Vertiv Financial Model
Energy Equipment Company Financials Example (Free Excel Download)
Vertiv Holdings Co is a global provider of critical digital infrastructure and continuity solutions, primarily serving data centres, communication networks, and commercial/industrial environments.
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About this model
This model provides a comprehensive equity valuation and scenario planning tool for an analyst covering Vertiv Holdings Co, focusing on forecasting revenue growth and margin expansion driven by the global artificial intelligence data centre build-out and the transition to high-density liquid cooling.
Vertiv Holdings Co is a global provider of critical digital infrastructure and continuity solutions, primarily serving data centres, communication networks, and commercial/industrial environments. The company designs, manufactures, and services power management systems, thermal management (cooling) equipment, and IT management solutions.
- Business segments: Americas (62% of revenue), Asia Pacific (20%), and Europe, Middle East & Africa (18%).
- Key geographies: Global footprint with heavy concentration in North America due to hyperscale cloud provider investments.
- Business model type: Asset-light manufacturing and assembly, complemented by a high-margin, recurring global services business.
- Competitive position: Market leader in data centre thermal management and power infrastructure, competing with Schneider Electric, Eaton, and Stulz. Vertiv benefits from deep co-development partnerships with hyperscalers and chipmakers like NVIDIA.
- Recent major events: Significant acceleration in orders (up 252% organically in Q4 2025) driven by AI infrastructure demand, and the acquisition of CoolTera to bolster direct-to-chip liquid cooling capabilities.
The downloadable Vertiv financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsVertiv financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $5.00B | $5.69B | $6.86B | $8.01B | $10.23B |
| Gross profit | $1.52B | $1.62B | $2.40B | $2.93B | $3.72B |
| Operating income | $259.9M | $223.4M | $872.2M | $1.37B | $1.83B |
| Net income | $119.6M | $76.6M | $460.2M | $495.8M | $1.33B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Vertiv
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Americas
- Segment name: Americas
- Revenue driver formula: Hyperscale & Colocation MW Capacity Added x Vertiv Capture Rate per MW + Service Attach Rate
- Historical growth rate: 20% to 42% (accelerated to 41.9% in 2025)
- Key growth levers and headwinds: Driven by massive capital expenditure from cloud providers (AWS, Microsoft, Google) upgrading to high-density AI clusters. Headwinds include supply chain bottlenecks and potential utility power constraints limiting data centre construction.
- Pricing dynamics: High pricing power due to constrained industry capacity and mission-critical nature of thermal management.
- Revenue recognition notes: Equipment revenue recognised upon transfer of control (usually shipment or delivery); service revenue recognised over the contract term.
- Seasonality: Q4 is typically the strongest quarter for equipment delivery and cash collection.
Asia Pacific (APAC)
- Segment name: Asia Pacific
- Revenue driver formula: Regional Data Centre Build-out x Market Share + Telecom Infrastructure Upgrades
- Historical growth rate: 10% to 18% (17.5% in 2025)
- Key growth levers and headwinds: Growth driven by emerging market digitisation and sovereign AI initiatives. Headwinds include foreign currency translation and intense local competition in China.
- Pricing dynamics: Highly competitive, particularly in the telecom space, requiring localised manufacturing to maintain margins.
- Revenue recognition notes: Standard equipment and services recognition.
- Seasonality: Q4 peak, though Chinese New Year can impact Q1 manufacturing and deliveries.
Europe, Middle East & Africa (EMEA)
- Segment name: Europe, Middle East & Africa
- Revenue driver formula: Regional Enterprise & Cloud IT Spend x Vertiv Penetration Rate
- Historical growth rate: Flat to 5% (1.7% in 2025)
- Key growth levers and headwinds: Constrained by strict data sovereignty laws driving local builds, but heavily offset by severe power availability constraints in tier-1 markets like Frankfurt, London, Amsterdam, and Paris.
- Pricing dynamics: Value-based pricing, with a premium on highly energy-efficient systems to meet strict European environmental regulations.
- Revenue recognition notes: Standard equipment and services recognition.
- Seasonality: Strong Q4, with a noticeable dip in Q3 due to the European summer holiday period impacting installation schedules.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Raw materials (copper, steel, aluminium), electronic components, direct labour, inbound and outbound freight, and manufacturing overhead.
- Gross margin range: 34% to 37% (36.3% in 2025).
- Key input costs and commodity exposures: Highly exposed to copper and steel prices, as well as freight rates. The company uses index-based pricing contracts to pass through commodity inflation.
- How COGS scales with revenue: Step-function scaling. As new manufacturing facilities come online, gross margins temporarily dip due to under-absorption, then expand as volume fills the factory.
Operating Expenses
- R&D: Approximately 4% to 5% of revenue. Heavily focused on liquid cooling, hybrid cooling (CoolPhase Flex), and high-density power distribution.
