What the changes say
- Order backlog doubled to approximately $15.0 billion, driven heavily by artificial intelligence infrastructure demand.
- Large cloud and hyperscale customers are exerting heightened pricing and contractual leverage.
- Data center expansions face growing local zoning and community opposition risks.
What changed since the prior 10-K
New
- NewRisks Related to Our Customers and Our Industry
Larger customers often require terms and conditions that are more favorable to the customer, which could result in downward pricing pressures on our business
Large communication network and cloud providers have enhanced leverage to demand favorable terms, penalties, and strict performance commitments for artificial intelligence projects.
- NewRisks Related to Our Customers and Our Industry
The industries and markets in which we operate are highly competitive, and we experience competitive pressures from numerous and varied competitors
Intense global competition from large-scale rivals could cause sales declines if our technology, reliability, or cost structure fail to keep pace.
- NewRisks Related to Our Business Operations
If we fail to anticipate technology shifts, market needs and opportunities, and fail to develop appropriate products, product enhancements and services in a timely manner, we may not be able to compete effectively and, as a result, our ability to generate revenues will suffer
Failure to anticipate technology shifts like artificial intelligence, alternative power architectures, and cooling technologies could reduce demand for our offerings.
- NewLegal and Regulatory Risks
Future legislation and regulation could disrupt our customers’ markets resulting in declines in sales volume and prices of our products and otherwise having an adverse effect on our business operations and performance
Unsettled laws and future regulations regarding artificial intelligence, cybersecurity, energy consumption, and data center construction could disrupt our customers' markets.
- NewRisks Related to Our Financial Position, Investments and Indebtedness
The presence of a material weakness in internal control over financial reporting could result in material misstatements in our financial statements
Future material weaknesses in internal control over financial reporting could impair our ability to report financial information accurately.
Dropped
- DroppedRisks Related to Our Customers and Our Industry
Large companies, such as communication network and cloud/hyperscale and colocation data center providers, often require more favorable terms and conditions in our contracts, which could result in downward pricing pressures on our business
- DroppedRisks Related to Our Customers and Our Industry
The areas in which we provide our product and solution offerings are highly competitive, and we experience competitive pressures from numerous and varied competitors
- DroppedRisks Related to Our Business Operations
Wars, conflicts and other types of geopolitical tensions, and any resulting sanctions by the U.S., European Union and other countries may contribute to inflation, market disruptions and increased volatility in commodity prices more acutely in the U.S. and Europe and a slowdown in global economic growth
- DroppedLegal and Regulatory Risks
in new regulations and customer requirements, or changes in current regulations and customer requirements, which could materially adversely impact our business, results of operations and financial condition
Large company concentration and buying power.
- DroppedRisks Related to Our Financial Position, Investments and Indebtedness
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual consolidated financial statements will not be prevented or detected on a timely basis
- DroppedRisks Related to Our Financial Position, Investments and Indebtedness
Despite our current levels of indebtedness, we have the ability to incur more indebtedness, which could further intensify the risks described above
Competition in product and solution areas.
- DroppedRisks Related to Our Financial Position, Investments and Indebtedness
Restrictive covenants in the credit agreements governing the Senior Secured Credit Facilities, the indenture governing the Notes, and any future debt agreements, could restrict our operating flexibility
- DroppedRisks Related to the Ownership of our Securities
compensation package, which often includes cash- and equity-based compensation. If our total compensation package is not viewed as competitive, our ability to attract, motivate and retain key employees could be weakened and failure to successfully hire or retain key employees and executives could adversely impact us
Reworded
- 94% rewrittenRisks Related to our Securities
We incur significant costs and devote substantial management time as a result of operating as a public company
Updated to emphasize the significant investment in personnel, systems, and processes required for internal controls and public company compliance.
- 91% rewrittenRisks Related to Our Business Operations
Any of these risks could have an adverse effect on our results of operations and financial condition
Removed references to competitive technology shifts and revenue generation, leaving only inventory management and obsolescence risks.
