How Vertiv Makes its Money: Revenue Breakdown
A breakdown of Vertiv Holdings (VRT) financials. See how Vertiv makes money from data center cooling, power management, and critical infrastructure for AI data centers using their 2024 annual report.
How Does Vertiv Make its Money?
Vertiv Holdings is a global provider of critical digital infrastructure and continuity solutions for data centers, communication networks, and commercial/industrial facilities. The company designs and manufactures the power, cooling, and IT infrastructure management systems that keep data centers running — making it a key picks-and-shovels play on the AI infrastructure buildout.
As AI data centers consume dramatically more power than traditional data centers (an AI GPU rack can consume 40-100+ kW vs. 5-10 kW for traditional servers), the need for advanced cooling systems and power management has surged. Vertiv is one of the primary beneficiaries of this trend, providing thermal management systems, uninterruptible power supplies (UPS), power distribution units (PDUs), and integrated rack solutions.
Vertiv (VRT) Business Model
Vertiv operates in the data center infrastructure sector. Below is a summary of Vertiv’s revenue streams, how the company generates income, and the key financial metrics from its most recent annual report. This breakdown uses data from Vertiv’s 2024 fiscal year filings with the SEC.
Vertiv Competitors
Vertiv’s key competitors and comparable public companies in the data center infrastructure sector include Nvidia, Dell Technologies, and Super Micro Computer. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Vertiv stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Product Category | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Critical Infrastructure & Solutions | $4.8B | $4.0B | +20.0% |
| Integrated Rack Solutions | $0.7B | $0.5B | +40.0% |
| Services & Spares | $2.3B | $2.0B | +15.0% |
| Total Revenue | $7.8B | $6.9B | +13.0% |
By Geography
| Region | 2024 | Approx. % |
|---|---|---|
| Americas | $3.8B | 49% |
| Asia Pacific | $2.1B | 27% |
| Europe, Middle East & Africa | $1.9B | 24% |
Critical Infrastructure & Solutions — 62% of Revenue
Vertiv’s core product portfolio:
- Thermal Management — Precision cooling systems for data centers, including chilled water systems, direct liquid cooling (DLC), rear-door heat exchangers, and computer room air conditioning (CRAC) units. This is the most AI-relevant product line — dense GPU clusters generate tremendous heat and require advanced cooling far beyond traditional air cooling.
- Power Management — UPS (uninterruptible power supplies) that protect data center equipment from power disruptions, and PDUs (power distribution units) that deliver clean, reliable power to server racks. Vertiv’s Liebert UPS brand is a market leader.
- Switchgear and Busbar — Electrical infrastructure that distributes power within data center facilities.
Integrated Rack Solutions — 9% of Revenue
Pre-configured, modular rack solutions that combine power, cooling, and cable management into turnkey units. This product line enables faster data center deployment and is growing rapidly as hyperscalers and enterprises race to build AI infrastructure quickly.
Services & Spares — 29% of Revenue
Maintenance contracts, monitoring services, spare parts, and lifecycle management for the installed base of Vertiv equipment. This is a recurring, high-margin business that grows as the installed base expands. Services provide critical aftermarket revenue for decades after initial equipment deployment.
Income Statement Overview
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $7.8B | $6.9B |
| Cost of Sales | $5.0B | $4.6B |
| Gross Profit | $2.8B | $2.3B |
| Operating Expenses | $1.2B | $1.1B |
| Operating Income | $1.6B | $1.2B |
| Net Income | $1.0B | $0.7B |
Financial data sourced from Vertiv SEC Filings.
Key Financial Metrics
- Gross Margin: 35.9% — Improving steadily. The shift toward higher-value cooling solutions for AI and a growing services mix are margin tailwinds.
- Operating Margin: 20.5% — Strong and expanding. Vertiv has executed well on pricing and operational efficiency improvements since going public in 2020.
- Revenue Growth: +13.0% — Consistent double-digit organic growth driven by data center construction and AI infrastructure demand.
- Orders Growth: ~30% — Orders are growing significantly faster than revenue, resulting in a rising backlog that provides strong forward visibility.
- Backlog: $6.5B+ — Approximately 10 months of revenue in backlog. The order-to-revenue gap reflects both strong demand and long lead times for complex power and cooling systems.
- Free Cash Flow: ~$1.0B — Improving and supporting debt reduction and shareholder returns.
Is Vertiv Profitable?
Yes, Vertiv is profitable and margins have expanded significantly as the company has scaled. The 20.5% operating margin is up from low single digits when Vertiv went public in 2020, reflecting successful price increases, better supply chain management, and operational improvements. Net income of $1.0 billion on $7.8 billion of revenue is a meaningful milestone for a company that was barely breaking even three years ago. The 35.9% gross margin is improving as the revenue mix shifts toward higher-value cooling solutions for AI data centers and the growing services business (which carries margins well above the company average). Free cash flow of approximately $1.0 billion is strengthening and supporting debt paydown from Vertiv’s leveraged background as a former Platinum Equity portfolio company. The $6.5+ billion backlog (roughly 10 months of revenue) provides exceptional forward visibility and supports continued growth.
What to Watch
- AI data center cooling demand — The most important secular trend. As GPU power density increases (Nvidia Blackwell draws more power than Hopper), the cooling requirements grow proportionally. Liquid cooling adoption could be a multi-year, multi-billion dollar opportunity for Vertiv.
- Order book momentum — Sustained order growth above revenue growth indicates a lengthening backlog and strong demand visibility. A slowdown in orders would be an early warning signal.
- Liquid cooling adoption — Direct liquid cooling (DLC) is transitioning from niche to mainstream for AI data centers. Vertiv’s DLC product portfolio and speed of product development in this area are key competitive factors.
- Pricing power — Vertiv has successfully raised prices in recent years. The question is whether this pricing power sustains as competition intensifies and supply chains normalize.
- Global data center buildout — Hyperscalers (Microsoft, Google, Amazon, Meta) have announced hundreds of billions in combined data center capex. As a key supplier to these projects, Vertiv is positioned to capture a meaningful share of this spend.
Vertiv (VRT) Financial Summary
Vertiv has transformed from an overlooked industrial company into one of the hottest AI infrastructure plays, delivering $7.8 billion in revenue (up 13%) in 2024 with orders growing approximately 30% — building a $6.5+ billion backlog that provides nearly a year of forward revenue visibility. The company’s thermal management and power infrastructure products are essential for the AI data center buildout, where GPU-dense racks require dramatically more cooling and power than traditional servers. Operating margins have expanded from low single digits to 20.5% as Vertiv has demonstrated pricing power and operational discipline, and net income reached $1.0 billion. With hyperscalers committing hundreds of billions to data center capex over the next several years, Vertiv’s position as a primary supplier of cooling, power, and integrated rack solutions gives it a multi-year growth runway.
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