- First quarter 2024 organic orders up 60% compared to first
quarter 2023, book-to-bill ratio 1.5x in first quarter 2024 and
record high $6.3 billion backlog at the end of first quarter
2024
- First quarter 2024 net sales of $1,639 million, 8% higher than
first quarter 2023
- First quarter 2024 operating profit of $203 million and
adjusted operating profit(1) of $249 million, up 42% from first
quarter 2023
- Accelerated capital deployment with $600 million in share
repurchases (~9.1 million shares at $66/share weighted average
price) in first quarter 2024
- Raising full year 2024 guidance, expect net sales growth of 12%
at the midpoint, operating profit of $1,150 to $1,200 million and
adjusted operating profit of $1,325 to $1,375 million, a 28%
increase at the midpoint compared to full year 2023
Vertiv Holdings Co (NYSE: VRT), a global provider of critical
digital infrastructure and continuity solutions, today reported
financial results for its first quarter ended March 31, 2024.
Vertiv reported first quarter 2024 net sales of $1,639 million, an
increase of $118 million, or 8%, compared to last year’s first
quarter. The book-to-bill ratio was 1.5x in the first quarter and
organic orders (excluding foreign exchange) increased 60% from last
year’s first quarter as underlying market demand remains strong,
benefiting from AI deployments, including liquid cooling
technologies, that are ramping up.
First quarter 2024 operating profit of $203 million reflects an
increase of $72 million and adjusted operating profit of $249
million reflects an increase of $73 million, or 42%, compared to
first quarter 2023. Adjusted operating margin expanded 370 basis
points to 15.2% in the first quarter 2024 compared to first quarter
2023, driven by benefits from favorable price-cost and increased
volume and productivity partially offset by growth investments in
R&D and capacity.
“Vertiv’s robust momentum in 2023 continued into the first
quarter of 2024, led by strength in orders, which grew 60%,
exceeding our expectations and reflecting increasing pipeline
velocity and acceleration of AI-driven demand,” said Giordano
Albertazzi, Vertiv’s Chief Executive Officer. “We are seeing order
patterns with longer lead times based on customer build schedules,
largely in 2025 and beyond, suggesting AI is starting to scale.
Though still in its early stages, AI is quickly becoming a
pervasive theme across our end markets. Continued advances in GPU
development and other AI-enabling technologies are necessitating
changes and upgrades to the critical digital infrastructure. We are
continuing to advance our portfolio to enable high-density and GPU
based deployments. With our global capacity, the most complete
portfolio of critical digital infrastructure solutions across the
entire thermal and power technology spectrum, vast global service
network and alignment with key technology partners, Vertiv is
uniquely positioned and ready to bring scale and support
development of the entire AI ecosystem.”
Dave Cote, Vertiv’s Executive Chairman, added: “Delivering
strong performance across the board, Vertiv is demonstrating its
true potential, driven by the continued strides Gio and his team
are making in improving execution and building a high-performance
culture. I am equally excited about the potential that remains for
further improvement. We are still in the early stages of unlocking
the potential of this business. The data center market remains
extremely positive for the foreseeable future, and Vertiv is
well-positioned for continued growth and operational improvement
over the long-term, which supports our capital deployment strategy
and enables us to invest in long-term value-creation while also
returning capital to shareholders.”
Adjusted Free Cash Flow(1) and
Liquidity
Net cash generated by operating activities in the first quarter
was $138 million, an increase of $96 million from first quarter
2023 and adjusted free cash flow was $101 million, an increase of
$76 million from first quarter 2023. First quarter 2024 adjusted
free cash flow performance was driven by higher adjusted operating
profit, improvement in working capital management and lower
interest expense which were partially offset by an $8 million
increase in capital expenditures to support growth.
