Core Points - nVent Electric plc announced a quarterly cash dividend of US$0.20 per ordinary share, scheduled for payment on November 7, 2025 [1] - The record date for shareholders to receive the dividend is October 17, 2025 [1] - nVent is recognized as a leading global provider of electrical connection and protection solutions [1] Company Overview - nVent designs, manufactures, markets, installs, and services high-quality electrical solutions [1] - The company's inventive electrical solutions aim to enable safer systems and contribute to a more secure world [1]

Company Overview - nVent is a $3 billion electrical company, recognized as a leader in the connection and protection space, with brands that are critical to electrification, sustainability, and digitalization trends [2] Financial Performance - For Q2, nVent reported a 30% increase in sales, with organic sales up 9% and EPS rising by 28% [2] - The company expects full-year growth of 24% to 26% reported and 8% to 10% organically, with EPS projected at just over 30% at the midpoint [2] - In the third quarter, the midpoint of growth is anticipated to be 28% on a reported basis and 12% organically [3] Strategic Actions - nVent divested its Thermal segment earlier in the year but plans to fully replenish the EPS that was impacted by this divestiture [3]

Company Overview - nVent is a $3 billion electrical company, recognized as a leader in the connection and protection space, with brands that are critical to electrification, sustainability, and digitalization trends [2] Financial Performance - For Q2, nVent reported a 30% increase in sales, with organic sales up 9% and EPS rising by 28% [2] - The company expects full-year growth of 24% to 26% reported and 8% to 10% organically, with EPS projected at just over 30% at the midpoint [2] - For the third quarter, the midpoint of growth is anticipated to be 28% on a reported basis and 12% organically [3] Strategic Actions - nVent divested its Thermal segment earlier in the year but plans to fully replenish the EPS that was impacted by this divestiture [3]

nVent Electric (NYSE:NVT) FY Conference Summary Company Overview - nVent Electric is a $3 billion electrical company specializing in connection and protection solutions, crucial for electrification, sustainability, and digitization trends [2][3] - The company reported a 30% growth in sales for Q2 2024, with organic sales up 9% and EPS up 28% [2][3] Financial Performance - Full-year growth expectations are reported at 24% to 26% for total sales and 8% to 10% for organic sales, with EPS projected at just over 30% [2][3] - Q3 growth expectations are set at 28% reported and 12% organically [3] Strategic Focus Areas - The company is focusing on three growth areas: high-growth verticals in electrical infrastructure, new product development, and mergers & acquisitions (M&A) [4] - nVent has completed eight acquisitions since 2019, increasing its revenue from $2 billion in 2017 to nearly $4 billion in 2025 [4][5] Market Trends and Opportunities - The company is experiencing strong demand in the data center market, particularly for liquid cooling solutions, which are growing three times faster than traditional cooling methods [5][6] - There is a significant opportunity in both "white space" (new data center builds) and "gray space" (existing infrastructure upgrades) due to the increasing demand for cooling solutions driven by AI and data center expansion [6][14] Capacity Expansion - nVent is expanding its manufacturing capacity in Minnesota, aiming for a fourfold increase to meet growing demand [13] - The company expects to fill this new capacity quickly, aligning with anticipated demand growth [13] International Growth - nVent is enhancing its management team to focus on growth in Europe and Asia-Pacific, particularly in AI and data center markets [23] - The company reported good performance in Europe during Q2 and sees potential for further growth [23] M&A Strategy - Future M&A efforts will focus on infrastructure, particularly in data centers and power utilities, with a disciplined approach to acquisitions [25][26] - The company has a healthy balance sheet and is actively looking for growth opportunities while maintaining a focus on cost savings [26] Margin and Pricing Outlook - Q2 margins were slightly better than expected, with a forecast for flattish margins in Q3 and improvement by year-end [29][30] - The company is confident in maintaining healthy margins despite cost pressures and is focused on rapid ROI from capital investments [30][31] Customer Relationships - nVent maintains strong partnerships with key customers, which helps mitigate pricing pressures and fosters long-term relationships [35] - The company is focused on co-developing products with customers to enhance its offerings [42] Conclusion - nVent Electric is well-positioned for accelerated growth driven by strong demand in electrification, sustainability, and digitalization, with a robust strategy for product development, capacity expansion, and strategic acquisitions [7][48]

