Vertiv Holdings Co

Previous wording

Unless the context otherwise indicates or requires, references to “the Company,” “Vertiv,” “we,” “us” and “our” refer to Vertiv Holdings Co, a Delaware corporation, and its consolidated subsidiaries. In addition, dollar amounts are stated in millions, except for per share amounts. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the Consolidated Financial Statements and the notes thereto included elsewhere in this Annual Report.

Current wording

Unless the context otherwise indicates or requires, references to “the Company,” “Vertiv,” “we,” “us” and “our” refer to Vertiv Holdings Co, a Delaware corporation, and its consolidated subsidiaries. In addition, dollar amounts are stated in millions, except for per share amounts. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the Consolidated Financial Statements and the notes thereto included elsewhere in the Annual Report.

Previous wording

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond Vertiv’s control) or other assumptions, which may change over time, and that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Vertiv has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports, including those set forth in its Form 10-K for the year ended December 31, 2024 filed on February 18, 2025 (the "2024 Form 10-K"). These risk factors and those identified elsewhere in this Form 10-Q, among others, could cause actual results to differ materially from historical performance and include, but are not limited to: risks relating to the continued growth of our customers’ markets; long sales cycles for certain Vertiv products and solutions as well as unpredictable placing or cancelling of customer orders; failure to realize sales expected from our backlog of orders and contracts, disruption of our customer’s orders or the markets; less favorable contractual terms with large customers; risks associated with governmental contracts; failure to mitigate risks associated with long-term fixed price contracts; competition in the industry in which we operate; failure to obtain performance and other guarantees from financial institutions; failure to properly manage supply chain, difficulties with third-party manufacturers and increases in costs of material, freight and/or labor, and changes in the costs of production; competition in the infrastructure technologies; risks associated with information technology disruption or cyber-security incidents; risks associated with the implementation and enhancement of information systems; failure to realize the expected benefit from any rationalization, restructuring and improvement efforts; disruption of, or changes in, Vertiv’s independent sales representatives, distributors and original equipment manufacturers; increase of variability in our effective tax rate costs or liabilities associated with product liability due to global operations subjecting us to income and other taxes in the United States and numerous foreign entities; the global scope of Vertiv’s operations, especially in emerging markets; failure to benefit from future significant corporate transactions; risks associated with Vertiv’s sales and operations in emerging markets including economic, political and production level risk; risks associated with future legislation and regulation of Vertiv’s customers’ markets both in the United States ("U.S.") and abroad; our ability to comply with various laws and regulations including but not limited to, laws and regulations relating to data protection and data privacy; failure …

Excerpt shortened here; the source contains the full paragraph.

Current wording

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond Vertiv’s control) or other assumptions, which may change over time, and that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Vertiv has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports, including those set forth in its Form 10-K for the year ended December 31, 2025 filed on February 13, 2026 (the "2025 Form 10-K"). These risk factors and those identified elsewhere in this Form 10-Q, among others, could cause actual results to differ materially from historical performance and include, but are not limited to: risks relating to the continued growth of our customers’ markets; long sales cycles for certain Vertiv products and solutions as well as unpredictable placing or cancelling of customer orders; failure to realize sales expected from our backlog of orders and contracts, disruption of or consolidation in our customer’s markets or categorical shifts in customer technology spending; less leverage with large customer contract terms; failure to mitigate risks associated with long-term fixed price contracts; competition in the industry in which we operate; failure to obtain performance and other guarantees from financial institutions; risks associated with governmental contracts; failure to properly manage production cost changes and supply chain; failure to anticipate market change and competition in the infrastructure technologies; risks associated with information technology disruption or cyber-security incidents; risks associated with the implementation and enhancement of information systems; failure to realize the expected benefit from any rationalization, restructuring and improvement efforts; disruption of, or changes in, Vertiv’s independent sales representatives, distributors and original equipment manufacturers; increase of variability in our effective tax rate costs or liabilities associated with product liability due to global operations subjecting us to income and other taxes in the United States ("U.S.") and numerous foreign entities; costs or liabilities associated with product liability and damage to our reputation and brands; the global scope of Vertiv’s operations, especially in emerging markets; failure to benefit from future significant corporate transactions; risks associated with Vertiv’s sales and operations and expanding global production facilities; risks associated with future legislation and regulation of Vertiv’s customers’ markets; our ability to comply with various laws and regulations including but not limited to, laws and regulations relating to data protection and data privacy; f…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Net sales were $7,349.9 in the first nine months of 2025, an increase of $1,684.5, or 29.7%, compared with $5,665.4 in the first nine months of 2024. The increase in sales was primarily driven by higher sales volumes including the positive impacts from foreign currency of $16.2. Product sales increased $1,527.3, which included the positive impacts from foreign currency of $15.7. Services & spares sales increased $157.2, which included positive impacts from foreign currency of $0.5.

