AI Takeaway
VRT delivered exceptional Q1 FY2026 results with revenue surging 30.1% YoY to $2.65B and net income more than doubling (+137.1%) to $390.1M, driven by strong operating leverage and robust cash generation.
Revenue
$2.65B
++30.13% YoY
EPS (Basic)
$1.02
++137.21% YoY
Operating Income
$440.1M
++51.39% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
VRT grew revenue by 30.1% YoY to $2.65B in Q1 FY2026, up from $2.04B in the prior-year period, reflecting continued strong demand for its products and solutions. This top-line momentum significantly outpaced cost of revenue growth of 22.3%, indicating improving operational efficiency.
Source: Source: 10-Q Income Statement
Operating income jumped 51.4% YoY to $440.1M, with operating margin expanding approximately 230 basis points to 16.6% from 14.3% in the prior year. This demonstrates that revenue growth is translating effectively into bottom-line profitability despite SG&A expenses rising 31.9% to $456.7M.
Source: Source: 10-Q Income Statement
Net income surged 137.1% YoY to $390.1M from $164.5M, with diluted EPS rising 135.7% to $0.99 from $0.42. The outsized net income growth relative to operating income growth suggests meaningful improvement in below-the-line items such as interest expense or tax efficiency.
Source: Source: 10-Q Income Statement
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Upgrade to unlockVRT carries a debt-to-equity ratio of 2.16x, indicating significant financial leverage relative to its equity base. While long-term debt has remained stable at ~$2.92B, the high leverage ratio could constrain financial flexibility if business conditions deteriorate or interest rates remain elevated. Debt service obligations may limit the company's ability to invest in growth or return capital to shareholders.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlockReported EPS of $1.17 versus the $1.01 analyst consensus — a +16.0% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $2.65B | $2.04B | +30.13% |
Cost of Revenue | $1.65B | $1.35B | +22.25% |
Operating Income | $440.1M | $290.7M | +51.39% |
Net Income | $390.1M | $164.5M | +137.14% |
EPS (Basic) | $1.02 | $0.43 | +137.21% |
EPS (Diluted) | $0.99 | $0.42 | +135.71% |
SG&A Expense | $456.7M | $346.3M | +31.88% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $13.4B | $9.45B | +41.78% |
Current Assets | $7.98B | $5.46B | +46.19% |
Total Liabilities | $9.16B | $6.78B | +34.94% |
Current Liabilities | $5.34B | $3.18B | +67.81% |
Stockholders' Equity | $4.24B | $2.67B | +59.20% |
Cash & Equivalents | $2.15B | $1.47B | +46.57% |
Long-Term Debt | $2.92B | $2.93B | -0.10% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $766.8M | $303.3M | +152.82% |
Investing Cash Flow | $-376.7M | $-38.8M | -870.88% |
Financing Cash Flow | $11.9M | $-24.9M | +147.79% |
Dividends Paid | $23.9M | $14.2M | +68.31% |
D&A | $107.7M | $71.6M | +50.42% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 16.6% | 14.3% | +2.33% |
Net Margin | 14.7% | — | — |
ROE | 9.2% | — | — |
ROA | 2.9% | — | — |
Current Ratio | $1.494 | — | — |
Debt to Equity | $2.157 | — | — |
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VRT delivered strong Q1 FY2026 results with revenue of $2.65B (+30.1% YoY), operating income of $440.1M (+51.4% YoY), and net income of $390.1M (+137.1% YoY). Diluted EPS came in at $0.99, more than doubling from $0.42 in the prior-year period, reflecting significant operating leverage and improved profitability.
VRT's revenue grew 30.1% year-over-year to $2.65B in Q1 FY2026, up from $2.04B in the same quarter of the prior year. Notably, cost of revenue grew at a slower pace of 22.3%, indicating that revenue growth is outpacing cost increases and driving margin expansion.
VRT's financial health appears solid, with $2.15B in cash and equivalents, a current ratio of 1.49x, and operating cash flow of $766.8M. However, the debt-to-equity ratio of 2.16x and rapidly growing current liabilities (+67.8% YoY to $5.34B) are areas investors should monitor closely.
VRT's net income surged 137.1% YoY to $390.1M in Q1 FY2026, significantly outpacing operating income growth of 51.4%, which suggests meaningful improvement in below-the-line items such as interest expense, other income, or tax benefits. The strong operating leverage, with operating margin expanding to 16.6% from 14.3%, also contributed to the outsized earnings growth.
Key risks for VRT include its elevated debt-to-equity ratio of 2.16x, which limits financial flexibility, and a sharp 67.8% YoY increase in current liabilities that has tightened the current ratio to 1.49x. Additionally, investing cash outflows surged nearly 9x YoY to -$376.7M, raising questions about the returns on this significant capital deployment.