Vertiv Holdings Co ( VRT )  shares are trading higher after the company reported better-than-expected first-quarter FY24 results and raised its 2024 guidance.

Net sales rose 8% Y/Y to $1.64 billion, beating the consensus of $1.62 billion. Organic orders (excluding foreign exchange) rose 60% Y/Y, led by strong underlying market demand benefiting from the ramp-up of AI deployments. 

The book-to-bill ratio stood at 1.5x in the quarter and had a $6.3 billion backlog at the end of the quarter.

Adjusted operating profit rose 42% Y/Y to $249 million, with adjusted operating margin expanding 370 basis points Y/Y to 15.2% in the first quarter of 2024, driven by favorable price-cost and increased volume and productivity.

Operating cash flow reached $138 million, and adjusted free cash flow stood at $101 million in the quarter. Adjusted EPS stood at $0.43, beating the consensus of $0.36.

Giordano Albertazzi, Chief Executive Officer, said, “We are seeing order patterns with longer lead times based on customer build schedules, largely in 2025 and beyond, suggesting AI is starting to scale. Though still in its early stages, AI is quickly becoming a pervasive theme across our end markets.”

The company bought back shares worth $600 million in the first quarter of 2024.

Outlook: For FY24, Vertiv ( VRT ) raised guidance for revenue to $7.54 billion – $7.69 billion (from $7.515 billion-$7.655 billion earlier) vs. consensus of $7.63 billion and adjusted EPS to $2.29-$2.35 (from $2.20-$2.26 earlier) vs. consensus of $2.30.

For the second quarter, Vertiv ( VRT ) expects revenue of $1.90 billion-$1.95 billion (vs. $1.90 billion estimate) and adj. EPS of $0.53-$0.57 (vs. consensus of $0.55).

Investors can gain exposure to the stock via TCW Transform Systems ETF and Series Portfolios Trust Adaptiv Select ETF .

Price Action: VRT shares are up 16.3% at $92.04 at the last check Wednesday.