Good morning, my name is Breca and I will be your conference operator today. At this time I would like to welcome everyone to Vertiv's second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. Please note that the call is being recorded. I would now like to turn the program over to your host today, Lynne Maxeiner to begin. Please go ahead. Great. Thank you, B reca. Good morning and welcome to Vertiv's second quarter 2025 earnings conference call. Joining me today are Vertiv's Executive Chairman Dave Cote, Chief Executive Officer Giordano Albertazzi, and Chief Financial Officer David Fallon. We have one hour for the call today. During the Q and A portion of the call, please be mindful of others in the queue and 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 this call we will make forward looking statements regarding future events, including the future financial and operating performance of Vertiv. These forward looking statements are subject to material risks 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. 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 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.vertiv.com. With that, I'll turn the call over to Executive Chairman Dave Cote. Good morning everyone. I have to say I'm pleased with how well we performed midway through 2025. We continue to outperform and deliver strong results. Gio and the team are executing very well, continuing to build a strong track record of financial performance and our investments in R&D and capacity are paying off today as planned and positioning us well for the future. The transformation at Vertiv continues to accelerate and I am more excited today than I've ever been about what is ahead. We are in a digital revolution that's got a long way to go and data centers remain fundamental to all of it. Our global scale and technology leadership aren't easily replicated and we keep widening that gap. We maintain our proven strategy of driving growth through both organic expansion and strategic acquisitions to extend our market leadership. Our recent Great Lakes acquisition announcement showcases our disciplined approach to deploying capital where we see clear strategic benefits and value creation opportunities. Our M&A pipeline remains robust and we'll continue to take this same approach, moving decisively when we find opportunities that enhance our technology, leadership, engineering capability, global capacity and overall growth profile. Our ongoing investments in R&D and capacity expansion ensure we stay ahead of market demand while delivering the innovative solutions our customers expect. This digital age is just getting started and Vertiv is poised to capitalize on the massive long term opportunity. With that, I'll turn it over to Gio to walk through the details of our performance and outlook. I'm confident he and the team will continue to execute at a high level and deliver value for our shareholders. Thank you Dave and welcome everyone. Thank you for joining us today. We go to slide three now. I am quite pleased with what we have delivered in Q2. Our adjusted diluted earnings per share was $0.95, approximately 42% up from second quarter 2024, primarily driven by higher adjusted operating profit. Our organic sales grew a very robust 34% year-on-year with strong performance in the Americas up in the mid-40s and APAC up in the mid-30s. EMEA delivered high single digit growth for the first time. We surpassed $3 billion in orders this quarter. This is certainly promising in terms of long term trajectory. Q2 orders were up approximately 15% from Q2 '24 and certainly not an easy comp and up 11% sequentially from Q1 '25. Our trailing 12 month organic orders growth was 11%. Our Q2 book-to-bill ratio of 1.2 times is particularly encouraging. We continue to build backlog at very high levels. Momentum in our business is accelerating. Our Q2 adjusted operating profit was $489 million up 28% year-on-year driven by higher sales. Our adjusted operating margin of 18.5% in line with guidance is approximately 110 basis points lower than prior year. This was primarily driven by the net impact of tariffs. Our updated guidance takes into consideration tariffs active on 28th of July, reflecting a moderate improvement in the tariff situation compared to our Q1 guidance. The temporary costs of the supply chain and manufacturing transition to tariff optimized footprint are higher than we initially estimated. We're also experiencing some temporary costs to deliver a steeper growth than expected and some executional challenges in EMEA. We expect all these factors will significantly moderate during the year and we believe they will be materially resolved by year end. For Q3 and for the full year, we are raising our investment in R&D and in growth compared to prior guidance. Our second quarter free cash flow of $277 million, though lower on a year-on-year basis, corroborates a strong cash generation trend. With adjusted free cash flow of $542 million in the first half, a robust growth of 24% year-on-year. This performance was driven by our improved operational execution resulting in higher adjusted operating profit. We are raising the full year adjusted free cash flow guidance to $1.4 billion. Our disciplined financial management is reflecting our strong balance sheet with a net leverage ratio of just 0.6 times at quarter end. We are raising our full year 2025 net sales guidance by $550 million - $10 billion. We expect organic growth to be approximately 24% for the full year. We're also raising our full year adjusted diluted EPS guidance to $3.80 or 33% higher than prior year. We are taking our adjusted operating profit guidance to just under $2 billion at the midpoint. 