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    VRT
    Earnings call· Jun 2026(Q2 FY26)

    Vertiv Holdings Q2 FY26 earnings call VRT

    Jul 29, 2026 Source

    Executive summary

    Vertiv Q2 FY26 — Strong Performance and Raised Full-Year Outlook Driven by Data Center Demand

    Vertiv delivered a robust second quarter, marked by strong sales growth and significant margin expansion, driven by accelerating demand in the digital infrastructure market. The company raised its full-year outlook across all key metrics, demonstrating confidence in its ability to execute on a strong backlog and leverage ongoing investments in capacity and technology. Management acknowledges increasing project complexity but is confident in its operational learning curve and disciplined approach to future growth.

    Highlights

    5

    • Net sales increased 24% year-over-year to $3.274 billion, with organic growth of 18%.

    • Adjusted operating margin expanded by 410 basis points year-over-year to 22.6%.

    • Adjusted diluted EPS grew 60% year-over-year to $1.52, exceeding guidance by $0.12.

    • Adjusted free cash flow was $925 million, a 234% year-over-year increase, with conversion exceeding 150%.

    • Full-year net sales guidance raised by $250 million to $14 billion, and adjusted EPS guidance raised by $0.35 to $6.70.

    Concerns

    3

    • Minor timing shifts in Q2 revenue, primarily driven by multiphase project execution and temporary supply chain dynamics, impacted Americas revenue.

    • EMEA organic sales were down 2% year-over-year in Q2 FY26.

    • Tariff impacts partially offset margin expansion, though favorable price-cost execution mitigated this.

    Guidance & targets

    18
    CategoryTargetConfidence
    Q3 FY26 Adjusted diluted EPS
    $1.80
    high materiality
    High
    Q3 FY26 Net sales
    $3.75 billion
    high materiality
    High
    Q3 FY26 Organic sales growth
    approximately 35%
    medium materiality
    High
    Q3 FY26 Americas organic growth
    high 30s
    medium materiality
    High
    Q3 FY26 APAC organic growth
    high 30s
    medium materiality
    High
    Q3 FY26 EMEA organic growth
    mid-teens
    medium materiality
    High
    Q3 FY26 Adjusted operating profit
    $918 million
    high materiality
    High
    Q3 FY26 Adjusted operating margin
    24.5%
    high materiality
    High
    Full Year FY26 Net sales
    $14 billion
    high materiality
    High
    Full Year FY26 Organic sales growth
    31%
    medium materiality
    High
    Full Year FY26 Americas organic growth
    high 30s
    medium materiality
    High
    Full Year FY26 APAC organic growth
    low 30s
    medium materiality
    High
    Full Year FY26 EMEA organic growth
    low single digits
    medium materiality
    High
    Full Year FY26 Adjusted diluted EPS
    $6.70
    high materiality
    High
    Full Year FY26 Adjusted operating profit
    $3.325 billion
    high materiality
    High
    Full Year FY26 Adjusted operating margin
    23.8%
    high materiality
    High
    Full Year FY26 Adjusted free cash flow
    $2.5 billion
    high materiality
    High
    Full Year FY26 Capital expenditures
    high end of 4% of '26 sales
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Americas
    Strong organic sales growth, but experienced minor timing shifts in Q2 revenue due to multiphase project execution and temporary supply chain congestion, expected to resolve in H2 2026. Margin expansion driven by commercial excellence and operational execution.
    Organic sales growth: 21%
    		$2.71 billion29%—360 bps expansion
    APAC
    Strong end market demand and commercial execution, leading to strong results. Margin expansion due to strong operating leverage.
    Organic sales growth: 26%
    		$720 million29%—270 bps expansion
    EMEA
    Market strengthening, expected to return to organic sales growth in H2 2026. Strong growth in adjusted operating margin due to improved operational execution.
    Organic sales growth: -2%
    		$484 million2%—380 bps expansion

    Operational metrics

    13
    Adjusted diluted EPS
    $1.52up 60% YoY
    Q2 FY26

    Exceeded guidance by $0.12, driven by higher volume and operational productivity.

