Vertiv Holdings VRT · USD

(13) SEGMENT INFORMATIONOperating profit (loss) is the primary income measure used by the chief operating decision maker (“CODM”), our Chief Executive Officer, to assess segment performance and make operating decisions. Segment performance is assessed exclusive of Corporate and other costs, foreign currency gain (loss), and amortization of intangibles. Corporate and other costs primarily include headquarter management costs, asset impairments and costs that support centralized global functions including Finance, Treasury, Risk Management, Strategy & Marketing, Legal, and global product platform development and offering management. The Company determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by the CODM, which includes determining resource allocation methodologies used for reportable segments. The segment performance measure excludes corporate and other costs, as described herein. Intersegment selling prices approximate market prices. Summarized information about the Company’s results of operations by reportable business segment and product and service offering follows:Americas includes products and services sold for applications within the data center, communication networks and commercial and industrial markets in North America and Latin America. This segment’s principal product and service offerings include: •Products: AC and DC power management, thermal management, low/medium voltage switchgear, busbar, air cooled and liquid cooled thermal management products, integrated modular solutions, racks, single phase UPS, rack power distribution, rack thermal systems, configurable integrated solutions, energy storage solutions, hardware, software for managing IT equipment.•Services & spares: Preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, training, spare parts, specialized fluid management, and critical digital infrastructure software.Asia Pacific includes products and services sold for applications within the data center, communication networks and commercial and industrial markets throughout Greater China, Asia, and India. Due to the similarities of economic characteristics and other qualitative factors, we aggregate Greater China, India and Asia operating segments and we report this as our Asia Pacific reportable segment.

(3) REVENUEThe Company recognizes revenue from the sale of manufactured products and services when control of promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. ProductsThe Company identifies delivery of products as performance obligations. Such products include AC and DC power management, thermal management, low/medium voltage switchgear, busbar, air cooled and liquid cooled thermal management products, integrated modular solutions, racks, single phase UPS, rack power distribution, rack thermal systems, configurable integrated solutions, energy storage solutions, hardware, and software for managing IT equipment. The Company generally satisfies these performance obligations and recognizes revenue for these products at a point in time when control has transferred to the customer. The transfer of control generally occurs when the product has been shipped or delivery has occurred, depending on shipping terms.For customized products that the customer controls at the customer’s site while the Company builds and customizes the product, the Company recognizes revenue over time because the customer obtains control of the asset as it is built. For these products, the Company uses an input method to recognize revenue based on costs incurred relative to total estimated project costs as this represents the most faithful measure of the goods transferred to the customer.Services & sparesServices include preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, specialized fluid management, training, spare parts, and critical digital infrastructure software. Services are generally recognized as the services are provided, or straight-line for stand-ready contracts, because the customer simultaneously receives and consumes the benefit as we perform the services. The Company recognizes revenue for software applications at a point in time upon transfer of the software and monitoring services are recognized over time.Disaggregation of RevenuesThe following table disaggregates revenue by business segment, product and service offering and timing of transfer of control:Year Ended December 31, 2025AmericasAsia PacificEurope, Middle East, & AfricaTotalSales by Product and Service Offering:Products$5,270.1 $1,510.9 $1,426.0 $8,207.0 Services & spares1,116.2 508.3 398.4 2,022.9 Total$6,386.

(16) COMMITMENTS AND CONTINGENCIESThe Company is a party to a number of pending legal proceedings and claims, including those involving general and product liability and other matters. The Company accrues for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Accruals are based on developments to date; management’s estimates of the outcomes of these matters; the Company’s experience in contesting, litigating and settling similar matters; and any related insurance coverage. While the Company believes that a material adverse impact is unlikely, given the inherent uncertainty of litigation, a future development in these matters could have a material adverse impact on the Company. The Company is unable to estimate any additional loss or range of loss that may result from the ultimate resolution of these matters, other than those described below.On August 3, 2021, an American Arbitration Association arbitration hearing commenced with respect to a 2018 claim filed by Vertiv against SVO Building One, LLC (“SVO”) alleging damages of approximately $12.0 with respect to (i) unremitted payment for work and materials in connection with, the design, engineering, procurement, installation, construction, and commissioning of a data center located in Sacramento, California and (ii) damages and injunctive relief relating to SVO’s unauthorized use of Vertiv’s intellectual property and work product. SVO filed a counterclaim in 2018 alleging damages of approximately $18.0 relating to (i) allegations that Vertiv was not a duly licensed contractor at all times during the project in violation of California’s contractor license regulations, (ii) breach of warranty, and (iii) gross negligence. On September 3, 2021, the arbitrator issued an interim phase one ruling finding (1) that Vertiv was in violation of California contractor license regulations and was barred from recovery of approximately $9.0 for work performed and equipment delivered in connection with the project, as well as requiring disgorgement plus interest of $10.