- SG&A: Includes global sales commissions, marketing, and corporate administrative costs. Highly leveragable; SG&A as a percentage of sales has been declining as revenue scales.
- Depreciation & Amortisation: Significant amortisation of intangible assets stemming from the Platinum Equity SPAC transaction and subsequent acquisitions.
- Stock-Based Compensation: Runs at approximately 1% to 1.5% of revenue, standard for a modern industrial technology firm.
- Restructuring / one-time charges: Historically frequent due to footprint optimisation, but normalising as the company reaches operational maturity.
Margin Profile
- Gross margin: 34% to 37%.
- EBITDA margin: 16% to 22%.
- Operating margin: GAAP operating margin of 15% to 18% (17.9% in 2025); Adjusted operating margin expanding rapidly from 15% to 23.2% in Q4 2025.
- Margin trend: Expanding significantly due to operational leverage, value pricing, and a shift towards higher-margin liquid cooling and services.
Balance Sheet Structure
- Total assets: Approximately $9 billion to $10 billion.
- Key asset categories: Inventory (high to support rapid growth), Accounts Receivable, Goodwill, and Intangible Assets.
- Goodwill & intangibles: Represents over 40% of total assets, a legacy of the company's carve-out from Emerson Electric, the Platinum Equity buyout, and the E&I Engineering acquisition.
- Working capital profile:
- Days Sales Outstanding (DSO): 65 to 75 days.
- Days Inventory Outstanding (DIO): 80 to 100 days (elevated to secure critical components for AI data centre orders).
- Days Payable Outstanding (DPO): 60 to 75 days.
- Net working capital as % of revenue: 15% to 20%.
- Working capital dynamic: The company consumes cash through working capital during periods of hyper-growth due to the need to build inventory ahead of large hyperscale deployments.
- PP&E: Asset-light footprint primarily consisting of assembly and testing facilities rather than heavy primary manufacturing.
- Right-of-use assets: Material due to leased warehouse and assembly spaces globally.
Capital Expenditure & Investment
- Capex as % of revenue: Historically 1.5% to 2.5% (2.2% in 2025).
- Maintenance capex vs. growth capex: Heavily skewed towards growth capex (approximately 70% growth / 30% maintenance) to build new liquid cooling and busbar manufacturing lines.
- Major capex programmes: Expanding global capacity for direct-to-chip liquid cooling, coolant distribution units (CDUs), and modular power solutions. 2026 capex is guided to double to $425 million - $525 million.
- Capitalised software: Minimal relative to physical tooling and facility build-outs.
- M&A pattern: Strategic bolt-on acquirer (e.g., E&I Engineering for switchgear, CoolTera for liquid cooling technology).
Debt & Capital Structure
- Total debt: Approximately $3.0 billion.
- Debt/EBITDA ratio: Net leverage dropped to approximately 0.5x at the end of 2025 due to massive EBITDA growth and strong free cash flow generation.
- Key debt instruments: Senior secured term loans and senior unsecured notes.
- Interest rate profile: A mix of fixed high-yield notes and floating-rate term loans, often hedged with interest rate swaps.
- Share repurchase programme: Highly active. The board authorised a $3.0 billion programme through 2027, with $2.4 billion remaining at the end of 2025.
- Dividend policy: Initiated a small but growing dividend; currently $0.0625 per share quarterly ($0.25 annually).
Cash Flow Characteristics
- Operating cash flow conversion: Very strong, though temporarily dampened by inventory builds. OCF was $1.0 billion in Q4 2025 alone.
- Free cash flow margin: Adjusted free cash flow was $1.88 billion in 2025, representing an 18% FCF margin.
- Major non-cash items: High depreciation and amortisation (from acquisition intangibles) and stock-based compensation.
- Working capital cash flow impact: A significant use of cash during the current AI scale-up phase, as inventory must be procured months ahead of revenue recognition.
- Capex intensity: Structurally low but currently elevated to capture the generational AI infrastructure opportunity.
Sheet Structure
- Assumptions: Hardcoded drivers for macroeconomic inputs, segment growth rates, margin profiles, and working capital days.
- Scenarios: Base, Bull (AI super-cycle), and Bear (hyperscaler capex digestion) toggles feeding the Assumptions sheet.
- Income_Statement: Consolidated view, driven by the segment build, ending in Net Income and EPS.
- Revenue_Build: Granular forecast of Net Sales by region (Americas, APAC, EMEA).
- Margin_Build: Operating profit forecasted at the regional segment level, minus unallocated corporate expenses to bridge to consolidated operating profit.
- Balance_Sheet: Standard assets, liabilities, and shareholders' equity.
- Working_Capital: Schedules for Accounts Receivable, Inventory, and Accounts Payable driven by DSO, DIO, and DPO.
