Vertiv (VRT) Q2 2026 earnings call transcript

Good morning. My name is Lucas Penner, and I will be your conference operator today. At this time, I would like to welcome everyone to Vertives 2nd Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Please note that this call is being recorded. I would now like to turn the program over to your host for today's conference call, Lynn Maxiner, Vice President, Investor Relations.

Great. Thank you, Lucas. Good morning and welcome to Vertives 2nd Quarter 2026 Earnings Conference Call. Joining me today are Vertives Executive Chairman Dave Cody, Chief Executive Officer Joe Albertazzi, and Chief Financial Officer Craig Chamberlain. We have one hour for the call today. During the Q&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'd 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 Vertives. These forward-looking statements are subject to material risk 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, and 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 the state. We undertake no obligation to update these statements as a result of new information or future events. During this call, we will also present both gap and non-gap financial measures.

Our gap results and gap to non-gap reconciliations can be found in our earnings press release and in the investor slide deck found on our website at investors. vertive. com.

With that, I'll turn the call over to Executive Chairman Dave Cody. I am incredibly pleased by our second-quarter performance and outlook for the rest of the year and beyond. We have a great position in a good industry and continue to execute very well. Few and a team say it's a forefront of technology with organic investments and acquisitions.

The industry outlook is incredibly good because the digital age has decades to go. Our outlook is incredibly good, and deservedly so as we provide the picks and shovels for the digital age. The fee-planning-geonist team has been doing continues to pay off and will do so even more in the future to benefit from our technology investment unfold over time. With all that goodness, we still have opportunity to further improve. As Gio likes to say, we are still far from our full potential. The future is so bright, we have to wear shades.

I love it. With that, I now turn it over to Gio.

Well, thanks, Dave, and welcome, everyone. Let us go to slide three. Strong quarter, EPS, margin, profit, and cash convincingly strong. Continuing on a trajectory of strong sales growth, even with some timing elements, pleased with what we see in July and full confidence in H2 execution and backlog. As a result, we have raised our full-year outlook. Net sales were up 24% versus Q2.25, driven by continued strength in the Americas, which grew 29% and APAC, also up 29%. Importantly, EMEA returned to positive net sales growth with a 2% year-on-year increase. On an organic basis, net sales grew 18% with additional 5% from acquisitions and 1% from favorable currency. Adjusted operating margin came in at 22.6% exceeding our guidance and growing 410 basis points year-on-year.

The strong margin performance translated into adjusted operating profit of $738 million, up 51% from a year ago. Adjusted diluted EPS were $1.52 or 60% up from second quarter 25, driven primarily by high volume and continued operational productivity. Adjusted free cash flow came in at $925 million, a very strong 234% year-on-year growth, driven by higher operating profit and working capital efficiency. Free cash flow conversion exceeded 150% in the quarter. We are raising our full-year guidance across all key metrics. Net sales raised to $14 billion, a $250 million increase from previous guidance, up 37% year-on-year. Adjusted diluted EPS now at $6.70, a 60% increase from 25. AOP now expected almost 60% up year-on-year and adjusted free cash flow expected at $2.5 billion.

And we achieved a net cash position at the end of Q2. Let's now move to slide four. And let's start with a market environment on the left. Our global pipeline momentum remains very strong and we expect another year of robust orders growth. Demand signals are clear and broad-based. Regionally, let's start with the Americas where market continues to be strong.

Pipeline is actually accelerating, corroborating the long-term growth trajectory of our business. In year's momentum is further strengthening. This reinforces our confidence in the acceleration for the second half of the year. APAC showed broad-based strength, pipeline expansion, and favorable market conditions. This supports continued growth across the region.

Pricing continues to be favorable. We expect positive price costs in 26, including the current impact of tariffs and countermeasures. Now, to the right side of this slide, Q2 revenue showed strong growth year-on-year, quarter to quarter. We are executing on further acceleration in Q3 and Q4 on strong backlog. Additional capacity is online globally. Examples are Johor in Malaysia, five large plants, expansions in the Americas, chiller capacity increases in EMEA and more. During this today, you saw that this expansion is rapid and broad-based, at speed but always in a very disciplined fashion.