2025 is shaping up to be a strong year. With that, we move to slide 4. Our TTM orders organic growth and our sequential orders growth, both at 11%, are testament to Vertiv's strong momentum in the market, particularly considering very strong orders. In second quarter 2024, our backlog stands strong at $8.5 billion, up 21% versus prior year and 7% sequentially from Q1, supporting our increased guidance for the year. Our price is aligned with our expectations. We're seeing robust pipeline growth across all regions, well balanced across our portfolio. Remember, these are tangible quoted opportunities in EMEA. While 2025 full year net sales are expected to be flat compared to 2024, we are seeing sequential growth in the orders pipeline, providing optimism for 2026 and beyond. The regulatory environment is becoming more conducive to AI Infrastructure investment reflected in our customer discussions and pipelines. While we are on the topic of orders, let me briefly explain a change in how we'll communicate orders. As we have consistently said, orders in this industry can be lumpy and this lumpiness can sometimes create unnecessary stock market reactions for Vertiv. Beginning on our Q4 and full year 2025 earnings call, we will provide projected full year orders rather than quarterly orders and backlog information. We believe this better aligns with how we run our business. We will provide updates on the full year projections quarterly as we progress through the year and as we deem necessary. Let's now move to the right side of the slide. The tariff situation remains quite dynamic and fluid with the tariff perimeter changing frequently and this can create inefficiencies in the playbook and execution as we adjust to a changing landscape. This guidance is based on the tariffs in place on 28th of July. We are vigorously executing tariff countermeasures. We believe tariffs will be materially offset exiting 2025. We are deliberately increasing spending in engineering and R&D capacity and go to market to fuel growth. We are fine tuning our supply chain as suppliers accelerate their localization effort to address the tariff situation. Our supply chain resilience is helping us well as growth accelerates. Our capacity expansion strategy continues to be two-pronged: strategic manufacturing and service investment ahead of anticipated growth, capacity liberation through vertical operating system productivity improvement. Let's now go to slide 5. Gray Space and White Space no longer are separate spaces. Gray Space is the traditional critical infrastructure that powers and cools the data center. The White Space is where the IT equipment, the IT stack lives, the racks, the servers, the compute infrastructure. With increasing rack density, the physical integration and interoperability between these spaces has become absolutely evident and critical. Think about it. With hundreds of kilowatts per rack, the mechanical, electrical infrastructure and the IT stack are so intimately connected, sharing the same space that they need to be thought of as one system. This is where Vertiv's trends really come into play. You have heard me describe Vertiv as the connective tissue between the gray and the White Space, between facilities and IT. Our traditional expertise in gray space is seamlessly becoming White Space infrastructure expertise. White space deployment is becoming more complex, more time consuming, more multidisciplinary. This is a unique opportunity for advanced prefabrication to dramatically reduce fit out complexity, reducing deployment time by an order of magnitude. This is SmartRun, a step change. Now we think about White Space deployment. Allow me another angle. The IT equipment has traditionally had frequent refresh cycles. As density increases over time, this may drive regular refresh cycles of the White Space mechanical and electrical infrastructure. Let's now switch to the right side of slide 5. Let's stay on this slide. We have announced a new acquisition, as Great Lakes, which is expected to close this quarter. We anticipate that this transaction will bring us an extensive portfolio of high-end rack solutions and innovation capabilities that are essential in today's increasingly demanding AI Infrastructure. White space Great Lakes portfolio includes custom racks, integrated cabinets, heavy duty racks and cabinets, and enhanced cable management solutions. Great Lakes high end infrastructure solution technology, capacity, and engineering expertise complement very well the rest of Vertiv's capabilities in the gray and White Space. With manufacturing and assembly facilities in the U.S. and Europe, we anticipate Great Lakes will enhance our ability to serve customers with speed and scale. We are enabling the end to end infrastructure for AI factories where we gain a growing presence in the White Space. Our understanding of the entire system from power to cooling to IT infrastructure positions us uniquely to solve the complex challenges that our customers face. With that, I'll turn it over to David. David, over to you. Perfect. T hanks, Gio. Turning to Slide six, let me walk you through our second quarter results and starting on the left, another strong quarter for earnings growth with adjusted EPS of $0.95, which is up 42% from last year and that's primarily driven by higher adjusted operating