Vertiv's Q2 2026 sales rose 24% to $3.27 billion and diluted EPS 53% to $1.27 as adjusted operating margin widened 4.1 points to 22.6%, but organic growth of 17.8% missed its own 20–24% guide even as full-year guidance was raised.
Revenue
$3.3B
+24.1% YoY
Net income
$498M
+53.5% YoY
Diluted EPS
$1.27
+53.0% YoY
Operating margin
19.5%
How VRT compares with Industrials peers
Figure
VRT
Peer median
Rank
Revenue growth (YoY)
+24.1%
+8.5%
6th of 79
Operating margin
19.5%
17.9%
28th of 78
EPS growth (YoY)
+53.0%
+13.4%
11th of 77
Rank 1 = fastest revenue growth, highest operating margin, fastest EPS growth. Peers are the other Industrials companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
Profit grew twice as fast as sales, but revenue came in at the bottom of Vertiv's own range
Vertiv, which makes the power and cooling equipment that keeps data centers running, grew second-quarter 2026 net sales 24.1% to $3,274.3 million and diluted earnings per share 53% to $1.27. The profit side beat the company's own April guidance comfortably; the sales side did not. Revenue landed near the low end of the $3,250–3,450 million range management gave three months earlier, and organic growth (sales growth with acquisitions and currency moves stripped out) was 17.8%, below the 20–24% guided. Management blamed "temporary supply chain congestion and multi-phased project execution" that pushed some revenue into later quarters, then raised full-year guidance anyway.
At a glance
Adjusted operating margin 22.6%, up 4.1 points. Vertiv kept 22.6 cents of every sales dollar as operating profit before acquisition-related charges, versus 18.5 cents a year ago, so profit grew about twice as fast as sales.
Customer prepayments doubled to $3,633.7 million in six months. Deferred revenue (cash customers pay before Vertiv delivers) was $1,814.7 million at the end of 2025. That is the main reason operating cash flow reached $1,099.8 million in the quarter, 2.2 times net income.
Full-year sales guidance raised to $14.0 billion at the midpoint (from $13.75 billion), which implies second-half sales about 36% above the first half's $5,923.8 million.
The numbers
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$3,274.3M
$2,638.1M
+24.1%
Organic sales growth
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5 pts of growth from acquisitions, 1 pt from currency
Gross margin
37.7%
34.0%
+3.7 pts
Operating profit (GAAP)
$637.9M
$442.4M
+44.2%
Operating margin (GAAP)
19.5%
16.8%
+2.7 pts
Adjusted operating margin
22.6%
18.5%
+4.1 pts
Net income
$497.8M
$324.2M
+53.5%
Diluted EPS (GAAP)
$1.27
$0.83
+53.0%
Adjusted diluted EPS
$1.52
$0.95
+60.0%
Operating cash flow
$1,099.8M
$322.9M
+241%
Orders growth / backlog
Not disclosed
Not disclosed in this release
Last disclosed: $15.0B backlog at Dec 31, 2025 (+109% YoY)
Vertiv reports in three regions:
Region
Q2 2026 sales
Reported growth
Organic growth
Adj. operating margin (vs Q2 2025)
Americas
$2,070.8M
+29.2%
+21.1%
27.6% (24.0%)
Asia Pacific
$719.9M
+28.5%
+25.7%
13.3% (10.6%)
Europe, Middle East & Africa
$483.6M
+1.7%
−2.4%
25.7% (21.9%)
Where the growth came from
The Americas carried the quarter. It supplied $468.5 million of the $636.2 million sales increase and 63% of total sales. Its organic growth slowed to 21.1% from 44% in Q1 (per the April release), which fits the 10-Q's statement that Americas growth was "slightly offset by temporary supply chain congestion and multi-phased project execution" — large AI data-center builds are delivered in phases, so a slipped phase moves revenue between quarters.
Acquisitions did most of the services growth. Services & spares sales rose 28.6%, but $89.1 million of the $148.7 million increase came from acquired businesses, including PurgeRite, the liquid-cooling fluid-management services firm bought in December 2025. Organic services growth was 10.1%, against 19.7% for products. The service line is growing mainly because Vertiv is buying it.
Europe is still flat. EMEA sales rose 1.7%, and the 10-Q attributes all of that to currency: without the $13.7 million exchange-rate benefit, sales fell 2.4%. For the first half, EMEA organic sales were down 14.8%. Its margin still improved to 25.7%, so the problem is volume, not pricing.
Why margins jumped. Gross margin rose to 37.7% from 34.0%. The 10-Q credits "the mix of product and service sales," and the release adds "continued strong productivity, and favorable price-cost, inclusive of tariff impacts and associated countermeasures." Price-cost means prices rose faster than input costs, tariffs included. Adjusted operating profit of $738.4 million beat the top of the $690–730 million guidance even though sales came in near the bottom of theirs.
