NYSE$VRT
Vertiv Holdings Co · Q2 2022 earnings
Q2 2022 earnings · · Investor relations
Briefing
Net sales increased and orders were up, but operating profit decreased due to material and freight inflation.
Vertiv reported strong demand with a 17% increase in orders and a record high backlog of $4.4 billion. Net sales grew by 11.0%, with organic net sales up by 7.9%. However, operating profit decreased to $26 million, and adjusted operating profit decreased to $82 million due to inflation and other cost headwinds. The company lowered its full-year adjusted operating profit guidance.
- Second quarter orders increased 17% compared to the prior year quarter, with 11% from higher volume and 10% from pricing.
- Backlog remained strong with another record quarter end of $4.4 billion at the end of June, increasing 39% from the end of 2021.
- Second quarter operating profit decreased $76 million to $26 million and adjusted operating profit of $82 million decreased $52 million from the prior year second quarter.
- Americas net sales increased 14.6% and were up 6.6% organically, driven primarily by price realization.
Headline financials
Revenue & EPS history
Vertiv · Revenue · Quarterly
$1.4B
Revenue by segment
Vertiv · $1.06B total across 1 segment · Q2 2022
- Products$1.06B+8.0%100.0%
Forward guidance
Vertiv anticipates a strong second half of 2022 with sequential acceleration of financial performance, positioning the company well for 2023. Third quarter guidance includes net sales of $1.46B - $1.50B and adjusted operating profit of $130M - $150M. Fourth quarter guidance includes net sales of $1.68B - $1.72B and adjusted operating profit of $240M - $265M. Full year 2022 adjusted operating profit guidance was lowered to $475M - $500M.
Tailwinds
- End market demand continues to be strong, as evidenced by continued strength in cloud and colocation markets.
- Price realization remains on plan.
- Supply chain constraints have started to ease with new suppliers coming online in support of the higher expected volume in the second half.
- Actions are taking hold and will bridge to a very strong fourth quarter and 2023.
- Pricing increases should outpace inflation in the second half
Headwinds
- Change in full year 2022 adjusted operating profit guidance is driven by higher sales volume more offset by foreign exchange, additional material inflation, lower expected profit from E&I, higher fixed costs due to the timing of the volume ramp-up in the second half and other cost headwinds.
- Third quarter guidance is lower than originally anticipated.
- Foreign currency negatively impacted second quarter sales by approximately $60 million.
- Net cash used by operating activities in the second quarter was $206 million, $265 million less cash generated compared to the prior year quarter
- Free cash flow for the full year to be in the range of a $25 million generation of cash to a $25 million use of cash
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 20 quarterly earnings reports · overlaid with Q2 2022
+1.5%
Avg return
Earnings day
+2.5%
Avg return
5 days after
+7.7%
Avg return
30 days after
56%
18 / 32 earnings
Positive
+30.0%
Q2 2023
Best reaction
-36.7%
Q4 2021
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q1 2026 | -2.1% | +3.2% | +4.8% | |
| Q4 2025 | +24.5% | +17.5% | +29.7% | |
| Q3 2025 | -2.0% | +10.4% | -8.6% | |
| Q2 2025 | +1.0% | -1.8% | -10.6% | |
| Q1 2025 | +8.5% | +20.0% | +45.0% | |
| Q4 2024 | -9.7% | -12.3% | -29.0% | |
| Q3 2024 | -2.2% | +1.0% | +24.6% | |
| Q2 2024 | -16.0% | -14.3% | -13.7% | |
| Q1 2024 | +14.1% | +19.7% | +34.1% | |
| Q4 2023 | +1.4% | +6.9% | +33.0% | |
| Q3 2023 | -10.7% | -1.9% | +9.4% | |
| Q2 2023 | +30.0% | +34.6% | +50.3% | |
| Q1 2023 | +18.5% | +21.2% | +61.4% | |
| Q4 2022 | +7.9% | +3.3% | -14.2% | |
| Q3 2022 | +4.7% | +1.3% | -2.8% | |
| Q2 2022 | +11.9% | +10.2% | -4.8% | |
| Q1 2022 | +10.6% | +9.3% | -0.9% | |
| Q4 2021 | -36.7% | -33.5% | -34.3% | |
| Q3 2021 | +6.9% | +8.3% | +7.2% | |
| Q2 2021 | +1.7% | +0.2% | +2.2% | |
| Q1 2021 | +0.7% | -1.1% | +7.5% | |
| Q4 2020 | -6.3% | -1.8% | -10.2% | |
| Q3 2020 | -1.8% | -4.0% | +12.2% | |
| Q2 2020 | +8.0% | +11.1% | +5.9% | |
| Q4 2019 | +3.4% | +8.5% | +31.5% | |
| Q1 2020 | -0.9% | -2.9% | +30.1% | |
| Q2 2019 | -16.4% | -31.9% | -13.7% | |
| Q3 2019 | +0.0% | -0.3% | +1.0% | |
| Q1 2019 | -0.3% | -0.3% | +0.1% | |
| Q4 2018 | +0.2% | +0.6% | +0.7% | |
| Q3 2018 | +0.5% | +1.2% | +1.3% | |
| Q2 2018 | -0.1% | -1.1% | -1.6% |
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