We are delivering data center infrastructure solutions at an increasing scale and level of complexity. That's exactly where we want to be. We experience a minor timing shift in Q2 revenue, primarily driven by multi-phase project execution and temporary supply chain dynamics, but the demand is there and the trajectory is strong. Keep in mind, there are increasingly large projects underway, think smartron and think even bigger with one core. These come with significant dependencies, a lot of coordination, a lot of rapid learning. I like the pace of our progress and we get stronger every day.

On capital expenditures, we now expect to be at the high end of our range, 4% of 26 sales, as we further expand global capabilities and capacity going into 27.

We continue to invest for the long term in a disciplined manner in future power architecture, advanced thermal systems, services and converged infrastructure. These are the building blocks that enable the next generation AI data centers and factors and we intend to continue to lead the industry. Let's now go to slide five. I am sure many of you will recall our CTO Scott Armels power architecture presentation at our investor day in May. I want to reiterate and build on what we share there. Multiple power architectures will coexist in the future. Verteus supports each one of them through a complete orchestrated power train. On the left side of the slide, you see the different architectures. Our AC foundation with as an example, Verteus Trinity and energy core battery storage system and the rest of the Verte power train, of course.

This architecture is broadly deployed, growing and will continue to be used by many categories of customers. The next architecture, serving even higher density, has a medium voltage AC source that feeds low voltage AC to deliver 800 volt DC at rack and pod level. Here you see new Verteus technologies like medium voltage best UPS and Verteus 800 volt DC side cars. This is under customer validation in 26 with deployment planned in 27.

Then the 800 volt DC architecture at data hall level. Here, Verteus solutions will include MV, DC UPS and solid state transformer to cover the multiple ways to address the end-to-end power with planned 27 customer validation supporting 28 deployment. As stated, rather than transitioning to a single architecture, the market is expected to leverage both AC and DC solutions as power requirements continue to evolve for years to come. Now, the right side of the slide, this is an example of deploying multiple power architectures at sites, sites evolve and expand. I'm thrilled to highlight our collaboration with NVIDIA and Vision Bay AI. Foxconn's business unit focused on AI supercomputing at their site in Gaussian, Taiwan. For the initial phase this site, Vision Bay AI awarded the power thermal and services business to Verteus for what is the first AI data center featuring NVIDIA GB 300.

On top of this, we are collaborating for the world's first AI data center adopting 800 VDC volt DC architectures at the rack and pod level featuring NVIDIA Verre Ruben. This is an example of early customer validation of our roadmap and supports the broad power architecture evolution. This is real, this is happening. In a nutshell, a number of viable power architectures expand and AC and DC coexist to deliver on the 800 volt DC, Verteus content opportunity per megawatt expands, and we're leading this transition. Let us now go to page six and let's continue on the topic of technology. I want to spend a moment talking about Verteus data center calling architectures and our unique fluid management services.

When the two are coupled combined, we ensure our customers to use nearly zero water. As they scale, many customers have been and are adopting closed loop cooling architectures as they optimize power and water use. A closed loop cooling architecture is just that, closed or sealed with water recirculating. Typically, it does not require additional water after the fill at startup. Verteus and two and thermal chain technologies for both the primary and secondary cooling loops, examples, are Verteus trink cooler, Verteus cool chip CDUs to name a few, fully enable this approach. This architecture enables a data center to run on no water consumption.

Now, let's take the focus on water use a step further. Let's also address the initial system fill, and this is where Perch writes near zero comes into the equation. As part of our unique fluid management technology and services, our Perch write near zero utilizes a closed loop recirculation system to capture, treat and reuse water during startup. This reduces the water normally used in the process by up to 90 percent during the startup of the data center. For our customers, this means a faster and more cost-effective deployment and commissioning of liquid cooling system and chilled water circuits. This means a significantly less waste and less disruption on side. More broadly, this expands Verteus differentiation, thermal management services, and we're managing fluid performance from start throughout decades of operational life.

Perch write near zero is scaling through our existing serving network, the capability we believe no one else can replicate at our scale. And with that, over to you, Craig.

Thanks you. Turn to slide seven. Let's walk through our second quarter financial results in more detail. On adjusted diluted EPS, we delivered $1.52, that's up 57 cents or 60 percent versus prior year, and 12 cents above guidance. The year-over-year improvement was driven by 58 cents from higher adjusted, aftertack adjusted operating profit, which was driven primarily from higher sales volume and increased profitability.

