Financial Trends -- 9/10
Vertiv is a prime beneficiary of the AI-driven data center infrastructure buildout.
Revenue re-accelerated to +27.7% in FY2025, reaching $10.2B, led by Americas at +40.8%.
Adj operating margin expanded +100 bps to 20.4% (23.2% in Q4), adj EPS grew +47% to $4.20,
and FCF surged +66% to $1.89B (18.4% margin). Most importantly, backlog more than doubled
to $15.0B, providing 1.5x revenue coverage and exceptional forward visibility.
Weight: 25%
FY25 Revenue
$10.2B
+27.7% YoY | Accelerating +1,095 bps
FY25 Backlog
$15.0B
+109% YoY | 1.5x revenue coverage
FY25 Adj EPS
$4.20
+47.4% YoY | Q4 record $1.36
FY25 FCF
$1.89B
+66% YoY | 18.4% margin
Revenue and Regional Breakdown ($M, FY ends December)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Total Revenue | $5,000M | $5,700M | $6,900M | $8,000M | $10,200M |
| Rev YoY | — | +13.9% | +20.6% | +16.7% | +27.7% |
| Acceleration | — | — | +671 bps | -385 bps | +1,095 bps |
| Americas | $2,200M | $2,800M | $3,900M | $4,600M | $6,400M |
| Americas YoY | — | +25.7% | +40.1% | +17.4% | +40.8% |
| APAC | $1,700M | $1,700M | $1,600M | $1,900M | $2,300M |
| APAC YoY | — | +0.3% | -4.9% | +16.2% | +21.1% |
| EMEA | $1,300M | $1,600M | $1,700M | $2,300M | $2,400M |
| EMEA YoY | — | +22.8% | +11.3% | +33.8% | +2.8% |
Revenue growth re-accelerated to +27.7% in FY2025, up +1,095 bps
vs FY2024. Americas (63% of revenue) was the dominant driver at +40.8% YoY,
reflecting massive AI/data center infrastructure spend in North America. APAC inflected
to +21.1% after years of stagnation. EMEA decelerated sharply to +2.8%, likely driven
by FX headwinds and tougher comps.
Quarterly Revenue YoY Trend
| Metric | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q4 25 |
|---|---|---|---|---|---|---|---|---|
| Rev YoY | +7.8% | +12.6% | +19.0% | +25.8% | +24.2% | +35.1% | +29.0% | +22.7% |
Revenue growth was strong across all quarters in FY2025, with
Q2 2025 hitting a peak of +35.1% YoY
($2.64B).
The acceleration from FY2024 is clear: Q1 went from +7.8% to +24.2%, Q2 from +12.6%
to +35.1%. Q4 2025 at +22.7% still represents robust momentum even as it normalizes
from the mid-year peak.
Orders and Backlog ($M, Annual)
Backlog exploded from $7.2B to
$15.0B in FY2025 (+109% YoY),
more than doubling in a single year. Quarterly progression: Q1 $7.9B, Q2 $8.5B,
Q3 $9.5B, Q4 $15.0B. The Q4 backlog surge (+58% sequentially) signals an extraordinary
wave of new AI data center orders. Backlog/revenue ratio of 1.5x provides exceptional
forward revenue visibility.
Profitability (Annual)
Adj operating margin expanded from 7.7% (trough in FY2022)
to 20.4% in FY2025 -- a +1,270 bps improvement over 3 years. The rate of
expansion is decelerating (+760 bps in 2023, +410 bps in 2024, +100 bps in 2025) as
margins approach peak levels, but the absolute level is strong. Q4 2025 hit
23.2% adj operating margin --
a new high watermark. Gross margin was roughly flat at 36.3%.
Adjusted EPS (Annual)
Adj EPS compounded from $0.53 to $4.20 over 3 years -- an
8x increase. FY2025 growth of +47.4% on a meaningful base ($2.85) demonstrates
strong earnings power. Quarterly adj EPS YoY growth remained strong throughout FY2025:
Q1 +48.8%, Q2 +41.8%, Q3 +63.2%, Q4 +37.4%. Q4 2025 EPS of
$1.36 was a quarterly record.