profit and lower net interest. Once again, we delivered strong organic sales growth of 34%, almost $300 million above prior guidance, and compared to last year, Americas was up 43%, APAC up 37%, and EMEA, still influenced by a lag in AI Infrastructure build, was up 7%, and as Gio stated, pipelines across all three regions continued to grow nicely, including EMEA. Our adjusted operating profit of $489 million was up 28% from last year and $54 million higher than guidance. Our adjusted operating margin of 18.5% was down 110 basis points from last year, but in line with guidance, with the year-over-year decline primarily driven by tariffs as expected. Now, based upon operational leverage from the much higher volume, it would be reasonable to expect adjusted operating margin to be higher than the 18.5% actual and guide. However, as Gio mentioned, we experienced higher than anticipated operational inefficiencies and execution challenges in the quarter in support of significantly higher volumes, in addition to higher than anticipated supply chain and manufacturing transition costs to mitigate tariffs. We expect some of these factors to continue in the third quarter but be materially resolved by the end of the year and as we enter 2026. As implied in our full year guidance, we expect fourth quarter adjusted operating margin to be more than 23%, keeping us on track with our targeted 25% full year adjusted operating margin by 2029. Finally, on this page, adjusted free cash flow was down $60 million from last year's second quarter, primarily due to favorable trade working capital timing last year. Year to date, adjusted free cash flow is up 24%, and as you will see in a few slides, we are raising our full year guidance by $100 million to $1.4 billion. In short, you can likely check the box on free cash flow. Now, moving to slide seven. Looking at our segment results, Americas had another strong quarter with organic sales up 43%, and that was driven by continued strength in Colocation and Hyperscale markets, and despite tariff headwinds, adjusted operating margin remained strong at 24%. APAC's 37% organic sales increase was driven by strong growth across the region. Margin expanded to 10.6%, primarily driven by operational leverage and a discrete expense in last year's second quarter. EMEA's top line grew 7% organically in the second quarter, lagging the other regions as we expected. We anticipate EMEA sales will be down organically in the back half of 2025 and relatively flat for the full year. As a reminder, EMEA was our fastest growing region in 2024 and we expect growth to reaccelerate based upon the healthy pipeline. Lower margin in EMEA is primarily driven by two things. First, we did have some operational execution challenges in the second quarter that we expect to address in the coming quarters. Second, we made a deliberate decision to invest in fixed costs in the region ahead of expected growth while expanding regional capacity pursuant to supply chain shifts to the U.S. in response to tariffs. While this investment and these supply chain actions contribute to excess capacity and cost in the near term, these should be absorbed when volumes reaccelerate in EMEA. As mentioned, pipeline remains healthy and we anticipate the strong pipeline to convert to top line as soon as 2026. Next, moving to Slide 8, we guide third quarter adjusted EPS of $0.97, 28% higher than last year. This improvement is primarily driven by an expected 22% increase in adjusted operating profit. On the top line, we expect another strong quarter of organic growth at 22% with Americas in the mid-30s, APAC in the low 20s, and EMEA down upper single digits in part driven by a challenging comp in last year's third quarter. We expect adjusted operating margin of 20% relatively consistent with 2024 despite tariff headwinds as we continue to leverage higher sales and drive positive price costs. Implied is 150 basis point sequential improvement from the second quarter, primarily driven by progress in resolving some of the operational inefficiencies and execution challenges. Moving to Slide 9, let me walk you through our full year financial guidance. We are raising projected adjusted EPS to $3.80, 33% higher than last year, primarily driven by higher adjusted operating profit and lower net interest. We are raising our full year top line guide by $150 million - $10 billion with $110 million of this increase from favorable foreign exchange. The resultant underlying organic growth of 24% is driven by expected continued growth in the Americas and APAC. While we expect EMEA to be relatively flat for adjusted operating profit, we are raising our full year guidance to just under $2 billion, up 28% from last year. As Gio mentioned, this guidance assumes tariffs active on July 28th. We expect, all other things being equal, a possible downside scenario from potential August 1st tariffs as currently understood and things are changing rapidly and somewhat challenging to quantify, but we believe that would still place our full year adjusted operating profit within our guidance range. For adjusted operating profit, full year adjusted operating margin is projected to be approximately 20% at the midpoint, 60 basis points higher than last year despite tariff headwinds and 50 basis points lower than prior guidance. We continue to drive margin improvement including positive price, cost and productivity. Implied in our guidance is fourth quarter adjusted operating margin in excess of 23% once again keeping us on track to