Consistent with our capital deployment strategy, we repurchased
$600 million of shares (or 9.1 million shares) in the first quarter
2024, including the repurchase of Platinum Advisors’ remaining ~8.0
million shares. Liquidity was $860 million and borrowings under our
ABL credit facility remained at zero at the end of first quarter
2024. Net leverage at the end of first quarter 2024 was 2.2x,
impacted by the opportunistic share repurchases in the first
quarter.
Updated Full Year and Second Quarter
2024 Guidance
The data center market continues to accelerate, including the
deployment of high-performance compute, and we have seen increased
velocity from our opportunity pipeline to orders. We believe Vertiv
is well-positioned to capture this market growth with our
systems-level approach to critical digital infrastructure, across
the power train and thermal chain, with 3,500+ field service
engineers around the globe who are ready to support AI deployment
at scale.
Second Quarter 2024 Guidance
Net sales
$1,900M - $1,950M
Organic net sales growth(2)
11% - 13%
Adjusted operating profit(1)
$315M - $335M
Adjusted operating margin(2)
16.7% - 17.1%
Adjusted diluted EPS(1)
$0.53 - $0.57
Full Year 2024 Guidance
Net sales
$7,540M - $7,690M
Organic net sales growth(2)
11% - 13%
Adjusted operating profit(1)
$1,325M - $1,375M
Adjusted operating margin(2)
17.5% - 17.9%
Adjusted diluted EPS(1)
$2.29 - $2.35
Adjusted free cash flow(2)
$800M - $850M
(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.
First Quarter 2024 Earnings Conference
Call
Vertiv’s management team will discuss the Company’s results
during a conference call on Wednesday, April 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 second 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 second 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
Vertiv Stockholder’s significant ownership and influence 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
March 31, 2024
Three months ended
March 31, 2023
Net sales
Net sales - products
$
1,270.3
$
1,186.5
Net sales - services
368.8
334.6
Net sales
1,639.1
1,521.1
Costs and expenses
Cost of sales - products
846.3
819.5
Cost of sales - services
226.4
206.1
Cost of sales
1,072.7
1,025.6
Operating expenses
Selling, general and administrative
expenses
314.0
308.7
Amortization of intangibles
46.0
45.2
Restructuring costs
0.3
13.1
Foreign currency (gain) loss, net
3.2
3.1
Other operating expense (income)
0.3
(4.9
)
Operating profit (loss)
202.6
130.3
Interest expense, net
39.0
46.8
Change in fair value of warrant
liabilities
176.6
(4.2
)
Income (loss) before income
taxes
(13.0
)
87.7
Income tax expense (benefit)
(7.1
)
37.4
Net income (loss)
$
(5.9
)
$
50.3
Earnings (loss) per share:
Basic
$
(0.02
)
$
0.13
Diluted
$
(0.02
)
$
0.12
Weighted-average shares outstanding:
Basic
379,135,184
378,129,786
Diluted
379,135,184
381,683,511
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
Vertiv Holdings Co
(Dollars in millions)
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
275.8
$
780.4
Accounts receivable, less allowances of
$31.6 and $29.1, respectively
2,097.1
2,118.1
Inventories
987.1
884.3
Other current assets
271.8
218.7
Total current assets
3,631.8
4,001.5
Property, plant and equipment,
net
565.3
560.1
Other assets:
Goodwill
1,322.8
1,330.3
Other intangible assets, net
