With a market cap of $27.8 billion, Shelton, Connecticut-based Hubbell Incorporated (HUBB) is a prominent industrial manufacturer specializing in electrical and utility infrastructure components used across power grids, industrial facilities, and commercial construction. Through its Utility Solutions and Electrical Solutions segments, the company produces mission-critical products, including insulators, connectors, wiring devices, grounding equipment, and harsh-environment enclosures, that support electric ...

PresentationJulian MitchellBarclays Bank PLC, Research Division Fantastic. Well, thanks, everyone, and welcome to the second session this morning. It's my pleasure to have Hubbell up here. Gerben Bakker, President and CEO; Joe Capozzoli, CFO. So thank you very much, Gerben and Joe for being here with us this morning. ...

Hubbell (NYSE:HUBB) FY Conference February 19, 2026 08:40 AM ET Company ParticipantsGerben Bakker - President and CEOJoe Capozzoli - CFOConference Call ParticipantsJulian Mitchell - Equity Research AnalystJulian MitchellFantastic. Well, thanks, everyone, and welcome to the second session this morning. It's my pleasure to have Hubbell up here, Gerben Bakker, our President and CEO, Joe Capozzoli, our CFO. So thank you very much, Gerben and Joe, for being here.Gerben BakkerThank youJulian Mitchell... with us t ...

Revenue Segmentation - The Utility Solutions segment accounted for 63% of consolidated revenues in 2025, 64% in 2024, and 61% in 2023[13] - The Electrical Solutions segment represented 37% of consolidated revenues in 2025, 36% in 2024, and 39% in 2023[15] - The Utility Solutions segment accounted for 63% of consolidated revenues in 2025, up from 61% in 2023, while the Electrical Solutions segment represented 37% of revenues in 2025, down from 39% in 2023[13] Order Backlog - The backlog of orders at December 31, 2025, was $2,159 million, up from $1,898 million at December 31, 2024[26] - The backlog of orders at December 31, 2025, was $2,159 million, an increase from $1,898 million at December 31, 2024, with substantial backlog expected to be shipped in 2026[26] Sales and Business Operations - The company sold its residential lighting business for a cash purchase price of $131 million, which generated $187.1 million in sales in 2023[17] - The company generated $187.1 million in sales from its residential lighting business in 2023, which was sold for a cash purchase price of $131 million[17] - Hubbell's products are primarily sold through distributors and directly to utilities, with a focus on electrical distribution and utility markets[14] - The Electrical Solutions segment products are primarily sold through distributors and retail outlets, catering to various markets including industrial and telecommunications[18] Customer Base - Approximately 42% of net sales are attributed to the top ten customers[21] - Top ten customers account for approximately 42% of the company's net sales, indicating a diversified customer base[21] Employee Information - As of December 31, 2025, Hubbell had approximately 18,000 employees, with 61% located in the United States[32] - As of December 31, 2025, Hubbell had approximately 18,000 employees, with 61% (about 10,900) located in the United States[32] - In 2025, over 87% of Hubbell's employees participated in the Elevate Employee Experience Survey, indicating strong engagement[37] - The company provides U.S. employees with up to 8 hours of paid time off annually for volunteer work with eligible charities[35] - Hubbell has expanded its leadership development programs to enhance career development opportunities for employees at all levels[34] - The company considers its labor relations satisfactory, with approximately 2,425 U.S. employees represented by 8 labor unions[32] - Hubbell's commitment to employee development includes competitive compensation and health programs tailored to local markets[31] Safety and Health Programs - The company has implemented a comprehensive safety program to protect employee health and safety, utilizing an enterprise-wide data management system[36] - Hubbell's myLife program offers competitive benefits aimed at supporting employees' health and well-being[36] Intellectual Property - The company has approximately 3,250 active patents covering its products[23] - The company has approximately 3,250 active patents, which it deems valuable but does not consider its business to be dependent on patent protection[23] International Operations - The company maintains operations in multiple countries, including the United States, Canada, and China[9] - The company operates several international facilities, including in Canada, Mexico, China, and the UK, to manufacture and market its products[9] Environmental Considerations - The company anticipates that environmental claims and costs will not materially affect its financial condition or competitive position[29] Product Segmentation - The Utility Solutions segment includes critical components for energy transmission and distribution, while the Electrical Solutions segment focuses on power management across various industries[10][15] Financial Performance - The company recorded a pre-tax loss of $5.3 million on the sale of its residential lighting business, which is included in total other expenses[17] - The company is not materially dependent on any single supplier for raw materials, which include steel, aluminum, and copper[22]