attain our long term target by 2029. Finally on this page we are increasing our full year adjusted free cash flow guidance to $1.4 billion, up $100 million from prior guidance driving full year adjusted free cash flow conversion to 95% as we continue to drive initiatives to optimize trade working capital and when you piece it all together, the growth trajectory, the margin progression and the free cash flow performance, these numbers certainly demonstrate the continued strength of our execution and our ability to drive significant growth while expanding margins. We talked a fourth quarter guidance slide in the appendix and if you look at the exit rates across all financial metrics, we believe we should be very well positioned for a strong start to 2026. With that said, I turn it back over to Gio. Thank you, David. Thanks a lot. We go to slide 10. Some key thoughts here to wrap up. Growth is certainly ongoing and it is here to stay. We have demonstrated the ability to meet our customer needs and to gain market share, delivering a 30% sales growth in the first half of 2025. While this has required accelerated investment in engineering, R&D capacity and go to market, we are aligning execution to this speedier growth rate. We are vigorously addressing the temporary margin challenges. This has my and my team's full attention. I'm confident we will see constant improvement. We have raised 2025 guidance for adjusted diluted EPS, net sales, AOP and adjusted free cash flow. The speed of technological evolution isn't abating and the industry is changing quite dramatically. We're driving this change and helping to shape the future of data center infrastructure. Lastly, let me highlight two particularly exciting developments that demonstrate our technology leadership and innovation in the market. Let's start with our collaboration with CoreWeave, which showcases Vertiv's position at the forefront of AI Infrastructure. With CoreWeave and Dell Technologies, we were the first to launch and deploy NVIDIA's GB300 NVL72. This follows our head start with GB200 NVL72 reference designs. Our infrastructure offering is always at least one GPU generation ahead, which is absolutely critical for our customers. Let me continue with our collaboration with Oklo. With the data center industry keenly focused on accessing increasingly large sources of power generation, our collaboration with Oklo is about making access to advanced nuclear power plants easier. Working on power and thermal reference architectures tailored to Oklo's great advanced nuclear power plant technology, we will enable this to happen at scale and in ways that significantly enhance the overall data center efficiency. These collaborations demonstrate how Vertiv is actively shaping the future of the data center infrastructure, working with innovative partners to solve the industry's most pressing challenges while maintaining our focus on efficiency, reliability and sustainability. I conclude by saying that the industry is effervescent, optimistically intense in driving acceleration. We're raising our full year guidance and we are confirming our long term margin objective. We are making sure we continue to lead the industry forward through this acceleration for the years to come. With that, let us start the Q&A session and over to you, Breca. Thank you, Gio. We will now begin the question and answer session, and if you would like to ask a question, you can do so by pressing STAR followed by one on your telephone keypad. In the interest of time, please limit yourself to one question, and if you have a follow up, please rejoin the queue. We will pause for a moment to compile the Q and A. The first question comes from Steve Tusa with J.P. Morgan. Your line is open, Steve. Hey guys, how's it going? Doing very well, Steve. How are you doing? Just on the margin side, I think you're going to be exiting the year at like a mid-30s incremental margin, which I think is relatively something that we would target I think over the long term. You guys have talked about, I know you're continuing to invest every year and there's always some incremental friction as you're delivering at this rate, which is pretty dramatic, but is there any reason why we wouldn't think about 2026 as a more normal year on margins, given your kind of easy comps in that exit rate? Certainly the direction of speed coming out of 2025 is encouraging in terms of the long trajectory, long term trajectory, I was vocal in the script thinking in terms of continue to believe that our objectives in terms of long term margins are correct. I would think that you're not probably too far from what we think the future could look like. Great, thank you. Thank you. Your next question comes from Amit Daryanani with Evercore. Your line is open. Thanks a lot. Good morning everyone. I was hoping, Gio, you could spend a little bit of time on the strength that we're seeing in both your backlog and orders right now and maybe just touch on two fronts. One, are you seeing a shift in duration of your orders right now? Or maybe just talk about the range of what that order book or backlog looks like. That would be really helpful. Then secondarily, can you just touch on the diversity of this backlog? You mentioned CoreWeave, I think at the end of your comments, and certainly the Neo Cloud seem to be ramping up in a much bigger way. I'd love to just understand how do you think of the duration of this backlog and then also the customer diversity that's perhaps starting to happen over here. I mean, I