- Depreciation_Schedule: Waterfall for existing PP&E, new capex, and amortisation of acquisition-related intangibles.
- Debt_Schedule: Tranche-by-tranche tracking of term loans and notes, calculating interest expense and mandatory amortisation.
- Cash_Flow: Indirect method starting from Net Income, adjusting for non-cash items and working capital changes to arrive at Free Cash Flow.
- Valuation: Discounted Cash Flow (DCF) using unlevered free cash flow, WACC calculation, and an EV/EBITDA multiple cross-check.
Key Financial Relationships
- `Americas Net Sales = Prior Year Americas Net Sales * (1 + Americas Growth Rate)`
- `APAC Net Sales = Prior Year APAC Net Sales * (1 + APAC Growth Rate)`
- `EMEA Net Sales = Prior Year EMEA Net Sales * (1 + EMEA Growth Rate)`
- `Total Net Sales = Americas Net Sales + APAC Net Sales + EMEA Net Sales`
- `Segment Operating Profit (Americas) = Americas Net Sales * Americas Adjusted Operating Margin`
- `Consolidated Adjusted Operating Profit = Sum of Segment Operating Profits - Unallocated Corporate Expenses`
- `Gross Profit = Total Net Sales * Consolidated Gross Margin %`
- `Accounts Receivable = (Total Net Sales / 365) * DSO`
- `Inventory = (COGS / 365) * DIO`
- `Accounts Payable = (COGS / 365) * DPO`
- `Interest Expense = (Beginning Debt Balance + Ending Debt Balance) / 2 * Weighted Average Interest Rate`
- `Adjusted Free Cash Flow = Cash from Operations - Capital Expenditures`
Cross-Sheet Dependencies
- The Revenue_Build and Margin_Build sheets dictate the top half of the Income_Statement.
- Net Income from the Income_Statement flows to the top of the Cash_Flow statement and into Retained Earnings on the Balance_Sheet.
- The Working_Capital sheet uses Revenue and COGS from the Income_Statement to calculate balances, which flow to the Balance_Sheet and dictate the working capital cash impact on the Cash_Flow statement.
- The Debt_Schedule requires the ending cash balance from the Cash_Flow statement to determine if the revolver needs to be drawn, creating a potential circularity with Interest Expense on the Income_Statement. A circuit breaker (toggle) must be included.
Sign Convention
- Income Statement: Revenues are positive. Expenses (COGS, SG&A, Interest, Taxes) are negative.
- Balance Sheet: All assets, liabilities, and equity balances are positive.
- Cash Flow Statement: Cash inflows are positive. Cash outflows (capex, debt repayment, dividends, inventory increases) are negative.
- Margin %: Displayed as positive percentages.
Things Most Likely to Go Wrong
- Working Capital Drag: Vertiv requires significant inventory to support 20%+ growth. Failing to model the cash drain from inventory build will overstate Free Cash Flow.
- Capex Step-Up: The company guided to a massive capex increase in 2026 ($425M-$525M) for liquid cooling capacity. Extrapolating historical capex % of sales will severely understate investment needs.
- Adjusted vs. GAAP Margins: Vertiv heavily promotes "Adjusted Operating Margin" (23.2% in Q4 2025) which excludes amortisation and restructuring. The model must bridge GAAP to Adjusted to accurately forecast cash taxes and true earnings.
- Tariff Impacts: The company frequently cites tariff countermeasures. Gross margin assumptions must account for potential supply chain friction.
- FX Translation: With 38% of revenue outside the Americas, a strong USD suppresses reported growth. The model should ideally separate constant-currency volume growth from FX impacts.
- Share Count Dilution: Stock-based compensation and historical warrant exercises have impacted share counts. Buybacks ($2.4B remaining) must be modelled to offset this dilution.
- Unallocated Corporate Costs: Segment operating margins look exceptionally high because corporate overhead is excluded. These must be subtracted to reach consolidated EBIT.
- Order Backlog vs. Revenue: Vertiv has a massive $15.0 billion backlog. Revenue growth is constrained by manufacturing capacity, not demand. Do not model revenue growth purely on order growth.
Validation Checks
- Gross Margin Band: Consolidated gross margin should remain between 34% and 38%. Flag if it exceeds 38% without a structural shift in pricing.
- Capex Absolute Value: 2026 Capex must be between $425 million and $525 million based on management guidance.
- Net Leverage: Debt/EBITDA should remain below 1.5x given the strong cash generation and current 0.5x starting point.
- Balance Sheet Check: Total Assets must exactly equal Total Liabilities + Shareholders' Equity in all forecast periods.
- FCF Conversion: Adjusted Free Cash Flow should be roughly 100% to 115% of Adjusted Net Income.
- Revenue Growth Limit: Total revenue growth should not exceed 30% annually in the base case, as physical manufacturing capacity and supply chains cannot support faster scaling.