Current wording

Net sales were $2,649.5 in the first quarter of 2026, an increase of $613.5, or 30.1%, compared with $2,036.0 in the first quarter of 2025. The increase in sales was primarily driven by higher sales volumes including the positive impacts from foreign currency of $56.6. Product sales increased $480.1, which included the positive impacts from foreign currency of $43.6. Services & spares sales increased $133.4, which included positive impacts from foreign currency of $13.0.

Previous wording

Excluding intercompany sales, net sales were $4,500.0 in the Americas, $1,527.2 in Asia Pacific and $1,322.7 in Europe, Middle East & Africa. Movements in net sales by segment and offering are each detailed in the Business Segments section below.

Current wording

Excluding intercompany sales, net sales were $1,814.4 in the Americas, $513.7 in Asia Pacific and $321.4 in Europe, Middle East & Africa. Movements in net sales by segment and offering are each detailed in the Business Segments section below.

Previous wording

Cost of sales were $4,756.1 in the first nine months of 2025, an increase of $1,154.7, or 32.1% compared to the first nine months of 2024. The increase in cost of sales was primarily driven by the impact of higher volumes. Gross profit was $2,593.8 in the nine months of 2025, or 35.3% of sales, compared to $2,064.0, or 36.4% of sales in the third quarter of 2024. Margin was slightly down in the first nine months of 2025 due primarily to the mix of product and service sales in addition to tariffs.

Current wording

Cost of sales were $1,649.8 in the first quarter of 2026, an increase of $300.3, or 22.3% compared to the first quarter of 2025. The increase in cost of sales was primarily driven by the impact of higher volumes. Gross profit was $999.7 in the first quarter of 2026, or 37.7% of sales, compared to $686.5, or 33.7% of sales in the first quarter of 2025. Margin increased in the first quarter of 2026 due primarily to the mix of product and service sales in addition to operational leverage.

Previous wording

Selling, general and administrative expenses (“SG&A”) were $414.3 in the third quarter of 2025, an increase of $79.7 compared to the third quarter of 2024. The increase in SG&A was primarily driven by increased compensation costs. SG&A as a percentage of sales were 15.5% in the third quarter of 2025 compared with 16.1% in the third quarter of 2024.

Current wording

Selling, general and administrative expenses (“SG&A”) were $456.7 in the first quarter of 2026, an increase of $110.4, or 31.9% compared to the first quarter of 2025. The increase in SG&A was primarily driven by increased compensation costs. SG&A as a percentage of sales were 17.2% in the first quarter of 2026 compared with 17.0% in the first quarter of 2025.

Previous wording

The remaining other operating expenses includes amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). These remaining operating expenses were $79.7 for the third quarter of 2025, which was a $29.5 increase from the third quarter of 2024. The increase was primarily due to a $24.4 increase in restructuring costs and a $6.6 increase in other operating expense (income) primarily due to mark-to-market losses associated with the economic hedges.

Current wording

The remaining other operating expenses includes amortization of intangibles, restructuring costs, foreign currency (gain) loss, and other operating expense (income). These remaining operating expenses were $102.9 for the first quarter of 2026, which was a $53.4 increase from the first quarter of 2025. The increase was primarily due to a $32.0 increase in other operating expense (income) primarily due to the contingent consideration and a $31.6 increase in amortization of intangibles related to our recent acquisitions. Refer to "Note 3 - Acquisitions" for additional information on these acquisitions. Other operating expenses were slightly offset by a $6.0 decrease in restructuring costs.

Previous wording

Interest expense, net, was $22.8 in the third quarter of 2025 compared to $35.9 in the third quarter of 2024. The $13.1 decrease was primarily driven by a $12.4 increase in interest income. To the extent interest rates continue to fluctuate our interest expense will change, although we expect these changes to be mitigated by our interest rate swaps and interest income.