will take this as a one question. Let's put it this way. Two aspects of your one question. One is the what is the duration and what is the mix in terms of time frames of our backlog and pipeline. Backlog is pretty much similar to what we have seen historically. There is no kind of either dramatic elongation or dramatic shrinkage of the backlog. If anything, what we see, and it's quite reassuring, we like it, is that some of our customers would like to have stuff earlier and there is an a ppetite. For us to deliver, if you will, when we can deliver and we can deliver. As we have demonstrated in the second quarter, we have increasing the customer base that is ready to receive. That's a good sign for the industry as it all when it comes to orders, let's say top pipeline more than orders because orders and what I say backlog is pretty much like for like when the order is received in a pipeline, we have a little bit of an elongation which is a positive elongation. Do not think about anything that distorts the shape between for example, what is six months, next six months or next 12 months vis a vis, beyond the next 12 months. There is a little bit more elongated visibility. Again, nothing that dramatically changed the shape. We have a nicely kind of actionable pipeline that supports our growth ambitions. There was an aspect about diversity, I'd say that clearly if we think about the part of the market that grows the fastest, we certainly think in what the, what we call the core Hyperscale, that that is quite a, quite a large container for us that includes certainly Hyperscale, traditional Colocation, sovereign and definitely new cloud. It is well balanced in that respect. Next, r eady for the next. We now have Jeff Sprague with Vertical Research Partners. Please go ahead. Hey, thank you. Good morning everyone. I'm going to sneak an unrelated two-parter in here too, if I can. Just first on tariffs and inflation, just given this kind of remarkable demand pulse you're seeing, do you have kind of the commercial leverage to fully recover tariffs? We're just talking about some kind of delay in terms of moving through the order backlog and converting to sales and then I'm sorry, Gio, could you just maybe address little scare through the market a couple weeks ago on AWS, delivering some kind of, or developing some kind of Liquid Cooling application. How you put something like that in context to your business. Thank you. I really have a hard time, Jeff, reconciling these two questions into one. Let me start from the AWS one. In general, think in terms of Hyperscalers having certainly a very strong opinion on how they want their infrastructure to be. No two Hyperscalers have the same behaviors, no two Hyperscalers have the same design philosophy. Certainly with every single Hyperscaler you need to have a very strong relationship and you have to be involved in the technology that very often together with them is developed. I do not want to over elaborate on the specific case because I will let AWS talk about that. In general, think about us being always connected with Hyperscalers. As I said several times, it is very important to be in the labs with them, to have our engineers and their engineers working together and that will bring good things about. That could be kind of a customization of products that are in our portfolio or us working on the technology exactly the way they want it. I do not think there should be any scare. This is not an anomaly in the way the market works. We are here to scale with our Hyperscale customers, w e are here to co-engineer with them. Thank you. We now have a question from Nigel Koh with Wolfe Research. Thanks, good morning and Gio, I promise I'll keep this to one question. No two partners within one question. Just one question. L et's see, you be the judge, c an we just talk about win rates? There's obviously a lot of speculation around the evolution to Liquid Cooling and lots of new entrants and the like. Just wondering, i n terms of your win rates, especially on the AI Infrastructure side of things, how is your win rate comparing to the last two or three years? Here comes the end. Is there any change in the way that the Hyperscalers are procuring equipment? I'm just wondering if the system wide approach is starting to gain traction as opposed to RFPs for specific components of the system. In general we will not go into the details of win rates for AI Infrastructure, not AI Infrastructure. Remember that already probably a year ago we were saying, hey, being too analytical about what is AI, what is not AI is false precision. In general we see good stability in our win rate. We should go product line by product line, we should go BU by BU, but in general when we see things in aggregate, we have stability of win rates, which is, of course, if you combine win rates and pipeline, certainly a good design. We do not see a dramatic way or any significant way in which Hyperscalers go about procuring their infrastructure component or their solutions and systems. There are some Hyperscalers who have been historically very much, oh, I want to design it and consult with you as a design, and then you will be part of our, let's say, supply chain for the specific system. There are others that sit with you and say, hey, these are my needs, what you want to, what you want, how do we design around my needs, what you have around my needs. Clearly, most people think in terms of suppliers as multi-source for resilience, but then again, in that case, from that