BAIRD 2026 GLOBAL INDUSTRIAL CONFERENCE - VERTIV HOLDINGS CO

Explicit Guidance:

• No specific numerical revenue, earnings, or margin guidance (e.g., ranges or point estimates) for FY2024, FY2025, or beyond was provided in this transcript.
• Management indicated that pricing for anticipated inflation is currently embedded in quoting processes, though no specific tax rate or capex targets were disclosed.

Business-Segment Outlook:

• Power & 800V DC: 800V DC infrastructure adoption is expected to begin with "sidecars" (hybrid infrastructure converting near the IT load) in the second half of 2027, with full end-to-end native 800V DC deployments anticipated in the second half of 2028.
• Thermal & Liquid Cooling: Liquid cooling penetration is increasing and expected to continue growing as a mixed technology alongside air cooling; the company views the transition from single-phase to two-phase liquid cooling as an evolution, not a disruption, with no specific timeline for widespread adoption yet defined.
• Prefabrication/Modular: The business is currently climbing a "learning curve" to industrialize the manufacturing of entire data center modules within factory walls; management expects continued operational progress and efficiency gains in the third quarter and beyond as communication and inventory redundancies mature.
• Utility Infrastructure Group (UIG): The recently acquired UIG business is expected to provide early visibility into data center projects (starting at land and power planning) and enhance capability in behind-the-meter power generation orchestration.
• Converged Infrastructure: Capacity additions are already serving more customers in the product portion of the business.

Market and Competitive Outlook:

• Demand Trends: AI compute demand is described as "very resilient," "very strong," and "not stopping," driven by hyperscalers, enterprise, and AI labs; traditional cloud compute demand is also noted as robust.
• Competitive Landscape: The CDU (Computer Room Distribution Unit) market is consolidating; management anticipates continued densification of data centers which plays in their favor. They welcome "rational and reputable competitors" but assert a competitive advantage through their existing install base and rapid service response loops.
• Power Dynamics: Power is viewed as a "pacing item" that the industry will overcome; the trend is shifting toward behind-the-meter power generation and grid orchestration rather than grid dependency.
• Pricing Power: Management sees no evidence of customer pricing fatigue; the company expects to maintain margins by structurally embedding inflation into quotes.

Macro / Industry Outlook:

• Regulatory Environment: Management anticipates post-midterm "pacing items" regarding policy or regulation but remains confident the industry will react and adapt, viewing these as temporary hurdles rather than structural blockers.
• Inflation: The company is actively managing inflation risks by embedding expected commodity and cost changes into new quotes to protect margins.
• Economic Resilience: The underlying trend for AI infrastructure is described as highly resilient despite potential macroeconomic pacing items.

Strategic Initiatives:

• M&A Strategy: Continued dual-path approach of organic development and inorganic acquisitions to build out power portfolios (e.g., 800V DC technology) and microgrid capabilities; the strategy aims to merge or accelerate whichever path offers better outcomes or speed to market.
• Capacity & Capability Expansion: Ongoing investment in manufacturing capacity, global supply chain optimization, and quality control personnel (hiring from automotive/industrial sectors) to support scaling from $4B to nearly $14.5B revenue volumes.
• Product Roadmaps: Validation of 800V DC architectures and testing of new liquid cooling technologies with customers and silicon providers.

Risks and Headwinds to Outlook:

• Scaling Complexity: The primary risk is balancing speed of scaling with quality and efficiency; management warns that slipping on any of these three levers (speed, quality, efficiency) could lead to bad customer experiences or margin erosion.
• Execution Risks: Project-level businesses face higher complexity than product-level businesses, requiring robust internal communication and redundancy to manage engineering changes and system-level outcomes.
• Technology Uncertainty: Specific timelines for widespread two-phase liquid cooling adoption remain unclear.

Management Tone on the Future:

• Confidence: Highly confident ("feel good," "resilient," "proud") in the durability of AI demand and the industry's ability to navigate power constraints.
• Tone: Optimistic but operational-focused; emphasizes that the "dancing" between speed, quality, and efficiency is a constant, high-priority evaluation.
• Differentiation: Repeatedly stresses competitive advantage derived from service speed, existing install base knowledge, and the ability to "close the loop" on field issues for new products faster than new entrants.

Miscellaneous:

• Market Architecture: Future power infrastructure will likely be a spectrum ranging from traditional low-voltage AC (for 20-year flexible resilience sites) to native end-to-end 800V DC (for focused AI factories).
• Service Loop: Management tracks "field first time yields" obsessively, particularly for new products, using commissioning data to rapidly update factory processes.