Summary
Vertiv Holdings Co. reported a strong revenue increase of 13.9% in 2022, reaching $5.7 billion, driven by higher sales volumes and the inclusion of E&I sales. Despite this top-line growth, the company experienced a 14.0% decrease in operating profit and a 36.0% decline in net income compared to 2021, primarily due to a significant increase in the cost of sales (up 17.3%) and higher interest expenses. The company's backlog saw substantial growth, increasing to $4.75 billion from $3.19 billion in the prior year, indicating robust future demand. This growth is attributed to strong market demand and extended lead times from ongoing global supply chain challenges. Vertiv's strategic priorities include customer focus, operational excellence, fostering innovation, building a high-performance culture, and reinforcing financial strength. Key challenges for Vertiv include persistent supply chain constraints, material and labor cost increases, and foreign currency headwinds, which are expected to continue impacting profitability in 2023. The company is actively managing these challenges through pricing actions and supply chain enhancements. Investors should monitor the company's ability to navigate these cost pressures and effectively realize sales from its substantial backlog.
Financial Highlights
53 data points| Revenue | $5.69B |
| Cost of Revenue | $4.08B |
| Gross Profit | $1.62B |
| R&D Expenses | $282.00M |
| SG&A Expenses | $1.18B |
| Operating Income | $223.40M |
| Interest Expense | $147.30M |
| Net Income | $76.60M |
| EPS (Basic) | $0.20 |
| EPS (Diluted) | $-0.04 |
| Shares Outstanding (Basic) | 376.73M |
| Shares Outstanding (Diluted) | 378.22M |
Key Highlights
- 1Revenue increased by 13.9% to $5.7 billion in 2022, primarily due to higher sales volumes and the acquisition of E&I.
- 2Operating profit decreased by 14.0% to $223.4 million, while net income decreased by 36.0% to $76.6 million, impacted by increased cost of sales and interest expenses.
- 3Order backlog significantly increased by 48.9% to $4.75 billion as of December 31, 2022, driven by strong demand and supply chain lead times.
- 4Gross profit margin decreased from 30.5% in 2021 to 28.4% in 2022, reflecting higher commodity, logistic, and labor costs.
- 5The company's operations were impacted by foreign currency fluctuations, resulting in a negative impact of $251.8 million on net sales.
- 6Vertiv opened a new thermal plant in Monterrey, Mexico, to support increased demand and backlog in its thermal business.
- 7Despite operational challenges, the company implemented price realization actions totaling $365.0 million in 2022.