(6) DEBTLong-term debt, net of current portion, consisted of the following as of December 31, 2025 and 2024:December 31, 2025December 31, 2024Term Loan due 2032 at 5.61% and 6.19% at December 31, 2025 and 2024, respectively$2,076.1 $2,097.0 Senior Secured Notes due 2028 at 4.125% at both December 31, 2025 and 2024, respectively850.0 850.0 Unamortized discount and issuance costs(13.1)(18.8)2,913.0 2,928.2 Less: Current portion(20.9)(21.0)Total long-term debt, net of current portion$2,892.1 $2,907.2 Contractual maturities of the Company’s debt obligations as of December 31, 2025 are shown below: 2026$20.9 202720.9 2028870.9 202920.9 203020.9 Total$954.5 Term Loan Due 2032 Subject to certain conditions and without consent of the then-existing Term Lenders (but subject to the receipt of commitments), Vertiv Group Corporation (the "Borrower"), a wholly-owned subsidiary of Vertiv Holdings Co ("Holdings Co"), may incur additional loans under the Term Loan Credit Agreement (as an increase to the Term Loan or as one or more new tranches of term loans) (“Incremental Term Loans”) in an aggregate principal amount of up to the sum of (a) the greater of $325.0 and 60.0% of Consolidated EBITDA (as defined in the Term Loan Credit Agreement), plus (b) an amount equal to the sum of all voluntary prepayments, repurchases and redemptions of pari passu term loans borrowed under the Term Loan Credit Agreement and of certain other pari passu indebtedness incurred outside the Term Loan Credit Agreement utilizing capacity that would otherwise be available for Incremental Term Loans, in each case, to the extent not financed with the incurrence of certain additional long-term indebtedness, plus (c) an unlimited amount, so long as on a pro forma basis, (i) with respect to indebtedness secured by the Collateral (as defined below) on a pari passu basis with the Term Loan, the Consolidated First Lien Net Leverage Ratio (as defined in the Term Loan Credit Agreement) would not exceed 3.75:1.00 and (ii) with respect to indebtedness incurred outside of the Term Loan Credit Agreement and secured by the Collateral on a junior basis with the Term Loan or that is unsecured, the Consolidated Total Net Leverage Ratio (as defined in the Term Loan Credit Agreement) would not exceed either (A) 5.25:1.

(8) INCOME TAXESThe Company's effective tax rate was 23.5%, 35.2%, and 13.8%, for the years ended December 31, 2025, 2024, and 2023, respectively. The effective rate in 2025 was primarily influenced by the mix of income between our U.S. and non-U.S. operations and net changes in valuation allowance and uncertain tax benefits offset by discrete tax benefits related to stock compensation. The effective rate in 2024 was primarily influenced by changes in tax incentives, offset by the net change in valuation allowance and the non-tax deductibility of the change in fair value of warrant liabilities. The effective rate in 2023 was primarily influenced by the net valuation allowance release offset by the non-tax deductibility of the change in fair value of warrant liabilities. Provision for (Benefit from) TaxesEarnings (loss) before income taxes from continuing operations consists of the following:Year Ended December 31, 202520242023U.S.$1,095.1 $189.5 $49.1 Non-U.S.(1)646.8 575.9 484.6 Total earnings (loss) before income taxes$1,741.9 $765.4 $533.7 (1)Certain of the Company’s Non-U.S. entities generate losses for which a valuation allowance is provided for and accordingly do not create a tax benefit.The principal components of income tax expense (benefit) from continuing operations consists of the following:Year Ended December 31, 202520242023Current:Federal$160.2 $66.7 $45.5 State and local35.5 21.8 16.9 Non-U.S.190.3 235.5 142.5 Deferred:Federal18.0 (6.0)(94.0)State and local3.8 (0.4)(23.5)Non-U.S.1.3 (48.0)(13.9)Income tax expense (benefit)$409.1 $269.6 $73.5 Reconciliation of U.S. federal statutory taxes to the Company’s total income tax expense (benefit) from continuing operations consists of the following:Year Ended December 31, 2025AmountPercentageTaxes at U.S. statutory rate (21%)$365.8 21.0 %State and local taxes, net of federal tax benefit(1)31.2 1.8 %Foreign Tax EffectsSwitzerlandChanges in Valuation Allowance42.7 2.5 %Other(13.7)(0.8)%Other Foreign Jurisdictions(2.0)(0.1)%Effect of Cross-Border Tax Laws(13.9)(0.8)%Tax Credits(1.9)(0.1)%Changes in Valuation Allowances(1.6)(0.1)%Nontaxable or Nondeductible ItemsShare-based Compensation(26.1)(1.5)%Other6.7 0.3 %Changes in Unrecognized Tax Benefits15.2 0.9 %Other Reconciling Items(2)6.7 0.4 %Income Tax Expense$409.1 23.5 %(1) The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California, Illinois, New Jersey, Oregon, and Texas.