Free Cash Flow ($M, Annual)
FCF conversion improved dramatically: FY2025 FCF of $1.89B
represents 18.4% of revenue and 90% conversion of adj operating profit. Q4 2025
alone generated
$910M in FCF, nearly half the
full-year total, indicating strong working capital release as backlog converts. FCF was
negative in FY2022 but has been strongly positive since FY2023.
Balance Sheet and Dilution (Annual)
- Debt stable at ~$2.9B: Declining slightly while revenue doubled -- significant organic deleveraging. Net leverage (Debt/EBITDA) has compressed significantly
- Share dilution negligible: Max annual dilution was +1.2% (FY2023). No meaningful dilution to equity holders
Acceleration / Deceleration Analysis (bps)
| Metric | 2023 vs 2022 | 2024 vs 2023 | 2025 vs 2024 |
|---|---|---|---|
| Revenue Growth Accel | +671 bps | -385 bps | +1,095 bps |
| Adj Op Margin Expansion | +760 bps | +410 bps | +100 bps |
| Adj EPS Growth Accel | +26,430 bps | -17,300 bps | -1,360 bps |
| FCF Growth Accel | +69,050 bps | -35,360 bps | +2,040 bps |
Revenue growth is re-accelerating strongly into FY2025
(+1,095 bps). Margin expansion is decelerating but from extremely high levels
(7.7% to 20.4% in 3 years leaves less room). EPS growth remains robust at +47% even
as the base scales. FCF growth also accelerated +2,040 bps.
Penalty / Modifier Assessment
| Factor | Impact | Detail |
|---|---|---|
| Negative FCF | 0 | FCF negative in FY2022 but strongly positive since FY2023; $1.89B in FY2025 |
| Dilution >10% | 0 | Max annual dilution was +1.2%; negligible |
| Rev growing but op income declining | 0 | Both revenue and operating income growing in every recent year |
| Debt growing faster than revenue | 0 | Debt declining while revenue growing +28% |
Total penalty: 0 pts. No penalty modifiers triggered.
FCF strongly positive, minimal dilution, operating income growing, debt stable/declining.
Transcript Context
From the Q4 2025 earnings call, CEO Giordano Albertazzi highlighted that
"AI-driven infrastructure build-out is accelerating, and data centers are at the center of
it all" and described Vertiv as being "in the early innings of this secular growth trend."
Executive Chairman David Cote stated the company delivered "strong results across key metrics"
with "tremendous momentum heading into 2026 and beyond." The backlog doubling to $15B was
driven by large AI data center orders across power management, thermal management (including
liquid cooling), and integrated infrastructure -- broad-based across hyperscalers, colocation,
and enterprise customers.
From the Q3 2025 earnings call, Cote noted: "We exceeded guidance across all
metrics in a very convincing way" and described the company as being "in the early stages of
the digital age." The company has consistently beat and raised guidance throughout FY2025.
Score Rationale
Score of 9/10 reflects exceptionally strong financial trends across revenue, margins, earnings, FCF, and backlog, all driven by the secular AI data center infrastructure buildout.
Strengths (supporting 9):
- Revenue re-accelerating to +28% in FY2025 with the largest segment (Americas) growing +41%
- Backlog more than doubling to $15B provides exceptional forward visibility (1.5x revenue coverage)
- Adj operating margin expanded +1,270 bps over 3 years to 20.4%, demonstrating strong operating leverage
- FCF conversion excellent at 18.4% of revenue ($1.89B), up from negative in FY2022
- Adj EPS compounding at +47% YoY on a meaningful base ($4.20 in FY2025)
- Debt stable/declining while revenue doubles -- significant organic deleveraging
- No penalty modifiers triggered
- All three regions growing, with APAC inflecting to +21% after years of stagnation
Factors preventing a 10:
- Gross margin was flat-to-slightly-down in FY2025 (-31 bps), suggesting some cost pressure at scale
- EMEA growth decelerated sharply to +2.8%, raising questions about demand breadth outside Americas
- Margin expansion rate is decelerating (+100 bps in FY2025 vs +410 bps in FY2024)
- Q4 2025 revenue growth decelerated to +22.7% from Q2 peak of +35.1%, though still strong
Data sourced from Daloopa (company_id: 11460) and Vertiv Holdings earnings releases (FY2021 through Q4 2025). All financials in USD. Fiscal year ends December.