VRT Q4 Deep Dive: AI Infrastructure Demand Fuels Order Backlog and Guidance Upside

Data center products and services company Vertiv (NYSE:VRT) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 22.7% year on year to $2.88 billion. The company expects next quarter’s revenue to be around $2.6 billion, coming in 1.9% above analysts’ estimates. Its non-GAAP profit of $1.36 per share was 4.9% above analysts’ consensus estimates.

Is now the time to buy VRT? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Vertiv’s fourth-quarter results were met with a strong positive market reaction, as the company delivered robust revenue growth and exceeded Wall Street’s non-GAAP profit expectations. Management attributed these results to exceptional demand for data center infrastructure, particularly in the Americas, where sales surged and large customer orders drove a significant increase in backlog. CEO Giordano Albertazzi highlighted that “fourth quarter orders were up 152% year over year and up 117% sequentially,” emphasizing the company’s strengthened position in the accelerating AI-driven data center market. Management also noted that operational leverage, productivity gains, and favorable pricing contributed to higher margins and strong cash generation.

Looking ahead, Vertiv’s guidance is shaped by continued momentum in AI-related infrastructure investments and a record backlog that provides visibility into 2026 and beyond. Management expects further sales acceleration in the Americas and improving trends in EMEA, with new product introductions such as OneCore and SmartRun targeting evolving customer needs. CFO Craig Chamberlain stated, “We are projecting adjusted diluted EPS growth of 43% at the midpoint,” underpinned by ongoing capacity expansion and strategic supplier partnerships. Management cautioned that while inflation and supply chain pressures persist, disciplined investment and pricing actions are expected to support margins and growth targets.

Key Insights from Management’s Remarks

Management credited the quarter’s performance to surging demand for AI data centers, operational execution, and the successful scaling of new products and services across geographic regions.

• Americas drove growth: Exceptional demand for data center infrastructure in the Americas led to 46% organic sales growth in the region, supported by broad-based customer activity and large-scale orders spanning multiple verticals.
• Record backlog expansion: The order backlog more than doubled year over year, reaching $15 billion, with a book-to-bill ratio near three. Management emphasized that these orders are increasingly larger and reflect customers’ long-term confidence in Vertiv’s delivery capabilities.
• Product innovation accelerates adoption: New solutions like OneCore and SmartRun are being adopted by large customers, offering end-to-end, prefabricated data center systems that streamline deployment and address the need for higher efficiency and scalability in AI-driven environments.
• Services segment gaining traction: The service portfolio experienced over 25% order growth, with management highlighting the PerchRight acquisition as a key enabler for comprehensive fluid management and recurring revenue from lifecycle services.
• Pricing and operational leverage: Vertiv successfully offset inflationary pressures through favorable pricing and productivity improvements, driving margin expansion—particularly in the Americas—while maintaining disciplined capital investments to support future growth.

Drivers of Future Performance

Vertiv’s forward outlook is anchored by sustained AI data center investment, a robust order pipeline, and capacity expansion initiatives to convert backlog into revenue and profit.

• AI infrastructure demand: Ongoing investment in AI and cloud infrastructure is expected to drive high-single to double-digit revenue growth, with management citing a healthy pipeline and customer preference for Vertiv’s system-level solutions.
• Regional performance divergence: The Americas is projected to remain the primary growth engine, while EMEA is anticipated to return to growth in the second half of the year and APAC’s outlook is mixed, with strength outside China offsetting continued softness within China.
• Margin and supply chain management: Management plans to maintain margin expansion by leveraging pricing power, productivity improvements, and close coordination with suppliers, but noted that increased capital expenditures and inflationary input costs could pressure near-term profitability if not carefully managed.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will focus on (1) how effectively Vertiv converts its sizable order backlog into revenue and profit, (2) the pace of adoption and customer feedback for OneCore and SmartRun solutions, and (3) the trajectory of EMEA and APAC regional recoveries—especially whether EMEA returns to growth as management expects. Developments in AI infrastructure spending and continued progress in Vertiv’s service business will also be critical indicators of sustained momentum.

Vertiv currently trades at $246.44, up from $199.62 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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