Looking at net sales, we delivered $3.274 billion in the quarter. That's up 636 million or 24 percent versus prior year. Organic sales growth was 18 percent with 5 percent additional growth contribution from acquisitions and an additional 1 percent growth contribution from favorable foreign exchange. By regions, America's grew 21 percent organically, APAC grew 26 percent organically, and AMIA was down 2 percent organically.

Moving to adjusted operating profit, we delivered 738 million, that's up 249 million or 51 percent versus prior year, and 28 million above the midpoint of our guidance. Adjusted operating margin of 22.6 percent expanded 410 basis points year-over-year and came in 140 basis points above guidance. The margin expansion was driven by strong operational execution, continued productivity gains, and favorable price college execution, partially offset by tariff impacts. We're also continuing investing in capacity and engineering R&D to support future business growth. To round out the quarter, adjusted free cash flow and minimum was outstanding, with the quarter ending at 925 million, up 648 million or 234 percent from prior year.

The improvement was driven by higher adjusted operating profit, strong working capital performance, including project milestone collection, which is inclusive of initial and advanced payments, and lower cash interest. These items were partially offset by higher cash taxes, and higher spending on CAPX investments. At our quarter end, our net leverage is at negative 1.1 times, providing even more flexibility. Just a quick note on our deferred revenue, you'll see an increase in the quarter, and that's driven by project advanced payments in ongoing milestone collections. We are very happy with our execution on project milestone development, and what you're seeing in deferred revenue is a combination of the payments at project initiation, order placement, and ongoing project milestone execution.

Flipping to site 8, let's look at segment performance. In America's net sales were 2.071 billion, up 29 percent, with organic growth of 21 percent. Organic sales growth remained strong in the quarter. As GEO mentioned earlier, some minor timing shifts in two key revenue. These shifts were reflected in the America's revenue numbers, and were primarily driven by multi-phase project execution and temporary supply chain congestion. However, we expect the associated timing delay to resolve in the second half of 2026. Adjusted operating profit was 571 million, driving 360 basis points in adjusted operating margin percentage. The margin expansion was delivered by ongoing commercial excellence and strong operational execution.

Moving to APAC, the region had strong results, with net sales at 720 million, up 29 percent, with organic growth of 26 percent. We continue to see strong in market demand, and the commercial execution across the team gives us confidence going forward. Adjusted operating margin percentage grew 270 basis points in the quarter, due to strong operating leverage realized in the region. In AMIA, net sales were 484 million, up 2 percent, with organic sales down 2 percent.

We continue to see a strengthening market, which supports our position for the reason to return to organic sales growth in the second half of 2026. AMIA also saw strong growth in adjusted operating margin percent, up 380 basis points a year on year. The team continues to drive improved operational execution, which came through in this strong margin performance.

Turning to slide nine, let's walk to our third quarter, 2026 guidance. For 3Q, we're projecting adjusted diluted EPS of $1.80 at the midpoint, that represents 45 percent growth versus prior year. That year over year improvement is driven by continued volume growth and ongoing margin expansion. On net sales, we expect 3.75 billion at the midpoint, that's up 1.074 billion or 40 percent versus prior year. Organic sales growth is expected to be up approximately 35 percent with an additional 5 percent from acquisitions. By reason, we expect America's organic growth in the high 30s, APAC in the high 30s, and AMIA in the mid-teams. Adjusted operating profit is expected to be 918 million at the midpoint, that's up 322 million or 54 percent versus prior year.

Adjusted operating margin is expected to be 24.5 percent at the midpoint, that's up 220 basis points a year over a year, and is driven by strong organic sales growth, continued operational leverage, and ongoing productivity realization.

Now let's turn to slide 10 for our updated full year, 2026 guidance. We're raising our outlook across all key metrics. Starting with adjusted diluted EPS, we now expect $6.70 at the midpoint, that's up $2.50 or 60 percent versus 2025. The updated range is now at $6.65 to $6.75. This is an increase of 35 cents at the midpoint versus prior guidance. The year over year improvement is driven by continued volume growth and ongoing margin expansion. For net sales, we now expect 14 billion at the midpoint, that's up 3.77 billion or 37 percent versus 2025. This represents an increase of 250 million versus our prior guidance. Organic sales growth is expected to be at 31 percent with 5 percent growth from acquisitions and 1 percent growth from favorable currency.