- 74% rewrittenRisks Related to Our Customers and Our Industry
Any disruption or consolidation of our customers’ markets or reduction in customer spending on technology could result in declines in the sales volume and prices of our products
Added local zoning decisions, community opposition, and temporary or permanent local moratoria restricting data center construction as disruption factors.
- 71% rewrittenRisks Related to Our Customers and Our Industry
Failure to obtain performance and other guarantees from financial institutions, may prevent us from bidding on or obtaining certain contracts, or increase our costs with respect to such contracts
Expanded to explicitly include large data center, artificial intelligence, and complex infrastructure projects requiring financial institution guarantees.
Was: Failure to obtain performance and other guarantees from financial institutions, may prevent us from bidding on or obtaining certain contracts, or cause our costs with respect to such contracts to be higher
- 69% rewrittenRisks Related to Our Customers and Our Industry
We may not realize all of the sales expected from our backlog of orders and contracts
Updated estimated combined order backlog figure to approximately $15.0 billion as of December 31, 2025, with delivery timelines extended to 12 to 18 months.
- 61% rewrittenLegal and Regulatory Risks
We are subject to risks related to various environmental and sustainability-related matters, metrics, and goals, which may impact our business and reputation
General stylistic edits replacing diversity, equity and inclusion with inclusion and shortening environmental, social, and governance references.
Was: We are subject to risks related to various environmental, social and governance ("ESG")-related matters, metrics, and goals, which may impact our business and reputation
- 60% rewrittenRisks Related to Our Business Operations
The global scope of our business poses specific operational risks and challenges, including those relating to disruptive global events and forces, compliance with laws, and enforcement of consistent company-wide standards and procedures; additional or exacerbated risks may exist in emerging markets
Updated global employee headcount to approximately 34,000 as of December 31, 2025, and added service centers to manufacturing facilities.
Was: The global scope of our operations, especially in emerging markets, poses specific risks and challenges with respect to operations, compliance with laws and enforcement of consistent company-wide standards and procedures
- 59% rewrittenRisks Related to Our Financial Position, Investments and Indebtedness
Our current or future levels of indebtedness could adversely affect our financial condition and prevent us from making payments on our debt obligations
Removed specific dollar figures for the Term Loan Facility and Notes as of December 31, 2024, referencing details elsewhere in the report.
Was: Our level of indebtedness could adversely affect our financial condition and prevent us from making payments on our debt obligations
- 55% rewrittenRisks Related to our Securities
In order to successfully operate, we must identify, attract, develop, train, motivate and retain key employees, and failure to do so could seriously harm us
- 45% rewrittenRisks Related to our Securities
Resales of our securities may cause the market price of our securities to drop significantly, even if our business is doing well
- 38% rewrittenLegal and Regulatory Risks
We are subject to various environmental, health and safety laws, regulations, and other requirements, including regulations related to the composition and take back of our products and our ownership, lease or operation of our facilities, each of which could subject us to significant costs or liabilities
Was: We are subject to environmental, health and safety matters, laws and regulations, including regulations related to the composition and take back of our products and our ownership, lease or operation of our facilities which could subject us to significant costs or liabilities
- 36% rewrittenRisks Related to Our Business Operations
We are subject to various changes in costs of production, including some that are beyond our control, the impacts of which may be exacerbated if we fail to properly manage our supply chain and inventory
- 34% rewrittenRisks Related to Our Customers and Our Industry
We rely on the continued growth of our customers’ critical infrastructure systems, in particular data center and communication infrastructure, to grow our business, operations and revenue, and any decreases in demand in these infrastructures could lead to a decrease in demand for our product offerings
Was: We rely on the continued growth of our customers’ networks, in particular data center and communication networks, to grow our business, operations and revenue, and any decreases in demand in these networks could lead to a decrease in our product offerings
- 33% rewrittenRisks Related to our Securities
Global macroeconomic conditions, including economic weakness and uncertainty in the areas in which we operate, could adversely impact our business, results of operations and financial condition
