VRT - Earnings call transcript Q1 2024

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Operator

Good morning. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Vertiv's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this call is being recorded. I'd now like to turn the program over to your host for today's conference call, Lynne Maxeiner, Vice President of Investor Relations.

Lynne Maxeiner

Great. good Conference welcome Call. and Quarter Vertiv's Jordan, Earnings XXXX you, morning to and First Thank

Financial Joining Dave Officer, Chief Cote; today Chief David me are Executive Gio Vertiv's Albertazzi; Executive Chairman, Officer, Fallon. and

of with and actual including to like undertake as annual These to I'd forward-looking cause statements the forward-looking in of that to release, you We today's forward-looking out the will begin, are our we material learn financial materially that we uncertainties from risks this future and events. new and could make to the we more earnings events, no Before call, regarding on Vertiv. to a believe these subject and result cautionary future risks about we future differ obligation this today that assumptions and reports statements point or that of date. in in made included SEC. these quarterly We results during are statements course the forward-looking information the based statements refer be update performance make Any operating can to filings language of you those as statements. reasonable other

call, measures. will and this both non-GAAP present GAAP During we also financial

call reconciliations Our our on website earnings non-GAAP results to in GAAP and in Chairman, slide GAAP I'll Executive deck found at the can our the turn found be over to Dave press that, investor release Cote. and investors.vertiv.com. With

David Cote

good a we're Well, pleased bring morning to investors. very our to

is to our our the flow deployment repurchase how wonderful first on and to to quarter, profile current focus our much returns well is progress, strategy, great work an profitability sales Hard accelerating, results with results, improvement opportunistic team we're and differentiate data growth intend to to advantage working generation. and capital investors. our consistency of see provides the in but industry. flexibility we cash further record shifts have positioned the go. Gio doesn't the capture in our initiating for still many Demand cash to competitive continues further share are positioned so the with opportunity. We've growth, pay We you made and generation track years. We're the process and great strengthen. underway everywhere. orders of clearly and build the the center well performance will We off technology in demonstrated Our a deliver gain over and

be and at year levels. it. are to is better Our or hold, We creating great goal running were high-performance customers starting the culture. accomplishing That high-performance we but than last very that still to business next strong. serving before our it. at journey. I'm meeting our is and year done a everyone the this is without take it's have excited to and early each can't with I'm in than be better discussions to not off on He ain't year started I'm my ahead. to We to world-class just and we my I'm culture be about opportunity we more It Gio. saying, trick, XXXX And create excited about shareholder the is enjoying value. and beyond for Essential tremendous also enjoying yet. working, continue and

I'll call So with to over turn that, Gio. the

Giordano Albertazzi

XXXX. good and saw we had and We Dave, single-digit Slide X%, good we up sales mentioned, much, X. a to X the very you QX And Dave growth Thank high across to as day, everyone. were regions. go start

which strong to drove beyond overage the an X. X.Xx. is grew This book-to-bill to come year-on-year good QX orders strength of is on QX and note, and orders, operating and have bps very deliveries $XX as Day. large was our sequentially. at market million acceleration times. typically map Slide of to a Our significant orders improvement X% progressing for position. The an $XXX margin of to customer-requested Important the market order adjusted a operating Investor of in comes indicator at lead excellence, XXX we explained demand operational More relevant million, XX.X%, our very longer our 'XX. XX% most Most road from profit year-on-year, in corresponding Adjusted of demonstrates on are which

buying share was adjusted price from million X.X average back cash the was in to We it year. In so. Advisers Platinum of flow as This shares Our million an time million their $XX to an do exited last we deployed improvement from $XX a free at weighted repurchased Vertiv. repurchases. $XXX those they of of million million, a shares position share. QX believe QX, favorable included $X We cash do $XXX of approximately

the at up share the slightly leverage driven opportunistic by to QX. ticked quarter X.Xx of end net Our in repurchase first the

and range XX% expand to our expect of growth good of guidance Our the XX.X%. that we with operating full organic and in to comfortably our I center Xx 'XX we as the and that. market data the start encouraged 'XX guidance our pleased positioned XX-plus of long-term we year to year. We year and Xx full margins I'm suggests target within see progress will now make return again the year, Overall, very targeted am towards percent. by raised our through adjusted to way what

