Vertiv Holdings Co Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Organic sales up 19% year-over-year, with double‑digit growth in all regions (Americas +21%, EMEA +25%, APAC +10%). This compares favorably to Q3 2023’s growth profile and reflects continued global demand strength.
  • Trailing 12‑month orders up 37%, versus ~35% last quarter, showing sustained momentum despite tough year‑on‑year comparisons.
  • Adjusted operating profit reached $417M, up $121M from Q3 2023, and margins hit 20.1%, surpassing the 20% mark for the first time (310 bps expansion YoY).
  • Adjusted free cash flow was $336M, up $115M YoY; year‑to‑date free cash flow reached $773M.
  • Backlog increased to $7.4B, supporting management’s view of accelerating sales growth in 2025 (compared to 14% organic growth expected for FY24).
  • Net leverage reduced to 1.4x; expected to reach ~1.2x by year‑end.

Full-Year 2024 Guidance (Raised)

  • Organic growth: 14% (up from prior guide).
  • Adjusted operating profit: $1.485B (raised by $50M).
  • Adjusted operating margin: 19% (30 bps above prior guidance; +370 bps YoY).
  • Adjusted free cash flow: $1B (up $125M from prior guidance).
  • EPS: $2.68, more than 50% above 2023.

Fourth Quarter 2024 Outlook

  • Organic sales growth expected at 13% YoY.
  • Adjusted operating profit expected at $437M; operating margin 20.4%.

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Operator: Good morning. My name is Nadia, and I'll be your conference operator today. At this time, I would like to welcome everyone to Vertiv's Third Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Please note 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, Nadia. Good morning and welcome to Vertiv's third quarter 2024 earnings conference call. Joining me today are Vertiv's Executive Chairman, Dave Cote; Chief Executive Officer, Giordano Albertazzi; and Chief Financial Officer, David Fallon. Today we have a few additional slides to cover in our presentation. We will let the Q&A portion of the call go an additional ten minutes if needed, up until 12:10 p.m. Eastern Time. We would kindly request to please limit yourself to one question, and if you have a follow up question, please rejoin the queue. Before we begin, I would like to point out that during the course of the 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 cautionary language included in today's earnings release, and you can l

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