Current wording

Interest expense (income), net, was $(4.4) in the first quarter of 2026 compared to $25.3 in the first quarter of 2025. The $29.7 decrease in expense is primarily driven by $21.2 of interest income related to the interest rate swap settlement and $4.5 of incremental interest income compared the first quarter of 2025. To the extent interest rates continue to fluctuate our interest expense will change, although we expect these changes to be mitigated by our interest rate swaps and interest income.

Previous wording

Income tax expense was $291.5 in the first nine months of 2025 compared to $171.4 in the first nine months of 2024. The $120.1 increase is primarily due to increased business performance and discrete tax expense due to legislative changes effective in the first quarter of 2025, offset by discrete tax benefits for stock compensation and return to provision adjustments. The effective rate in the first nine months of 2025 was primarily influenced by the negative impact of a valuation allowance established to account for legislative changes effective in the first quarter of 2025 partially offset by discrete tax benefits for stock compensation, changes in deferred tax liabilities and return to provision adjustments. The effective rate in the first nine months of 2024 was primarily influenced by the negative impacts of non-deductible changes in fair value of the warrant liabilities and discrete tax benefits related to stock compensation.

Current wording

Income tax expense was $48.2 in the first quarter of 2026 compared to $100.9 in the first quarter of 2025. The $52.7 decrease from the first quarter of 2025 and the effective rate in the first quarter of 2026 is primarily due to increased business performance, offset by discrete tax benefits for stock compensation and the interest rate swap settlement. Refer to "Note 9 - Financial Instruments and Risk Management" for additional information about the interest rate swap settlement. The effective rate in the first quarter of 2025 was primarily influenced by the negative impact a valuation allowance established to account for legislative changes effective in the first quarter of 2025 partially offset by the favorable impact of other discrete items such as stock compensation and changes in deferred tax liabilities.

Previous wording

Americas net sales were $4,500.0 in the first nine months of 2025, an increase of $1,255.3, or 38.7%, from the first nine months of 2024. The increase in sales was primarily driven by higher sales volumes due to products increasing by $1,140.5 and sales of service & spares increasing by $114.8. Americas net sales were negatively impacted by foreign currency of approximately $10.3.

Current wording

Americas net sales were $1,814.4 in the first quarter of 2026, an increase of $629.1, or 53.1%, from the first quarter of 2025. The increase in sales was primarily driven by higher sales volumes due to products increasing by $517.6 and sales of service & spares increasing by $111.5. Americas net sales were positively impacted by foreign currency of approximately $7.5.

Previous wording

Operating profit (loss) in the third quarter of 2025 was $501.8, an increase of $198.4, or 65.4%, compared with the third quarter of 2024. Margin increased primarily due to the mix of product and service sales in addition to operational leverage.

Current wording

Operating profit (loss) in the first quarter of 2026 was $490.2, an increase of $230.5, or 88.8%, compared with the first quarter of 2025. Margin increased primarily due to the mix of product and service sales in addition to operational leverage.

Previous wording

Asia Pacific net sales were $1,527.2 in the first nine months of 2025, an increase of $353.4, or 30.1%, from the first nine months of 2024. The increase in sales were primarily driven by growth in India, partially offset by the negative impact of foreign currency of approximately $10.1. Net sales of products improved by $319.5, and service & spares improved by $33.9.

Current wording

Asia Pacific net sales were $513.7 in the first quarter of 2026, an increase of $66.5, or 14.9%, from the first quarter of 2025. The increase in sales were primarily driven by products increasing by $47.3, and service & spares increasing by $19.2, and the positive impact of foreign currency of approximately $13.0.

Previous wording

Operating profit (loss) in the first nine months of 2025 was $173.4, an increase of $66.6, or 62.4%, compared with the first nine months of 2024. Margin increased primarily driven by operational leverage and cost improvement actions.

Current wording

Operating profit (loss) in the first quarter of 2026 was $67.4, an increase of $21.7, or 47.5%, compared with the first quarter of 2025. Margin increased primarily driven by operational leverage and continued cost improvement actions.

Previous wording

Europe, Middle East & Africa net sales of $1,322.7 in the first nine months of 2025, increased by $75.8, or 6.1%, from the first nine months of 2024. Sales were positively impacted by foreign currency by approximately $36.6. Net sales of products increased by $67.3 and services & spares increased by $2.5 compared to the first nine months of 2024.

