Vertiv Holdings Co Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Performance

  • Demand remains strong across all major end markets, continuing momentum from Q2 2021 where sales were up 25% and orders up 24% (YoY). In Q3 2021, sales rose 6% (YoY), while orders increased 17%.
  • Record backlog of $2.4 billion, up 34% since end of 2020.
  • Adjusted operating profit reached $131 million, up $64 million versus Q3 2020 and representing a 490 bps margin expansion.
  • Free cash flow was $44 million for Q3 but $128 million year‑to‑date, over $140 million higher than the prior-year period.
  • Supply chain constraints and inflation remain major challenges, especially in the Americas. Pricing actions are beginning to offset inflation, but costs still outpaced price in Q3 by ~$40 million.

Key Business Updates

  • E+I Engineering Acquisition – Closing accelerated to November 1 (from December 1 guidance). Expected to contribute ~$65 million of revenue and $15 million in operating profit in Q4.
  • Divestiture – Vertiv signed an agreement to sell its heavy industrial UPS business, expected to close by end of Q4.
  • Market Demand – Cloud, hyperscale, and colocation remain strong globally. Enterprise activity improving, particularly in the Americas (upgraded from “yellow” to “green”).

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Operator: Good morning. My name is Anthony, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Vertiv Third 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. Thank you, Anthony, and good morning, and welcome to Vertiv's Third Quarter 2021 Earnings Conference Call. Joining me today are Vertiv's Executive Chairman, Dave Cote; Chief Executive Officer, Rob Johnson; Chief Financial Officer, David Fallon; and Chief Strategy and Development Officer, Gary Niederpruem. Before we begin, I'd 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 today's earnings release and you can learn more about these risks in our registration statement, our annual report on Form 10-K 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

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