All right. We'll kick off day three here at the JP Morgan Industrials Conference. We're very happy to have Craig Chamberlin as well as Gio Albertazzi from Vertiv. I think Gio is fresh off a flight back from GTC. Before getting into that, maybe just starting every fireside this conference with a bit of an overview on just maybe the Middle Eastern situation and how we should look at that in the context of Vertiv. Well, of course, let's see, the situation will unfold in the next few days, a week, weeks for us. Certainly an area in which we operate in terms of the markets we serve with some manufacturing capacity there. We feel pretty good in terms of the supply chain resilience that we have built over the years. In terms of the market, it's a subpart of our EMEA market. It would be probably premature to think about what the actual impact is, but we see good resilience across the spectrum. Yeah, you know, time will tell. There's a little bit. It's premature still. You haven't heard any of the. I know there was some activity that was ramping there that's probably a bit deferred, but you haven't really heard any news about any of those projects that are not really moving forward? None. Okay. No, no news at this stage. Okay. GTC, I mean, I've been to this conference, didn't have a chance to, you know, listen in to what the CEO of NVIDIA had to say in depth. But maybe what are your couple takeaways from GTC and how that would- Well- How that maybe has evolved for Vertiv? Well, certainly in our confirmation of the huge amount of demand that NVIDIA see, and that's the demand that of course we also see. Our view of the market, the views of the market, align quite a lot. Two other things that are important is the continuous evolution of the silicon, but not just the silicon, of the system, because I'd say NVIDIA is past the silicon in and of itself. Of course, the silicon GPUs are central, but it's the entire IT system, the entire, let's say, part that they've been developed. Continuous evolution, more and more productive silicon and systems, which means that you drive more tokens per megawatt, which makes the whole AI more, the every token more cost efficient. With that cost efficiency, of course, comes even more adoption of AI. That was encouraging. You know, we were part and we also announced our partnership being part of the DSX Omniverse type of infrastructure, again aimed at optimizing the design of data centers or dare I say AI factories, but also enabling a fast deployment and an optimization during the life cycle of the infrastructure at the AI factory. We are participating in that effort. We are an important player in that effort with products like our Vertiv OneCore. Everything going in the direction of an acceleration in the industry and acceleration towards faster deployment and better utilization. The more efficient these chips get, the more tokens, I guess, come out, the price comes down of those tokens, but it's still net very positive for your customer from an ROI perspective. Very much so. Yeah. Very much so. We like this evolution of the technology because that technology becomes more dense, more demanding from an infrastructure standpoint. That's exactly what creates value for us in terms of the market that we serve, but also leverages our unique capabilities. Very encouraged also by the incredible buzz around everything GTC also Vertiv in that perspective. Very excited. Right. I think there was more buzz here, though, at the JP Morgan Industrials Conference. That was the second most important event of the week for sure. From a tokens per megawatt perspective, you guys kinda bumped it up to 3.5. Yes. As we move into more prefab and complex systems, you know, where do you see that going over time? What's the influence there? Well, yeah, I think we will have an opportunity when in a couple of months plus at our Investor Day to further elaborate in more, in a more details on this aspects of our business. In general, we see prefabrication and we like to talk about this integrated and converged infrastructure. It's not just integration, but it's a system that is designed as a converged infrastructure. We see that that helps us add more value and capture more value. It's something that drives towards an increase in megawatt, sorry, dollars per megawatt. when you think about those kind of free prefabs, a lot of that, how much of that, of those prefabs is, you know, your equipment versus kind of a third party content? It is a lot of Vertiv equipment. Yeah. Okay. That's a lot of Vertiv equipment. If you think about our portfolio as stretching all the entire range of power and thermal, so the majority use our equipment. Yeah. Yeah. Okay. Unlike some others who may be packaging a lot of stuff they don't have- Look, one thing is being an integrator. Yeah. There is value in integration, but another thing is to deliver a system that is thought of as one system that is a tailored example on, say, Vera Rubin. Yeah. It's kind of a, how can I say, crazily optimized around that application, and that has a lot of value for our partners and for our customers. Okay. Before getting into the technology, maybe just on overall cycle, what inning do you think we're in here? It's always hard to tell. We're definitely out of pre-game warm-ups, but my view is we're still not quite middle innings. I'm not putting words in your