Core Insights - Hubbell (HUBB) is emerging as an unexpected beneficiary of the growth in AI data centers, despite not being a company typically associated with this sector [1] Group 1 - The impact of artificial intelligence on various industries is proving to be significant and sometimes surprising [1]

分组1 - Exxon Mobil Corporation reached a new 52-week high, closing at $143.73, with a gain of 3.9% on Tuesday [1][5] - TD Cowen analyst Jason Gabelman maintained a Buy rating on Exxon Mobil and raised the price target from $135 to $145, while Barclays analyst Betty Jiang also maintained an Overweight rating and increased the price target from $140 to $145 [1] 分组2 - iShares Russell 2000 ETF gained 0.2% during the session [2][5] 分组3 - Rockwell Automation is set to report its first quarter fiscal 2026 results, with analysts expecting earnings of $2.48 per share on revenue of $2.09 billion [3] - Rockwell Automation shares rose 0.3% to close at $430.31 on Tuesday [5] 分组4 - Hubbell Incorporated reported better-than-expected fourth quarter results, with earnings of $4.73 per share, surpassing the consensus estimate of $4.71 per share, and quarterly sales of $1.492 billion, exceeding the estimate of $1.489 billion [4] - Hubbell shares gained 1.7% to settle at $503.86 during the session [5]

Financial Data and Key Metrics Changes - Hubbell reported a 12% total sales growth in Q4 2025, with adjusted operating profit growth of 19% and adjusted earnings per share growth of 15% [5][10] - Organic growth for the fourth quarter was 9%, driven by strong performance in the Electrical Solutions segment and grid infrastructure businesses [5][10] - The company achieved a free cash flow margin of 15% and a return on invested capital of 19% for 2025, indicating strong business model quality [9] Business Line Data and Key Metrics Changes - **Electrical Solutions Segment**: Achieved 7% organic growth and 14% adjusted operating profit growth for the full year 2025, with adjusted operating margins exceeding 20% for the first time [7][8] - **Utility Solutions Segment**: Generated net sales of $936 million in Q4 2025, representing a 10% growth, with grid infrastructure showing strong performance and 12% organic growth [13][15] Market Data and Key Metrics Changes - The utility market remains strong, driven by investments in aging infrastructure and data center build-outs, contributing to robust project activity [5][8] - Grid automation sales declined by 8% in Q4, primarily due to weaker project activity in meters and AMI, although growth in grid protections and controls was noted [15][11] Company Strategy and Development Direction - Hubbell is focused on unifying its Electrical Solutions segment to enhance competitiveness and drive operational efficiencies [7] - The company plans to continue investing in high-return areas and innovative solutions to maintain growth and productivity benefits in 2026 and beyond [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong outlook for 2026, anticipating 5%-7% organic growth across the portfolio, particularly in utility T&D and data center markets [20][22] - The company expects to manage price and productivity effectively to offset inflation while continuing to invest in business growth [23] Other Important Information - Hubbell's acquisition of DMC Power is expected to contribute positively to growth and margins, with ongoing investments in automation and production capacity [8][9] - The company is initiating a 2026 outlook for 7%-9% total sales growth and adjusted earnings per share between $19.15 and $19.85 [22] Q&A Session Summary Question: Can you provide more color on orders and their impact on MRO activity? - Management noted strong order momentum, particularly in T&D and data center markets, with visibility into 2026 remaining positive [27][28] Question: What is the outlook for meters and AMI? - The business is stabilizing after working through backlog, with expectations for modest growth moving forward [31][32] Question: How should we think about margin expansion throughout the year? - Management anticipates solid margin expansion, with Q1 expected to be stronger than typical due to easier year-over-year comparisons [39][45] Question: What is the expectation for raw materials prices and cost inflation? - Anticipated mid-single-digit cost inflation for 2026, with ongoing management of price and productivity to address this [54][70] Question: What is the growth outlook for grid infrastructure? - Management expects high single-digit to low double-digit growth in transmission and substation markets, with continued investment in distribution [60][61] Question: How will free cash flow be utilized? - The company plans to deploy free cash flow for high-quality CapEx, M&A opportunities, and share repurchases [63][65]

