A month has gone by since the last earnings report for Vertiv Holdings Co. (VRT). Shares have lost about 12.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Vertiv due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Vertiv Q3 Earnings Beat Estimates, Net Sales Up Y/Y
Vertiv Holdings reported third-quarter 2025 non-GAAP earnings of $1.24 per share, beating the Zacks Consensus Estimate by 24%. The figure jumped 63.2% year over year.
Net sales increased 29% year over year to $2.68 billion, surpassing the Zacks Consensus Estimate by 3.60%. Net sales on an organic basis increased 28.4% year over year.
VRT Prospects Ride on Strong Backlog
Organic orders (excluding foreign exchange) rose 60% year over year, and the book-to-bill ratio was roughly 1.4x in the third quarter. The backlog at the end of the third quarter was $9.5 billion.
Backlog was 30% higher than 2024-end and up 12% from the end of the second quarter of 2025.
In the third quarter, trailing twelve-month (TTM) organic orders grew 21% compared with the prior-year period.
Product revenues (which accounted for 82.8% of total revenues) increased 33.9% year over year to $2.21 billion. Service revenues (17.2% of total revenues) increased 9.9% year over year to $461.4 million.
Americas’ revenues increased 42.9% year over year (43% organic) to $1.71 billion and accounted for 64% of total revenues. Product revenues increased 49.1% year over year (49.2% organic) to $1.42 billion. Service & spares revenues increased 18.3% year over year (18.1% organic) to $285.8 million in the reported quarter.
Asia and Pacific (APAC) revenues increased 20.2% year over year (21.3% organic) to $519.8 million and accounted for 19.4% of total revenues. Product revenues increased 25.1% year over year (26.3% organic) to $392.7 million. Service & spares revenues increased 7.3% year over year (8.1% organic) to $127.1 million in the reported quarter.
Europe, Middle East, and Africa (EMEA) revenues increased 0.2% year over year (down 4% organic) to $443.6 million and accounted for 16.6% of total revenues. Product revenues increased 1% year over year (down 3% organic) to $348.3 million. Service & spares revenues decreased 2.6% year over year (down 7.5% organic) to $95.3 million in the third quarter of 2025.
VRT’s Operating Details
Selling, general, and administrative (SG&A) expenses increased 23.8% year over year to $414.3 million. As a percentage of sales, SG&A expenses decreased 70 basis points (bps) year over year to 15.5%.
Adjusted operating profit jumped 42.9% year over year to $595.6 million. The third-quarter non-GAAP operating margin was 22.3%, up 220 bps year over year.
Americas adjusted operating profit surged 65.4% year over year to $501.8 million. EMEA’s adjusted operating profit decreased 27% year over year to $83.5 million. APAC’s adjusted operating profit surged 55.3% year over year to $68.5 million.
VRT’s Balance Sheet Remains Strong
As of Sept. 30, 2025, cash and cash equivalents totaled $1.39 billion compared with $1.64 billion as of June 30, 2025.
Long-term debt at the end of the third quarter was $2.897 billion, down from $2.900 billion reported in the previous quarter.
Cash flow from operating activities was $508.7 million for the reported quarter, up from $322.9 million in the prior quarter. Free cash flow was $462 million for the third quarter.
VRT Raises 2025 Guidance
For 2025, revenues are now expected to be between $10.16 billion and $10.24 billion. Organic net sales growth is expected to be between 26% and 28%.
Vertiv expects adjusted operating profit between $2.04 billion and $2.08 billion. Operating margin is expected to be in the 20%-20.5% range.
VRT expects 2025 non-GAAP earnings between $4.07 per share and $4.13 per share.
Free cash flow for 2025 is expected to be between $1.47 billion and $1.53 billion.
For fourth-quarter 2025, revenues are expected to be between $2.81 billion and $2.89 billion.
Organic net sales are expected to increase in the 18% to 22% range.
Vertiv expects adjusted operating profit between $620 million and $660 million. Operating margin is expected to be in the 22.1%-22.7% range.
VRT expects fourth-quarter 2025 non-GAAP earnings per share between $1.23 and $1.00.
Free cash flow for the fourth quarter of 2025 is expected to be between $470 million and $530 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Vertiv has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Vertiv has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Vertiv Holdings Co. (VRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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