VRT Q2'26 Conference Call Notes
Three things from Vertiv Holdings's call, starting with: The 800V DC revenue opportunity is expanding per megawatt, but deployment timeline is slipping from 2027 to 2028
Three things that matter from Vertiv Holdings (VRT) in its Q2’26 call:
The 800V DC revenue opportunity is expanding per megawatt, but deployment timeline is slipping from 2027 to 2028: While management reiterated content expansion opportunities with 800V architecture, they quietly shifted customer validation to 2027 and deployment to 2028, a full year later than investor day promises. ‘We’re active in the development with Plan 27 customer validation supporting 28 deployment.’
Record Q2 beat masks supply chain execution issues on complex projects that pushed $100M+ of revenue: Despite 60% EPS growth and raised guidance, management admitted to ‘minor timing shifts’ and ‘temporary supply chain dynamics’ that delayed revenue recognition. The learning curve on mega-projects is steeper than expected.
Deferred revenue surge to record levels signals massive prepayments but also execution risk: Deferred revenue jumped materially in Q2 from ‘project advance payments and ongoing milestone collections.’ This is either the best problem to have (cash before delivery) or a red flag on project complexity.
Disclosure Quality: B- | Financial Quality: B
Track VRT’s promise history and grade trend: callsheetdaily.com/tickers/vrt
Delta Sheet
▼ Net Sales: $2,650M (up 30% YoY) → $3,274M (up 24% YoY) (600 bps deceleration in growth rate)
▼ Organic Sales Growth: 23% YoY → 18% YoY (500 bps deceleration)
▼ Adjusted EPS: $1.17 (up 83% YoY) → $1.52 (up 60% YoY) (2300 bps deceleration in growth)
▲ Adjusted Operating Margin: 20.8% → 22.6% (+180 bps sequential expansion)
▼ Americas Organic Growth: 44% YoY → 21% YoY (2300 bps deceleration)
▲ EMEA Organic Growth: -29% YoY → -2% YoY (+2700 bps improvement)
▲ APAC Organic Growth: 12% YoY → 26% YoY (+1400 bps acceleration)
▲ Adjusted Free Cash Flow: $653M (up 147% YoY) → $925M (up 234% YoY) (+8700 bps acceleration)
▲ Free Cash Flow Conversion: Not disclosed → ＞150% (New disclosure of exceptional conversion)
▲ Net Leverage: 0.2x → -0.1x (net cash) (Moved to net cash position)
- Deferred Revenue: Not specified → Increase driven by project advances (Material increase flagged)
▲ FY26 Revenue Guide: $13.75B midpoint → $14.0B midpoint (+$250M raise)
▲ FY26 EPS Guide: $6.35 midpoint → $6.70 midpoint (+$0.35 raise)
- CapEx as % of Sales: Not disclosed → 4% (high end of range) (Accelerating capacity investment)
