Third-quarter sales rose 61% to $4.31 billion, about 15% above forecasts, and the company raised every full-year target. The shares rose about 14%, while free cash flow grew more slowly than sales.
The AI infrastructure trade got the quarter it wanted from Vertiv. The detail investors cannot see is how much more is already booked.
The maker of power and cooling equipment for data centers reported third-quarter net sales of $4.31 billion, up 61% from $2.68 billion a year earlier, with organic growth of 55%. Analysts polled by S&P Global had expected about $3.77 billion. Adjusted earnings were $2.21 a share, up 78% and well above the $1.82 estimate, and above the company's own July guidance of $1.77 to $1.83. The adjusted operating margin widened 2.9 percentage points to 25.2%.
Organic orders grew more than 100%. "We are in the middle of the largest infrastructure buildout and it's accelerating," said Giordano Albertazzi, the company's chief executive.
Raising the year
Vertiv lifted its 2026 guidance to net sales of $14.45 billion to $14.85 billion and adjusted earnings of $7.10 to $7.20 a share, from $6.65 to $6.75. For the fourth quarter it expects sales of $4.3 billion to $4.5 billion, implying organic growth of about 50%, and adjusted earnings of $2.22 to $2.28.
Growth was broad but led by the Americas, where sales rose 75% to $3.0 billion, with Asia-Pacific 50% to $779 million and Europe, the Middle East and Africa 23% to $545 million.
What the release leaves out
Two figures complicate the picture. Vertiv gave the growth rate of its orders but not their dollar value or the size of its backlog, so investors cannot judge how many quarters of revenue are already secured. And free cash flow, while up 50% to $652 million, grew more slowly than sales, leaving the free cash flow margin at about 15% against about 17% a year earlier.
The market's answer
The shares opened at $243, up 16.5% from Tuesday's close of $208.56, and were at about $238 in early afternoon, up about 14% on 12.5 million shares. They held most of the opening jump.
Flex, the contract manufacturer whose cloud and power business serves the same build-out, rose about 10% after raising its full-year sales guidance to $34.9 billion to $35.9 billion from $33.7 billion to $35.2 billion and reporting record adjusted earnings of $1.18 a share.
The bull and the caution
The bull case: orders doubling, a 15% revenue beat and higher guidance across the board point to a cycle that is still speeding up, hours before Microsoft and Alphabet update their capital spending plans.
The caution: without a backlog figure, the durability of the orders is a matter of trust, cash conversion is lagging growth, and a stock that has rallied this far depends on the spending plans of a handful of very large customers.
What to watch
Commentary on the call about order timing and pricing, Microsoft's and Alphabet's capital spending figures after Wednesday's close, any disclosure of backlog in Vertiv's quarterly filing, and fourth-quarter cash flow.