Vertiv DCF model

Big-4 capex was $294.8bn in 1H 2026, up 84% on $160.1bn in 1H 2025 (Amazon $98.4bn, Alphabet $80.6bn, Meta $49.1bn, Microsoft $66.7bn, being its FY2026 total of $115.9bn less $49.3bn for July-December 2025; hyperscaler 10-Qs for the quarter ended 2026-06-30 (Amazon.com filed 2026-07-31, Alphabet 2026-07-23, Meta Platforms 2026-07-30) and Microsoft 10-K FY2026 (filed 2026-07-29)). Meta guides $130-145bn for 2026 (Meta Q2 2026 10-Q) and Alphabet expects to raise 2026 investment in technical infrastructure significantly above 2025 (Alphabet Q2 2026 10-Q). Dated headlines: Amazon raised 2026 capex to $220bn (mlq.ai, 2026-08-02); big-tech AI spending of about $760bn in 2026 (Statista, 2026-07-31); Big Tech capex seen above $1 trillion in 2027 (CNBC, 2026-04-30). Company view of the market: data-center physical-infrastructure capex is projected to grow ~18% a year over 2025-2030 and Vertiv's served market ~16-18% (Vertiv 2026 Investor Conference presentation, 19-May-2026 (company IR site), pp.18, 19, 42); Vertiv's own projection for 2030 is in the ratio's basis below. Assumption: +82.4% in 2026 (~$686bn, so 2H is ~$391bn against $295bn in 1H), +45% in 2027 (~$995bn), then growth fading year by year to 13.0% by 2030 (+34.3%, +23.7% and +13.0% in 2028-30; ~$1.87tn in 2030), still below the 16-18% a year the company cites for its market, and to 3.0% by 2035 (~$2.61tn), the terminal growth rate. The fade ends in 2030, a year earlier than a four-year build-out stage would end it, because the company's projection window ends in 2030, so that Vertiv's FY2030 revenue lands inside the company's 20-22% growth framework (see the ratio below).

hyperscaler cash flow statements, purchases of (Microsoft: additions to) property and equipment: Amazon.com 10-K FY2025 filed 2026-02-06; Alphabet 10-K FY2025 filed 2026-02-05; Meta Platforms 10-K FY2025 filed 2026-01-29; Microsoft 10-K FY2025 filed 2025-07-30 and 10-Qs for Dec-2023 (filed 2024-01-30) and Dec-2025 (filed 2026-01-28). Terms: Amazon + Alphabet + Meta + Microsoft, in $mm and divided by 1,000; Microsoft (June year end) is put on a calendar year as fiscal year - prior July-December + current July-December.