- 32% rewrittenRisks Related to Our Financial Position, Investments and Indebtedness
Our business plan may be dependent on access to funding through the capital markets
Was: Our business plan is dependent on access to funding through the capital markets
- 31% rewrittenRisks Related to Our Business Operations
Unanticipated changes in domestic or global tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could cause increased variability in our effective tax rate and negatively impact our financial performance
Was: Unanticipated changes in domestic or global tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could cause increased variability in our effective tax rate and impact our financial performance
- 26% rewrittenLegal and Regulatory Risks
Any failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results
- 26% rewrittenRisks Related to Our Business Operations
Any failure of our product offerings could subject us to substantial liability, including product liability claims, which could damage our reputation or the reputation of one or more of our brands
- 25% rewrittenLegal and Regulatory Risks
We are subject to governmental export and import controls and sanction programs that could subject us to liability or impair our ability to compete in international markets
- 23% rewrittenRisks Related to Our Business Operations
Any failure by us to identify, manage, integrate and complete acquisitions, divestitures, investments and other significant transactions successfully could harm our financial results, business and prospects
Was: Any failure by us to identify, manage, integrate and complete acquisitions, divestitures and other significant transactions successfully could harm our financial results, business and prospects
- 22% rewrittenRisks Related to Our Business Operations
Implementations of new IT, information security systems, and enhancements to our current systems may be costly and disruptive to our operations
Was: Implementations of new information systems and enhancements to our current systems may be costly and disruptive to our operations
- 21% rewrittenRisks Related to Our Financial Position, Investments and Indebtedness
Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets
All 41 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Customers and Our Industry
- 01We rely on the continued growth of our customers’ critical infrastructure systems, in particular data center and communication infrastructure, to grow our business, operations and revenue, and any decreases in demand in these infrastructures could lead to a decrease in demand for our product offerings34% rewritten
- 02We may not realize all of the sales expected from our backlog of orders and contracts69% rewritten
- 03Any disruption or consolidation of our customers’ markets or reduction in customer spending on technology could result in declines in the sales volume and prices of our products74% rewritten
- 04Larger customers often require terms and conditions that are more favorable to the customer, which could result in downward pricing pressures on our businessNew
- 05We have long-term, fixed-price contracts (including long-term, turnkey projects). Our failure to mitigate certain risks or accurately estimate our costs associated with fulfillment of such contracts may result in excess costs and penalties
- 06The industries and markets in which we operate are highly competitive, and we experience competitive pressures from numerous and varied competitorsNew
- 07Failure to obtain performance and other guarantees from financial institutions, may prevent us from bidding on or obtaining certain contracts, or increase our costs with respect to such contracts71% rewritten
Risks Related to Our Business Operations
- 08We are subject to various changes in costs of production, including some that are beyond our control, the impacts of which may be exacerbated if we fail to properly manage our supply chain and inventory36% rewritten
- 09Any of these risks could have an adverse effect on our results of operations and financial condition91% rewritten
- 10If we fail to anticipate technology shifts, market needs and opportunities, and fail to develop appropriate products, product enhancements and services in a timely manner, we may not be able to compete effectively and, as a result, our ability to generate revenues will sufferNew
- 11Implementations of new IT, information security systems, and enhancements to our current systems may be costly and disruptive to our operations22% rewritten
- 12We may not realize the expected benefits from any rationalization, restructuring, and improvement efforts that we have taken or may take in the future
- 13Disruption of, or consolidation or changes in, the markets or operating models of our independent sales representatives, distributors and original equipment manufacturers could have a material adverse effect on our results of operations
- 14Unanticipated changes in domestic or global tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could cause increased variability in our effective tax rate and negatively impact our financial performance31% rewritten
- 15Any failure of our product offerings could subject us to substantial liability, including product liability claims, which could damage our reputation or the reputation of one or more of our brands26% rewritten
