Vertiv Holdings Co delivered an exceptional fourth quarter and full year 2025, characterized by triple-digit organic order growth and significant margin expansion. For Q4, organic orders surged 152% year-over-year (up 117% sequentially) with a book-to-bill ratio of 2.9x, driving backlog to $15 billion, more than double the prior year. Q4 organic net sales increased 19%, led by a 46% jump in The Americas, while adjusted operating margin expanded 170 basis points to 23.2% and adjusted EPS rose 37% to $1.36. For the full year, sales reached $10.2 billion with 26% organic growth, and adjusted EPS jumped 47% to $4.20, supported by $1.9 billion in adjusted free cash flow. Looking ahead to 2026, management projects robust growth with adjusted EPS of $6.20 (up 43%) and sales of $13.5 billion (up 28% organically), driven by the accelerating AI-driven infrastructure build-out and capacity expansion.
| Metric | Value | Change |
|---|---|---|
| Q4 Organic Orders Growth | 152% | Up 152% YoY |
| Q4 Book-to-Bill | 2.9x | N/A |
| Backlog | $15.0 Billion | Up 57% QoQ / >100% YoY |
| Q4 Organic Net Sales Growth | 19% | Up 19% YoY |
| Q4 Adjusted Operating Margin | 23.2% | +170 bps YoY |
| Q4 Adjusted EPS | $1.36 | +37% YoY |
| FY 2025 Net Sales | $10.2 Billion | +26% Organic |
| FY 2025 Adjusted EPS | $4.20 | +47% YoY |
| FY 2025 Adjusted FCF | $1.9 Billion | +66% YoY |
AI Infrastructure Leadership: Management emphasized that Vertiv is a primary beneficiary of the 'AI-driven infrastructure build-out,' noting they are 'still in the early innings of this secular growth trend.' The company reported trailing twelve-month organic orders growth of 81% and a Q4 book-to-bill of 2.9x, indicating massive demand for data center power and cooling solutions. This signal is reinforced by the $15 billion backlog, which management claims positions them for strong growth into 2027.
Product Innovation and Convergence: Vertiv is actively defining the market with converged solutions like 'OneCore' and 'SmartRun.' OneCore is described as an end-to-end solution that 'dramatically simplifies and accelerates the customer journey,' while SmartRun focuses on white space infrastructure. These products address the need for speed and simplicity in deploying gigawatt-scale AI data centers, strengthening Vertiv's competitive moat against simpler component providers.
Strategic Acquisitions (PerchRight): The acquisition of PerchRight was highlighted as a critical move to strengthen fluid management capabilities for liquid-cooled AI data centers. Management noted that fluid management is 'one of the most technically demanding and financially consequential aspects of running a modern data center.' This acquisition allows Vertiv to offer a comprehensive lifecycle service, increasing recurring revenue and differentiation.
Capacity Expansion and CapEx: To support the massive backlog, Vertiv is increasing capital expenditure to 3-4% of sales in 2026, up from a historical 2-3%. Management stated they are 'accelerating capacity expansion' through both new facilities and productivity improvements. This signals a commitment to capturing share immediately rather than constraining growth due to supply issues.
Regional Diversification and Recovery: While The Americas (up 46% organically) remain the primary engine, management signaled a turnaround in EMEA, stating 'the coiled spring is uncoiling' with expectations for sales growth to return in H2 2026. In APAC, despite China being 'muted,' India and the rest of Asia are 'robustly accelerating,' providing a hedge against regional concentration risks.
Transparency Reduction (Orders/Backlog Reporting): In a significant shift, management announced they will 'no longer report actual orders, orders forecast, or backlog with quarterly earnings' starting immediately. They justified this by citing 'excessive volatility' that is not representative of sustained performance. However, for a company trading on high growth expectations, removing visibility into the primary demand driver (orders) creates a transparency risk and makes future performance harder for investors to track independently.
Regional Weaknesses in APAC and EMEA: Despite overall strength, Q4 sales in APAC were down 9% organically and EMEA was down 14%. Management admitted China's 'soft growth rate' is expected to persist in 2026. While EMEA is expected to recover in the second half, the current weakness in these large regions poses a risk to the consistency of the 28% organic growth guidance for 2026.
Execution Risk on Backlog Conversion: With backlog elongating into a 12-18 month window and standing at $15 billion, the pressure to execute on delivery is immense. Management acknowledged that capacity expansion is a 'two-pronged approach' involving CapEx and productivity. Any failure to scale supply chains or labor force (they are hiring 5,000 field service people) rapidly enough could lead to delays or margin pressure.
Margin Pressure in Segments: While corporate margins expanded, APAC operating margins fell 270 basis points due to volume deleverage, and EMEA margins declined due to sales softness. Management guided that EMEA margin pressure would continue into Q1 2026. This indicates that the geographic mix of sales could negatively impact overall margins if the recovery in EMEA is slower than anticipated.