Current wording

Europe, Middle East & Africa net sales of $321.4 in the first quarter of 2026, decreased by $82.1, or (20.3)%, from the first quarter of 2025 due to softer market demands from prior periods. Sales were positively impacted by foreign currency by approximately $36.1. Net sales of products decreased by $84.8 and services & spares increased by $2.7 compared to the first quarter of 2025.

Previous wording

Operating profit (loss) in the third quarter of 2025 was $83.5, a decrease of $30.9, or (27.0)%, compared with the third quarter of 2024. Margin decreased primarily due to the mix of product and service sales and operational inefficiencies.

Current wording

Operating profit (loss) in the first quarter of 2026 was $53.5, a decrease of $25.2, or 32.0%, compared with the first quarter of 2025. Margin decreased primarily due to operating leverage.

Previous wording

Corporate and other costs include costs associated with our headquarters located in Westerville, Ohio, as well as centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, IT, Legal, Human Resources, and global product platform development and offering management. Total corporate and other costs were $88.9 and $45.0 in the third quarter of 2025 and 2024, respectively. Total corporate and other costs increased $43.9 compared to the third quarter of 2024 primarily due to a $31.1 increase in restructuring costs, an increase in certain employee related costs and a decrease in the foreign currency loss of $4.4.

Current wording

Corporate and other costs include costs associated with our headquarters located in Westerville, Ohio, as well as centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, Legal, Human Resources, and global product platform development and offering management. Total corporate and other costs were $93.4 and $47.4 in the first quarter of 2026 and 2025, respectively. Total corporate and other costs increased by $46.0 compared to the first quarter of 2025 primarily due to the $33.2 of contingent consideration associated with the PurgeRite acquisition, an increase in certain employee-related costs, and a decrease in the foreign currency loss.

Previous wording

Capital Expenditures: Our capital expenditures are primarily related to the maintenance of our long-term assets, as well as the investment in projects, such as capacity and facility expansion, that support growth and innovation to further our enterprise strategy. Our capital expenditures (including capitalized software) were approximately $131.4 during the first nine months of 2025. We expect to have capital expenditures (including capitalized software) of $225.0 to $275.0 for the full year 2025.

Current wording

Capital Expenditures: Our capital expenditures primarily relate to the maintenance of our long-term assets, as well as the investment in projects, such as capacity and facility expansion, that support growth and innovation to further our enterprise strategy. Our capital expenditures (including capitalized software) were approximately $114.0 during the first quarter of 2026. We expect to have capital expenditures (including capitalized software) of $425.0 to $525.0 for the full year 2026 in order to support capacity expansion across the business.

Previous wording

We have additional obligations as part of our ordinary course of business, beyond those committed for capital expenditures, which consist of debt obligations and other financial instruments. Refer below, as well as to “Note 6 — Debt” and “Note 13 — Commitments and Contingencies” of the Unaudited Condensed Consolidated Financial Statements for more information. In addition, we have uncertain tax positions that are further discussed in “Note 7 — Income Taxes” of the Unaudited Condensed Consolidated Financial Statements. We anticipate payments for lease obligations of approximately $75.0 for the full year 2025. We do not have any guarantees or other off-balance sheet financing arrangements, including variable interest entities, which could materially impact our financial condition or liquidity.

Current wording

We have additional obligations in the ordinary course of our business, beyond those committed for capital expenditures, which consist of debt obligations and other financial instruments. Refer below, as well as to “Note 6 — Debt” and “Note 13 — Commitments and Contingencies” of the Unaudited Condensed Consolidated Financial Statements for more information. In addition, we have uncertain tax positions that are further discussed in “Note 7 — Income Taxes” of the Unaudited Condensed Consolidated Financial Statements. We anticipate lease payment obligations of approximately $93.0 for the full year 2026. We do not have any guarantees or other off-balance sheet financing arrangements, including variable interest entities, which could materially impact our financial condition or liquidity.

Previous wording

At September 30, 2025, we had $1,396.0 in cash and cash equivalents and $544.6 in short-term investments, which includes amounts held outside of the U.S., primarily in Europe and Asia. Non-U.S. cash is generally available for repatriation without legal restrictions, subject to certain taxes, mainly withholding taxes. We are not asserting indefinite reinvestment of cash or outside basis for our non-U.S. subsidiaries due to the outstanding debt obligations in instances where alternative repatriation options, other than dividends, are not available. At September 30, 2025, Vertiv had $782.8 of availability (subject to customary borrowing base and other conditions) under the ABL Revolving Credit Facility, net of letters of credit outstanding in the aggregate principal amount of $17.2, and taking into account the borrowing base limitations set forth in the ABL Revolving Credit Facility.