Page go Let's now. -- Slide to X

of short X quarter. did It slide this we differentiate difficult months not time, include just market for of about noticed, last have periods our may shades and market to over call environment you was ago. color As becomes the very

very and profile industry have industry. serving a of environment, market vantage data XX% a remarks. Certainly, we market our point: that view and seen technology, will XX/X we unique globally, an built has can are the our domain feel during continue decades reliability at unique with in our not strength the exposure service a provide industry It technological to our center Advanced deep see we the requirements lean true we times data the material center its have global knowledge experience replicate. And is releases and underway on decade easy future differentiators data as earnings offer. now scale, accompanying customers over We AI, in strong to of how we transformation, of the and these the one understanding its serving core. expertise, center our on Vertiv and local truly

side AI we future is into We true It in in Slide as So large projects. the look expected growth, strong backlog QX Pipelines for X, extremely increased some being we as at by the of brought of to explained dynamics left million evidenced clearly acceleration order and Americas. is starting if that's clear accelerated scale, also orders we This up that the said. $XXX first particularly quarter. velocity periods. already

remain surprise on as but us to years. the of we is impact So anticipate most order That that the We about XX% no caution gives growth want orders not will think future ahead. I the is expectation. better strong, years new visibility

that order there to We level QX that supported are very of high reasons specific growth. are --

example, that as For comparison precise progresses, easiest timing QX on The orders our and QX was will fluctuate. were get can orders 'XX tougher given year-on-year. down 'XX comparison XX%

orders. particularly while It seeing be want precision, a So high QX absolute of QX I would and don't value expected to very to suggest surprise. sequentially given the worsen not QX orders is false not down

anyway expecting are year-on-year QX. good We in order growth

absolute the Also and the high How remains investments not suggests this Xx X.Xx dollar and that We Our multiple levels quarter-to-quarter throughout here, will anticipating guidance factors with looks are capacity. given that book-to-bill anticipating depends support like very it above at strong. we range we which is velocity sales is build customers we're of customers. the year, the are normal. the should believe new of we schedules. On provided. orders making, remain pipeline our on book-to-bill comfortable now I'm

a have XX As reminder, globally. manufacturing we plants

capacity We $XXX process provided range $XX previously the have explained we decisions. million million cadence As further manage CapEx expansion spend for past, year. in to rigorous this a stringently to

that We expect the end of high to at range. be

still with 'XX, So report we planned, X to sales were range million already ramp-up please to have in our of as we provided liquid to of the continues activate of underway X.X% the X% shared $XXX I'm cooling we of assume globally at we 'XX. conference. The plants you and X comfortably within happy CapEx planning production investor at production in

ramp-up are as track shared the in with We capacity on February.

We AI-related strong momentum continue orders. with to see

are broadly the pipeline AI-related the AI our than see we projects double not more on specific While did detail for in or orders, we more orders, liquid cooling last months. disclosing X

America. shift, of cooling but We North are in thermal GPU see with whereby next-generation This AI in powertrain consistent and of the reflecting cooling. is maps, that terms starting require will The pipeline terms liquid scaling liquid not only in road chain. the to chips whole is technology

with working get closely customers what our for ahead. We ready is their infrastructure to are

supply without operate chain an of Now X Slide to continue expected, our constantly comes where the improving but still. play. side as into bump, that's occasional not to Supply resilience right chains

built liquid We cooling support out environment supply chain. our same and chain our we The complex. to of technology the geopolitical becoming with continue increasingly have existing in rigor supply is build to deployment resilience

are increase business. of to our constantly We the resilience working

inflation, change material at but bag, a know Looking we things quickly. mixed can

reflect an the are We in yet. believe inflationary we and we're plans to world, that continue price/cost executing

an turn now There management is Let's X. lately to focus Slide intense rightfully so. and on thermal

serve center AI that offering, data acceleration. Vertiv fuel positioned data overall uniquely center power a market evolution the opportunity. center deployment to central market and to complete to the As for we whole and power data also are to powertrain enable the very cooling, design in But leader the of the is market. has

relevant asked minute are spend The We We liquid and to of quality include data capacity. E&I power distribution get now. power low-voltage portfolio center want about medium-voltage the the We the power to switchgear, acquisition market. both offering. We in talked often switchgear of about in quite a on busway cooling Vertiv and February. segments expanded

customer across example expanding good to and the switchgears. capacity demand. powertrain operational are our support We A are busbars significantly

doubled of double we again we to to by at track 'XX our we support growth since end the it the ahead. already have capacity are end acquired 'XX, of see E&I on the We and

a we what for the high-density similar to to that, end-to-end testament with the an You do is with circa to manage capacity. Vertiv cover me them to maintaining demand about a room infrastructure be on is work continues operate the you. important way The the and XX% average designing the thermal choice on over are heard we to solution. This chain we a ability always of David, digital customers capacity we peaks. talk for our This complete have with across partner future. And infrastructure powertrain why having to reason most

