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Vertiv: Muted Q1 and What it Could Mean
Vertiv reported exceptionally strong Q4 2024 results, but the midpoint guidance for Q1 2025 missed consensus estimates triggering a sell-off. The robust 25.8% YoY revenue growth and 77% YoY adjusted EPS growth in Q4 accented the drop-off into Q1 2025 revenue growth of 17.4% and adjusted EPS growth of 39.5%. Management stated that rather than a weak Q1, they had an “particularly strong” Q4. Management now estimates 2025 sales at $9.2 billion at the midpoint—$75 million above November's guidance—even with a $125 million FX headwind. However, a $200 million Q4 revenue beat increased the revenue base, lowering full-year organic growth to 16% from 17%. Essentially, while absolute sales were higher, the beat diluted the year-over-year growth percentage compared to last year's forecast.
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