Vertiv makes the equipment that keeps data centers alive. When a company like Microsoft or Amazon builds a giant building full of computers, it needs systems to manage the power flowing in, cool all the hardware down, and keep everything running if the electricity cuts out. Vertiv designs, builds, and services exactly those systems, power management units, cooling equipment, racks, software, and the maintenance contracts that follow. Customers pay when they order the equipment, and then often pay again for years of service contracts. Revenue flows in from big one-time orders and from a recurring stream of spare parts and service visits. The diagram below traces where the money goes.

Five years of financial data tell a story with a clear turning point. In 2021 and 2022, Vertiv was generating revenue but struggling to turn it into cash. Revenue was $5.0 billion in 2021 and $5.7 billion in 2022. But free cash flow, the actual money left over after running the business and paying for equipment, was thin at $0.1 billion in 2021 and turned negative at minus $0.3 billion in 2022. The company was carrying heavy debt and could not keep up with rising material costs fast enough.

Then 2023 changed everything. Revenue jumped to $6.9 billion, gross margin climbed from 28.4% to 35.0%, and free cash flow swung from negative to $0.8 billion. That recovery continued through 2024 and 2025. By 2025, revenue hit $10.2 billion and free cash flow reached $1.9 billion. Net debt, which was $2.9 billion in 2022, fell to $1.2 billion by 2025. The business went from burning cash to generating it at scale, and it did so while growing revenue by more than double over four years.

The engine behind this acceleration is the boom in artificial intelligence infrastructure. Cloud companies, AI startups, and large enterprises are all racing to build or expand data centers, and every one of those buildings needs Vertiv's power and cooling systems. The company's order backlog tells that story plainly. At the end of 2024, orders waiting to be fulfilled totaled $7.2 billion. By the end of 2025, that figure had more than doubled.

A large backlog sounds like good news, and it mostly is. But it also introduces real risk. Customers who place big orders can cancel them, reschedule them, or slow them down. Vertiv acknowledges this directly, noting that the $15.0 billion backlog may not fully convert to actual sales. The company also signs long-term contracts at fixed prices, which means if steel, copper, or aluminum costs jump after the contract is signed, Vertiv absorbs the difference. That exact problem hurt margins in 2022 when inflation hit faster than the company could raise prices.

Tariffs add another layer of cost pressure. Vertiv manufactures across more than 40 countries and sources components globally. When the United States imposes tariffs on imported goods, and other countries respond with their own tariffs, the cost of making and shipping products rises. Vertiv noted that tariff impacts were already offsetting some of the benefit from higher sales volumes in 2025, keeping gross margin roughly flat at 36.3% compared to 36.6% in 2024 despite the big revenue jump. The company is expanding domestic manufacturing to reduce this exposure, but that takes time and capital.

There is also a concentration risk hiding inside the revenue numbers. A very large share of Vertiv's growth is coming from data center customers, specifically hyperscale cloud operators and AI-focused builders. If those customers slow their spending, whether because AI investment cools off, interest rates rise, or a recession hits, Vertiv's order flow could shrink quickly. The company openly flags this: customers can cancel orders with penalties, place huge orders on short notice, or delay decisions for long stretches. That makes quarterly revenue hard to predict even when the annual backlog looks enormous.