BAIRD 2026 GLOBAL INDUSTRIAL CONFERENCE - VERTIV HOLDINGS CO

Financial Performance:

• Revenue expanded from $4 billion in 2020 to nearly $14.5 billion in the current year.
• Strong operational beat in the third quarter driven by prefabrication (modular data center) execution and increased capacity.
• Management emphasizes maintaining margin efficiency and protecting profitability through proactive inflation embedding in quoting processes.
• The acquisition of the Utility Infrastructure Group (UIG) integrates upstream power generation and orchestration technology, adding content and visibility to the power portfolio.

Guidance and Future Outlook:

• AI compute and cloud demand remain resilient with accelerating pipeline growth globally across hyperscalers, enterprises, and AI labs.
• Management forecasts the commercialization of 800V DC "sidecars" (hybrid infrastructure) in the second half of 2027, with full end-to-end 800V DC native infrastructure emerging in the second half of 2028.
• Long-term outlook remains positive despite potential regulatory "pacing items," citing industry resourcefulness in overcoming power grid constraints.
• The company expects continued market expansion driven by the need for behind-the-meter power generation and grid orchestration.

Business Segments and Product Lines:

• Prefabrication/Modularity: Shifted from on-site fabrication to factory-based manufacturing of entire data center modules to reduce construction complexity and accelerate timelines; currently navigating the learning curve for system-level communication and redundancy.
• Power: Expanding into 800V DC architectures and microgrids; validating new product roadmaps with customers and silicon providers.
• Thermal: Leading position in liquid cooling (both single-phase and evolving two-phase); managing a crowded CDU space by leveraging scale, service capability, and deep field knowledge.
• New Acquisitions: Integration of UIG to enable early engagement in data center planning (land and power) and provide advanced behind-the-meter power orchestration.

Market and Competitive Landscape:

• Market trends indicate a transition toward higher compute density, necessitating widespread adoption of liquid cooling alongside traditional air cooling.
• The CDU (Coolant Distribution Unit) market is consolidating; Vertiv welcomes rational competitors but leverages its large installed base and service network as a barrier to entry for new players.
• Competitive advantage stems from the ability to rapidly close feedback loops between field performance and factory design, particularly for new technologies.

Risks and Challenges:

• Scaling Complexity: The primary constraint is maintaining quality, efficiency, and on-time delivery simultaneously while scaling at unprecedented volumes.
• Execution Risk: Managing the "learning curve" associated with industrializing complex, system-level project businesses versus standard product manufacturing.
• Regulatory/Pacing: Potential policy changes post-election could impact project pacing, though demand is viewed as resilient enough to overcome such hurdles.
• Inflation: Ongoing input cost inflation requires continuous price embedding in quotes to protect margins without losing market share.

Management Commentary and Tone:

• Tone is confident and focused on "resilient" demand, emphasizing that AI deployment is in early stages of adoption.
• Management demonstrates discipline regarding capital allocation, utilizing a dual strategy of organic development and strategic inorganic growth (M&A) to accelerate capability.
• CEO Gio Abattazi and CFO Craig Chamberland emphasize that quality and reliability are core competitive advantages, not just compliance metrics.
• Leadership expresses laser focus on the "trilemma" of scaling, quality, and efficiency to avoid customer dissatisfaction or margin erosion.

Analyst Questions and Answers:

• Pipeline Durability: Confirmed that the speed of pipeline growth has increased globally, driven by demand for AI and traditional cloud compute.
• 800V DC Timeline: Clarified that 800V DC adoption will be mission-dependent; lower resilience needs (colos) will retain traditional architecture longer, while focused AI factories will adopt native 800V DC sooner.
• M&A Strategy: Reiterated a balanced approach between organic R&D (led by Scott and the internal team) and M&A to accelerate market entry, citing UIG as a successful example of merging technology and market foothold.
• Quality Control: Discussed the implementation of rigorous manufacturing controls, hiring of automotive industry veterans to enhance global supply chain quality, and obsession with "field first-time yields."

Other Key Points:

• The definition of "prefabrication" is evolving into the manufacturing of entire data center modules to industrialize a historically non-standardized construction process.
• Liquidity and service capability in liquid cooling are critical differentiators; Vertiv's large installed base provides unique data on field performance that new competitors lack.
• Pricing fatigue has not been observed; customers continue to value the combination of price, quality, and service.
• The industry is moving toward "active" data centers that support the wider grid, a capability enabled by UIG's technology.