Implied $2.05 / $1.57 / $1.40 of Americas product revenue per $100 of Big-4 capex in 2023-2025: the ratio has fallen as hyperscale capex goes increasingly to compute chips and memory rather than facility power and cooling (interpretation; not disclosed). Americas product sales were $3,142.0mm in 1H26, +37.9% (organic +34.4%) (SEC Form 10-Q for quarter ended 2026-06-30, filed 2026-07-29, Note 4; Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29)). Demand evidence: Q4 2025 organic orders +252% year on year, book-to-bill ~2.9x and backlog $15.0bn at December 2025 (+109%), the majority expected to ship within 12-18 months (Q4 2025 earnings release (Form 8-K exhibit 99.1, filed 2026-02-11); SEC Form 10-K for fiscal year ended 2025-12-31, filed 2026-02-13, Item 1 Backlog); current deferred revenue (customer advances) doubled to $3,633.7mm at 30-Jun-2026 from $1,814.7mm (SEC Form 10-Q for quarter ended 2026-06-30, filed 2026-07-29). The Q1 and Q2 2026 releases give no backlog or order figure (Q1 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-04-22); Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29)). FY2026 level is set so total revenue lands on the guidance midpoint of $14,000mm (organic +31%; Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29)); Q2 revenue slipped on temporary supply-chain congestion and multi-phased project timing (Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29)). FY2027 level is set so total revenue lands on consensus ($18.3bn). Assumption: the ratio falls 15.9% in 2026 and 3.7% in 2027, then keeps eroding, by 6.0% by 2030 (-4.5%, -5.2% and -6.0% in 2028-30, in line with its fall of 11% in 2025 and 23% in 2024 rather than the 3.7% of 2027) and then at an easing rate to -0.5% by 2035, so Americas product revenue grows ~53% in 2026 and ~40% in 2027 against capex growth of 82% and 45%, then ~28%, ~17% and ~6% in 2028-30 against capex growth of 34%, 24% and 13%, and below capex growth throughout. Company framework (the check on the mid term): at its May-2026 investor conference in Greenville, SC, Vertiv set a 5-year framework to 2030 of 20-22% organic revenue growth a year, an adjusted operating margin of 27% by 2030, capex of 3-4% of revenue a year and adjusted free cash flow conversion of 95-100%, with data-center power capacity additions rising from about 20 GW a year toward about 35 GW (TIKR.com, article on Vertiv's May-2026 investor conference in Greenville, SC, 2026-05-31). The company's own conference presentation shows the same growth, margin and capex figures and net sales of about $26bn in 2030 (Vertiv 2026 Investor Conference presentation, 19-May-2026 (company IR site), pp.16, 44 for the ~$26B of 2030 sales and pp.39, 50 for the 20-22% growth rate; pp.16, 39, 42, 50 for margin; p.47 for capex), with 2026 at $13.75bn, the guidance midpoint of that date; the Q2 2026 release raised the 2026 guidance midpoint to $14.0bn and does not mention the 2030 projection (Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29)). 20-22% a year from $10.23bn is $25.5-27.6bn; the acquisitions closed by 30-Jun-2026 are not in that organic figure and add roughly $1.0-1.3bn of 2030 sales (estimate: they contributed 5% of Q2 2026 net sales, about $0.5bn a year, Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29), grown at 20-25% a year), so the framework's range for total 2030 revenue is about $26.5-28.9bn. Like for like: the 2026 guidance of $14.0bn with organic growth of 31% is $13.4bn of organic sales ($10.23bn x 1.31), so about $0.6bn of 2026 sales comes from acquisitions and currency (Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29)), and the company's 20-22% is an organic rate. The model's FY2030 total revenue is $27.5bn, a 21.9% CAGR from FY2025: the top of the 20-22% range if the range is applied to total revenue ($27.6bn), and about the midpoint of it on an organic basis, because taking out roughly $1.0-1.3bn of acquired and currency sales leaves an organic-equivalent FY2030 of $26.2-26.5bn, a 20.7-21.0% CAGR (the 21% midpoint is $26.5bn). The company's own ~$26B marker is a rounded figure at the low end of its range (a 20.5% CAGR from $10.2bn); holding total revenue at $26.0bn would put the organic-equivalent FY2030 at $24.7-25.0bn, a 19.3-19.6% CAGR, below the 20% floor. The top of the range applies to total revenue, so the other five lines are moderated too (see their basis). Why growth falls after 2027: consensus for 2027 ($18.3bn, +30.6%) is already well above the ~$16bn that the company's own path implies for 2027 (2026 at $13.75bn growing at the ~17% a year that reaches $26bn), so meeting both consensus and the framework means growth of 14.6% a year over 2028-30 on average: the model has +23.1%, +14.9% and +6.4%, falling every year, then 5.7%, 5.0%, 4.3%, 3.6% and 2.8% in 2031-35. Growth of 6.4% in 2030 is still well below the 16-18% a year of the market the company cites (Vertiv 2026 Investor Conference presentation, 19-May-2026 (company IR site), pp.18, 19, 42). A four-year build-out stage (2028-2031) cannot do this: with the same end values FY2030 revenue would be $30.8bn, and holding FY2030 at $27.5bn needs revenue to fall 2.0% in 2031. The build-out stage is therefore three years (2028-2030, the company's projection window ends in 2030) and maturity five years (2031-2035); growth after 2030 is the model's own and fades to terminal growth.

Americas services & spares were $743.2mm in 1H26, +46.2% (organic +15.8%; acquisitions added $150.4mm, including PurgeRite, a fluid-management services business bought on 4-Dec-2025) (Q2 2026 earnings release (Form 8-K exhibit 99.1, filed 2026-07-29)); growth was +11.9% in 2024 and +21.1% in 2025. Assumption: +43% in 2026 (acquisition effect carries to year end, organic ~15-20%), +28% in 2027 as the hyperscale equipment installed in 2025-26 enters maintenance and fluid-management contracts, then fading to 10% by 2030 and 4% by 2035. The company describes services growth of 20%+ as accelerating on install-base expansion (Vertiv 2026 Investor Conference presentation, 19-May-2026 (company IR site), p.44); the 10% for 2030 is a moderation so that total revenue stays within the company's 20-22% growth framework, and it is the highest 2030 rate of the five lines grown at a rate because the installed base keeps growing after equipment shipments slow. Limitation: Vertiv does not disclose the installed base under service contract, contract counts or renewal rates, so no volume x price build is possible; services & spares (maintenance, commissioning, fluid management, spare parts, software) can only be grown at a rate.

SEC Form 10-K for fiscal year ended 2025-12-31, filed 2026-02-13, Note 3 - Revenue, Disaggregation of Revenues (segment x offering): Americas, Services & spares