Financial Data and Key Metrics Changes - The company reported a 12% total sales growth in Q4 2025, with net sales reaching $1.493 billion, driven by 9% organic growth and 3% from acquisitions [4][9] - Adjusted operating profit grew by 19%, with adjusted operating margins expanding by 140 basis points [4][10] - Adjusted diluted earnings per share increased by 15% to $4.73 [10] - Free cash flow for Q4 was $389 million, contributing to a full-year total of $875 million, representing a 90% conversion on adjusted net income [11] Business Line Data and Key Metrics Changes - **Utility Solutions Segment**: Generated net sales of $936 million in Q4, a 10% increase year-over-year, with organic growth of 7% and acquisitions contributing 4% [12] - **Grid Infrastructure**: Achieved 12% organic growth, driven by strong demand in transmission and substation markets [13] - **Electrical Solutions Segment**: Reported net sales of $557 million in Q4, with 13% organic growth, primarily from data center markets [14][15] Market Data and Key Metrics Changes - The utility market remains strong, with significant investments in transmission and substation infrastructure, driven by aging infrastructure and new load generation [4][19] - Data center markets showed exceptional growth, exceeding 60% in Q4, supported by targeted capacity investments [15][21] Company Strategy and Development Direction - The company is focused on unifying its electrical solutions segment to enhance competitiveness and drive operational efficiencies, achieving above-market growth [6] - Continued investment in automation and production capacity is planned to support high-growth areas [7][8] - The company anticipates 5%-7% organic growth across its portfolio for 2026, with a strong focus on utility T&D and data center markets [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong order momentum and visibility into favorable end markets for 2026 [27][28] - The company expects to manage cost inflation effectively while continuing to invest in growth initiatives [23][24] - The outlook for 2026 includes total sales growth of 7%-9% and adjusted earnings per share between $19.15 and $19.85 [22][23] Other Important Information - The company closed a high-growth acquisition in DMC Power, enhancing its portfolio in grid infrastructure [7] - Free cash flow margin for 2025 was reported at 15%, with a return on invested capital of 19% [8] Q&A Session Summary Question: Can you provide more color on orders and their impact on MRO activity? - Management noted strong order momentum, particularly in T&D and data center markets, with visibility into 2026 remaining positive [27][28] Question: What is the outlook for meters and AMI? - Management indicated that the business is stabilizing and expects modest growth moving forward after a period of decline [32][33] Question: How should we think about margin expansion throughout the year? - Management confirmed expectations for margin expansion, with a focus on maintaining strong performance in Q1 [41][50] Question: What is the current assumption on raw materials prices? - The company anticipates mid-single-digit cost inflation for 2026, with ongoing management of price and productivity to address this [58][59] Question: What is the outlook for grid infrastructure growth in the first and second half of the year? - Management expressed optimism for high single-digit to low double-digit growth in transmission and substation markets, with expectations for continued strength in distribution [64][66] Question: How will free cash flow be utilized in 2026? - The company plans to deploy free cash flow towards high-quality CapEx, M&A opportunities, and share repurchases [67][70]

