Vertiv Holdings

Good morning. My name is Joe, and I will be your conference operator today. At this time, I would like to welcome everyone to Vertiv's first quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. Please note that this call is being recorded. I would now like to turn the program over to your host for today's conference call, Lynn Maxeiner, Vice President of Investor Relations.

Thank you, Joe. Good morning and welcome to VRDA's first quarter 2022 earnings conference call. Joining me today are VRDA's Executive Chairman, Dave Cody, Chief Executive Officer, Rob Johnson, Chief Financial Officer, David Fallon, and Chief Strategy and Development Officer, Gary Niederprun. Before we begin, I point out that during the course of this call, we will make forward-looking statements regarding future events, including the future financial and operating performance of VRDA. These forward-looking statements are subject to material risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. We refer you to the cautionary language included in today's earnings release, and you can learn more about these risks in our annual report, our proxy statement, and other filings with the SEC. Any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events. During this call, we will also present both GAAP and non-GAAP financial measures. Our GAAP results and GAAP to non-GAAP reconciliations can be found in our earnings press release and in the investor slide deck found on our website at investors.virtu.com. With that, I'll turn the call over to Executive Chairman Dave Cody. Good morning.

We do recognize our first quarter guidance was a low bar. However, it's also important to note that we did better than that. We've been addressing key shortfalls, including execution of an aggressive pricing plan, taking a realistic look at inflationary pressures, creating a more action-focused America's culture, and changing management in areas of the business that did not execute well. As I mentioned on the last call, I've been more personally involved in business as we work our way through some of the near-term challenges. The actions we've taken have started to take hold, and we see the benefits playing through. The pricing realized in the first quarter of $40 million exceeded our plan by $10 million. This gives us some confidence we are on track to deliver the pricing plan for the remainder of the year. We're comfortable in what we see in Q2 so far. Demand backdrop remains very favorable. We anticipate even more pricing playing through the P&L as we continue to burn off more of that lower price backlog. The real test will be in Q3, when we expect to see the significant positive impact from our pricing actions that we've already taken. And Q4 will more fully reflect our run rate adjusted operating profit that sets the stage for a strong 2023. Well, this has been very painful for everyone. I believe the actions that have been taken, especially related to price, position as well have been performed in the second half and next year. We're taking this a quarter at a time. We've cleared the Q1 hurdle, and we are on track for Q2, which will be a step up from Q1 performance. We still have to prove to you that we can do this, and we are squarely focused on taking appropriate actions to make sure we do that. So with that, I'll turn the call over to Rob.