point of view as well, it is a customer-by-customer type of decision and philosophy. In general, nothing dramatically different, even as the technology or what they buy is moving with the technology of the industry, the technology evolutionary. Okay, thank you. Thank you. We now have Scott Davis with Melius Research. Please go ahead when you're ready. Hey, good morning everybody. Good morning. I want to drill down, if we can, into the operational inefficiencies and just Gio, if you can just talk a little bit about root cause, a re these the standard things of kind of premium freight and overtime labor and third shift inefficiencies and stuff like that, or there are other kind of hiccups that you're having while you're adding capacity as far as getting components, getting tooling and stuff like that I mean, what just a little bit m ore granularity I think on where you're s eeing those inefficiencies, I think would be helpful. Thanks. Yeah, I think it's a combination of things, Scott. We have addressed that during the, as we're going through the slides, but I really like to think about it in three ways. One is there is a tariff transition. I mean, we talked about tariff setting, tariffs, etc., in a state to state. When you transition from a certain footprint of supply chain and manufacturing to another one that is more adjusted to the tariff, you have to involve new sources. Sometimes you have to have new certification. You move a backlog from one place to another. You have stops and goes that, of course, inject inefficiency, and some of that, of course, you can fight and you do and we do. Some other is what you have to face. If you then think this ongoing anyway, but ongoing and overlapped to a situation in which we're growing at 34%, then you have that compounding with exactly what you were saying. You have to enable that growth more over time. You have premium freights, and that is the premium freight for, that is the premium freight for the tariff reconfigurations, probably a combination of the two. Clearly, both these elements, the tariff transition and the strong acceleration, are normalizing and are normalizing as we make more capacity available as we design the way we operate and align the way we operate to a higher level of growth. You were talking about retooling. Let's talk about retooling. That would probably be more a tariff transition, using it to get, extending a little bit the definition of that. There will certainly be, over time, the backlog movements, the freight. We talked about some other EMEA specific operational executional challenges that are specific to part of our business that we are addressing with focus and, dare I say, with even my direct involvement on certainly more than a weekly basis. All things that, as I was saying, we believe will be in full control. Thank you guys. Appreciate it. Thank you. Thank you. Your next question comes from Andrew Obin with Bank of America. Yes, good morning. Hey, good morning too. Yeah, so one of the things that sort of came up last quarter, during various channel checks, is that there are a lot of teething pains on Liquid Cooling systems in the industry. I would guess that this sort of bodes well for service contracts and any color or commentary on growth rates for thermal service contracts or Liquid Cooling. Because I think at the analyst day last year, people have sort of thought that this could be an attractive growth opportunity for Vertiv. Thank you. Yep. Thank you, Andrew. Certainly, let's say if you think about the cooling and you go back to what I was saying when we go through slides, the degree of intimacy, interoperability between a cooling system, Liquid Cooling system, and a multimillion dollar rack is enormous. The system is quite complex from a technology standpoint, from a calibration balancing standpoint. We are fully convinced and we see that indeed being the case, that our service strength is really making a difference in the deployment of Liquid Cooling at scale. Let's not forget scale. It's a big element here, but also during the life cycle of the Liquid Cooling system. Yes, the answer is straight. Yes, we believe that Liquid Cooling is helpful and will be certainly favorable in terms of our thermal services. Thermal contract growth is an area we truly believe will be strong going forward. Thank you. Thank you. We now have Michael Elias with TD Cowen on the line. Great. Thanks for taking the question. Just curious as you think about the evolution of what goes into the data c enter that is increasingly looking a t taking a medium voltage directly to the rack, and rack density is getting up to 1-2 megawatts per rack. How do you think about your current product footprint and any ways that you need to evolve your offering in order t o keep pace with the evolution inside the data center? Thank you. Thank you, Mike. I think this is certainly something that is happening very clearly in our roadmaps. And you're right. Just as we saw the thermal or the cooling infrastructure evolve, and it's not finished. Of course it continues to evolve. By the same token, the same will happen on the power side of things. You heard us, you probably heard us. People heard us. Vocally support NVIDIA's plan to have a higher, let's say, voltage type of rack power distribution in general. This, of course, will have reverberations across the entire power infrastructure. Yes, the portfolio is evolving. What we are really happy about and we nurture very carefully and very intensely is the relationship we have