Financial Data and Key Metrics Changes - Hubbell reported a strong financial performance in Q4 2025, with total sales growth of 12%, adjusted operating margin expansion of 140 basis points, adjusted operating profit growth of 19%, and adjusted earnings per share growth of 15% [4][8] - Net sales for Q4 2025 reached $1.493 billion, driven by 9% organic growth and 3% from acquisitions [8][10] - Free cash flow for Q4 was $389 million, contributing to a full-year free cash flow of $875 million, representing 90% conversion on adjusted net income [10] Business Line Data and Key Metrics Changes - The electrical solutions segment achieved 13% organic growth in Q4, primarily driven by strong demand in data center markets, which saw growth exceeding 60% [13][14] - Utility solutions generated net sales of $936 million in Q4, reflecting a 10% increase, with organic growth of 7% and acquisitions contributing 4% [11] - Grid infrastructure within utility solutions experienced 12% organic growth, supported by strong performance in distribution, substation, and transmission markets [11][12] Market Data and Key Metrics Changes - The utility market remains robust, with significant investments in transmission and substation infrastructure, driven by aging infrastructure and new load generation [4][6] - The data center market is a key growth driver, with expectations for continued strong performance in 2026, particularly in modular power distribution [19][74] - The grid automation market faced challenges, with an 8% decline in sales, primarily due to reduced project activity in meters and AMI [12][30] Company Strategy and Development Direction - Hubbell's strategy focuses on unifying its electrical solutions segment to enhance competitiveness and drive organic growth, achieving 7% organic growth and 14% adjusted operating profit growth for the full year 2025 [5][6] - The company plans to continue investing in high-return areas, including automation and production capacity expansion, to support growth and margin expansion [6][16] - The outlook for 2026 anticipates 5%-7% organic growth across the portfolio, with strong demand expected in utility T&D, data center, and light industrial markets [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong order momentum and visibility into favorable end markets, particularly in T&D and data center sectors [25][26] - The company expects to navigate cost inflation effectively through pricing and productivity actions, maintaining a positive outlook for margin expansion in 2026 [21][50] - Management highlighted the importance of ongoing investments in infrastructure and modernization initiatives to support long-term growth [19][20] Other Important Information - Hubbell's adjusted operating margins for the electrical solutions segment exceeded 20% for the first time in history [5] - The company closed a high-growth acquisition in DMC Power, enhancing its capabilities in the utility solutions segment [6] - The balance sheet remains strong, with a net debt to EBITDA ratio of 1.3 times, positioning the company well for future investments [10] Q&A Session Summary Question: Can you provide more color on orders and their impact on MRO activity? - Management noted strong order momentum, particularly in T&D and data center, with visibility into favorable end markets providing confidence for 2026 [25][26] Question: What is the outlook for meters and AMI? - The business is stabilizing at a lower base, with expectations for modest growth moving forward after a period of backlog consumption [30][31] Question: How should we think about margin expansion throughout the year? - Management anticipates solid margin expansion throughout 2026, with a seasonal pattern expected [39][46] Question: What is the expectation for raw materials prices and cost inflation? - Anticipated mid-single digits for cost inflation in 2026, with ongoing management of price and productivity to address this [55][70] Question: What is the outlook for the transmission and substation market? - Management expressed optimism for high single-digit to low double-digit growth in transmission and substation markets, supported by ongoing investments [61][62] Question: Can you discuss the long-term fit of the Aclara business? - The business has been reshaped to focus on markets where Hubbell has a strong position, with expectations for improved margins moving forward [86][88]

Forward Looking Statements and Non-GAAP Measures Forward Looking Statements Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements generally relate to our expectations and beliefs regarding our financial results, condition and outlook, projections of future performance, anticipated growth and end markets, changes in operating results, market conditions and economic conditions, expected capital ...