Current wording

At March 31, 2026, we had $2,150.6 in cash and cash equivalents and $349.9 in short-term investments, which include amounts held outside of the U.S., primarily in Europe and Asia. Non-U.S. cash is generally available for repatriation without legal restrictions, subject to certain taxes, mainly withholding taxes. We are not asserting indefinite reinvestment of cash or outside basis for our non-U.S. subsidiaries due to the outstanding debt obligations in instances where alternative repatriation options, other than dividends, are not available. At March 31, 2026, Vertiv had $2,483.3 of availability (subject to customary conditions) under the Senior Unsecured Revolving Credit Facility, net of letters of credit outstanding in the aggregate principal amount of $16.7.

Previous wording

We believe our current cash, cash equivalent, and short-term investment levels, augmented by availability under the ABL Revolving Credit Facility, will provide adequate near-term liquidity for the next 12 months of independent operations, invest for growth in existing businesses, and manage our capital structure on a short- and long-term basis. We expect to continue to opportunistically access the capital and financing markets from time to time. Access to capital and the availability of financing on acceptable terms in the future will be affected by many factors, including our credit rating, economic conditions, and the overall liquidity of capital markets. There can be no assurance that we will continue to have access to the capital and financing markets on acceptable terms.

Current wording

We believe our current cash, cash equivalent, and short-term investment levels, augmented by availability under the Senior Unsecured Revolving Credit Facility, will provide adequate near-term liquidity for the next 12 months of independent operations, allow us to invest for growth in existing businesses, and manage our capital structure on a short- and long-term basis. We expect to continue to opportunistically access the capital and financing markets from time to time. Access to capital and the availability of financing on acceptable terms in the future will be affected by many factors, including our credit rating, economic conditions, and the overall liquidity of capital markets. There can be no assurance that we will continue to have access to the capital and financing markets on acceptable terms.

Previous wording

Net cash provided by operating activities was $1,134.9 in the first nine months of 2025, a $240.8 increase in cash generation compared to the first nine months of 2024. Net income from operations of $887.2 included $356.5 of net non-cash expense items, consisting of depreciation and amortization of $220.3, deferred taxes of $92.2, non-cash stock-based compensation expense of $38.7, and amortization of debt discount and issuance costs of $5.3. Trade working capital utilized $140.7 in the first nine months of 2025 compared to $69.2 provided in the first nine months of 2024.

Current wording

Net cash provided by operating activities was $766.8 in the first quarter of 2026, a $463.5 increase in cash generation compared to the first quarter of 2025. Net income from operations of $390.1 included $131.3 of net non-cash expense items, consisting of depreciation and amortization of $107.7, deferred taxes of $28.2, change in fair value of contingent consideration of $33.2, non-cash stock-based compensation expense of $17.0, and amortization of debt discount and issuance costs of $1.6. Trade working capital provided $227.8 in the first quarter of 2026 compared to $4.8 used in the first quarter of 2025.

Previous wording

Net cash used for investing activities was $892.7 in the first nine months of 2025 compared to net cash used for investing activities of $120.7 in the first nine months of 2024. The increased use of cash over the comparable period was primarily driven by purchases of short-term investments of $539.6 and the acquisition of businesses of $221.7.

Current wording

Net cash used for investing activities was $376.7 in the first quarter of 2026 compared to net cash used for investing activities of $38.8 in the first quarter of 2025. The increased use of cash over the comparable period was primarily driven by a $76.1 increase in capital expenditures in order to support capacity expansion across the business and net purchases of short-term investments of $248.4.

Previous wording

Net cash used for financing activities was $44.3 in the first nine months of 2025 compared to $640.4 used for financing activities in the first nine months of 2024. The decrease in cash used in 2025 was primarily the result of a $599.9 decrease in repurchases of common shares, offset by a $13.5 decrease in employee taxes paid for shares withheld, a $3.0 decrease in exercise of employee stock options, and a $14.5 increase in dividend payments.

Current wording

Net cash provided by financing activities was $11.9 in the first quarter of 2026 compared to $24.9 used for financing activities in the first quarter of 2025. The increase in cash provided in 2026 was primarily the result of a $29.2 increase in proceeds from the issuance of long-term debt, and a $22.2 increase in exercise of employee stock options, offset by a $9.7 increase in dividend payments.