By region, we expect America's organic growth in the high 30s, APAC in the low 30s, enemy is in low single digits. Moving to adjusted operating profit, we now expect 3.325 billion at the midpoint. That's up approximately 1.235 billion or 59 percent versus 2025. This is an increase of 125 million versus our prior guidance. Adjusted operating margin is expected to be 23.8 percent at the midpoint, expanding approximately 340 basis points from 2025 and up 50 basis points versus our prior guidance. The margin expansion is driven by continued operational leverage and positive price cost execution, which is offsetting some tariff headwinds.

Finally, adjusted free cash flow is expected to be 2.5 billion at the midpoint. That's up 613 million or 32 percent versus 2025. The year-over-year improvement is driven by higher adjusted operating profit and lower cash interest, which is partially offset by higher cash taxes and higher investments in capital expenditures. We're delivering strong results, raising our outlooks and executing with discipline. Based on our performance and momentum, we're very confident in our ability to continue driving results throughout the balance of the year.

With that, I'll send it back to you, slide 11, to wrap up. Strong to two performance. We are delivering and the team continues to raise the bar on what's possible. We raised our full year 26 guidance across all key metrics. The momentum is strong. It's broad-based and it's accelerating. We continue to invest with discipline. Not just for the 45 percent growth we expect in the second half, but for the years beyond, capacity innovation services. On M&A, we closed the thermo-key in June, strengthening our heat rejection capabilities.

We closed the strategic thermal labs in April. We're adding the server-side liquid cooling and core plate expertise for high-density thermal management. Together, these two acquisitions expand what we offer across the full thermal spectrum, from heat rejection to direct-to-chip cooling. Allow me to additional spotlights. At the Naval Postgraduate School in partnership with NVIDIA, we delivered a fully engineered package to rack, power, and cooling system into an existing on-prem facility. This includes liquid cooling integration, commissioning, and deployment, and deployment support. This is a repeatable at-scale reference architecture for NVIDIA GB300. We call this BERTIV Smart IT Solution. The project established an advanced, locally-operated AI environment for education, research, engineering, modeling, and simulation. This also shows how an existing facility can rapidly be transformed to support next-generation accelerated computing.

Easy for enterprise and sovereign customers to adopt. In India, Germany, our collaboration with Data 4 is a great example of the momentum we're seeing in that region. BERTIV delivers complete powertrain, including switchgear, UPS, and battery systems, etc. , and thermal chain, like chilled water units, free cooling chillers, and our industry-leading services, it all will enable Data 4's new Frankfurt site. This is exactly the kind of optimized end-to-end system deployments with BERTIV excels. To conclude, I'm more confident in our trajectory today than I've ever been. We're executing, we're investing ahead of the curve, and increasingly, our customers are asking us to help them architect their most complex infrastructures. That's the role we've earned, and if the role we intend to further strengthen.

With that, let's go to the Q&A.

We will now begin the question and answer session. In order to ask a question, press star, then the number one on your telephone keypad. In the interest of time, please limit yourself to one question, and if you have a follow-up question, please rejoin the queue. We'll pause for just a moment to compile the Q&A.

And if so, how do you mitigate or kind of manage through it so that it really doesn't disrupt quarters the way that perhaps it can?

Well, thanks, Scott, for the question. And you're right, complexity is increasing. Some of the projects are not only bigger but multi-dimensional. There could be a lot of supply chain interdependencies. And this supply chain is not necessarily an external supply chain. It can be very often an internal with an inverted supply chain. Now, clearly, like everything and like we've done in so far, there is a learning curve. I'm pleased with the speed at which we are progressing in this learning curve. And this learning curve is learning curve at the execution on this complexity. So I'm pretty confident about our direction of travel. And again, these are the first very large projects with this level of complexity.

