Vertiv Holdings

Good morning, my name is Nadia and I'll be your conference operator today. At this time, I would like to welcome everyone to Vertiv's third quarter 2024 earnings conference call. All lines will be placed on mute to prevent any background noise. Please note this call is being recorded. I would now like to turn the program over to your host for today's conference call, Ben Maxiner, Vice President of Investor Relations.

Great. Thank you, Nadia. Good morning and welcome to Virta's third quarter 2024 earnings conference call. Joining me today are Virta's executive chairman, Dave Cody, chief executive officer, Giordano Albatazzi, and chief financial officer, David Fallon. Today, we have a few additional slides to cover in our presentation. We will let the Q&A portion of the call go an additional 10 minutes, if needed, up until 1210 p.m. Eastern time. We would kindly request to please limit yourself to one question, and if you have a follow-up question, please rejoin the queue. Before we begin, I would like to point out that during the course of the call, we will make forward-looking statements regarding future events, including the future financial and operating performance avertive. These forward-looking statements are subject to material 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 and quarterly reports and other filings made 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.birdiv.com. With that, I'll turn the call over to Executive Chairman Dave Cody.

Good morning. Q3 was another very strong quarter across the board on every metric, sales, income, cash flow, and audits. Fourth quarter guidance is strong, and sales for 2025 look stronger still based on wicked good audits performance. And importantly, There is more goodness ahead as our portfolio expands, new products are introduced, and the Vert of Operating System, or VOS, becomes reality. There are two areas I'd like to address specifically where investors seem to oscillate between fear and excitement. The first is AI reality, and the second is liquid cooling. We had the agricultural revolution, then the industrial revolution, and now we're only about 40 years into the digital revolution. AI is just the next step in that digital revolution. AI is real. It has just begun. It's got a long way to go. Data centers are fundamental to all that computing. There is no other alternative, even on the horizon. Distributed architecture enhances need for data centers. Even quantum computing relies on digital-based data centers. We've enjoyed extremely strong orders in the first half of 24. And we would agree that continued approximately 60% orders increases are unlikely, as we tried to say last quarter. By the same token, we are seeing robust backlog building growth supporting orders continue. Cloud and AI reinforce each other and drive the need for a lot of computing. Additionally, the AI ramp up in countries outside the U.S. is just beginning. This goes extremely well for Virta for a long time as a market leader in data center infrastructure. As the data center infrastructure develops, liquid cooling increasingly comes to the fore, and we continue to rapidly gain share. There are various parts to a liquid cooling system, and like all our products, we work to position ourselves in the high IP and know-how areas, specifically CDUs, and total systems. Gio has several charts in his presentation to simplify understanding of a liquid-cooled system, our position, and why we will continue to gain share in this rapidly growing market. Our data center products portfolio is the broadest in the industry. It's also important to note that while rapidly growing, we are not just in liquid cooling. Everything is growing well. We have extensive coverage in thermal systems, power management, IT solutions, modular, and services. AI and data center growth in this digital age benefits everything we do, not just liquid cooling. While it's true there is competition in liquid cooling, that's also true of all our markets. We won't win 100% of all orders, but I believe we will continue to gain share because of our technology base and broad portfolios. global scale, deep industry expertise, global service, and strong customer relationships. These are distinguishing characteristics that others in the market can't match. Vertiv's role is an important one in the industry. We've worked very closely on roadmap consistency with key technology providers to be ready for today and seeing around the corners to what the industry needs to do next. A great example of this is the joint announcement we did last week with Nvidia highlighting the co-development partnership for the AI factory of the present and future. The industry needs to be ready for this new era of compute. And Vertiv is working closely with our customers so they will be ready for what is coming. While there is intense focus right now on every aspect of AI and the data center market, I would encourage investors who scare themselves about the AI future or Virta's role to instead take a longer-term view of the secular growth story in front of us. There is a multi-decade growth trajectory unfolding. Competition is not a new phenomenon, and we expect there to be competitors in the market as there always have been. Virta's advantages, though, are not easily replicated, and we are further expanding them. That is what I saw five years ago as I looked at this unique company. Market leadership, global scale, technology differentiation, great end markets, and longstanding customer relationships. The foundational elements for value creation were there, but it needed to be unlocked in a convincing way with strong leadership. I credit Gio and his team for doing the hard work to start unlocking the full potential of Verge. We are still far from our full potential, and that is the most exciting part as I think about what is coming next quarter, next year, and for many years ahead. And it is certainly supported by our auditors and operational performance. So with that, I'll turn the call over to Gio.