David Fallon

Gio. Thanks,

strong higher to growing primary and Organic profit overperformance. Adjusted $XXX price/cost slide operating quarter our single Page driven performance high X% year's first million volume. increased of guidance mainly first regions $XX exceeded Sales expected the were sales This last high results, higher the year. consistently was that the than We high X of the all to relatively guidance summarizes of start the in with than our end the to due digits. Turning sales above by EMEA, higher beat financial X. in with driver of end and million productivity quarter model. favorable net

focus XXX certainly is Our that and do. increased of adjusted to operating plenty driving results. mentioned, and we demonstrating basis XX.X%, on have margin much still operational excellence, further opportunity as to our points continued But

the Moving right. to

primarily quarter year, by last from diluted was Our also taxes. tailwind adjusted first income adjusted higher EPS the $X.XX, higher than profit a and small $X.XX operating driven

right, first to which the was higher flowing free for last profitability higher adjusted $XXX quarter, through was cash far the free flow year's than flow. the On cash with million quarter Xx

quarter. at million we only year-end or forward the net third at of $XXX lower repurchase, EBITDA is Gio continue decline the we And than while to leverage leverage if net to end Xx despite expectations, in based the expand higher the As mentioned, sooner. to generating was as not cash. X.Xx And on leverage quarter, anticipate share slightly X.Xx net the

they the $XXX from the and included price repurchased $XX, shares shares million, in, at their this approximately million share point. we which As repurchase as position. X million All of at average exited quarter mentioned, looks $XXX pretty an million in X.X Platinum good

digits. hyperscale results. those this an sales challenging X. and XX.X% Adjusted grew margin colocation. of comparison prior grew driven have XXX increase first a balanced We year's summarizes extremely growth region stronger first across also to by segment quarter And basis over in first Americas number from India had year. this driven growth the the by Americas demand while last productivity. APAC Page on Asia double this Americas favorable organically, top than our quite in low with both regions. the a growing driven and points primarily operating by with was relatively price/cost to increased X% Turning and expanded XXXX, XX% with X% we subregions from continued growth market the strong where of slide in rest quarter seen This to in quarter the

growth the benefit as see by margin contribution a price increased single from contribution digits fixed cost expect albeit $XX $X market region, XXXX. APAC headwinds points the both and year's but on margin muted there. cost year. busbar. strong low adjusted quarter million organically, anticipated, in China throughout points driven grew as driven quarter, But margin strength to as low to by onetime first with we by operating encouraging. grew leverage as partially the productivity. million remain improved we than XX% expanded driven and from not cost in and basis Although to last China and of was of XXX higher rest stable XXX we continue sales by increased improved which switchgear given margin costs operating levels, XX.X% and China leverage stabilizing, EMEA fixed EMEA adjusted costs the at China driven focus last Corporate primarily

For costs the we corporate full $XXX to of be $XXX to million the range million. year, in expect

look second guidance. Next, our quarter moving at is This to X. Slide a

anticipate We over with U.S. exchange against single high approximately has the We in of as APAC are Americas mid-teens, the an second dollar expecting last digits low the double most and foreign up organic quarter months. currencies year-over-year growth foreign EMEA headwind $XX several XX% strengthened million sales digits.

the margin midpoint and between XX.X%, benefits basis second and by from investments. XXX growth at profit offset expect continued million adjusted expected quarter We points operating partially $XXX operating with adjusted up $XXX million price/cost of

midpoint our of sales for XX% the upon a year pipeline increasing organic regions. X, the year from we higher X Slide all to start favorable estimates visibility the across with growth XX% into year, turning guidance. the approximately full Next, strong 'XX Based for to are at and sales rest expectations to a