- 16The global scope of our business poses specific operational risks and challenges, including those relating to disruptive global events and forces, compliance with laws, and enforcement of consistent company-wide standards and procedures; additional or exacerbated risks may exist in emerging markets60% rewritten
- 17Any failure by us to identify, manage, integrate and complete acquisitions, divestitures, investments and other significant transactions successfully could harm our financial results, business and prospects23% rewritten
- 18Our operations depend on production facilities, including the expansion of existing facilities and opening of new facilities, throughout the world, which subjects us to varying degrees of risk of disrupted production
Legal and Regulatory Risks
- 19Future legislation and regulation could disrupt our customers’ markets resulting in declines in sales volume and prices of our products and otherwise having an adverse effect on our business operations and performanceNew
- 20Any failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results26% rewritten
- 21Our international operations expose us to specific legal compliance issues relating to anti-corruption laws and regulations of the U.S. government and various other international jurisdictions, and our failure to comply with those regulations could adversely impact our business
- 22We are subject to governmental export and import controls and sanction programs that could subject us to liability or impair our ability to compete in international markets25% rewritten
- 23Changes in U.S. or foreign trade policies, including additional tariffs or global trade conflicts, could increase the cost of our products, which could adversely impact the competitiveness of our products
- 24We are subject to risks related to legal claims and proceedings filed by or against us, and adverse outcomes in these matters may materially harm our business
- 25We are subject to various environmental, health and safety laws, regulations, and other requirements, including regulations related to the composition and take back of our products and our ownership, lease or operation of our facilities, each of which could subject us to significant costs or liabilities38% rewritten
- 26We are subject to risks related to various environmental and sustainability-related matters, metrics, and goals, which may impact our business and reputation61% rewritten
Risks Related to Our Financial Position, Investments and Indebtedness
- 27Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets21% rewritten
- 28We are exposed to fluctuations in foreign currency exchange rates, and our hedging activities may not protect us against the consequences of such fluctuations on our earnings and cash flows
- 29The presence of a material weakness in internal control over financial reporting could result in material misstatements in our financial statementsNew
- 30Our current or future levels of indebtedness could adversely affect our financial condition and prevent us from making payments on our debt obligations59% rewritten
- 31In addition, under the ABL Revolving Credit Facility, if availability goes below a certain threshold, Vertiv Group and its restricted subsidiaries are required to comply with a minimum “Consolidated Fixed Charge Coverage Ratio” (as defined in the ABL Revolving Credit Facility) of 1.00 to 1.00
- 32Our business plan may be dependent on access to funding through the capital markets32% rewritten
Risks Related to our Securities
- 33Resales of our securities may cause the market price of our securities to drop significantly, even if our business is doing well45% rewritten
- 34Anti-takeover provisions contained in our Organizational Documents could impair a takeover attempt
- 35Our Certificate of Incorporation includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders
- 36We are a holding company and depend on the ability of our subsidiaries to pay dividends
- 37Global macroeconomic conditions, including economic weakness and uncertainty in the areas in which we operate, could adversely impact our business, results of operations and financial condition33% rewritten
- 38In order to successfully operate, we must identify, attract, develop, train, motivate and retain key employees, and failure to do so could seriously harm us55% rewritten
- 39We may elect not to purchase insurance for certain business risks and expenses and, for the insurance coverage we have in place, such coverage may not address all of our potential exposures or, in the case of substantial losses, may be inadequate
- 40Fluctuations in interest rates could materially affect our financial results and may increase the risk our counterparties default on our interest rate hedges
- 41We incur significant costs and devote substantial management time as a result of operating as a public company94% rewritten
Other Vertiv Holdings 10-Ks
- FY2024 10-K risk factors44 risks
Data center demand and customer network growth drive Vertiv's business operations and financial health.
Filed Feb 18, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.