1,615.9
1,672.9
Deferred income taxes
159.3
159.8
Right-of-use assets, net
185.1
173.5
Other
111.2
100.4
Total other assets
3,394.3
3,436.9
Total assets
$
7,591.4
$
7,998.5
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
21.2
$
21.8
Current portion of warrant liabilities
371.6
—
Accounts payable
983.7
986.4
Deferred revenue
735.0
638.9
Accrued expenses and other liabilities
541.8
611.8
Income taxes
56.6
46.5
Total current liabilities
2,709.9
2,305.4
Long-term debt, net
2,916.1
2,919.1
Deferred income taxes
154.6
159.5
Warrant liabilities
—
195.0
Long-term lease liabilities
153.3
142.6
Other long-term liabilities
264.1
262.0
Total liabilities
6,198.0
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, 373,969,346 and 381,788,876 shares
issued and outstanding at March 31, 2024 and December 31, 2023,
respectively
—
—
Treasury stock, at cost: 9,076,444 shares
and none at March 31, 2024 and December 31, 2023, respectively
(605.9
)
—
Additional paid-in capital
2,745.2
2,711.3
Accumulated deficit
(707.1
)
(691.9
)
Accumulated other comprehensive (loss)
income
(38.8
)
(4.5
)
Total equity
1,393.4
2,014.9
Total liabilities and equity
$
7,591.4
$
7,998.5
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Vertiv Holdings Co
(Dollars in millions)
Three months ended
March 31, 2024
Three months ended
March 31, 2023
Cash flows from operating
activities:
Net income (loss)
$
(5.9
)
$
50.3
Adjustments to reconcile net income (loss)
to net cash provided by (used for) operating activities:
Depreciation
19.8
17.7
Amortization
48.9
48.9
Deferred income taxes
(7.6
)
3.4
Amortization of debt discount and issuance
costs
2.1
2.7
Change in fair value of warrant
liabilities
176.6
(4.2
)
Changes in operating working capital
(99.7
)
(86.9
)
Stock based compensation
9.2
5.5
Other
(5.9
)
4.6
Net cash provided by (used for)
operating activities
137.5
42.0
Cash flows from investing
activities:
Capital expenditures
(35.8
)
(27.8
)
Investments in capitalized software
(0.7
)
(2.0
)
Proceeds from disposition of property,
plant and equipment
—
12.4
Net cash provided by (used for)
investing activities
(36.5
)
(17.4
)
Cash flows from financing
activities:
Borrowings from ABL revolving credit
facility and short-term borrowings
190.0
100.2
Repayments of ABL revolving credit
facility and short-term borrowings
(190.0
)
(110.2
)
Repayment of long-term debt
(5.3
)
(10.9
)
Dividend payment
(9.3
)
—
Repurchase of common shares
(599.9
)
—
Exercise of employee stock options
14.4
2.2
Employee taxes paid from shares
withheld
(3.0
)
(0.1
)
Net cash provided by (used for)
financing activities
(603.1
)
(18.8
)
Effect of exchange rate changes on cash
and cash equivalents
(6.0
)
1.8
Increase (decrease) in cash, cash
equivalents and restricted cash
(508.1
)
7.6
Beginning cash, cash equivalents and
restricted cash
788.6
273.2
Ending cash, cash equivalents and
restricted cash
$
280.5
$
280.8
Changes in operating working
capital
Accounts receivable
$
9.9
$
(90.1
)
Inventories
(106.5
)
(79.5
)
Other current assets
(31.7
)
(1.2
)
Accounts payable
9.8
(62.3
)
Deferred revenue
100.0
144.2
Accrued expenses and other liabilities
(68.5
)
(16.5
)
Income taxes
(12.7
)
18.5
Total changes in operating working
capital
$
(99.7
)
$
(86.9
)
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 March 31,
2024
2023
Δ
Δ %
Organic Δ %(2)