pleased relentless from guidance the we we are In XX.X% driver are year continued result, stone with guidance to billion our margin is billion cost And adjusted $X.X demonstrates path of midpoint never XX%-plus. being operating our by driven adjusted midpoint in our XX.X% the focus fixed margin a across as addition, the increasing prior adjusted margin profit a $X.XX contribution but and operational on primary leverage. The operating sales. incremental primarily full business stepping guidance operating on increasing satisfied. on to for there improvement always, But to guidance as

year, higher Our increase over projected adjusted by diluted that's $X.XX XXXX profit. of primarily operating at midpoint the the EPS represents an XX% compared and adjusted to driven last

happy additional first the answer And there this noise Now quarter and review adjusted more moving fair and are And analysts and by after liabilities. from accounting our lesser than around to we on finally, first EPS the year, this instead be $XXX change extent. for far this investors provided some and to calculations this also driven full XX for call. And warrant the requirements is in information rate of XX those the information and time charge a on primarily with tax of million quarter in value investing effective to call, appendix, right slide. valuable we'll on and Slides questions in

capacity Gio. cash turn Gio further growth. And use with are back over for to year the operating be our that interest we taxes, holding to CapEx the approximately repurchases. for our said, And for XX% midpoint $XXX free $XXX flow higher as free are higher adjusted offset conversion adjusted expect I share million flow estimate it profit to guidance We for net we cash full higher million, to future as as we is increasing which year cash by mentioned, quarter cash of first support at

Giordano Albertazzi

David. Well, thank you,

Center at absolutely Slide last Conference was go I week. palpable. would the I Data XX. Let's to was the say World excitement

it clear comes signals from demand. the very So data when market center to

Our to a technology of central we unprecedented as display know-how leaders, the the this thought shared serving lot long thermal industry's and value enablement cooling experience. market AI on in of as collaborated road was for more in future of infrastructure. We deployment. become specifically like -- liquid in digital leadership of We collaborated today that value industry map some the strength and the the to my we with insights chart power, is

We pace. shoulders industry. of you broad are ambitions the with global match the And scaling our that to up to need capacity keep

moving and We are fast the mobilizing around globe.

we let's continuing ability Our high-performance execute continue what the to intensity creating of the culture rapidly do Operating and organization, to to is well we grounded The is are we increasing, in System and the team, are in things Vertiv deploy. holding the This am single and and Vertiv place, I results. driving relentless deliver do fast. a with me first expectation to the focus day continue is in to the accountable every right and entire

by I fully over may, Jordan, we be and winners winning. With said, the believe strength that execution. of So Q&A. their you, will to determined keep intend you portfolio the their to for

Operator

first Our question Partners. from Instructions] Research Sprague Vertical [Operator Jeff comes of

Jeffrey Sprague

the wonder, I color suite bit you out it a is give -- more on just us as could how AI if to products. complexion kind Gio, of just of little playing your relates

the point there? and in general it's like. customers' opening there anything it's configurations you or early early said in that Is your bit out days, kind add really to a comments know and your of past from incremental changes You've would what the

Giordano Albertazzi

Jeff, question. you thank the for

that couple of that cooling. a When around that when with that doubling I cooling, is something as gave that months said, AI signal. capacity liquid certainly a very consistent back. is we in type of last was of certainly and is demand So we we the think think an strong The see the And we whole is liquid curve I side in we months, in to quite referring the pipeline itself see acceleration convincing space. X

the and powertrain It's the of board is the terms of But truly, entirety thermal demand across the in the chain. across board.

pleased So GPU-based in there to still we decision many early customer structure technologies piece is the one more It's were of the unfolding, able impacting across design range. of to the just some like that respects simply megawatts It's anyway customers to entire are the Again, industry, market future is a the expansion demand our be it's exact of compute compute, the or just that and for are our but the we are still but -- portfolio. not support their and that specific and follow industry expecting, spectrum is structurally. entire to deployed is there entire high-density range. being

Jeffrey Sprague

kind chain. And the just lens then widening of on supply

So are like the ability be. of where being to about really general to need you hard field it is seeing higher sounds the drive terms these deliver kind the hearing in feeds way. that or seems craft 'XX the of like terms But into What of is to utility it yours is working and in keep able product you ground. the to question right? the Gio, My there, in picture 'XX? big revenues sure It I'm you're of demand and kind just from preparation, megawatts kind of site it like. here, to labor, the put

Giordano Albertazzi

building Could of very permits about be last the -- considering seeing growing. and were brief we This absolute the this is saying not in is not I'll we from industry Jeff, growth is situation data getting bigger center. dramatically let's time. there terms? second be what Again, that but about Yes, kind question. a changed getting forget The power. has were

public debate this. of So also a about of lot, there is course,

reference to that. I'll So

Operator

Our comes Amit from question of Daryanani next Evercore.

