Data center infrastructure company Vertiv Holdings (VRT) impressed investors with better-than-expected earnings for the second quarter of 2025. The provider of power, cooling, and IT infrastructure solutions is gaining from “unprecedented data center growth, particularly in AI-enabled infrastructure.” Backed by solid Q2 results, Vertiv raised its full-year guidance. VRT stock rose 3.2% in Wednesday’s extended trading session in reaction to the upbeat results.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Vertiv Impresses with Robust Performance
Vertiv’s Q2 net sales grew 35% year-over-year to $2.64 billion, surpassing the Street’s consensus estimate of $2.35 billion. Moreover, adjusted earnings per share (EPS) rose about 42% to $0.95, surpassing analysts’ estimate of $0.83.
The company’s top-line growth was driven by strong data center demand and continued market penetration. Specifically, organic orders increased about 15% year-over-year. Vertiv highlighted that its strong market position is reflected in its growing backlog, which stood at $8.5 billion at the end of Q2 2025.
While the Q2 bottom line gained from solid sales, it was adversely impacted by a 110 basis points decline in the adjusted operating margin to 18.5%, primarily due to the impact of tariffs. Additionally, fixed cost investments, higher-than-anticipated supply chain and manufacturing transition costs to mitigate tariffs, and operational inefficiencies and execution challenges associated with rapid business growth also impacted profitability. Management assured that it has plans in place to address these issues and expects these temporary factors to be materially resolved by the end of this year.
VRT Raises Full-Year Guidance
Vertiv now expects full-year revenue in the range of $9.925 billion to $10.075 billion, up from the previous guidance of $9.325 billion to $9.575 billion. The company projects adjusted diluted EPS of $3.75 to $3.85, compared to the previous outlook of $3.45 to $3.65.
Further, Vertiv expects 2025 adjusted free cash flow in the range of $1.375 billion to $1.425 billion, up from the previous outlook of $1.250 billion to $1.350 billion. However, the company is lowering its adjusted operating margin outlook to 20% (at the midpoint of the revised guidance), down from the previous estimate of 20.5% due to the factors discussed above. Nonetheless, Vertiv is confident about achieving its long-term adjusted operating margin target of 25% by 2029.
Overall, management is optimistic about the road ahead, as the data center market continues to see strong momentum with sequential pipeline growth and a rise in AI-related activity.
Is VRT a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on Vertiv Holdings stock based on 14 Buys and one Hold recommendation. The average VRT stock price target of $141.77 indicates a 1.7% possible downside risk from current levels.
Analysts’ price targets are expected to be revised in reaction to the Q2 results.