mouth, but what do you think inning we're in in this whole cycle? Look, we are still at the beginning. Yeah. We're really at the beginning. Now we see tremendous traction in terms of adoption of AI, but it's so the beginning. We see, you know, a long trajectory. I agree 100% with what you're saying. When you think about any risks that, what are you hearing from your customers as far as bottlenecks? We had a panel on Monday, and they basically talked about some of the power bottlenecks being relieved, but then, you know, something else pops up. They seemed much more, I guess, constructive on the ability to fulfill- Yeah orders. What do you think may be bottlenecks and then risks that you watch out for? Yeah, let's start with bottlenecks. If we go back a couple of years, maybe a year and a half, when everyone said, "Hey, the world will stop as such because we will run out of power," and said, "No, power is a pacing item. Mm-hmm. Power. Of course, with an industry that grows at this speed, there's always something that you have to work on and to remove as a bottleneck. That doesn't mean that power is not something that continues to be worked on and optimized, but to say, "Hey, the demand is there. Demand is real." Capital and ingenuity are being thrown at the power problem. The power problem will be. I wouldn't say eliminated, but managed for the growth that the industry needs. The same is true for other possible challenges, you know, permitting, but of course it depends on the country in which you operate. I'd say yes, this is an industry that's growing very fast. There will always be something, but there will always be an answer to the challenge at hand. When you look at it today and you kinda rank those, what are the top two bottlenecks you think the industry is facing right now? I would say continue to be power as a- Okay as a pacing item. Yep. The other is, I go back to what I always say, this is a construction industry in many respects, so labor and complexity on site is something that is being addressed, and we were talking about prefabrication. It's the exact way in which this has been alleviated. There will be other things in the future. There will be other solutions in the future. Any risks you see out there today that you know make you nervous that you know we could have an air pocket or hiccup or anything like that? We don't see that. We see strong demand continuing, and no air pockets. Yeah. I'm not gonna ask about orders, but you said you would talk about pipeline. Pipeline is still doing pretty well? Well, you know, we go back to what was it, middle of February? February. Yeah. I'll go back to what we were saying then. Okay. Then, EMEA, it seems like there's a bit more optimism from your tone on EMEA. What's going on there? I know it's gonna be down here in the near term, but how do we see the trajectory in EMEA? Sorry, we go back to the- Putting Middle East aside, of course. Yeah, no, 'cause I go back to our earnings call in February. Yeah. We see the spring uncoiling as we coined, I think you coined that way of putting it, at six months ago or so when we were together. That is definitely happening, and pretty optimistic about that. From a customer perspective, you there's a lot of different players now in the market. How do you guys make sure that you're, you know, I mean, you do serve everyone, but how do you make sure you kind of choose the right projects, the guys that are gonna, you know, be there five, 10 years from now? Sure, sure. Is that not really a concern right now just because of all the funding and the capital that's coming in? You go ahead. No, I think we are selective in certain regions and understanding, you know, what we have to do from a long-term perspective of winning, but for us it is a quick cycle to cash. We do wanna deploy, get our installed base out there. I think where you're going, Steve, what I think about a lot is who's gonna be operating that data center 5, 10 years from now so that I can get intimacy with that customer and drive what I call the services model on the back end. I wanna ensure they have stability there, so that I can ensure that, you know, they're continuing to go and I can wrap my arms around it. I think on the OE side, the quick to cash helps us out a lot 'cause we end up getting our items deployed, our equipment deployed, and we get it out there and we get our cash in the door. The back end of the cycle is what I always wanna make sure that I understand what the customer is going to be and how long they're gonna be there, so I can continue to drive revenue on that piece of product that I put out in the market. When it comes to the different types of technologies, whether it's ASICs or GPUs, do you, I mean, is one more content rich than the other? How do you think about that split? Well, in general, when we're talking that part of the market, the ASICs, anyway, advanced silicon, pretty much kind of all live in the right side of the spectrum that we gave you and that we will further elaborate on in our Investor Day. Clearly, if you take the Vera Rubin or even future, then it's the kind of rightmost end of that spectrum. Right. As like we said a few times already, NVIDIA defines the envelope. Mm The rest falls inside the envelope. Again, when we talk about AI, silicon, it all sits on the right side of the dollars per megawatt spectrum. Got it. It's