Hello everyone and welcome to Barron's. I'm Andy Serwer and welcome to our guest Giordano Albertazzi, who is the CEO of Vertiv. Giordano, nice to see you. Thank you so much for taking the time to talk with us.
Well, thank you for having me, Andy. Glad to be here.
So, let's start off for people who aren't familiar with Vertiv. Tell us about what you guys do.
Well, Vertiv is a leader — we believe the leader — in digital critical infrastructure. That means everything that is physical infrastructure for the data center, not only data center, also telecom and some commercial industrial, but 80% of our business is in data center. So, everything that is around all the technology that is around the IT, the IT part, the power, the cooling, the services that go with that. A lot of the physical stuff inside what in the industry we call the white space — so, where the sancta sanctorum with all the IT — but also increasingly infrastructure solutions. That means all this technology is modularized and delivered to site pre-engineered, pre-built for a rapid deployment.
And there's a lot of excitement about this business, obviously reflected in your stock, reflected in your revenue growth. We'll get to all that. But what does your order book look like right now? I mean, your revenue, I guess 10.2 billion last year, expected to be 13.75 for this year. For an 80-year-old company, I mean, wow, right?
Well, you know, recently we have guided a $14 billion top line for this year. The company is much, much older than, of course, eight years. We come from —
It's eight zeros, what is it?
Oh, eight zeros. Sorry, that's certainly a different number. Well, then you got our legacy pretty much right. But yes, so certainly a lot of acceleration. Not only because the market that we serve is accelerating, as everyone knows — the data center, especially the AI part of the data center — but certainly because of an increasingly important role in that industry.
Yeah, your earnings were very, very strong recently. There were some questions about timing disruptions, though, maybe. Can you address that a little bit?
Yeah, when we think about our growth, you know, we have reported a 24% growth in the second quarter, coming out of a very strong growth in Q1, later part of last year. So, a story of growth and an acceleration. We see our volumes expand. We're building capacity. We are innovating very, very vigorously, and the trajectory is very strong. Trajectory is very strong and will continue to be very strong. If we think about our guided growth for 2026, we are in this moment at 37% year-on-year growth, which is certainly strong. Think about a company that de facto operates in the physical world. So, that is a lot of additional capacity, is a lot of additional volume.
Right. So, but just that timing disruption, nothing for investors to particularly be concerned about?
Increasingly, we are delivering large projects — i.e., technology for large data centers — more and more frequently for us is delivering infrastructure solutions, products like Vertiv OneCore, which is a fully optimized converged data center that is delivered in modular chunks. And of course there is complexity there. There are many factories within Vertiv that serve other factories that then assemble, integrate, and deliver. And sometimes there could be a synchronization element to that, but as we explained recently to our investors, we see growth continue. We see those timing factors being absorbed in the second half of the year. And anyway, our execution strength continues to improve. So, very, very confident about the long-term growth, of course, and very, very strong growth in the second half — 45% year-on-year second half. Fully confident in the backlog and our ability to execute on that.
Great. Thanks for explaining that. Let me ask you about your customers, Giordano. Who are they? Who are your most important partners? What businesses, what lines of business specifically?
Sure. So, our customers — and again, I'll focus on the biggest part of our business, the data center business — but pretty much we operate across the spectrum of the potential customers in the data center world. So, we can start from the hyperscalers, the big names that we all know. More or less every one of them is a customer of ours. But then there is a full ecosystem of what we call collocators — so, data center developers that then either retail their capacity for data center to enterprise or lease to hyperscalers. Again, many players across the world, the majority are working with us. And then there is always the enterprise data center business and group of customers. Recently, we should add quite an important and rapidly accelerating category of customers, which are the so-called neo-clouds. So, cloud providers that are specialized in AI cloud services. So, those that would deploy — almost as a sole business model — deploy AI cloud and AI infrastructure.
Is that like a CoreWeave, companies like that?
Companies like that, absolutely.
Right, okay. You've been at the company, at Vertiv, for what, over 25 years now, and predecessor companies. CEO for three and a half years, I think I have right? What's your plan coming in, and how have you had to adapt that given this growth spurt that you guys are going through?
Well, the central point, of course, was around making sure that from a technology standpoint, we were further accelerating our advantage. And that's what we have done relentlessly. That has also been possible through very strong partnerships. Example, with Nvidia. So, not just someone with very good technology, but also someone who can help the industry define the technology of the future. Working with major silicon providers, we have been able to define what the infrastructure — the physical cooling, power — of the future needs to be to really, let's say, house all the new silicon technology. And that has created for us an opportunity to accelerate faster than the market and grow faster than the market. That has been always a very central aspect of my leadership and something that Vertiv continues to be very focused on.
Our R&D spend has been growing quite dramatically over time and will continue, to the tune of a 2025 CAGR over time. But it's not just technology. Technology is central, but then it is an ability to operate and scale. The two things need to go hand in hand. The speed at which the market is growing, the speed at which we are growing — when not only we grow with the market, but we gain market share in a growing market — is such that it requires really almost to constantly rewire culturally and rewire the way you operate. These rates of growth are not common in an industrial world. Even in an industrial world like we are, that is really a hybrid between tech and industrial. So it is a lot about culture, it is about making sure that we have the capacity, making sure that we have a supply chain that is resilient and capable to support our trajectory. It is partnerships, as I was saying. It is innovation. And very importantly, it is the strength of our relationship with our customers. Again, it's not just about providing technology when they need it. It's about together defining what technology will be needed two, three years out there, so that our customers and us can develop technology in unison, if you will.
What percentage of the business is in the US? Do you have —
I go back to last year's, and more or less we're talking about Americas. We don't break out necessarily the US, but we're Americas at 55% of the business, and specifically, it's easy to imagine that the US is the biggest market in the Americas.
Yeah, but the other half of the company is global then, so you're pretty global.