And we are more and more equipped for this, not just from a technologist's point, but from a logistics and operations in general. When it comes to the second part of your question, so what could be the, it's an ongoing impact on the future? Well, certainly, as I said, there is a learning curve that we are progressing on at speed. But there is also the fact that we were prudent. Anyway, in our second and a half guidance, this is true in general for the future. So if you think about our H2 guidance, we're not assuming all stars align. So we have a wiggle room for this progress on the learning curve not to be perfect, though, of course, speed and perfection is our goal.

I mean, I think we always look at it opportunistically, Scott, and this is the thing that we've talked about even in an investor day. Given today, it is a good time to look at it. But I think it's always something that we evaluate and take it. What do we consider our capital deployment? And it's one of the areas we look at.

Okay. And let's start from the end. Let's start from the end. Yes, of course, this is certainly supporting our comments about orders. When I talk about pipeline, I always like to talk about magnitude of pipeline, if you will, and speed of pipeline. When I talk about speed of pipeline, we talk about acceleration. It means that the sales cycle within the pipeline can be faster or slower. So we notice in acceleration, so it's becoming faster sales cycle. But at the same time, just to be extremely clear, the strength is also in sheer size of the pipeline in terms of quarter to quarter, year-on-year growth. And this is broad-based. It's pretty much across the world, but also it's broad-based across the various customer categories.

Certainly the whole range, happy scalars. It is true for enterprise.

It's certainly true for colo, neo-cloud, so pretty, pretty broad-based. Just to add on to that, Jeff, I would also just say, again, as hyperscalers and colos, hyperscalers are sometimes deploying through colos, so to look at it that way, you might get a little bit of a mix there. So just to ensure, going back to what Geo said, we're seeing it again across regions, across products, and that's the way we really look at it. But that's the way we would view our pipelines and see it accelerating in all those phases.

Where do you stand on that product evolution? Just like one of the slides was describing, the solid state is currently a matter of project development for us. It's in project development phase.

So, no big differences. When it comes to the vertive side and the exact amount, well, we will not be too specific, but the majority of what we're seeing is really coming from those dynamics that I've described during, while I was going through my opening remarks, but also the conversation with Scott. That is pretty much the dynamics that we see.

Is it on the supply chain? You know, the supply chain is always a matter of working the sequence of things. It's nothing different than what we have experienced historically. And we're pleased with how we are strengthening the resilience of our business in general. And I would just add that just to clarify, you know, we're talking about the large project deployments and the learning curve around that, which has confounding effects from both the external supply chain and our own internal supply chain.

So, there are some, I'd say, gray areas in there when, you know, we typically can recover from a late part and in our smaller supply chain, when it becomes a larger supply chain, it becomes more confounding. So, again, not to define that specifically, but that's the areas where we're seeing it the most is in those large project deployments that we're learning and understanding what that takes to go forward and how to iron those out. And then also, again, as we talked about, thinking of not always that being perfect in the second half as we look in the guidance.

I know you're retiring in September, so congratulations and great career, fantastic career. But to your question, yeah, if you look at the face of the balance sheet, and I mean, the face of the balance sheet, you'll see that our deferred revenue did go up. And our deferred revenue is a read through in terms of those advanced deposits on orders, but it's also ongoing deposits as we go through the milestones of delivering those larger projects. So, it's a combination of both. But that is driving the working capital and the great cash performance when you look at it across the entire balance sheet. So, definitely an indicator of strong commercial performance on both sides.

And then we can go a little bit. I'll double click on it as we go further into your question, Nigel. But in terms of the actual progress collections, there is a portion that we get up front. And there's a portion that we deliver milestones. And a lot of that is related to delivering products to the end project. And so, that's how you would start phasing it in. And sometimes you get those a couple, like a month before you deliver projects. Sometimes you get those at the end of design. So, they are all phased in different ways. So, we would get a portion up front. We'd get a portion at the delivery milestones that we set forth.

Always, in our view, staying ahead of the curve in terms of a cash position in that project. So, some of it's going to be related to deliveries where you would see revenue incurred. Some of it might be delivered on terms of a design point, which would be a secondary milestone before revenue occurs. And again, they're all a little different in how we look through them. All the goal being staying ahead of the cash curve and being cash positive on that.

On the other faces of the balance sheet, you mentioned lots of movement. We do have a significant ramp in the second half. So, you would see some inventory come on. And as that inventory comes on, you'll see AP come on as well. And we did have a good quarter in terms of sales. So, that's where our AR is going up as well. So, all of this is a reflection of the volume you're seeing. Thermokie had little impact to that.

