Yahoo Finance Vertiv Holdings Co (VRT) (Q1 2024) Earnings Call Transcript Highlights: Robust Growth and ...
Q1 Sales Growth: Increased by 8%
Order Growth: Grew 60% year-on-year and 4% sequentially
Book-to-Bill Ratio: Strong at 1.5x
Adjusted Operating Profit: $249 million
Adjusted Operating Margin: Improved to 15.2%
Adjusted Free Cash Flow: $101 million, up $76 million from Q1 last year
Share Repurchases: 9.1 million shares at an average price of $66 per share, totaling $600 million
Net Leverage: Increased slightly to 2.2x
Full Year '24 Guidance: Organic growth expected at 12%, adjusted operating margins to expand to 17.7%
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide more color on how AI is impacting your suite of products? A: (Giordano Albertazzi, CEO) The demand for AI is accelerating, particularly around liquid cooling, which aligns with our capacity plans. The demand is broad, affecting the entire powertrain and thermal chain, not just high-density compute. It's still early for the industry, but we're well-positioned to support our customers across all their needs.
Q: What are you seeing in terms of site preparation and utility feeds for delivering these megawatts? A: (Giordano Albertazzi, CEO) The industry is growing, and while there could be more growth in absolute terms, the process of building data centers involves securing permits and power, which can be a limiting factor.
Q: How much of the 60% order growth is driven by duration expansion versus unit uptick? A: (Giordano Albertazzi, CEO) The majority of the order growth comes from large projects with extended delivery dates, shifting from a 9-18 month window to about 12-18 months. This gives us better visibility and allows for more orderly execution.
Q: Can you discuss the regional performance, particularly in China and India? A: (Giordano Albertazzi, CEO) Americas remains our largest region, with AI acceleration primarily in North America. In Asia, we see encouraging signs in China and strong demand in India, which is also an important manufacturing hub for us. EMEA is slightly behind in AI adoption.
Q: What is the nature of your relationship with NVIDIA, and how are you preparing for new technologies like the Blackwell product? A: (Giordano Albertazzi, CEO) Our relationship with NVIDIA involves commercial partnerships, certification of our liquid cooling products, and collaborative engineering efforts. For new technologies requiring liquid cooling, like NVIDIA's Blackwell, our portfolio is well-prepared, and we're confident in our technology and manufacturing capabilities.
Q: How are you managing the aging of your backlog, and what's the outlook for switchgear capacity? A: (Giordano Albertazzi, CEO) We're seeing a strategic extension in delivery dates, which provides longer coverage. Regarding switchgear, we're doubling our capacity to support growth, reflecting the importance of our acquisition strategy and our comprehensive powertrain offerings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
