Data center products and services company Vertiv (NYSE:VRT) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 22.7% year on year to $2.88 billion. The company expects next quarter’s revenue to be around $2.6 billion, coming in 1.9% above analysts’ estimates. Its non-GAAP profit of $1.36 per share was 4.9% above analysts’ consensus estimates.
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Vertiv (VRT) Q4 CY2025 Highlights:
- Revenue: $2.88 billion vs analyst estimates of $2.88 billion (22.7% year-on-year growth, in line)
- Adjusted EPS: $1.36 vs analyst estimates of $1.30 (4.9% beat)
- Revenue Guidance for Q1 CY2026 is $2.6 billion at the midpoint, above analyst estimates of $2.55 billion
- Adjusted EPS guidance for the upcoming financial year 2026 is $6.02 at the midpoint, beating analyst estimates by 12.9%
- Operating Margin: 20.1%, in line with the same quarter last year
- Free Cash Flow Margin: 31.6%, up from 15.4% in the same quarter last year
- Organic Revenue rose 19.3% year on year (miss)
- Market Capitalization: $76.32 billion
"Our fourth quarter performance demonstrates Vertiv's leadership position in an increasingly complex and demanding data center market," said Giordano Albertazzi, Vertiv's Chief Executive Officer.
Company Overview
Formerly part of Emerson Electric, Vertiv (NYSE:VRT) manufactures and services infrastructure technology products for data centers and communication networks.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Vertiv’s sales grew at an incredible 18.5% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Vertiv’s annualized revenue growth of 22.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Vertiv’s organic revenue averaged 21.9% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results. 
This quarter, Vertiv’s year-on-year revenue growth of 22.7% was excellent, and its $2.88 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 27.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 22% over the next 12 months, similar to its two-year rate. This projection is eye-popping for a company of its scale and implies the market sees success for its products and services.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
Vertiv has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 12.7%. This result isn’t too surprising as its gross margin gives it a favorable starting point.
Looking at the trend in its profitability, Vertiv’s operating margin rose by 12.7 percentage points over the last five years, as its sales growth gave it immense operating leverage.
In Q4, Vertiv generated an operating margin profit margin of 20.1%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Vertiv’s EPS grew at an astounding 39.3% compounded annual growth rate over the last five years, higher than its 18.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into Vertiv’s earnings to better understand the drivers of its performance. As we mentioned earlier, Vertiv’s operating margin was flat this quarter but expanded by 12.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Vertiv, its two-year annual EPS growth of 53.4% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q4, Vertiv reported adjusted EPS of $1.36, up from $0.99 in the same quarter last year. This print beat analysts’ estimates by 4.9%. Over the next 12 months, Wall Street expects Vertiv’s full-year EPS of $4.19 to grow 29.5%.
Key Takeaways from Vertiv’s Q4 Results
We were impressed by Vertiv’s optimistic full-year EPS guidance, which blew past analysts’ expectations. We were also glad its full-year revenue guidance trumped Wall Street’s estimates. On the other hand, its organic revenue slightly missed. Overall, we think this was a good quarter with some key metrics above expectations. The stock traded up 14.3% to $228.10 immediately following the results.
Vertiv put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
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