with the key players, be them silicon or Hyperscalers, by which we together define what the future will be like. One, two, three years out and align our portfolio and our technology. If you think about this kind of a higher voltage DC power, that's something that of course leverages very well our decades-long DC power technology. You can think about this evolution again. I want to stay on the power side as something that is even broader as data centers will become more and more self-sufficient from a power generation standpoint. We know that that is certainly a trend, not the sole trend, but it's certainly a trend. You will see, back to my Oklo point earlier, as you see that the powertrain, the power infrastructure will need to be very well orchestrated exactly from power generation all the way to inside a rack. There will be various architectures that really will depend on, again, the type of philosophy and also the type of use of a certain data center, how much flexibility you want to have to different types of loads. Long story short, the system is becoming more important, the system is becoming more complex, and this is an exercise that we are of course engaging in and we are very excited about. Thank you. Thank you. We now have Nicole DeBlase with Deutsche Bank. Please go ahead. Yeah, thanks. Good morning, guys. Good morning. I just had a question on margin, the guidance implies like a 10 basis points year-on-year d ecline in margins in the third quarter, a pretty big step up t o like over 200 basis points of expansion in the fourth quarter. Probably a question for David, but can we kind of walk through some of the puts and takes that give y ou guys confident in that step up? Thank you. Yeah. I think it's two things, Nicole. Number one is the benefit of operational leverage. You can get our exact Q4 numbers in the appendix, but there's over $200 million increase in sales expected in Q4 versus Q3. That definitely provides the benefits of operational leverage. The other bucket is simply addressing the operational inefficiencies and execution challenges that we've seen in Q2 and into Q3. Once again, we believe all of these should be resolved in Q4. It may be oversimplifying things, but I think those are the two buckets that drive the improvement from Q3 to Q4. Simple is great. Thanks David. Thank you. We now have Amaruta Mathura with UBS. Your line is open. Thanks, operator. Good still morning. Good morning, everybody. Just Gio, at the front of the call you had talked about the regulatory environment getting better for AI Infrastructure and that was being reflected in your pipeline. Can you just give us a little bit more color on that? W hat specifically is getting better? Also, just I know you don't like commenting on orders for obvious reasons, but you have been quite generous in talking about trailing twelve month orders and the expectations there. We're getting past these tougher comps here where I think there looks like a possibility for TTM orders to reaccelerate. Wondering if you would engage with me in that type of conversation. Another case of very clear two questions disguised as S1. Let me address the regulatory environment and be patient with me. This is in general true, if we think about the U.S. environment, of course we see a lot of attention from the administration for the sector. It is not just the sector in terms of data center as and of itself, but elements that are then conducive very much to data center growth that is all around, all around power and power grid and power generation. That is what I refer to. Also, my comment was a little bit oriented towards me where we see national governments, the EU, but also places like the U.K. more aware of the importance and the strategic importance of AI. That is slowly, as we said, slowly but surely starting to head in the right direction. One thing that I have not mentioned this time that I am fully convinced about is that one of the reasons why Europe is maybe a little lagging, we are talking about a coil spring, is that so much kind of attention and time and resources are really focused on North America and the U.S. that sometimes are the same players, the same players that play both in the U.S., North America and Europe. This is even more so true than it is, if you will, with Asia. It has its own dynamics and positive dynamics, I must say. You will see that a lot of the attention is absorbed by what happens in the U.S. and we believe times will soon be mature for an acceleration in Europe and EMEA. What about the trailing twelve- month? [crosstalk] That's the second question. As we said, I would be guiding orders and that's not what we did. All right, thank you. [crosstalk] It was the second question. Be patient with me. Thanks. Thank you. We now have a question from Chris Snyder with Morgan Stanley. Your line is open. Thank you. I wanted to ask on gross margin, which has obviously come under some pressure here in the first half after a period of very healthy expansion. Is this only a function of tariffs s ome of the inefficiencies discussed earlier o r are there also headwinds from whether it be mix or new technologies ramping t hat is Liquid Cooling, when you guys look at the backlog, is the expectation that gross margin returns to expansion in Q4 and that kind of helps provide that operating lift or is that still a little, a little bit further out? Thank you. Couple of things, please add. We are happy about the new technologies and I think the new technologies corroborate our value story and