Vertiv (VRT) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales rose 19% year-over-year to $2,074 million, driven by strong demand in data centers, especially AI-related projects, with double-digit growth in all regions.

• Adjusted operating profit increased 41% to $417 million, and operating profit rose 48% to $372 million, reflecting higher sales and margin expansion.

• Adjusted free cash flow reached $336 million, up $115 million year-over-year, aided by profit growth and working capital improvements.

• Backlog at quarter-end was $7.4 billion, up ~47% year-over-year, supporting future growth.

• Full-year 2024 guidance raised across all metrics, with 2025 organic sales growth expected to accelerate from 14% in 2024.

Financial highlights

• Q3 2024 net sales: $2,074 million, up 19% year-over-year; organic growth 19.2%.

• Adjusted operating margin: 20.1%, up 310 basis points year-over-year, surpassing the 20% milestone for the first time.

• Adjusted diluted EPS: $0.76, up from $0.52 in Q3 2023; diluted EPS was $0.46.

• Adjusted free cash flow: $336 million, up from $221 million in Q3 2023.

• Net leverage at quarter-end: 1.4x, with liquidity of $1.5 billion.

Outlook and guidance

• Full-year 2024 organic growth expected at 14%, with adjusted operating profit of $1,475M–$1,495M and margin at 19%.

• Adjusted free cash flow guidance raised to $975M–$1,025M for 2024.

• Q4 2024 net sales expected between $2,115M and $2,165M, with organic growth of 11%–15%.

• Full-year adjusted diluted EPS guidance: $2.66–$2.70, over 50% higher than 2023.

• 2025 organic sales growth projected to accelerate beyond 2024’s 14%, with further margin expansion and strong free cash flow.