What the headline numbers hide
The cash flow is mostly customer prepayments. In the first half, operating cash flow of $1,866.6 million was 2.1 times net income. But $1,822.7 million of that came from the rise in deferred revenue. At the same time, inventories grew by $1,048.0 million and receivables by $644.2 million. Inventory reached $2,522.7 million on June 30, up 73% since December, while first-half sales grew 27%. Customers are paying for inventory Vertiv is building for future deliveries. That supports demand, but if deliveries slip further, the inventory stays on the balance sheet and those advances are still owed as product. Full-year adjusted free cash flow guidance of $2.4–2.6 billion assumes the pattern continues.
The GAAP-to-adjusted gap is $100.5 million this quarter. Adjusted figures exclude $73.7 million of amortization of intangibles (up from $46.9 million because of acquisitions), a $28.8 million increase in the PurgeRite earnout liability, $1.9 million of deal costs and a $3.9 million restructuring credit. The earnout charge is a real cost: the liability rises when the acquired business is expected to pay out more against its targets, and it is money Vertiv expects to owe the sellers. Adjusted EPS is $0.25 above GAAP EPS, versus a $0.12 gap a year ago.
About 6 points of the 53% EPS growth came from a lower tax rate. The effective tax rate fell to 19.7% from 23.0%, which the 10-Q attributes to "discrete tax benefits related to stock compensation" — a benefit that varies with the share price and option exercises and may not recur. At last year's rate, diluted EPS would have been about $1.22, up roughly 46%. Buybacks did not help: diluted shares rose 0.7% to 392.7 million. Lower interest expense ($17.4 million vs $21.3 million) added about a cent. Most of the EPS growth came from operations.
Vertiv stopped reporting orders. At year-end 2025, Vertiv disclosed a fourth-quarter book-to-bill ratio of about 2.9x (orders received were about 2.9 times sales shipped) and a $15.0 billion backlog. Neither the Q1 nor the Q2 2026 release gives an orders or backlog figure, so readers cannot check directly whether demand is accelerating or slowing. The best available substitute is deferred revenue, which rose 100% since December while quarterly sales grew 24%. That suggests new commitments still exceed shipments, but prepayments depend on contract terms and are not the same measure as orders.
Guidance is higher, and the second half has to deliver more. Compared with April, full-year guidance rose on every line: sales $13.8–14.2 billion (from $13.5–14.0 billion), organic growth 30–32% (from 29–31%), adjusted operating margin 23.3–24.3% (from 22.8–23.8%), adjusted EPS $6.65–6.75 (from $6.30–6.40) and adjusted free cash flow $2.4–2.6 billion (from $2.1–2.3 billion). Because Q2 organic growth was 17.8% and first-half organic growth 19.9%, reaching 30–32% for the year requires much faster growth in the second half. Q3 guidance alone calls for 34–36%.
Takeaway: Vertiv's margin expansion is real: adjusted operating margin rose 4.1 points on better pricing and productivity. The weak point is converting its backlog into revenue. Organic sales growth missed the company's own range, and full-year guidance depends on roughly $8.1 billion of second-half sales, about 36% above the first half. With orders no longer disclosed, the Q3 revenue figure is the main test of whether the supply-chain delays were really temporary.
Outlook
Management's guidance. For Q3 2026: net sales of $3,650–3,850 million, organic growth of 34–36%, adjusted operating margin of 24.0–25.0% and adjusted EPS of $1.77–1.83 (up 43–48%). For the full year: the ranges above, with capital spending of about 4% of revenue ($550–570 million per the 10-Q), at the top of its earlier range, for capacity expansion.
Deals since the quarter closed. On September 2 Vertiv agreed to buy UtilityInnovation Group, a designer of on-site microgrids and power controls for data centers, for about $1.45 billion in cash, plus up to $1.15 billion more if EBITDA targets are met. The price is about 13 times UIG's expected 2027 EBITDA. On September 24 it agreed to buy King Environmental Services, an Irish liquid-cooling fluid-management firm, on undisclosed and non-material terms. Both are expected to close in Q4 2026. Vertiv ended June with a net cash position and $5.6 billion of liquidity, so it can fund UIG without strain. The pattern continues from PurgeRite: Vertiv is buying services and power capability around its core equipment. It also means more amortization and earnout charges, so the GAAP-to-adjusted gap is likely to widen.
Our read on demand durability. The filing gives three pieces of evidence that AI-driven demand is still growing. Customers doubled their prepayments in six months. Management raised guidance after a quarter in which revenue slipped. And capital spending in Q2 ($173.3 million) was nearly four times the prior year's, which a company rarely does unless it expects the volume to arrive. The case against: EMEA is shrinking organically, services growth is mostly acquired, and without orders data readers are relying on management's statement that "pipelines continue to strengthen." For Q3, check three things: whether organic growth reaches the 34–36% guided, whether inventory growth slows as deliveries catch up, and whether Vertiv resumes disclosing orders or backlog. A second quarter of revenue at the low end of guidance would suggest the supply-chain constraint is lasting longer than management expects.
The full Q2 10-Q was filed on July 29, 2026. Figures are from the 10-Q and the earnings release (Exhibit 99.1 to the July 29 8-K); backlog and book-to-bill are from the Q4 2025 release filed February 11, 2026.