01—Abstract
Summary
Summary of the 10-K filed February 13, 2026. Cited figures are marked; the original filing is the authoritative source.
Vertiv Holdings Co (NYSE: VRT) closed fiscal 2025 with a strong year of growth and profitability.
Net sales rose 27.7% to $10,229.9 milliona from $8,011.8 million, driven by higher volumes across products and services. Gross margin was broadly flat at 36.3% versus 36.6% as volume leverage and price realization were offset by cost inflation, particularly tariffs. Operating profit increased 33.8% to $1,829.7 million, and net income rose to $1,332.8 million, or $3.41 per diluted share, compared with $495.8 million in 2024, which had been depressed by a $449.2 million non-cash warrant revaluation loss.
Operating cash flow reached $2,113.8 millionb, up 60.2%, supported by $339.3 million of working capital inflow and a large increase in customer deposits (deferred revenue rose to $1,814.7 million). The balance sheet strengthened, with cash and short-term investments of about $1,828 million against $2,913 million of gross debt. Backlog nearly doubled to approximately $15.0 billion from $7.2 billion, signaling strong forward demand tied to AI and high-density compute infrastructure.
Vertiv also expanded through the $1,138.3 millionc net-cash acquisition of PurgeRite (liquid cooling services) and the roughly $200 million Great Lakes Data Racks acquisition, adding goodwill and intangibles that now represent about 32% of total assets. The Board raised the quarterly dividend to $0.0625 per share, and $2.4 billion remains under the $3.0 billion repurchase authorization, though no buybacks occurred in 2025.
Investors should weigh the growth against key risks: customer concentration among hyperscalers and large colocation providers, which grants them increasing pricing and contract leverage; long-term fixed-price and turnkey project exposure; tariff and supply chain cost pressure; FX sensitivity; and a 2025 restructuring charge of $54.5 milliond. Management concluded internal control over financial reporting was effective, and the SEC's investigation into the company's 2022 public statements was closed without enforcement recommendation on December 30, 2025, though the securities class action and derivative suit remain pending.
02—Key points
Key Highlights
- Net sales grew 27.7% to $10,229.9 million, with the Americas up 41.9% to $6,386.3 million and 62% of total sales.
- Operating profit rose 33.8% to $1,829.7 million; gross margin was roughly flat at 36.3% (vs. 36.6%) as tariff-driven cost inflation offset volume and pricing gains.
- Net income of $1,332.8 million ($3.41 diluted EPS) compares with $495.8 million in 2024, which included a $449.2 million non-cash warrant fair value loss that did not recur.
- Backlog approximately doubled to $15.0 billion from $7.2 billion at year-end 2024, with the majority expected to ship within 12 to 18 months.
- Operating cash flow increased 60.2% to $2,113.8 million, aided by a $717.5 million increase in deferred revenue from customer prepayments.
- Acquisitions totaled roughly $1.2 billion in cash in 2025 (PurgeRite and Great Lakes), lifting goodwill to $2,033.7 million and expanding liquid cooling and rack capabilities.
- Shareholder returns: quarterly dividend raised to $0.0625 per share; $2.4 billion remains under the $3.0 billion buyback authorization, with no repurchases in 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Vertiv Holdings kept $0.13.
- Revenue$10.23B100.0%
- Cost of revenue−$6.51B63.7%
- Gross profit$3.72B36.3%
- Operating costs−$1.89B18.4%
- Operating income$1.83B17.9%
- Interest, other & tax−$496.9M4.9%
- Net income$1.33B13.0%
04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 13, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $10.23B$8.01B | +27.7% |
| Cost of Revenue | $6.51B$5.08B | +28.3% |
| Gross Profit | $3.72B$2.93B | +26.6% |
| R&D Expenses | $441.70M$367.60M | +20.2% |
| SG&A Expenses | $1.62B$1.37B | +17.7% |
| Operating Income | $1.83B$1.37B | +33.8% |
| Interest Expense | $86.10M$150.40M | −42.8% |
| Net Income | $1.33B$495.80M | +168.8% |
| EPS (Basic) | $3.49$1.32 | +164.4% |
| EPS (Diluted) | $3.41$1.28 | +166.4% |
| Shares Outstanding (Basic) | 381.71M376.42M | +1.4% |
| Shares Outstanding (Diluted) | 390.65M386.33M | +1.1% |
05—Questions
Frequently Asked Questions
What drove the large jump in Vertiv's 2025 revenue and profit?
Net sales increased $2,218.1 million, or 27.7%, primarily on higher product volumes tied to data center and AI infrastructure demand, with product sales up $1,961.8 million and services and spares up $256.3 million. Operating profit grew faster than sales, rising 33.8%, because SG&A grew more slowly (15.8% of sales vs. 17.1% in 2024) and segment margins improved, especially in the Americas (26.8% vs. 24.4%).
Why did net income more than double, and is that growth repeatable?
Part of the increase reflects the absence of a $449.2 million non-cash loss from revaluing private warrants in 2024, which were fully exercised in December 2024. Underlying operating profit growth of 33.8% is the more meaningful indicator. Income tax expense also rose to $409.1 million, and the effective tax rate fell to 23.5% from 35.2%, partly due to a 2024 valuation allowance charge that did not recur, so tax normalization could affect future comparisons.
How much backlog supports future revenue, and what are the risks to it?
Combined backlog was about $15.0 billion at December 31, 2025, versus $7.2 billion a year earlier, and most of it is expected to ship within 12 to 18 months. Backlog is not a guarantee: customers can reduce, defer, or cancel firm orders, usually with penalties, and large customers have growing leverage over contract terms. The company also notes that pricing changes take longer to flow through results given the large backlog.
What are the main balance sheet and debt considerations?
Vertiv had $1,728.4 million of cash, $99.5 million of short-term investments, and $2,913 million of gross debt (Term Loan due 2032 of $2,076.1 million, and $850.0 million of 4.125% Senior Secured Notes due 2028). Net leverage is modest relative to 2025 EBITDA. The company had $784.0 million of ABL revolver availability. Goodwill and intangibles total $3,928.5 million, or about 32% of assets, so future impairment would matter if acquired businesses underperform. Customer deposits and deferred revenue are a significant source of working capital.
What should investors watch for going forward?
Key items include whether backlog converts to revenue on schedule, the margin impact of tariffs and supply chain costs as the company scales capacity (2026 capex guidance is $425 to $525 million), integration of PurgeRite and Great Lakes including up to $250 million of potential PurgeRite earn-out payments, the 2025 restructuring program, and the outcome of the pending securities class action and derivative litigation. Concentration among hyperscale and neocloud customers and their pricing leverage are also key risks to monitor.
06—Continue