Amit Daryanani

could context I Gio, some guess, was I [Technical Difficulty]... put hoping around you

Operator

there? -- Amit, ahead. Amit, has go you your line please still

Amit Daryanani

well. can you hear Hopefully, me

Giordano Albertazzi

now. you hear can We

Amit Daryanani

should orders about of to this versus bit this think then becoming I if expanding growth metrics? about and the Gio, accelerating really versus in at those extremely compares you question really All think easier. do point? revenues, think And duration your there But Is start around is happening. nonetheless, growth I and uptick by XX% 'XX how impressive wondering we that's kind guess about targets unit of longer-term revenue the get beyond at think was talk much you was as about right. growth way Perfect. driven a to could you these X is the I a my order number

Giordano Albertazzi

majority Well, overage, you good delivery going some say, number. the And was projects, through the projects, the one. the Amit, as indeed. the Certainly, seen order will, what extension, and when the or The we the coming has in date. we're of we in indeed thank large happy of been question. is that have let's slides saying for lead requested were is majority there acceleration of large our order if -- very from about you I time

about terms in more past, in X- to the talking the a XX-month of So was requested I delivery. window

-- a this is little bit Now what longer. serving are we

shared while the chain. What had us. possibility it's end align execute XX, the in the on of But that we mean terms see future everything does a of fairly Investor so. on general punctually, we of of of on the has months terms But what of XX you. that of It's have more gives I mean we Day been is in or changing visibility again, with ranges that That to premature. probably do, the customers and a in bit us conversation think we So what even market, is supply our the the of still upper today to and at you -- stick good. window little and dynamics the orderly we if will, coverage behind terms more years?

So positive that in respect.

Operator

question comes of next Our from Steve Tusa JPMorgan.

C. Stephen Tusa

the rate -- on cover talked a just run guys you market, the and I quarterly gigawatt here, mean, your at the your question rate adds we're the all of a kind like I of Just estimate lot consultants, of for guess. U.S., industry roughly? you kind the What's what's in here the of the to

Giordano Albertazzi

be of detail -- back you view at with November. going what an updated we look, this of end into the in given Well, shared would

to go So Amit. made answering, I back will I comments

hold the deployed There market much shared how with we gigawatts through. happy is the the been again, as we in were it's better and that projection right is many so We think see. North dynamic are very I So we We happening. tailwinds literature debate and in see world have expectations we other We're that you situation the gave what headwinds. now. see still that still that, with and we that some to that parts exactly of a America shared reference

C. Stephen Tusa

just above Xx assume I every level will the would accelerating of know concerned? that's absolutely not in this quarter? talked that to to not talked orders every to at is we backlog price X.Xx now about assume of I mean stable orders, from on being far have Okay. it a what kind this range. are And but continue as then fourth going quarter. as that quarter the wide grow guys stage book-to-bill the I just Should decelerating, But then relative you're And about sustainable, here. you the should remain particular or you

Giordano Albertazzi

So second third and question.

So go backlog, the back, and not on I orders if so Steve. I'm surprised,

the direction Day. of every Investor be the We're one back shared So with it above play. Price, a the on I when to it's said, we book-to-bill. at remainder year, giving see not the with that we price/cost. little on are travel the the What you premature that let's go dynamics say. and say, comments or Xx we you we that also satisfied consistent we'll second to with, I happens question, at the in is made a with February. There lot hand, about but obviously, certainly of we're backlog we vision third of talking are for comes believe the consistent, quarter, now to Whether price. and okay, price/cost disclosing We're guidance is and bit

Operator

Our Melius next of question Research. comes from Scott Davis

Scott Davis

be a but So of is the of relates cooling I chips as Day, NVIDIA don't require read little percentage question proportionally book-to-bill, of these that that but your said little BXXX, that like backlog increasing your them. the are of Investor a And a ton perhaps, new book-to-bill? your color to I chips a in would cooling, dynamic you percent obvious this as it a with about, know about seeing bit these is the I they but know helpful. exact GBXXX, It s*** in your you seems much as

