Vertiv Holdings Co Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Key Highlights

  • Q1 sales grew 22% year over year, with all regions and major verticals contributing. Orders rose 21% versus Q1 2020, resulting in a record $2.1 billion backlog.
  • Adjusted operating profit reached $112 million, up 450% (a $92 million increase) versus Q1 2020, driven by strong volume and lower fixed costs as a percentage of revenue.
  • Adjusted operating margin improved by 790 basis points versus last year.
  • Free cash flow was $43 million, an improvement of $246 million from Q1 2020 due to higher profitability and lower interest expense.
  • Supply chain constraints and cost inflation (commodities and logistics) are creating short-term headwinds, but mitigation actions are underway, including pricing measures.
  • Vertiv raised full-year 2021 guidance: revenue now expected at $4.8–$4.9 billion (up $125 million) and adjusted operating profit at $585–$605 million (up $20 million).

Market & Segment Performance

  • Cloud, hyperscale, and colocation markets remain strong globally as demand for digital services continues expanding.
  • Enterprise markets showed early signs of recovery, improving from “red” to “yellow,” but a full rebound is still uncertain.
  • Communication networks strengthened, especially in APAC (shifted to green), helped by 5G rollout.
  • Commercial and industrial showed improvement across all regions.

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Operator: Good morning. My name is Grant, and I will be your conference operator today. At this time, I would like to welcome everyone to Vertiv's First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded. I would 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. Thanks, Grant, and good morning, and welcome to Vertiv's First Quarter 2021 Earnings Conference Call. Joining me today are Vertiv's Executive Chairman, David Cote; Chief Executive Officer, Rob Johnson; Chief Financial Officer, David Fallon; and Chief Strategy and Development Officer, Gary Niederpruem. Before we begin, I point out that during the course of this call, we will make forward-looking statements regarding future events, including the future financial and operating performance of Vertiv. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. We refer you to the cautionary language included in this earnings release, and you can learn more about these risks in our registration statement, our proxy statement and other filings with the SEC. Any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result

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