certainly our margin story. As we explained, there are tariff elements and certainly growth inefficiency in the operational aspects that we, I think, discussed. Those are really the main elements. When it comes to margin and backlog margin, because we do not go in those level of details, but certainly we factor the margin in our backlog when we talk about, when we give our guidance in general. I don't know if you want to add David. Yeah. Just on the topic of mix could be a factor quarter to quarte based on larger projects. I'll tell you, for the full year, mix will not have a negative impact on our margin. If anything, it will be slightly positive. Thank you. Appreciate that. Thank you. We now have the next question from Andy Kaplowitz with Citigroup. Please go ahead, Andy. Good morning everyone. I think in the past you said that the market in Vertiv are trending toward the high end of your 15%-17% growth. CAGR, fiber, scalar and Colocation revenue growth through 2029 and your 12%-14% growth for Vertiv. Given the recent order momentum, are we thinking that growth could be even higher? Modestly higher rates? Especially given you're seeing a broadening of AI spend, I think into sovereigns or enterprise. Do you say the order ramp has been more what you've been expecting, maybe just slightly faster? I think early to think in terms of let's say, or a contraction or a change in our, let's say market growth expectations. I think it would be premature. Certainly we like what we see in terms of market demand. Certainly going back to the point we're making, that range for hyper and colo that we gave, the 15%-17% w e're probably thinking about the upper end as usual. We continue to look at the market, to evaluate the market. Right now it would be premature. Certainly as we're saying in this market, we are taking market share and yes we are, we are happy with the trajectory. Again, we're not even shocked in terms of that because we've been talking about our pipeline getting stronger for quite some time and again, not commenting on any specific quarter because of the lumpiness that we have several times discussed. We think that from a trailing twelve, the momentum is the right one and is momentum that certainly implies market share gain. I tried. Thanks, Gio. Thanks. Thank you. We have a question from Mark Delaney with Goldman Sachs. Please go ahead. Yes, thank you very much for taking my question. You said you expect to generate about $1.4 billion of free cash flow for this year and plan to use about $200 million for the Great Lakes acquisition. Can you speak to your priorities for the rest of the free cash flow and if you expect M&A to become a more regular part of your capital allocation framework from here? Thank you, Mark. Certainly M&A is an important element in our capital allocation strategy and certainly in our value, more broadly speaking, value creation. We have been very vocal about that. We are happy about what we have recently announced. It is an important part. Again, it is an important part that we address with keen focus. We have a strong process and a very active pipeline. What exactly will happen would be obviously super premature to say. We are not shy and will not be shy if the right timing and the right thing mature to the point that we can action. I am certainly pleased with how much stronger our engine in this respect is. I do not want to predict anything right now, but certainly we have the means, we have the credibility and we have the process in place. Thank you. Thanks a lot. Our final question, I apologize. Our final question comes from Noah Kaye with Oppenheimer. Your line is open. Thanks. Gio, you talked at DCD earlier. T his week about the trend towards modular and prefab solutions as really kind of accelerating. I would love to understand to what extent your backlog has started to remix in that direction and perhaps whether we can even tie that trend to the demand acceleration you're seeing. Thank you. That is certainly a trend that we see. We know that the industry needs speed, and speed in construction is paramount for success for our customers. Also, as I said several times, this is the construction industry. If you have to build very, very, very complex systems like data centers on site at speed, then there certainly are challenges, shortages, manpower, skilled labor shortages. Surely things can be done better in a prefabrication setup and mode. Yes, we see an acceleration in the modular business. Do not think the modular business as something else from what we do. For us, modular business is prefabricating a lot of our technology. We are not just a regular kind of integrator. We indeed are absolutely not an integrator. We are prefabricating the technology that we own, and that makes a big difference. It is not like, oh, thermal is going down, power is going down, and prefabrication is going up. No, it is really integral. It is almost like a wrapping around in our technologies and one that can create a lot of value to our customers. This can be multiple things. If you take o ur SmartRun that I was talking about earlier, you will have power racks, power distribution, you will have secondary fluid network. You can include everything. Liquid cooling, busways, controls, you name it. It is really a way to package increasing the value that we deliver to our customers. That's very helpful. Thank you. Thank you. Thank you. This concludes our question and answer session, and I would like to turn the call back over to Gio for any closing remarks.