Giordano Albertazzi

is into much too certainly and going worth industry a single quarter not without mix. in orders Yes, direction going the defined of the by details

bookings, But We the our look in general liquid we the with -- the modular, across trajectory service. the The to portfolio. general cooling, balanced happy -- mix our power, with we cooling. -- in see it when at when are of our we and the look of

So a were talking $X.X we is balanced $X.X we to is per we million. there pretty of side, when said picture. Think were moving the what element back $X cooling an on to $X the expansion million, that side, TAM thermal as saying between million, about million megawatt

our say, assume orders. probably So look is it's also let's in, trajectory just again, may quarter. are that cooling at something that of But one liquid underlying. early X But we happy the about

Scott Davis

in cooling of your the anything manufacturing? little about capacity? the follow-up a interesting. there capacity, a this kind Is as That's it production Or processes, liquid And is wheelhouse? adding a of different is particularly raising your Okay. bit the in Gio, profile complicated risk animal of

Giordano Albertazzi

board, it's it's whether a small liquid, whether manufacturing, chillers management the across ginormous been or designing refrigerant, it's or whether thermal products We've engineering, whatnot.

a in experience what confident But So certainly, see we our all, know-how, consistent we know-how consistency all feel from the we over learned we the in that and of decades. takes onboarded team the it of with technology have is with the but experience certainly this benefiting our also recently.

Scott Davis

a good That's of on luck, Best and congrats Okay. start. guys, helpful.

Giordano Albertazzi

Thank you. you. Thank

Operator

Kaplowitz comes question of Our Citigroup. Andy from next

Andrew Kaplowitz

talk you by encouraging mentioned about what's some single-digit on can low going region? growth Gio, You in China.

now becoming that So big Pac it enough matters has is then moving growth it forward? your the And for turned there? India corner Asia

Giordano Albertazzi

closed clearly revenue we general, in Well, of in about the XXXX with Americas. XX%

is strong. We like be AI the to David what be continue North to continues in China. and think we if about very, you region. will explaining accelerated very in So the Asia. biggest predominantly And very, the in see Americas America, Americas, Americas situation was the

to in AI So what some India see also some and It's We of encouraging us. EMEA, to want for location Again, Asia. in terms to talk but important start say. I of it's impact the terms an signs, in an location is -- capabilities early early capacity. important movements is. manufacturing

pretty I eventually a and and later, roll full. in we behind again, them something that over And in are months a but what -- little we X that's So AI, something already to XX-month X- activate in we upon Asia. lag. like bit AI see optimistic also may will that's be commented that EMEA

Andrew Kaplowitz

And a Gio, follow-up. just quick

I more we think the November, now Is that revenue, mentioned are hyperscalers doing. doing? know to you toping customers are What I think, hyperscalers growth? in given what their split was enterprise In with enterprise. the XX-XX

Giordano Albertazzi

hyperscalers, -- that we When typically we talk caveat about combine to colocation. hyperscalers and we just question. So

not So do separate we numbers. give

that's it's time, is of the of that business. acceleration, big the of So last -- as happening kind in part A said I lot players.

So projection that's we saw our we that November, projection the our what the market gave of in -- to still also, of when accelerate And part market we the see. of -- or most. dynamics, we

part range acceleration being, back gave premature to will to enterprise market. very the IT But X% we say. enterprise benefit growth. still And happening, distributed when impact to so And go a time the is then. for we happy Eventually, the with around it's the that I'm of we convinced the AI X% indicated then, back and back what that bit and

Operator

of Our Delaney next Goldman question comes Mark from Sachs.

Mark Delaney

a and be the execute beyond something in with especially range to for on previously. visibility likely better of to backlog range it on sustained guidance annual XXXX, tracking that XXXX think margins I coverage been might that mid-XX% new high to be the putting are now had high XX% based more XX% type and Is giving the the it in incremental that Vertiv's price/costs? bookings position compared range assumed in leverage

David Fallon

Yes.

