Vertiv Q4 Earnings Beat Estimates, Net Sales Up Y/Y, Shares Fall

Vertiv Holdings VRT reported fourth-quarter 2025 non-GAAP earnings of $1.36 per share, beating the Zacks Consensus Estimate by 5.80%. The figure jumped 37.4% year over year.

Net sales increased 22.7% year over year to $2.88 billion, surpassing the Zacks Consensus Estimate by 0.07%. Net sales on an organic basis increased 19% year over year.

Vertiv stock lost 1.87% in pre-market trading.

VRT's Prospects Ride on Strong Backlog

In the fourth quarter of 2025, organic orders rose approximately 252% year over year, with the backlog increasing to $15.0 billion, up 109% compared with the fourth quarter of 2024 and up 57% sequentially from the third quarter of 2025. The book-to-bill ratio for the fourth quarter was approximately 2.9x, and trailing 12-month organic orders growth was 81% compared with the prior-year period

Vertiv Holdings Co. Price, Consensus and EPS Surprise

Vertiv Holdings Co. price-consensus-eps-surprise-chart | Vertiv Holdings Co. Quote

Product revenues (which accounted for 82% of total revenues) increased 23.3% year over year to $2.36 billion. Service revenues (18% of total revenues) increased 20.2% year over year to $519.5 million.

Americas’ revenues increased 50.2% year over year (46% organic) to $1.88 billion and accounted for 65.5% of total revenues. Product revenues increased 54.3% year over year (51.2% organic) to $1.56 billion. Service & spares revenues increased 33% year over year (25.2% organic) to $321.9 million in the reported quarter.

Asia and Pacific (APAC) revenues decreased 9.6% year over year (9.3% organic decline) to $492 million and accounted for 17.1% of total revenues. Product revenues increased 13.7% year over year (13.5% organic) to $360.4 million. Service & spares revenues increased 4% year over year (4.5% organic) to $131.6 million in the reported quarter.

Europe, Middle East, and Africa (EMEA) revenues decreased 8.2% year over year (14.1% organic) to $501.7 million and accounted for 17.4% of total revenues. Product revenues decreased 13.3% year over year (18.2% organic decline) to $384.6 million. Service & spares revenues increased 13.7% year over year (3.3% organic) to $117.1 million in the fourth quarter of 2025.

VRT’s Operating Details

Selling, general, and administrative (SG&A) expenses increased 27.7% year over year to $461.6 million. As a percentage of sales, SG&A expenses decreased 60 basis points (bps) year over year to 16%.

Adjusted operating profit jumped 32.5% year over year to $668.1 million. The fourth-quarter non-GAAP operating margin was 23.2%, up 170 bps year over year.

Americas adjusted operating profit surged 76.7% year over year to $568.2 million. EMEA’s adjusted operating profit decreased 23.6% year over year to $111 million. APAC’s adjusted operating profit decreased 28.8% year over year to $48.7 million.

VRT’s Balance Sheet Remains Strong

As of Dec. 31, 2025, cash and cash equivalents totaled $1.72 billion compared with $1.39 billion as of Sept. 30, 2025.

Long-term debt at the end of the fourth quarter was $2.892.1 billion, down from $2.897 billion reported in the previous quarter.

Cash flow from operating activities was $1 billion for the reported quarter, up from $508.7 million in the prior quarter. Free cash flow was $909.9 million for the fourth quarter.

VRT Raises 2026 Guidance

For 2026, revenues are now expected to be between $13.25 billion and $13.75 billion. Organic net sales growth is expected to be between 27% and 29%.

Vertiv expects adjusted operating profit between $2.98 billion and $3.10 billion. Operating margin is expected to be in the 22%-23% range.

VRT expects 2026 non-GAAP earnings between $5.97 and $6.07 per share. 

Free cash flow for 2026 is expected to be between $2.1 billion and $2.3 billion.

For first-quarter 2026, revenues are expected to be between $2.5 billion and $2.7 billion. Organic net sales are expected to increase in the 18% to 26% range.

Vertiv expects adjusted operating profit between $475 million and $515 million. Operating margin is expected to be in the 18.5%-19.5% range.

VRT expects first-quarter 2026 non-GAAP earnings per share between 95 cents and $1.01 per share.

Zacks Rank and Other Key Picks

Currently, Vertiv has a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices ADI, Applied Optoelectronics AAOI, and MKS MKSI. While MKSI sports a Zacks Rank #1 (Strong Buy), Analog Devices and Applied Optoelectronics carry a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Analog Devices’ shares have gained 61% in the past 12-month period. Analog Devices is scheduled to release first-quarter 2026 results on Feb. 18, 2026. 

Applied Optoelectronics shares have returned 93.4% in the past 12-month period. Applied Optoelectronics is set to report fourth-quarter 2025 results on Feb. 26. 

MKS shares have surged 149.5% in the past 12-month period. MKS is set to report its fourth-quarter 2025 results on Feb. 17, 2026.

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This article originally published on Zacks Investment Research (zacks.com).

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