Net sales
(1)
Americas
$
925.0
$
862.3
$
62.7
7.3
%
7.1
%
APAC
332.3
313.0
19.3
6.2
%
9.1
%
EMEA
381.8
345.8
36.0
10.4
%
9.8
%
Total
$
1,639.1
$
1,521.1
$
118.0
7.8
%
8.1
%
Adjusted
operating profit (loss)(3)
Americas
$
187.8
$
145.8
$
42.0
28.8
%
APAC
30.4
16.6
13.8
83.1
%
EMEA
70.3
46.1
24.2
52.5
%
Corporate (4)
(39.9
)
(33.0
)
(6.9
)
20.9
%
Total
$
248.6
$
175.5
$
73.1
41.7
%
Adjusted
operating margins (5)
Americas
20.3
%
16.9
%
3.4
%
APAC
9.1
%
5.3
%
3.8
%
EMEA
18.4
%
13.3
%
5.1
%
Vertiv
15.2
%
11.5
%
3.7
%
(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, change in fair value of warrant liabilities, 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 March 31,
2024
2023
Δ
Δ %
Americas:
Products(1)
$
716.1
$
673.9
$
42.2
6.3
%
Services & spares
208.9
188.4
20.5
10.9
%
$
925.0
$
862.3
$
62.7
7.3
%
Asia Pacific:
Products(1)
$
224.0
$
208.9
$
15.1
7.2
%
Services & spares
108.3
104.1
4.2
4.0
%
$
332.3
$
313.0
$
19.3
6.2
%
Europe, Middle East &
Africa:
Products(1)
$
297.3
$
267.7
$
29.6
11.1
%
Services & spares
84.5
78.1
6.4
8.2
%
$
381.8
$
345.8
$
36.0
10.4
%
Total:
Products(1)
$
1,237.4
$
1,150.5
$
86.9
7.6
%
Services & spares
401.7
370.6
31.1
8.4
%
$
1,639.1
$
1,521.1
$
118.0
7.8
%
(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 March 31,
2024
Net Sales Δ
FX Δ
Organic growth
Organic Δ %(1)
Americas:
Products(2)
$
42.2
$
0.4
$
42.6
6.3
%
Services & spares
20.5
(1.9
)
18.6
9.9
%
$
62.7
$
(1.5
)
$
61.2
7.1
%
Asia Pacific:
Products(2)
$
15.1
$
6.1
$
21.2
10.1
%
Services & spares
4.2
3.2
7.4
7.1
%
$
19.3
$
9.3
$
28.6
9.1
%
Europe, Middle East &
Africa:
Products(2)
$
29.6
$
(4.7
)
$
24.9
9.3
%
Services & spares
6.4
2.5
8.9
11.4
%
$
36.0
$
(2.2
)
$
33.8
9.8
%
Total:
Products(2)
$
86.9
$
1.8
$
88.7
7.7
%
Services & spares
31.1
3.8
34.9
9.4
%
$
118.0
$
5.6
$
123.6
8.1
%
(1)
Organic growth percentage change is
calculated as organic growth divided by net sales for the three
months ended March 31, 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 March 31,
2024
Three months ended March 31,
2023
Americas
$
187.8
$
145.8
Asia Pacific
30.4
16.6
Europe, Middle East & Africa
70.3
46.1
Total reportable segments
288.5
208.5
Foreign currency gain (loss)
(3.2
)
(3.1
)
Corporate and other
(36.7
)
(29.9
)
Total corporate, other and
eliminations
(39.9
)
(33.0
)
Amortization of intangibles
(46.0
)
(45.2
)
Operating profit (loss)
$
202.6
$
130.3
Reconciliation of net cash provided by
(used for) operating activities to adjusted free cash flow
Three months ended March 31,
2024
Three months ended March 31,
2023
Net cash provided by (used for) operating
activities
$
137.5
$
42.0
Capital expenditures
(35.8
)
(27.8
)
Investments in capitalized software
(0.7
)
(2.0
)
Proceeds from disposition of PP&E
—
12.4
Adjusted free cash flow
$
101.0
$
24.6
Reconciliation from operating profit
(loss) to adjusted operating profit (loss)
Three months ended March 31,
2024
Three months ended March 31,
2023
Operating profit (loss)
$
202.6
$
130.3
Amortization of intangibles
46.0
45.2
Adjusted operating profit
(loss)
$
248.6
$
175.5
Reconciliation from operating margin to
adjusted operating margin
Three months ended March 31,
2024
Three months ended March 31,
2023
Δ
Vertiv net sales
$
1,639.1
$
1,521.1
$
118.0
Vertiv operating profit (loss)
202.6
130.3
72.3
Vertiv operating margin
12.4
%
8.6