Yeah, we're pretty convinced about that. And we're also, when we look at all the elements of the powertrain in the various architectures. And when we think what happens inside the wide space, in the gray space, we see value there for Virta than an expansion of revenue per per megawatt. So, not differently from our conversations or what we shared at investor day. It's two months ago, we continue to go through that math and that math is corroborated by, of course, all the progress that we're doing on the product development, but also on the activity that we are conducting with customers. So, we should and we would need to go elements per elements in that in that chain.

But, but again, think about the entire powertrain, all the elements vis-a-vis what we have today and see that with that density, with that complexity, our content is is impacted fairly.

All right, apples to apples, Andrew. Now, what you might be feeling a little bit differently is, as we talked about back and forth quarter, we had a large order influx on the infrastructure solution business where I would say a lot of these milestones are set up in the project based world, as opposed to the point, you know, product based world. So, the project based world might have more milestones before delivery of revenue. So, you would get one in one of the input of order and then one along the way as a design and one that you potentially as you start to deliver products. So, you have different levels of milestone of those projects versus the point product.

And we know that the project basis that we've talked about a lot, those larger ones, one quarter smart runs, we had a large order intake and the fourth quarter of the last year that we spoke to. And again, that would be some of the stuff that you might be seeing in the deferred revenue as it comes through throughout the year. And then again, it is tied to our regular down payments as well. But no structural change in the way that we would recognize the deferred revenue.

I wouldn't use the word disruption. I think we have to, I want to be clear about, we talk about complexity into the interdependencies. As I said, very, very often, in these large approaches, you will see multiple, multiple vertical factors feeding other factories beside, of course, external suppliers feeding those factors as well. So, it's really a complexity. So, there is an operational aspect to your question that is, you know, we are getting stronger in the operational execution of that complexity. So, the complexity doesn't go away, but our ability to handle that complexity is certainly accelerating very, very strong. And that hence my questions, sorry, hence my, my, my, my comments. But again, I wouldn't, I wouldn't talk in terms of, of the disruption.

I agree. I think on your second point of why do we feel comfortable about the second half? As Gio said, you know, it's a learning curve when you have the large projects and you do have congestion in your supply chain, which again, some of that stuff's normal on point products, which is easier to iron out as you have a learning project for the larger project. Some of it takes a little bit more time to get smoothed out and understand, you know, we're seeing good signs of being able to ratchet up that learning curve. And as we think about the second half, we've also assumed some of that congestion continues as we normally would. But on these projects, it might be a little bit further of congestion that we would have assumed than normal.

So all exactly. So all in all, we believe that we have, we're prudent in our second half and very, very well supportive of that fund.

Thank you, Nicole. When we talk about unlocking revenue, let's just be clear of that, you know, the revenues that were, let's say a little bit locked in some elements on the second quarter are being delivered deployed in the second half. And we feel extremely well about that. When it comes to, you know, some elements of congestion, possible elements of congestion, as Craig mentioned, we are prudent in our guidance, though we believe that there will be, and we see, we are seen, certainly a strong acceleration and improvement from an operational standpoint, we're still remain prudent in our guidance. There is capacity that is being released, and that is a big element, of course, of also the back of conversion.

So look at it, there's three levels. The operational acceleration in the complex projects, the capacity coming available, as has been coming available in the second quarter, but first, even more so in the second half, a very strong back of coverage. And over and above that, wrap it up with anyway, the guidance that it's not an all-star aligned type of guidance.

Thank you, Amit. And I really appreciate that you joined that parallel to exactly a year ago. It was a different nature that stage was island and some executional challenges on the bus bus switch gear that we have amply recouped, as you were saying. But I think this highlights the fact that in a business that is moving at this speed, that is growing at this speed with a number, let's say of technology, with the technology speed, sorry, the speed of technology evolution that we are experiencing and indeed driving, there is a lot of complexity to manage.

And so in many respects, the parallel is similar. You were talking about, while that was emerging, this is a revenue, anyway, it's operational execution that we're concentrating on right now. So it may be different in the type of product line, if you will. It's not different in terms of the type of focus and the type of recipe that we apply. And again, it's a matter of really continued to mature operationally as the market, the portfolio, scope of what we do, continues to evolve. So I feel very good about that.

