Data center technology provider Vertiv Holdings LLC is set to release its fiscal 2025 third-quarter earnings report on October 22, 2025, before the market opens in the Eastern USA.

According to Bloomberg analysts' predictions, the company’s revenue for the third quarter is expected to be $2.588 billion, up 24.8% year-on-year; adjusted earnings per share (EPS) is projected to be $0.99, up 30.2% year-on-year.

Review of the Previous Quarter

Vertiv performed strongly in fiscal 2025 second quarter, beating expectations with non-GAAP earnings per share of $0.95; revenue reached $2.64 billion, up 35.4% year-on-year. This performance demonstrates the company’s substantial growth potential amid strong data center demand.

For the third quarter, Vertiv expects net sales to be between $2.51 billion and $2.59 billion, with organic growth ranging from 20% to 24%. Adjusted operating profit is estimated to be between $490 million and $530 million, with adjusted earnings per share (EPS) expected to be between $0.94 and $1.00.

Looking to fiscal 2025, Vertiv predicts full-year net sales to reach between $9.925 billion and $10.075 billion, with an expected organic growth rate of 23% to 25%, adjusted free cash flow is projected to be between $1.375 billion and $1.425 billion. These forecasts indicate the company will continue to benefit from the robust growth in data center demand.

This Quarter’s Outlook

With abundant orders, the focus for the third quarter is on efficiently "converting orders into revenue". In the first half of the year, several large projects progressed smoothly in North America, and a stable pricing system helped significantly boost product revenue for the second quarter. If North American hyperscale data center projects are delivered as scheduled in the third quarter, revenue could reach the upper limit of the earnings guidance. Additionally, increased capacity utilization will dilute fixed costs, promoting gross margin improvement.

From a supply-side perspective, ongoing improvements in component costs and outsourcing costs, coupled with optimized delivery combinations, will further support gross margin growth. Institutions generally expect the third quarter gross margin to be at or slightly above 33.7%. If the proportion of service revenue remains stable or slightly increases, the net margin is expected to approach 10%.

With the growing application of AI, demand for liquid cooling technology in data centers is rising, especially in handling high power density. According to McKinsey forecasts, the total investment in data center infrastructure between 2025 and 2030 could reach $7 trillion, and as a key supplier in the industry, Vertiv stands to benefit from this trend. The market growth for liquid cooling technology could surpass that of traditional electrical equipment, becoming a new growth point for Vertiv.

In the second quarter, Vertiv’s service revenue accounted for approximately 18% to 19%. As scaled shipments continue, the support of service business to the gross margin becomes increasingly significant. If service income continues to grow in the third quarter, the net margin may reach or slightly exceed 10%, providing strong support for adjusted EPS growth.

Investment Analysis

Numerous institutional analysts express optimism about Vertiv’s future growth prospects, particularly appreciating the company’s advantages in high-density power and liquid cooling solutions, leading to upward adjustments in their target prices. Morgan Stanley also believes that third-quarter revenue and gross margin are likely to steadily grow. Analysts generally focus on several key factors, including whether third-quarter revenue and gross margin meet expectations, whether the proportion of high value-added products and services continues to rise, and whether order quality provides solid support for the upcoming quarters.

Overall, institutions consistently view Vertiv's long-term prospects positively, especially under the driving forces of liquid cooling technology, service business, and high value-added solutions. They expect continued improvement in the company’s gross margin and EPS. With the ongoing growth in data center demand, the increase in the proportion of liquid cooling technology and high value-added products, along with the service business stability, are expected to be the key drivers for Vertiv’s robust profit growth in the upcoming quarters. Market expectations for the company’s "high growth + profit improvement" will continue. If these trends persist, Vertiv is poised to achieve robust profit growth in the upcoming quarters.

Summary

Vertiv's outlook remains promising. The company is expected to continue benefiting from the strong growth in data center demand, especially propelled by liquid cooling technology and high value-added products, with anticipated sustained improvement in gross margin and EPS. If these trends persist, Vertiv is likely to achieve robust profit growth in the upcoming quarters, maintaining market expectations for its "high growth + profit improvement".

This content is based on tiger AI and Bloomberg data, and is for reference only.