APAC and EMEA declines
In segment detail, Chamberlin said Americas sales rose 50% (46% organically), supported by broad-based strength across products and customer segments. Adjusted operating profit in the Americas segment was $568 million, up 77%, with margin expanding by 450 basis points, which management attributed to operational leverage, price-cost benefits, and productivity.
APAC sales fell 10% (9% organically), primarily due to macroeconomic conditions in China. APAC adjusted operating profit was $49 million, and adjusted operating margin was 9.9%, down 270 basis points, which the company attributed mainly to volume deleverage. In EMEA, sales decreased 8% (14% organically) due to continued market softness. EMEA adjusted operating profit was $111 million and adjusted operating margin was 22.1%, down from 26.6% a year earlier, reflecting lower operating leverage.
Albertazzi said the Americas remained the primary engine of growth and that, even after the large fourth-quarter order intake, the company’s pipeline continued to grow. For EMEA, he described sentiment as improving and said he expects a return to sales growth in the second half of 2026. In APAC, he said growth was accelerating outside China, with India and the rest of Asia “robustly accelerating,” while China remained muted and is expected to stay soft in 2026.
Cash flow, leverage, and working capital dynamics
Vertiv generated $910 million of adjusted free cash flow in the fourth quarter, up 151% from the prior year period. Chamberlin said the increase was driven by higher operating profit and working capital efficiency, partially offset by higher cash taxes. He also said large orders in the quarter came with larger advanced payments, which benefited fourth-quarter cash flow.
For the full year, the company reported approximately $1.9 billion in adjusted free cash flow, with Albertazzi citing an adjusted free cash flow conversion rate of 115%. Vertiv exited the quarter with net leverage of 0.5x, which Chamberlin said provides “significant strategic flexibility.”
During Q&A, Chamberlin clarified that the company’s working capital outlook for 2026 assumes a positive working capital outcome, but “less positive” year over year. He said the level of down payments and progress payments can vary with the mix of orders, but he did not characterize the fourth quarter as meaningfully different from historical practice.
2026 outlook: growth, margin expansion, and higher CapEx
Management issued 2026 guidance calling for adjusted diluted EPS of $6.02 on 28% organic sales growth and an adjusted operating margin of 22.5%. Chamberlin said the midpoint implies 43% adjusted EPS growth and roughly 210 basis points of margin expansion, driven largely by operating leverage and positive price-cost, alongside continued investment in capacity and technology.
At the midpoint, Vertiv guided 2026 net sales of $13.5 billion, with growth assumptions including:
- Americas: high-30% sales growth
- APAC: mid-20% sales growth
- EMEA: flat to down mid-single digits, with a return to growth expected in the second half
For adjusted free cash flow, Vertiv forecast $2.2 billion in 2026, up 17%, with Chamberlin citing strong profit growth and working capital improvements, offset by higher taxes and increased capital expenditures.
For the first quarter of 2026, the company projected adjusted diluted EPS of $0.98 and net sales of $2.6 billion, representing 22% organic growth at the midpoint. The company guided to 19% adjusted operating margin in the quarter, a 250-basis-point expansion. Chamberlin added that on an exit-rate basis, Vertiv expects to have “materially offset” unfavorable tariff margin impacts as of the first quarter.
Strategy: systems, services, and changes to orders disclosure
Albertazzi emphasized the company’s push toward system-level offerings and prefabricated solutions, including Vertiv OneCore and Vertiv SmartRow, which he said are designed to simplify deployment and reduce “time to token” for customers. He cited collaborations with Hut 8 (OneCore) and Compass Datacenters (SmartRow) as examples discussed on the call.
On services, Albertazzi said lifecycle services orders grew more than 25% year over year. He also said Vertiv was nearing 5,000 field service personnel and highlighted continued investment in commissioning and digitization within services. Management discussed the PurgeRite acquisition as expanding Vertiv’s fluid management capabilities for chilled water and liquid-cooled AI data centers, describing it as strengthening the company’s service offering across design, commissioning, and ongoing operations.
Albertazzi also announced that Vertiv plans to stop reporting quarterly actual orders, orders forecasts, or backlog with earnings, arguing that lumpiness in large orders can create “excessive volatility” that is not representative of sustained performance. He said the company will continue to provide full-year historical disclosure regarding sales and backlog in its Form 10-K and will continue to discuss market conditions on quarterly calls.
In Q&A, Albertazzi said the large fourth-quarter orders did not reflect unusual end-of-year incentives or anomalies, but rather increasing project sizes and customer confidence in Vertiv’s ability to deliver at scale. He also said backlog consists of binding purchase orders.
On capacity, management said it is accelerating expansion through both capital investment and productivity improvements. Albertazzi reiterated that capacity expansion is being pursued in “many steps,” while Chamberlin said 2026 capital spending is expected to rise to 3% to 4% of sales from the historical 2% to 3% range, with the company viewing 2% to 3% as a normalized level over time.
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.