(7) LEASESThe Company leases office space, warehouses, vehicles, and equipment. Leases have remaining lease terms of 1 year to 20 years, some of which have renewal and termination options. Termination options where applicable are exercisable at the Company’s discretion. Lease terms used to recognize right-of-use assets and lease liabilities include periods covered by options to extend the lease where the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. The majority of the Company’s leases are operating leases. Finance leases are immaterial to the Company's Consolidated Financial Statements. The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other operating leases are recorded on the balance sheet with a corresponding operating lease asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants. Operating lease assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate, adjusted for lease term and foreign currency, based on the information available at lease commencement date. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term.Refer to the below table for a summary of operating lease expenses:Year Ended December 31, 2025Year Ended December 31, 2024Operating lease cost$83.7 $67.1 Short-term and variable lease cost41.8 35.8 Total lease cost$125.5 $102.9 Supplemental cash flow information related to operating leases is as follows:Year Ended December 31, 2025Year Ended December 31, 2024Cash paid for amounts included in the measurement of lease liabilities:Operating cash outflows - payments on operating leases$83.4 $66.

(2) ACQUISITIONSPurgeRiteOn October 31, 2025, the Company entered into a sale and purchase agreement ("Acquisition Agreement") to acquire Purge Rite Intermediate, LLC ("PurgeRite"). The transaction ("Acquisition") closed on December 4, 2025. Under the terms of the Acquisition Agreement, total consideration transferred was $1,138.3, net of cash acquired of $14.4. The gross consideration was $1,152.7, consisting of $1,003.5 in cash, $139.2 of contingent consideration and $10.0 other. The Company is required to pay up to $250.0 of additional cash consideration if PurgeRite achieves certain post-closing performance metrics, pursuant to the terms and conditions of the Acquisition Agreement.The Company incurred $5.2 of acquisition-related costs related to PurgeRite. Those costs, primarily related to third-party transaction and advisory fees, and are included within "Selling, general and administrative expenses" on the Consolidated Statements of Earnings(Loss).Headquartered in Houston, Texas, PurgeRite has established itself as an industry leader in mechanical flushing, purging, and filtration for mission-critical data center applications, including strong relationships with hyperscalers and Tier 1 colocation providers. It brings engineering expertise, proprietary technologies and the ability to scale to meet the needs of challenging data center schedules, enabling complex liquid cooling applications across the thermal chain from chillers to coolant distribution units. PurgeRite's services will join forces with Vertiv's existing liquid cooling offerings to deliver end-to-end thermal management solutions from facility to room and row to rack.The Company accounted for the acquisition of PurgeRite using the acquisition method of accounting. Assets acquired and liabilities assumed have been recorded based on their preliminary fair values, and as a result, the estimates and assumptions are subject to change. The Company is still in the process of finalizing the valuation estimates to determine the final purchase price allocation including the final working capital adjustments and amounts allocated to intangible assets. The Company expects to complete this process no later than twelve months after the closing of the Acquisition. The following is a preliminary purchase price allocation of assets acquired and liabilities assumed related to the acquisition:Accounts receivable$69.5 Other current assets7.2 Property, plant and equipment150.0 Goodwill588.

Processes for Assessing, Identifying, and Managing Cybersecurity Threats: The Company maintains a fully-defined set of documentation for assessing, identifying, and managing material risks from cybersecurity threats. We recognize the risk that cybersecurity threats pose to our operations, and cybersecurity is an integral component of our overall enterprise risk management ("ERM") strategy. Our cybersecurity framework is aligned with the National Institute of Standards and Technology’s special publication 800-53 and ISO 27001 and is comprised of the following four main pillars:Risk Governance: The Company’s cybersecurity program utilizes a cross-functional approach to address cybersecurity risks and engage in discussions with the Board (or a committee thereof) and our management on an as-needed basis. The Company’s cybersecurity processes are implemented to help ensure that the Company’s cybersecurity practices are aligned with the Company’s overall ERM standards and practices. The Company has formed a Cyber Risk Oversight Committee ("CROC") to oversee the Company’s cybersecurity program. Our CROC, in turn, communicates material risks to the Company’s Enterprise Risk Committee ("ERC") and the ERC interacts with the Board, the Audit Committee and executive management on a regular interval, or more frequently (if necessary) in regard to such risks. Currently, the CROC is comprised of representatives of our IT department as well as senior leadership, including a majority of the direct reports to our Chief Executive Officer ("CEO"). The ERC is comprised of our Chief Legal Counsel, Senior Director of Global Risk Oversight and various heads of regional or global business units and corporate functions, including but not limited to, IT, finance, accounting, legal, and human resources.Risk Identification: We have developed risk identification and vulnerability management procedures that address the identification, prioritization, and remediation of cybersecurity vulnerabilities. To facilitate this program, the Company has created cyber risk and incident management procedures and a related risk register to document and monitor potential risks. As discussed below, the Company uses certain third-party tools to identify and manage cybersecurity vulnerabilities. Each risk in the risk register is monitored by one of our cybersecurity members and updates are reported to the CROC as needed.