not, you know, obviously NVIDIA's over here. You're doing their kind of cutting edge, but the ASIC is still right within that. Oh, absolutely. That envelope, yeah. Absolutely. Take TPUs, and you take an example of a very, very high densities. Yeah. Very high densities. Yeah. They are good for us, of course. From just getting into the technology a little bit here, the 800 V. Yeah ... the architectures that are coming out, where are we in this journey, and how do you see it playing out from a architecture and then also a penetration perspective as we move into the next few years? Uh, well- 2030 We're progressing well with the plans that we shared with you, with investors, being kind of a second half of this week. Yes, sorry, this week. Second half of this year. Still a little bit jet-lagged. It was a short kind of a red-eye. That's pretty funny. Weeks feel like years in this case. Exactly. It's okay. Exactly. That plan continues to be executed upon, and we are happy about the pace. When it comes to the architectures, we shouldn't think about it as black and white. One day someone will flip a switch. Yeah Everything will become an 800 V DC ±400 V, depending on the type of silicon and let's say application. We will see multiple powertrain configurations from let's say full medium voltage to more traditional type of powertrains. When there is an 800 V DC silicon at the end of it, you will have conversion, an 800 V DC done at row level to fully let's say medium voltage DC native powertrains. It's a big spectrum. We do not see a day when everything will flip. We see a coexistence, at least for the foreseeable future of multiple architectures, which is something I would like. We're very confident on our medium voltage or 800 V DC technology, and we see the fact that all the technologies will coexist in the market. What are some of the moving parts within that? Is there anything that's pretty clear right now that will happen within the architecture that will change? You will see if I understand the question, you will see. Just thinking about the traditional architecture where it's, you know, transformer to switchgear to, you know, UPS to Yes what a power shelf like Yeah Just thinking about that train. I've seen the NVIDIA white paper, maybe that's it. I don't know. But I'm sure there's like a thousand other variations. There are a lot of variations that. I'm curious where we are today, like what's seemingly kind of the most definitive thing you can say? Look, today, we still see the majority in the traditional powertrain designs. Okay. We're working a lot on everything, battery energy storage system plus medium voltage UPS as an area that is very, very important for the future. As far as the content there, I know, I think you have a partnership with LS Electric, but is that related to this 800 V, or do you have what you need in-house to manufacture- No, it's pretty much Vertiv thing. Okay. Of course we have a Yeah ... we have a good relationship with LS. Yeah. This 800 V DC portfolio expansion is very much a Vertiv in-house thing. Solid-state transformer, is that something that you guys will be or is that too far outside the Vertiv envelope? Well, I think it would be a little bit premature to say, but, as usual, when technology has become important for the industry, we are very early in that space. Just lastly, this adoption trend you're gonna start to sprinkle it in into second half 2026. How does that ramp look like? What percentage of installs could it be in 2028 or 2029? No, I think it's still premature. Okay. I think it's still premature also for the market in general and just for Vertiv. You'll see different type of operators, different type of data centers adopting different types of technologies. I think talking about mix and volume, speed of acceleration is a little bit premature. But we have a good understanding of, let's say, a range of outcomes and of course preparing not just from a technology, but also from a capacity standpoint. Right. There are still, I would assume, you know, some hurdles from a safety perspective, and this is a pretty robust change. This is an important change. Yeah. It's an important change that goes in the direction of making our services capabilities also in the medium to high voltage more important from a customer relation standpoint and ability to survey a complicated infrastructure. Shifting to the cooling infrastructure, how do you see that evolving? Obviously, liquid cooling did go from, you know, 0 to 80% of capacity or whatever now. Anything on that front, and how do you see the, I guess I'm gonna also ask, kind of the role of the chiller going forward? 