Overall: Management displayed an extremely high level of confidence and enthusiasm throughout the call, frequently using superlatives to describe the company's momentum and market position. Executives emphasized the 'secular growth trend' of AI infrastructure and Vertiv's specific competitive advantages, sounding assured in their ability to execute on a massive $15 billion backlog. The tone shifted from celebratory regarding past results to assertive about future capacity and technology leadership.
Confidence: HIGH - Management provided specific, aggressive guidance for 2026 (43% EPS growth) and detailed operational metrics to support their outlook. They dismissed concerns about lumpiness and regional softness as temporary or manageable, reinforcing their conviction in the long-term trajectory.
$6.20 (43% growth at midpoint)
$13.5 Billion (28% organic growth)
22.5% (210 bps expansion)
$2.2 Billion
$0.98 (53% growth)
$2.6 Billion (22% organic growth)
Hedging & Uncertainty: Management used very little hedging regarding past performance, speaking with certainty about Q4 and FY2025 results ('We delivered strong results'). However, regarding future specifics, they employed temporal hedges such as 'expect to return to sales growth in the second half' for EMEA and 'soft growth rate to persist' for China. Notably, when discussing the decision to stop reporting orders, Giordano Albertazzi used the phrase 'We believe that currently, the best approach is...' which softens the blow of the transparency reduction. The guidance itself was presented confidently ('We are projecting...'), but they acknowledged the 'lumpy' nature of orders, effectively hedging against future quarterly volatility.
We are still in the early innings of this secular growth trend. - David M. Cote, Executive Chairman
The coiled spring is uncoiling. - Giordano Albertazzi, Chief Executive Officer
We believe that currently, the best approach is to no longer report actual orders, orders forecast, or backlog with quarterly earnings. - Giordano Albertazzi, Chief Executive Officer
Shock and awe numbers. - Jeffrey Todd Sprague, Analyst (Vertical Research)
We are not done yet. - David M. Cote, Executive Chairman
I have never been more excited about Vertiv Holdings Co's future. - Giordano Albertazzi, Chief Executive Officer
Analyst Sentiment: Analysts were overwhelmingly positive, frequently congratulating management on the 'shock and awe' numbers and 'unbelievable year.' Questions focused heavily on the sustainability of the order book, the mechanics of converting the massive backlog, and the specific product mix (e.g., cooling technologies). There was clear skepticism or surprise regarding the decision to stop reporting orders, with analysts probing for clarification on visibility.
Management Responses: Management responses were direct and detailed, particularly regarding operational capabilities and product technology. They deflected concerns about the 'lumpiness' of orders by emphasizing the strength of the pipeline. When pressed on the decision to stop reporting orders, they stood firm, framing it as a move to reduce 'excessive volatility' for investors. They provided granular details on capacity expansion and regional dynamics to reassure investors about the feasibility of the 2026 guidance.
Sustainability of Order Growth: Analysts sought to understand if the 152% order growth was a one-time event or sustainable. Management emphasized the 'robust pipeline growth' and 'system level thinking' driving larger orders.
Capacity and CapEx: Multiple questions focused on the ability to convert the backlog. Management detailed the increase in CapEx to 3-4% of sales and the 'two-pronged approach' of footprint expansion and productivity gains.
Transparency (Orders Reporting): Analysts asked for clarification on the decision to stop reporting orders/backlog. Management reiterated that it leads to 'excessive volatility' and does not represent the 'sustained performance' of the company.
Regional Outlook (Europe/China): Questions addressed the weakness in EMEA and China. Management described EMEA as a 'coiled spring uncoiling' with recovery expected in H2, while characterizing China's softness as a macro issue but noting strength in India/Rest of Asia.
Cooling Technology: Analysts inquired about the evolution of cooling (e.g., raised racks, CDUs). Management confirmed a move toward 'hybrid cooling' and reaffirmed the long-term necessity of CDUs and heat rejection technologies.
Vertiv is executing at a high level, capitalizing effectively on the AI infrastructure boom. The company reported phenomenal Q4 results with 152% order growth and expanded margins, validating its position as a critical partner for hyperscalers. The $15 billion backlog provides exceptional visibility for 2026, supporting the aggressive guidance of 43% EPS growth. While the decision to stop reporting orders is a frustrating reduction in transparency, the fundamental momentum—driven by innovative products like OneCore and the strategic PerchRight acquisition—remains intact. The valuation is supported by strong cash generation ($1.9B FCF) and a clear path to margin expansion. We remain buyers on strength.
Management confirmed that the AI-driven build-out is accelerating, describing it as a 'secular growth trend' still in its 'early innings.' Data centers are the center of this growth, with orders becoming larger and more complex.
The Chinese market remains 'muted' with a 'soft growth rate' expected to persist into 2026. However, this is offset by robust acceleration in India and the rest of Asia.
Management noted a significant improvement in market sentiment in EMEA, describing it as a 'coiled spring uncoiling.' Pipelines are expanding, and sales growth is expected to return in the second half of 2026.
Management stated that 'pricing continues to be favorable,' with 2025 pricing exceeding inflation and expectations for the same in 2026. They are mitigating material inflation through pricing mechanisms and supplier cooperation.