Well, look, our overall performance is anything in improving. So I would say that the answer is, is it not something that changes our perception in the market, we believe?

I would say our outlook doesn't change in terms of the M&A world. We still look at it in the same way. We looked at it back during investor day, but it is active and we do see an active market and we are participating in that active market looking at, you know, several targets. But again, it has to fit us and it has to be the right, I'd say, value play for us in terms of fit in our portfolio and what we believe we can grow and what we can return to investors in terms of what we're going to pay. Again, I've always talked about we invest in ourselves first and that's capacity and that's R&D and that's development and that's the things we're always going to look at.

And then we'll look at, you know, the external spots where we believe we can get true value out of an acquisition and an add-on, whether it be regional reach or a product that we believe will get it to the market faster or technology we don't currently have. So yes, we are active and we continue to look at it in terms of that framework.

Well, there is clearly always an analysis, you know, make or buy vertical integration and anything we do, be it at point-product level and at, let's say, a large infrastructure solution level. When you talk about vertical integration for infrastructure solutions, for us is really we are very vertical integrated in the sense that we're putting into our infrastructure solutions products that are birded products. So then clearly we are in good control of the supply chain in that respect. And so we feel good in this moment. We do not think there are any major gaps in vertical integration for what we're doing, but that doesn't mean that we will not adjust over time the mix of make or buy in whichever dimension that could be, depending on the type of business, depending on where we manufacture and auto manufacturing locations are the same in terms of access to a nearby, let's say, supplier critical mass.

So it's always there now, but we do not perceive in this moment that there are any major gaps. But for example, if you think about an acquisition that we shared with you last quarter, B Marko, that was a move to vertical integrate on our frame construction for our infrastructure solutions. So that I think testament to the dynamic approach that we have when it comes to make a buy.

A multi-dimensional multi-layer question, Ananda, here. So I will not comment on rumors in the market as we shared with investors in May, but also earlier today. We believe that the adoption of 800 volt will be gradual, would be convincing. We are certainly very invested in that part of the portfolio. Whether that happens at the speed that is currently in our roadmaps and that you saw or something slower than that, we will be flexible and certainly we are extremely resilient with that because it means that other parts of the architectures that we provide to our customers will certainly take the share of the market in terms of architecture. So whichever way, no matter the speed of acceleration, we think that we are in a good place because we have the architectures, we have the technologies, the roadmaps as we shared, but there is a 400 volt DC question and that 400 DC volt question is an important one.

We see that some players are thinking in terms both of 800 and 400. The underlying technology is not dramatically different and quite honestly we are involved in both.

Yeah. Well, thanks for the MIA question. We are pretty bullish about MIA as you saw. Certainly, we believe in a strong second half and back to growth. You see MIA performing better than we expected anyway in the second quarter. So very, very confident in the second half. I was vocal about the fact that we were very happy with the orders in MIA in the first quarter. I would say that we like what we see in the second quarter and there is a back of formation that is certainly convincing and we see that the improvement translates in top line and bottom line improvement has demonstrated. So the market continues to accelerate and we certainly have a very important position in that market.

And Luke, I just hit on the fact that we do as we talked about through even back as early as last year, we do see a second half increase in growth for MIA in terms of where we expect their organic growth to go from a revenue perspective. In terms of the, or I said, the gain that you saw in margin was a favorable comp too. As you had mentioned, the Ireland portion did come through QQ last year, which was in MIA. So there's a little bit of a comp in there, but we do still expect margins to be pretty, pretty good.

This concludes our question and answer session.

I would like to turn the conference back to Jill Albertazzi for any closing remarks. Well, thank you. And thank you very much, everyone. Thank you for the questions and thank you for your time today. I am very pleased with what we delivered this quarter and how would position for the second half? The team is executing at a high level, scaling capacity, deepening customer partnership and advancing our technology portfolio, all simultaneously. It's not easy, but it is in, but this invigorates us. Part lines are strong. Our operational discipline is sharp and our customer trust us to deliver at scale. Just to be clear, I am very encouraged by our trajectory.

I am pleased but certainly never satisfied. With that, thank you all and I wish you all a great rest of the day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.