'Cause you guys are a systems provider- Yeah You're maybe in a good spot to kind of understand. No, absolutely. First of all, of course, liquid cooling is ubiquitous. Will continue to be. There is no turning back. There are some customer players that continue to be focused on air, but the majority is going to liquid. With, of course, a portion of air as well because there are data center loads that continue to be air cooled. Let's go to the system. When we think about the thermal chain as really a system, the heat rejection, so where the chiller sits, is becoming more and more important element of the system. As liquid temperature are increasing or can increase with some of the newer chips and going back to what Jensen Huang mentioned, what was it, a month or a couple of months back. Yeah You see that the ability to use a smaller amount of mechanical cooling, that becomes a real opportunity. It's an opportunity, of course, dependent on the geography. It depends on the climate in which you operate, but it means that your heat rejection system or system of heat rejection equipment becomes from a one size fits all to you can modulate chillers, dry coolers, trim coolers, in our case, our portfolio. A product that is in between that can, depending on the condition of the locality, depending on the type of climate, depending on where you, when you are in the year, you can modulate the amount of mechanical versus free cooling, generating a lot of efficiency, but also needing much less electricity and power that can be converted to generating tokens. Right. The whole system becomes more efficient, effective, but also more complex to deliver and to orchestrate, and something I would like. If we look at the kinda growth rates of liquid versus air, I think the liquid cooling TAM has to be significantly bigger than anybody would have thought a year and a half, two years ago, obviously, just because of the megawattage, nobody predicted that. How do we Yes ... is the air cooling market still like a really solid double-digit market, or is there liquid just, you know, taking over that TAM? Yeah. There is not a taking over, if you will. Clearly the speed of growth of air cooling is much smaller than liquid. I would say that probably I don't know, but soon we will see those two TAM growth started to align because the mix shift will probably be completed in a year or two. Right. Because you're currently penetrating dramatically- Yes You'll be penetrating. Yes. We're still in a Yeah In a phase of partial substitution. Yeah. That will stabilize with both, of course, but let's say steady state mix between air and water. From a you know growth rate perspective and just looking at your you know your current long-term growth rate, the cooling market and the power market, is one growing faster than the other in that 12-14 that I think you still have out there as your guide? I would say that we should look at the market as synchronous. Yeah Pretty much synchronous in terms of growth rates. Okay. Got it. Just pivoting back to the customers here, how are you seeing the funding environment evolving there? There was a super interesting deal you guys did with Hut 8, I believe. That seemed like it was a pretty not creative, but like a pretty innovative deal. Are you seeing more of those out there from a financing perspective and funding perspective for the customers? I think we go back to the comments where they say what are the pacing items for the industry? Well, when you have a pacing item and the demand is very strong, then the market becomes, you know, very. The market. Very good at finding solutions to problems. That's what we see. Very, very strong solutions, and very convincing solutions, and that's what we're seeing, so. From a end market perspective, obviously, the colo is growing really fast. What are you seeing in the enterprise? Still behind, of course, everything, colo, hyperscale, in self-build or new cloud. We start to see an increasing interest in enterprise for, let's say, enterprise sovereign or. Yeah Private data and private AI. We're still early stages. We're seeing, again, going back to GTC, NVIDIA starting to have systems that are silicon and systems that are designed specifically for edge enterprise applications. And the market is there, and I think it is early stage still, but encouraged by the dynamics and by the direction travel. Is it growing? Is enterprise growing today? It is growing. Yeah. It is growing. Believe there will be an acceleration. I think we will have an opportunity in a month and a half when we have our Investor Day. Telecom, any signs of life there? Well, you know, that sector is still growing relatively slow. I think we go back to what we're saying, low- to mid-single-digit%. Yeah. Okay. Just lastly on the business and the top line, talk about services and where you are today on that initiative. I would assume with all these liquid cooling installations and the risk-averse customer around that new architecture that there's a real opportunity for you guys here. There is, and we are capturing that opportunity very well. It's not just a risk aversion, and certainly the risk aversion is a fundamentally important survival trait in our customer base. It's really the sheer complexity of the infrastructure to build. When you have a liquid cooling infrastructure, I go back to talking about thermal, the same is true for power. With more complicated heat rejection systems, you have to have a very skilled, very reliable, and very knowledgeable partners with you, such as we are. Again, this more increased level of complexity creates new opportunities. If you go back to our PurgeRite acquisition, two years ago, nobody would have thought that the fluid management space would be so important as it is today. The complexity of the system, the sensitivity to perfect calibration at commissioning and during life cycle of the primary and the secondary fluid networks are creating beautiful opportunities for services. I know it's a relatively smaller part of your business. You guys include installation and commissioning and things