- Dividend Payout: The annual dividend of $0.25 per share should represent a very low payout ratio (<10%), leaving the bulk of cash for buybacks and capex.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Americas Revenue Growth | 28.0 | % | Blended down from 2025's 41.9% to align with management's 2026 consolidated guidance. |
| APAC Revenue Growth | 15.0 | % | Slight deceleration from 2025's 17.5% due to macro headwinds. |
| EMEA Revenue Growth | 5.0 | % | Improvement from 2025's 1.7% as power constraints ease slightly. |
| Consolidated Gross Margin | 36.5 | % | Flat to 2025 (36.3%) as volume leverage offsets tariff impacts. |
| SG&A as % of Revenue | 14.5 | % | Continued operating leverage as top-line scales. |
| R&D as % of Revenue | 4.5 | % | Elevated to support liquid cooling and AI infrastructure innovation. |
| DSO (Days Sales Outstanding) | 70 | Days | Historical average for enterprise hardware sales. |
| DIO (Days Inventory Outstanding) | 90 | Days | Elevated to secure supply chain for $15B backlog. |
| DPO (Days Payable Outstanding) | 65 | Days | Standard supplier terms. |
| 2026 Capital Expenditures | 475 | $ Millions | Midpoint of management's $425M - $525M guidance. |
| Long-Term Capex / Revenue | 3.5 | % | Settling higher than historical 2% due to liquid cooling intensity. |
| Effective Tax Rate | 24.0 | % | Blended global statutory rates. |
| Annual Dividend per Share | 0.25 | $ | Based on $0.0625 quarterly rate set in 2025. |
| Share Repurchases (Annual) | 800 | $ Millions | Aggressive deployment of the $2.4B remaining authorisation. |
| WACC | 9.5 | % | Standard for a high-growth industrial technology firm. |
| Terminal Growth Rate | 3.0 | % | Reflects long-term data centre replacement cycles. |
Data Sources & Benchmarks
- Filings: SEC EDGAR (Form 10-K, 10-Q, 8-K) and Vertiv Investor Relations website (investors.vertiv.com).
- Key Peers: Schneider Electric (SU.PA), Eaton Corporation (ETN), Legrand (LR.PA), and nVent Electric (NVT).
- Industry Data: Dell'Oro Group (Data Center Physical Infrastructure reports), Synergy Research Group (Hyperscale capex tracking).
- Consensus Estimates: Bloomberg or FactSet for forward EPS and revenue estimates.
Sources
- Vertiv Holdings Co SEC 10-K Report (TradingView summary, Feb 2026)
- Vertiv Reports Strong Orders, Sales, and EPS Growth; Raises Full Year Guidance (July 2025)
- Vertiv Reports Strong Fourth Quarter with Organic Orders Growth of 252% (Feb 2026)
- Vertiv Holdings Co. 2024 Shareholder Letter (April 2025)
- Vertiv Fourth Quarter 2025 Results Presentation (Feb 2026)
- Vertiv 2024 Investor Event Presentation (Nov 2024)
- Notre Dame Investment Club Vertiv Pitch (Sept 2025)
Do more with the Vertiv model
Frequently asked
What does Vertiv Holdings Co do?+
Vertiv Holdings Co is a global provider of critical digital infrastructure and continuity solutions, primarily serving data centers, communication networks, and commercial/industrial environments. The company designs, manufactures, and services power management systems, thermal management equipment, and IT management solutions.
What are the main drivers of Vertiv's revenue growth?+
Vertiv's revenue growth is primarily driven by the global artificial intelligence data center build-out and the transition to high-density liquid cooling. The company has experienced significant acceleration in orders, with organic growth up 252% in Q4 2025, largely due to AI infrastructure demand.
How does Vertiv's capital expenditure strategy support its growth?+
Vertiv's capital expenditure is heavily skewed towards growth capex, representing approximately 70% of its total capex, to build new liquid cooling and busbar manufacturing lines. For instance, 2026 capex is guided to double to $425 million - $525 million to expand global capacity for these critical solutions.
What are the key cost assumptions in Vertiv's financial model?+
Key cost assumptions in Vertiv's financial model include COGS at approximately 67.9% of revenue, R&D at about 5% of revenue, and SGA expenses around 22% of revenue. These percentages reflect the company's asset-light manufacturing and assembly business model.
Where can I download a financial model for Vertiv (VRT)?+
A comprehensive equity valuation and scenario planning Excel model for Vertiv (VRT) is available for download. This model focuses on forecasting revenue growth and margin expansion driven by AI data center demand through FY2026–FY2030.
How does Vertiv's working capital profile impact its cash flow during growth periods?+
Vertiv's working capital profile indicates that the company consumes cash through working capital during periods of hyper-growth. This dynamic is primarily due to the need to build inventory ahead of large hyperscale deployments to secure critical components for AI data center orders.
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