So David. this is

get course, year, earlier in 'XX, if the incrementals, to in right time in 'XX incrementals AOP, that's in consistent XX%. estimated around If that, It in a that For from it's those that still more Day, target to in the we're to margin. incremental we'll ramp driven our we're some pleased quarter. a Investor to and to. And get we year-over-year increase long-term the south become time every be XX% guided said optimistic of of the the frame 'XX. But bit margin with the certainly the But that we in maybe second hit that half. November we 'XX. there what with contribution little incrementals or period, by very challenging long-term mid-XX% that to down is our is XX%-plus through a But bit year XX% of was quarter. full we're 'XX estimated primarily little go that second that first able year do that you be challenging We And as does contribution comparables frame. in guiding those more we range

Mark Delaney

was That's helpful context. question thinking the opportunity. about other My addressable market

that you're addressing? variety You how opportunities talked about of either much understand there with of full or the can augment address. to Slide to are showed perhaps us Maybe improve your deck X a can powertrain today. R&D the tuck-in -- of addressable And Vertiv can various market areas and same on you help you M&A serve

Giordano Albertazzi

approximately then had about in and that acquisitions that. as organic technologies something what everyone, to our data again, sometimes have both of probably we that the center which it well remind and allocation let's and going again, density. $X.X again, we traditional, $X I at and It's know a are say. of is to opportunity. refer that million what in organically, about on organic, portfolio is our it's instead of we several what we strategy. liquid we thing indirect see. And CAGR XX%. -- technologies the with critical future, that say, as we million vocal engineering add is million Two believe to I easiest enabled acquisitions, you aspects. that digital sorry And $X.X orchestrated think have R&D, say, demonstrated capital inorganic megawatt binary. But we -- certainly, the and would us course, us. said part to work We will we invest available with with to and as been be let's and complete a per CoolTera megawatt the up times, of cooling continuing inorganic And to high believe is portfolio back design AI TAM the That's we in of for most TAM we very speculating want But and We've by infrastructure. matches per on CoolTera, did to a like clearly, never

Operator

next Obin America. Our from Bank Andrew question of comes of

Andrew Obin

the exactly press you to comment do put Do conduction Can guys what's relationship. how And guys release need a anything out you NVIDIA you the to relationship? there? be Are You product? getting product? you that on of are the Blackwell the higher-power for ready ready nature technologically standardized being for from also,

Giordano Albertazzi

is certainly level. And Well, commercial the it's of very, that we standpoint. part relationship is cooling, of I network certification and but importantly is a NVIDIA, certainly say go-to-market of our a been from There relationship. partner nutshell which liquid the multifaceted working -- an together very element have of engineering that's network would in at essential a

specifically So Blackwell technology to it's technologies clear. a very that comes cooling. technology, very, it still requires That's future the important. When liquid and

that a is we that as have is said cooling cooled about that, if that's cooling vocally -- to want And liquid liquid now dots you draw the band. a drive leader market that chip. legitimate. connect with also I what fact liquid clear So the into with in That the the something will

are just to liquid And occasions our will of of portfolio, our we several is we portfolio single-phase generation right today next about and been Now in explaining, vocally we there that the And level certain for -- on generations, publicly generation. as more in portfolio be the again, X-phase instead of though. and next going the cooling. part technology, terms talked

Andrew Obin

And very this from understand should full right? very first to continue new think in portfolio. ramp production? the as strong invest? at get year, technology, stage least be question fairly brand-new think it to of in about And basically, it's a a percentage to it And you expect need Because of from of you. the to have your that we technology I there well is completely standpoint. last the Do are you investors we I how But margin-dilutive, technology, positioned as Got ramp you given to we small this was as technology? ramp position up

Giordano Albertazzi

past well be air industry can in for the So generations very the current it cooled. is general that the in was fact small the

then industry. the And of February infrastructure. as margin we in When it to capacity already of Vertiv shared using the to So say, true investment the majority with I are is comes comes it the technology. earnings progressing we pretty goal. air-cooled long-term to certainly profile, you back deployments that I'm explained, growth. in CDU our our call, is is our that not were to refer the we and would well What long-term new that it's the a here. trajectory across well, capacity, talking percent GPU with about indicated business, that's back and I with margins, thermal When consistent consistent XX-plus

Operator

Coe Our of next Research. question comes from Wolfe Nigel

Nigel Coe

the other -- color about maybe a is now my there's on on obviously, some question side? is of mentioned, the what helpful. we've a of lot then And set the focus and was switchgear. you would a So on out really the caught beyond? backlog the seen increase on on few finally, quite maybe on-prem more lot some Gio, the there much My on thing be XXXX the But backlog questions aging. the How for investor that color on-prem. that AI and capacity attention So hyperscales. of the GPUs right was

of doubling over what underwrites next of of couple terms So that outlook in sort your wondering the for I'm years. E&I capacity just in

