Vertiv Holdings Co Q4 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Key Performance Highlights

  • 2023 was described as a “great year,” with Vertiv’s stock price rising 252%, making it the top hypothetical performer in the S&P 500.
  • Q4 organic sales grew 12% year-over-year, led by 22% growth in the Americas; orders rose 23% year-over-year and 18% sequentially.
  • Book-to-bill reached 1.3x, signaling sustained strength into 2024.
  • Record backlog increased by approximately $0.5 billion sequentially, reaching $5.5 billion (up 16% year-over-year).
  • Adjusted operating profit was $330 million in Q4 (up $120 million versus Q4 2022), with margin improving 500 basis points to 17.7%.
  • Adjusted free cash flow reached $778 million for the year, over $1 billion higher than 2022.
  • Net leverage improved to 1.9x, down sharply from 5.6x at the end of 2022.
  • CoolTera acquisition (December) strengthens Vertiv’s liquid cooling portfolio, especially for AI-driven deployments.

Full Year 2023 Results Compared to 2022

  • Organic sales grew 21% (versus 2022).
  • Adjusted operating margin rose to 15.3%, up 760 basis points year-over-year.
  • Adjusted free cash flow increased by more than $1 billion year-over-year.
  • Deferred revenue grew 80%, contributing ~30 percentage points to FCF conversion (114%).

Regional Performance

  • Americas: Sales up 22% in Q4; adjusted operating margin up 640 basis points to 26.9%.

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Operator: Good morning. My name is Brika, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Vertiv's Fourth Quarter and Full Year 2023 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, Brika, and good morning, and welcome to Vertiv's Fourth Quarter and Full Year 2023 Earnings Conference Call. Joining me today are Vertiv's Executive Chairman, Dave Cote; Chief Executive Officer, Giordano Albertazzi; and Chief Financial Officer, David Fallon. Before we begin, I'd like to 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. You can learn more about these risks in our annual and quarterly reports and other filings made 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 of new info

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