    Adjusted operating profit
    $738 millionup 51% YoY
    Q2 FY26

    Exceeded midpoint of guidance by $28 million.

    Adjusted operating margin
    22.6%expanded 410 bps YoY
    Q2 FY26

    Came in 140 basis points above guidance, driven by strong operational execution, productivity gains, and favorable price-cost execution, partially offset by tariff impacts.

    Free cash flow conversion
    >150%
    Q2 FY26

    Exceeded 150% in the quarter.

    Net leverage
    -0.1x
    Q2 FY26 end

    Company achieved a net cash position at the end of Q2 FY26.

    Organic sales growth
    18%
    Q2 FY26

    Company-wide organic sales growth.

    Sales growth contribution from acquisitions
    5%
    Q2 FY26

    Contribution to total net sales growth.

    Sales growth contribution from favorable foreign exchange
    1%
    Q2 FY26

    Contribution to total net sales growth.

    Price cost
    favorable
    FY26

    Expected to be positive in 2026, including the current impact of tariffs and counter managers.

    Deferred revenue
    —increased
    Q2 FY26

    Increase driven by project advanced payments and ongoing milestone collections, reflecting strong commercial performance.

    800-volt architecture customer validation
    ongoing
    2026

    Customer validation for 800-volt architecture at rack and pod level, featuring new Vertiv technologies like mid-voltage BaaS UPS and Vertiv volt DC site cars.

    MV DC UPS and solid state transformer development
    active development
    2026

    Development for 800-volt architecture at data hall level, covering multiple ways to address end-to-end powertrain.

    PurgeRite NearZero water reduction
    up to 90%
    start-up

    Utilizes a closed-loop recirculation system to capture, treat, and reuse water during data center start-up, reducing water normally used in the process.

    Industry KPIs

    4
    MetricValueDetails
    Orders bookings growthrobust orders growth expected
    M a acquisition contribution5%%
    Backlog by segment end marketstrong backlog
    Data center exposure pipelinestrong global pipeline momentum

    Product announcements

    5
    ProductTypeDetails
    Vertiv Trinegy and energy core battery storage systemupdate
    Mid-voltage BaaS UPS and Vertiv volt DC site carsmilestone
    MV DC UPS and solid state transformerroadmap
    PurgeRite NearZerolaunch
    Vertiv SmartIT solution for NVIDIA DGX GB300launch

    Deals & partnerships

    4
    ThermoKeyStrengthening heat rejection capabilities.

    Closed in June, expanding Vertiv's offerings across the full thermal spectrum.

    Thermal LabsAdding server-side liquid cooling and cold-plate expertise for high-density thermal management.

    Closed in April, expanding Vertiv's offerings across the full thermal spectrum.

    NVIDIA and Visionbay.ai (Foxconn)Collaboration for AI supercomputing site in Kaohsiung, Taiwan.

    Vision Bay AI awarded power, thermal, and services business to Vertiv for Taiwan's first AI data center featuring NVIDIA DGB 300. Also collaborating on the world's first AI data center DP800 DC-DC architectures at rack and pod level featuring NVIDIA Vera Rubin.

    Data 4Delivering complete powertrain for Data 4's new Frankfurt site.

    Includes switchgear, UPS, battery systems, and thermal chain like chilled water units and free cooling chillers, along with industry-leading services.

    Capital programs

    1
    Global Capacity Expansionunderway
    Period spend: high end of 4% of '26 sales

    Benefit: additional capacity online globally

    Includes examples like Johor in Malaysia, 5 large plant expansions in the Americas, and chiller capacity increases in EMEA MMO. Investments are disciplined for long-term growth.

    Risks & headwinds

    2
    Project execution complexity and temporary supply chain dynamicsQ2 FY26, expected to resolve in H2 FY26

    Minor timing shifts in Q2 FY26 revenue

    Mitigation: Progressing on a learning curve for handling large, complex projects; prudent H2 guidance assumes some continued congestion; strengthening operational execution.

    Tariff impactsFY26

    partially offset margin expansion

    Mitigation: Expected positive price-cost execution in 2026, including current tariff impacts, to offset headwinds.