Giordano Albertazzi

X-in-X. Nigel. Thank you,

go coverage backlog bit So not times acceleration indication the we -- on the a our and I cloud delivery very very, in -- a this agent, and much mainly we have and dates is a dominantly when was versus and mentioned stage, AI. strategy in the element requested of an it Center On-prem details to have longer. of hyperscale, colo for we density about makes of crowded. will World, high the hyperscale It little that at that's an of too lead comes But certainly, and enterprise type predominantly type Data the we show. see, very,

have leave that that a it we the really switchgear portfolio way So to importance of busways/busbars, to And testament to the powertrain inside-track When that. and switchgear, very all is sure and acquisition the we're to comes and medium-voltage again, I distribution happy. from the entire entire PDUs. make it to the

Operator

comes Our from Bank. of Deutsche next Nicole DeBlase question

Nicole DeBlase

would perspective kind say that data and you data -- mostly an balance I guys maybe it's of you've actual focused just to when so AI order new been guess has based related on that AI you construction? received of Or on center what between from have far, upgrades existing a centers?

Giordano Albertazzi

still predominantly We data it's of feel the for a being. time X, center bit but new

Nicole DeBlase

the gives then pin you XQ? in Q-on-Q, down, expecting think a to it on I slide said respect expectations guys XQ? a I know lot know but you outlook a you sensitivity color other Like it like are I And data continues pull-forward? that there's look there every was direct any conviction center quantifying clear. customer with in into like And sequentially that obviously investor I'm level sense. I Is to what Why at to That's it. comment? guys you next I makes into the that trying growth, Got CapEx, mean, quarter. we like rise expecting down obviously, Okay. of the guess, you're order like guess was the you of pull-forward higher. do order for a growth to time

Giordano Albertazzi

commercial is mean I the science. exact side that of not an Absolutely.

Let's the stacks put statistically the it and make to relevant using try this way. We science pipelines pipeline. on

order So or of necessarily QX time. moment probably are any that but other we call very are QX lands control an granted, not things our in in there that or

analyze diligent last in be very I pipeline an something we quarter and the diligent acceleration. that way was the in was that QX, pipeline characterized is is and in statistically. what vocal we we very way do This pipeline about manage So

order. order it -- in to statistically time we takes to And -- sorry, see same become is here. the to an So the opportunities, true

But happy sense. makes rapidly state there it exact future about we had, like from historically will size. are pipeline things an Now But if they've than our of is to on you comments statistically our about what look pull-ins, based will, if difficult. happening make more are

Operator

Oppenheimer. of comes question from Noah next Kaye Our

Noah Kaye

longer work between and improve maybe on just last revisit sourcing. the much question done company around to like would the the over to around Mark's year-plus time lead margins. I management relationship pricing has The and orders the processes so

grow, to this So are visibility protecting margin to backlog have you Do in how backlog? profile? the as margins we see we indeed continuing higher

Giordano Albertazzi

a factoring also vocal indicated also have includes continuously and our us to targets times price. dynamics are of side pricing been multiple but equation you muscle. price/cost and a of in we react in are Well, terms price and implemented that we than with And allow we on we positivity, in will, trajectory contractual if and material of that that have also that and and But we mechanisms about were, stronger it's relationship. which approve factoring in the happy and in way terms strengthening commercial much cost unforecasted. in our place the to the is We the the strengthened something better -- that's are actions being we the

Noah Kaye

say price/cost XQ? the changes it for it's it was also possible Is for related was what it positive a to assumption? Any that? And housekeeping for guide to year. quarter Okay. Is million item. The last that still the $XX say to fair

David Fallon

for our in expectation not from the we quarter, shared a significantly -- anything, The first changed little bit trending not what different. but more year if has full favorable, significantly

Operator

to like over any I'd to question-and-answer for conference our turn session. remarks. Giordano concludes This Albertazzi closing the back

Giordano Albertazzi

But world. execution questions like and service strong. your for everyone, palpable is thank multiple and and certainly foremost, the you, to Vertiv team innovation, the that the I'd -- first The thank is Well, something on very around questions. focus customer

we really you for support, And good everybody's progress. joining us today. day. have thank a very for So and the Thanks appreciate

Operator

has now for The you attending conference Thank today's presentation. concluded.

may disconnect. You now

Vertiv (VRT) 24 Apr 242024 Q1 Earnings call transcript