%
3.8
%
Amortization of intangibles
$
46.0
$
45.2
$
0.8
Vertiv adjusted operating profit
(loss)
248.6
175.5
73.1
Vertiv adjusted operating
margin
15.2
%
11.5
%
3.7
%
Reconciliation of Diluted EPS to
Adjusted Diluted EPS
Three months
ended March 31, 2024
Operating profit
(loss)
Interest expense,
net
Change in Warrant
Liability
Income tax
expense (benefit)
Net income
(loss)
Diluted EPS (1)
GAAP
$
202.6
$
39.0
$
176.6
$
(7.1
)
$
(5.9
)
$
(0.02
)
Amortization of intangibles
46.0
—
—
—
46.0
0.12
Change in warrant liability
—
—
(176.6
)
47.9
128.7
0.33
Non-GAAP Adjusted
$
248.6
$
39.0
$
—
$
40.8
$
168.8
$
0.43
Pro-forma diluted shares (in millions)
389.3
(1)
Diluted EPS is based on 379.1 million
shares. Adjusted diluted EPS is based on a pro-forma diluted share
count of 389.3 million which includes 379.1 million basic shares
and 10.2 million potential dilutive stock options, restricted stock
units and performance awards converted into RSUs upon achievement
of the related performance target which would have been in diluted
EPS if the Company had net income for the three months ended March
31, 2024. 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 share count.
Three months
ended March 31, 2023
Operating profit
(loss)
Interest expense,
net
Change in Warrant
Liability
Income tax
expense (benefit)
Net income
(loss)
Diluted EPS (1)
GAAP
$
130.3
$
46.8
$
(4.2
)
$
37.4
$
50.3
$
0.12
Amortization of intangibles
45.2
—
—
—
45.2
0.12
Change in warrant liability
—
—
4.2
—
(4.2
)
—
Non-GAAP Adjusted
$
175.5
$
46.8
$
—
$
37.4
$
91.3
$
0.24
Diluted Shares (in millions)
381.7
(1)
Diluted EPS and adjusted diluted EPS based
on 381.7 million shares (includes 378.1 million basic shares, 1.9
million potentially dilutive warrants, and 1.7 million potential
dilutive stock options and restricted stock units). Diluted EPS and
adjusted diluted EPS includes an adjustment to exclude $4.2 million
from net income which is attributable to the warrants as they were
dilutive in the period. 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
share count.
Vertiv Holdings Co
2024 Adjusted Guidance
Reconciliation of Diluted EPS
to Adjusted Diluted EPS (1)
Second Quarter 2024
Operating profit
(loss)
Interest expense,
net
Income tax
expense
Net income
(loss)
Diluted EPS (2)
GAAP
$
282.0
$
47.0
$
66.0
$
169.0
$
0.44
Amortization of intangibles
43.0
—
—
43.0
0.11
Non-GAAP Adjusted
$
325.0
$
47.0
$
66.0
$
212.0
$
0.55
Diluted Shares (in millions)
384.6
Full Year 2024
Operating profit
(loss)
Interest expense,
net
Change in
Warrant
Liability
Income tax
expense
Net income
(loss)
Diluted EPS (3)
GAAP
$
1,174.0
$
173.0
$
177.0
$
278.0
$
546.0
$
1.41
Amortization of intangibles
176.0
—
—
—
176.0
0.45
Change in warrant liability
—
—
(177.0
)
—
177.0
0.46
Non-GAAP Adjusted
$
1,350.0
$
173.0
$
—
$
278.0
$
899.0
$
2.32
Diluted Shares (in millions)
387.9
(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 384.6 million shares (includes 374.6 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 387.9 million shares (includes 377.4 million basic
shares and a weighted average 10.5 million potential dilutive stock
options and restricted stock units).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240423045499/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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