like that in the service number. Are you getting any visibility on maybe the multiple or the content per megawatt installed that you could get over the lifetime of the product? I mean, these haven't been installed for more than, like, a year. Yeah. Any visibility on that, on that kind of business model, how we should think about that? Yeah. I would say that we would not be specific here. Of course, we have you know our models and our dare I say good understanding of course of the trajectory. When we talk about complexity being favorable in terms of $3-$3.5 million per megawatt, well, then service is clearly also pushing that to the right. The services on complex system is certainly very favorable in terms of content. How fast can that kind of core service business, so not the install related stuff? Yeah, yeah. What we call life cycle. life cycle. How fast can that grow? Is that, if you're right, and you grow to 20 this year, whatever, high 20s, how fast is that business growing? Or should we think about it growing? It's growing right now in double digits. You just don't see it because it's not growing as fast as the OE. Okay. I think that's what ends up happening is a lot of that OE equipment stays on, you know, warranty for a couple of years, and then as it comes off, we attach, and we try to attach for the, let's say, the extended services and extended warranty period. In my mind, it's more of a steady growth. Okay. I'd like it to be a steady growth. What we've talked about, Steve, is at some point, the OE party is gonna slow. Yep. As it slows, I wanna keep that backbone growing at the low double digit kinda growth, 'cause it's gonna continue to give me the I'd say the mix that I want and the outcome that I want and the revenue that I want. Gio and I are pretty maniacal about ensuring that we wrap our arms around every piece of equipment we have out there and ensuring that we have the installed base service. 'Cause as you said, it's early innings. We don't even know what that revenue model looks like yet. Right. 'Cause some of the stuff's just been deployed for a couple of years. Yep, yep. Another comment here. When you think about, if you will, almost the chasm between commissioning and life cycle services. Yep Kicking in contracts, well, that is closing very quickly, for example, liquid cooling or systems that are complex. Because it's not about being covered against things that you are covered anyway during warranty. It's about you need to balance the system. You need to have reliability built in, and very often a crew of Vertiv service people on site day one. It's not about, "Oh, yeah, I'll see you in two years." It's day one. Yeah. It's critical day one. Maybe the content is a little bit smaller because there will be part of the activity that is covered through warranty, but it's really kinda the monitoring, the How you- The present, the service level guaranteed on-site that play a very big role. We like a lot the direction travel. That's what Next Predict is really all about, right? Next Predict is getting in there and ensuring the stickiness. Like I, again, Steve, you've been around industrials kind of where I've been around them. The ultimate end game at any industrial build-out is to be there when the services start paying off. Right I think we're lucky enough to be part of the build-out, and you can grab that OE. But really, the end market and the future staying is going to be how much you can grab of that services market and staying in it for the long term, 'cause that's the real 10-20-year kind of revenue stream that you want. Right. That incremental cost, obviously, to protect the $1 trillion of capital- Yeah you just spent is relatively small in event that something Yes goes wrong. Yes. Definitely. Yeah, yeah. Just on the margin front. You know, the margins last year impacted by tariffs a little bit. This year, we'd always thought about you guys as a 35% incremental margin company. You're a little bit below that this year. Sure below gross margin. Maybe just talk about how you're kind of measuring your productivity efforts a lot, you know, and against demanding customers and the investments you have to make. What's the biggest walk down from your gross margin to kind of the low thirties incremental? Yeah. Is low 30s incremental the right run rate to think about longer term? I think longer term we'll come back at Investor Day and kind of give the same framework. I mean, we've always talked about 30%-35% as kind of the space we wanna be in, and we wanna grow towards that. I think we'll get more of a framework around it as we talk in an Investor Day. To walk down to this year, it's one, the bounce back, right? We're bouncing back from the tariffs, so we're ensuring that we get that back. We did have a heavy investment. As you know, we're going from 2%-3% to 3%-4%. Bringing on that additional capacity, you do have a little bit of a headwind from that we'll work our way through here in the first half and into the second half, and I think we'll exit the year. We'll begin the year like probably high 20s%, 28%, 29%, and we'll work our way up into the 30s%, and then we'll exit at that rate. I think that's kind of what we're expecting, and we'll put a more bow around it as we get into the Investor Day. That's really the big walk down for us, is bringing that capacity on effectively. Okay not rushing