VRT earnings analysis
What we found in VRT's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Vertiv posted a strong Q2: revenue increased 24.1% YoY to $3.2743B, gross margin expanded to 37.7% from 34.0%, and calculated operating margin reached 19.5% versus 16.8% a year ago. Americas and Asia Pacific were the growth engines, while EMEA was nearly flat in Q2 and declined 8.4% in the first half. Cash generation was exceptionally strong, but the company is sharply increasing capacity capex, with $550.0M-$570.0M expected for 2026, and the filing adds a detailed debt-covenant risk factor.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated to $3.274B
- Q2 net sales rose $636.2M, or 24.1% YoY, to $3.2743B, and increased 23.6% sequentially from $2.6495B in Q1 2026. Higher volume was supplemented by $129.7M of acquisition-related sales and $35.9M of favorable FX.
- Material margin and profit expansion
- Gross margin expanded 370 bps YoY to 37.7% from 34.0%, while operating profit increased $195.5M, or 44.2%, to $637.9M; calculated operating margin was 19.5%, up from 16.8% a year earlier and 16.6% in Q1 2026.
- GAAP EPS rose sequentially and year over year
- GAAP net income increased $173.6M, or 53.5%, to $497.8M, and GAAP diluted EPS was $1.27, up from $0.99 in Q1 2026 and $0.83 in Q2 2025.
- Americas and APAC led segment growth
- Americas delivered $2.0708B of sales, up $468.5M or 29.2% YoY, with segment operating profit up 48.6% to $571.4M. Asia Pacific sales rose $159.7M, or 28.5%, to $719.9M and profit increased 61.5% to $95.6M.
- Operating cash conversion strengthened
- First-half operating cash flow rose $1.2404B to $1.8666B. Trade working capital generated $678.8M, versus a $95.2M use a year earlier, primarily due to deferred revenue.
- Strong reported liquidity supports expansion
- Liquidity was substantial at June 30, with $2.8106B of cash and equivalents, $300.0M of short-term investments, and $2.4836B available under the revolver after $16.4M of letters of credit.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- EMEA underlying demand remains weak
- EMEA quarterly sales grew only $8.0M, or 1.7%, to $483.6M; favorable FX contributed approximately $13.7M. For the first half, EMEA sales fell $74.1M, or 8.4%, to $805.0M, reflecting softer prior-period demand.
- Growth investment materially increases cash use
- Capacity expansion is materially raising investment needs: first-half capex was $285.9M versus $81.5M a year earlier, and management expects full-year capex of $550.0M-$570.0M. Investing cash outflow increased to $780.7M from $182.8M.
- Debt covenants could constrain flexibility
- The new/updated debt-covenant risk factor notes $850.0M of Senior Secured Notes and $2.1000B of Senior Notes outstanding. The revolver requires a maximum consolidated leverage ratio of 4.00:1.00, with a possible 4.50:1.00 step-up following a qualifying acquisition of at least $750.0M cash consideration.
- Acquisition-related costs and execution risk
- Acquisition accounting and integration are weighing on expenses: Q2 corporate and other costs rose $20.9M to $79.6M, primarily including a $28.8M contingent-consideration fair-value loss related to PurgeRite; first-half related loss was $62.0M.
- Trade and supply-chain uncertainty persists
- Management cites dynamic trade and geopolitical conditions, including tariffs and the US-Israel and Iran war. It has begun IEEPA tariff refund claims, but states the amount, timing, and likelihood of recovery are uncertain; Q2 supply-chain congestion also modestly offset sales growth.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.27
- Gross margin
- 37.7%
- Operating margin
- 19.5%
- Segment
- Americas revenue: $2.071B, +29.2% YoY; operating margin: 27.6% versus 24.0%.
- Segment
- Asia Pacific revenue: $719.9M, +28.5% YoY; operating margin: 13.3% versus 10.6%.
- Segment
- Europe, Middle East & Africa revenue: $483.6M, +1.7% YoY; operating margin: 25.7% versus 21.9%.
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS outlook. Management expects 2026 capital expenditures, including capitalized software, of $550.0M-$570.0M to support capacity expansion; it also anticipates approximately $110.0M of full-year lease payments.
The filing reads better than the one before it.
What came before.
- 10-Q · April 22, 2026
- Vertiv reported Q1 2026 net sales of $2,649.5 million, up $613.5 million (+30.1%) versus Q1 2025, with gross margin expanding to ~37.7% and operating profit of $440.1 million. Diluted EPS was $0.99, up $0.57 versus Q1…
- 10-K · February 13, 2026
- Vertiv reports strong 2025 results driven by data-center demand: net sales rose to $10,229.9 million in 2025 from $8,011.8 million in 2024 (a ~27.7% increase) and backlog more than doubled to $15.0 billion as of…
- 10-Q · April 23, 2025
- Vertiv reported a strong Q1 with net sales of $2,036.0M (up $396.9M or 24.2% YoY), operating profit of $290.7M, and net income of $164.5M reversing the prior-year loss. Operating cash flow was robust at $303.3M,…
- 10-K · February 18, 2025
- Vertiv reported net sales of $8,011.8 million for the year ended December 31, 2024, up from $6,863.2 million in 2023, driven by stronger demand and a materially larger backlog. Backlog increased to $7,178.8 million (up…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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