    What to watch in Q3 FY26

    5

    Resolution of Q2 revenue timing shifts

    H2 FY26
    CurrentMinor timing shifts in Q2 FY26 revenue
    TargetResolution in H2 FY26

    Why it matters

    Verifying the recovery of delayed revenue and the company's ability to manage complex project execution will be key to meeting full-year guidance.

    As Gio mentioned earlier, some minor timing shifts in 2Q revenue, these shifts were reflected in the Americas revenue numbers and were primarily driven by multiphase project execution and temporary supply chain congestion. However, we expect the associated timing delay to resolve in the second half of 2026.

    Q&A highlights

    6

    Analyst asked for more detail on Q2 revenue shifts, if complexity is a persistent issue, and how Vertiv plans to mitigate it.

    Gio Albertazzi acknowledged increasing complexity in large, multi-dimensional projects with supply chain interdependencies (internal and external). He stated Vertiv is progressing rapidly on the learning curve for execution and is prudent in H2 guidance, not assuming "all stars align." Craig Chamberlin clarified that the issue is primarily with large project deployments, not point products, and the company is seeing good signs of ratcheting up the learning curve.

    “Complexity is increasing. Some of the projects are not only bigger but multidimensional there could be a lot of supply chain interdependencies. And this supply chain is not necessarily an external supply chain. It can be very often and internal with Vertiv supply chain.”

    asked by Scott Davis · answered by Giordano Albertazzi

    2 min read6 chapters

    Detailed Narrative

    01

    Market Momentum and Pipeline Strength

    Vertiv is experiencing strong global pipeline momentum with clear and broad-based demand signals across Americas, EMEA, and APAC. The company expects another year of robust orders growth, with the pipeline accelerating in speed and sheer size across hyperscalers, enterprise, Colo, and Neocloud customer categories. This underpins confidence in the long-term growth trajectory and H2 execution.

    02

    Strategic Investments in Technology and Capacity

    Vertiv continues to invest in future power architectures, advanced thermal systems, services, and converged infrastructure to lead the industry in next-generation AI data centers. This includes customer validation of 800-volt architectures in 2026 for 2027 deployment, and MV DC UPS/solid-state transformer development for 2027 validation and 2028 deployment. Capacity expansions are also rapid and broad-based globally, including new facilities in Johor, Malaysia, and expanded chiller capacity in EMEA.

    03

    Power Architecture Evolution and Content Opportunity

    The market is evolving towards multiple coexisting power architectures (AC and DC), including 800-volt DC solutions. Vertiv supports all these architectures, and its content opportunity per megawatt expands as power requirements increase. The company highlighted a collaboration with NVIDIA and Visionbay.ai for Taiwan's first AI data center featuring NVIDIA DGB 300 and the world's first AI data center DP800 DC-DC architectures.

    04

    Sustainable Cooling Solutions

    Vertiv is differentiating through unique fluid management services, including PurgeRite NearZero, which reduces water use by up to 90% during data center start-up by capturing, treating, and reusing water in closed-loop cooling systems. This technology, coupled with Vertiv's thermal chain technologies, enables nearly zero water consumption for customers, offering faster deployment and reduced waste.

    05

    Operational Execution and Project Complexity

    While Q2 revenue experienced minor timing shifts due to multiphase project execution and temporary supply chain dynamics, management views this as a learning curve for increasingly large and complex projects. The company is strengthening its operational execution to handle these interdependencies, including internal Vertiv factories feeding each other, and remains confident in its ability to deliver the associated revenue in the second half of 2026.

    06

    M&A Strategy and Recent Acquisitions

    Vertiv maintains an active M&A pipeline, focusing on strategic fits that offer regional reach, accelerate product time-to-market, or provide new technologies. Recent acquisitions include ThermoKey (heat rejection capabilities) and Thermal Labs (server-side liquid cooling and cold-plate expertise), which expand Vertiv's offerings across the full thermal spectrum for high-density thermal management.

    AI-generated summary of the company’s earnings call. Not investment advice.