through it. Any movement in raw materials that we have to, you know, keep an eye on, or are you guys pretty- I mean, I think we keep an eye. managing it pretty well with price? I think we keep an eye on it regularly. We've increased our pace in terms of how we look at it and how we go back to the market in terms of pricing. We regularly understand what that input cost looks like and try to ensure that we're pricing for it and margin. For us it's a pretty regular drumbeat. We look at it, you know, almost on a daily basis and understand what it looks like, what our pricing looks like, ensure our quotes are updated for it, not just for the one that's gonna be delivered, but look at when it's going to be delivered and how we expect that input cost to change. Do you target margin? Just remind us, do you target margin neutral, margin accretive, dollar neutral? How do you think about, We look at it at a minimum. On a price/cost basis. At a minimum, margin neutral. Okay. And- Got it. Just lastly on the margins, restructuring. Are we at the tail end of any restructuring or is there always stuff to do, and how do we think about the targeted efforts there? I mean, I think we look at it by region, by what we see from in terms of what the market looks like, and these markets change dynamically. You'll know that, you know, we've done some in the past, and I think it's always based on what we see the end market looking like. We don't wanna sit and wait. If there is an action that needs to take, we wanna be out in front of it and understand what that means. I don't say it's completely gone. We're still working through a couple of them. If we see the market change on this, of course, we're gonna go out and take the cost out because we don't wanna be sitting with unused cost. That's kind of the way we think about it. Exactly, it's a state of mind of a permanent optimization of the company. Yeah. Permanent optimization of company. It's not something that happens every now and again. You constantly think about you optimize the company. Yep. Any color on the segment margins and how we should think about which ones have the most opportunity over the intermediate term? I mean, I think in when you're looking at segment margins, again, we feel like, you know, Americas always has the tailwind of volume behind it right now. EMEA's bouncing back, and I would say it's bouncing back because you felt this first half of the year was the dip on sales. They get a little bit of headwind from that, but they'll bounce back in the second half. I think we see a steady trajectory in the APAC of continuing to grow and optimize there. That's kind of the way I look at it, is, you know, ride the volume in Americas, and bounce back into EMEA, and there's steady growth in the APAC region. Just one more for you. What the heck are you guys gonna do with all this cash? You wanna take it? I mean, it's pretty. I mean. It's pretty abundant. You guys are at, you know, I don't know. Well- 0.5 times leverage. I mean, yeah, we like our balance sheet. I'm not gonna apologize for having a strong balance sheet. It's what got us investment grade, so I'll stand behind it 100% of the time, but that doesn't mean we're not gonna look at things that will strategically fit in the portfolio. For us it's don't spend money to spend money. Spend money smartly and spend money where we can actually get a large return on that money. We've done it in the past in terms of the add-ons and the bolt-ons that we've gotten. We've always looked at them at what is the growth potential behind them and what's it gonna return to us. For us, it's not a, "Hey, we gotta go play in the inorganic market." We really like the portfolio. Now, if something's missing or we think there's a spot where we can really jump in and grow it, we'll go do that. You know, we're a little lighter when it comes to stock buyback or dividend, and we like to keep the powder dry in case there is something that pops up and we wanna go. But the best place for us to spend our money is R&D and CapEx, 'cause that's an immediate return. I know what it is. It's tangible. We spend the money that's gonna be spent there, and then we start looking at how do we deploy. I don't know if you have anything else. No. I think it's absolutely as it is. I know there have been a couple of deals, but are you still cold plate agnostic, if you will, or is that an evolving area enough so that you, that may be something you guys would be interested in either developing or In our industry. acquiring? You have to be server agnostic. You do not know what server or what cold plate your thermal infrastructure would serve. Indeed, the two things are disconnected. You know what type of loads, but you do not know what the cold plate that you will indeed serve is. Clearly, agnosticism versus relative to the server is a very important part of our strategy. Okay. Sorry, one more for you. I just wanted to clarify this, which I should have before on. 'Cause I'm getting this question all the time. On 800 V as you see it today, that is within your current window that you've talked about? Whatever the architectures that you've seen, that is within the current window? Oh, yeah. Okay. Not only that, but we believe, again, it's on the right side of the window. On the right side. On the right side of the window. Okay. Well, thanks a lot. We had Dave Cote here on-