Vertiv, the leader in AI liquid cooling, reports Q3 revenue up 61% year-on-year, orders increase over 100%, pre-market surge over 15% | Financial Report Insights

As a key supplier of power and cooling solutions for data centers, Vertiv saw significant simultaneous acceleration in revenue, profit, orders, and cash flow in the third quarter, and raised all key full-year metrics. Pre-market share price once surged over 15%.

Vertiv's third-quarter net sales reached $4.313 billion, up 61% year-over-year, exceeding the high end of the company’s previous guidance by more than 12%. Adjusted diluted earnings per share (EPS) stood at $2.21, a 78% increase year-over-year and about 21% above market consensus. The company disclosed that organic order growth in the third quarter exceeded 100% year-over-year, a figure that changed the market’s perception of growth sustainability—order growth well above revenue growth means the current boom has a foundation to extend into the future.

The company then raised the midpoint of its full-year net sales guidance to $14.65 billion, up $650 million from the prior midpoint; full-year adjusted diluted EPS guidance midpoint was raised to $7.15, up about 6.7% and also around 6.2% higher than consensus estimates before the earnings report. Vertiv CEO Giordano Albertazzi stated:

"We are in the midst of the largest wave of infrastructure construction in history, and this wave is still gaining momentum."

Third-quarter net sales amounted to $4.313 billion, up 61.2% year-over-year, with organic growth contributing 55 percentage points and M&A about 6 points. The growth displayed obvious geographical breadth: Americas revenue grew 74.5% (organic: 66.2%), Asia Pacific grew 49.9% (organic: 48.3%), and EMEA (Europe, Middle East, and Africa) grew 22.8% (organic: 19.3%).

On the profitability front, adjusted operating profit reached $1.087 billion, up 82.5% year-over-year; adjusted operating margin was 25.2%, up 290 basis points year-over-year, exceeding the company’s original guidance ceiling (25%) by 20 bps. GAAP operating margin was 22.8%, up 350 bps year-over-year. Albertazzi attributed the margin improvement to scale effect and manufacturing efficiency improvements, partially offset by product mix changes and continued investment in growth.

In terms of cash flow, third-quarter operating cash flow was $794 million, up 64% year-over-year; adjusted free cash flow was $652 million, up 50%. As of the end of September, the company’s liquidity rose to $6.2 billion, maintaining a net cash position.

The degree to which results surpassed expectations was unusual. At a scale with revenues already exceeding $4 billion, actual revenue was about 15% higher than the market consensus of $3.76 billion and roughly $463 million higher than the company's previous guidance ceiling—a significant absolute difference. Adjusted diluted EPS was $2.21 versus market expectations of about $1.82, a beat of approximately 21%.

More importantly, this beat did not rely on cost cuts or tax rate changes, but resulted from revenue, organic growth, operating margin, and EPS all simultaneously outperforming expectations, reflecting the resonance of capacity release, accelerated project delivery, and operating leverage. For comparison, Q2 revenue grew 24.1% year-over-year but slightly missed consensus; management then attributed this partially to timing shifts in project executions. The strong Q3 delivery substantiates that explanation and repairs the market’s previous discount of project delivery capability.

The company disclosed that third-quarter organic order growth exceeded 100% year-over-year. This is the most significant data point of long-term value from this earnings report. Revenue reflects fulfillment of past orders, while order growth determines the trajectory of future revenue. Order growth well above the 55% organic revenue growth means backlog continues to expand, giving the market more reason to see the current rapid growth continuing into the future, not merely as a one-time Q3 delivery peak.

Executive Chairman Dave Cote stated:

"The faster industry technology changes, the more advantageous for us. We keep investing and building, and everything we build is designed for scale."

It should be noted that the company did not disclose the latest total backlog or book-to-bill ratio in the earnings attachments; order conversion to revenue still requires scheduling, delivery, and acceptance stages, leaving some timing uncertainty.

For full-year guidance, the company raised its net sales guidance range to $14.45–14.85 billion, with a midpoint of $14.65 billion; organic revenue growth guidance was raised from about 31% to 38%; adjusted diluted EPS guidance range is $7.10–7.20, with a midpoint of $7.15, roughly 70% year-over-year growth; adjusted free cash flow guidance was raised to $2.6–2.8 billion.

For the fourth quarter, the company guided net sales to $4.313–4.513 billion, organic revenue growth of 49%–51%, adjusted diluted EPS of $2.22–2.28, up about 65% year-over-year, with a midpoint of $2.25, about 1.8% higher than the consensus forecast of $2.21 prior to the earnings report.

It’s important to note that the midpoint of full-year revenue guidance was raised about $650 million, but Q3 actual revenue already exceeded the previous guidance midpoint by about $563 million; the full-year EPS midpoint was raised by $0.45, while Q3 EPS already exceeded the previous guidance midpoint by about $0.41. In other words, the majority of the full-year guidance increase comes from the Q3 outperformance already realized, with only limited incremental Q4 upward revision.

Regionally, the Americas contributed about 78% of quarterly revenue growth, overwhelmingly leading this season’s expansion; APAC’s nearly 50% organic growth and EMEA’s around 20% organic growth further expanded the geographic base of growth.

As for adjusted operating margin: EMEA posted 28.0% for the quarter, a remarkable 920 basis points improvement year-over-year; APAC was 17.0%, up 380 bps; Americas 29.4%, roughly flat year-over-year. Notably, cumulative EMEA organic revenue for the first three quarters was still down 3.3% year-over-year, but growth resumed in Q3 and margins improved significantly, though sustainability remains to be confirmed in subsequent quarters.

By product and service, product revenue grew organically about 63.6%, services and spare parts saw organic growth of about 18.1%—the latter’s high reported growth rate included significant M&A contribution, with true organic growth clearly lagging the products segment. As installed base scales up, whether service and lifecycle management can accelerate will impact the stability of future revenue.

Operating cash flow for the first three quarters reached $2.661 billion, up about 140% year-over-year; adjusted free cash flow was $2.23 billion, up about 128%, representing a high surface cash conversion rate. However, it should be noted that deferred revenue increased by approximately $2.313 billion during the first three quarters, which was a key support for operating cash flow.

The balance sheet shows that, compared to the end of 2025, inventory increased from $1.457 billion to $3.288 billion, an increase of about 126%, significantly higher than revenue growth; deferred revenue rose from $1.815 billion to $4.121 billion, up about 127%. The rapid inventory buildup reflects the company proactively expanding capacity and stockpiling, while the large increase in deferred revenue comes from customer advance payments—indicating high demand visibility, but also that part of current cash flow is yet to be realized as deliveries.

The company maintains its expectation that full-year capital expenditure will be about 4% of revenue. In the third quarter, capex plus capitalized software investment totaled approximately $142 million, up about two-fold year-over-year, indicating the company is still in a clear phase of capacity expansion investment.