Core Insights - nVent Electric plc is entering a new growth phase, with Q2 results indicating accelerated progress in this direction [1][3] Company Performance - nVent is demonstrating strong infrastructure-led growth, although its elevated valuation levels suggest limited upside potential unless demand or execution exceeds expectations [3] Market Position - The company is shifting focus towards long-cycle, higher-value areas, which is expected to enhance its growth trajectory [1]

Company Overview - nVent Electric has a market capitalization of $14.27 billion, with a trailing twelve months (TTM) revenue of $3.31 billion and a net income of $585 million, resulting in a dividend yield of 1.12% [6] - The company operates with over 12,100 employees and focuses on engineered solutions for electrical connection and protection, serving various end markets including industrial, infrastructure, commercial, and energy sectors [7][9] Recent Insider Activity - Chief Accounting Officer Randolph A. Wacker sold 3,000 shares of nVent Electric for a total transaction value of $267,270, leaving him with 27,525 shares valued at approximately $2.44 million post-transaction [2][10] - This sale aligns with Wacker's historical trading activity, as the median trade size is about 3,389 shares from January 2023 to August 2025 [3] Stock Performance Context - The transaction occurred at a share price of $89.09, close to the current price of $88.78, following a significant 40.8% increase in the stock price over the past year [4][10] - Wacker's trading history indicates a pattern of net reduction in holdings over the past three years, suggesting a strategic approach to managing his investment [5] Growth and Market Trends - nVent Electric is benefiting from the "electrification of everything" megatrend, which includes the adoption of electric vehicles, renewable energy, and smart infrastructure [11][12] - The company has raised its full-year revenue and earnings guidance, reporting over 20% growth in organic orders, particularly driven by strong performance in the data solutions business [12] Investment Perspective - Wacker's recent sale appears to be a profit-taking move rather than a negative signal, as the company continues to focus on growth markets and shows strength in the data center sector [10][13] - nVent Electric is positioned as a favorable investment opportunity within the AI and data center themes, leveraging its established product portfolio and market presence [13]

Core Insights - nVent Electric plc reported better-than-expected second-quarter financial results, with earnings of 86 cents per share, surpassing the analyst consensus estimate of 79 cents per share [1] - The company achieved quarterly sales of $963 million, exceeding the analyst consensus estimate of $897.872 million [1] Financial Guidance - nVent Electric raised its FY2025 adjusted EPS guidance from a range of $3.03-$3.13 to $3.22-$3.30 [2] - The company now expects reported sales growth for FY25 to be between 24%-26%, compared to the prior guidance of 19%-21% [2] Market Reaction - Following the earnings announcement, nVent Electric shares fell by 0.8%, trading at $89.14 [2] - Analysts adjusted their price targets for nVent Electric after the earnings report [2] Analyst Ratings - RBC Capital analyst Deane Dray maintained an Outperform rating on nVent Electric and raised the price target from $85 to $102 [7] - Roth Capital analyst Justin Clare reiterated a Buy rating and increased the price target from $89 to $100 [7]

Core Insights - nVent Electric Plc reported strong Q2 2025 earnings, with adjusted EPS of $0.86, a 28% increase year-over-year, and revenue of $963 million, up 30% year-over-year, driven by acquisitions and product launches [1][2][6] Financial Performance - Adjusted EPS reached $0.86, exceeding the consensus estimate of $0.79 and up from $0.67 in Q2 2024 [2][6] - Revenue for Q2 2025 was $963 million, surpassing the estimate of $908.38 million and increasing from $740 million in Q2 2024 [2][5] - Free cash flow declined to $74 million from $101 million in Q2 2024, a decrease of 26.7% [2][8] - Adjusted operating income rose to $200 million, an 18.3% increase year-over-year [2][6] - Adjusted return on sales fell to 20.8%, down from 22.9% in the previous year [2][7] Growth Drivers - The company achieved organic sales growth of 9%, with acquisitions contributing 20.7 percentage points to the overall revenue growth [5][6] - Power utilities and data centers now account for approximately 40% of total sales, reflecting a strategic shift towards high-growth infrastructure sectors [5][9] - nVent launched 35 new products in Q1, supporting growth in electrification and sustainability markets [6][9] Strategic Acquisitions - Recent acquisitions, including ECM Industries and Trachte, have enhanced nVent's capabilities in key sectors [4][9] - The integration of Trachte and Avail EPG has exceeded expectations, contributing positively to growth synergies [9] Operational Efficiency - The company emphasizes lean manufacturing practices, which have led to increased output and operational improvements [11] - Management anticipates that tariff-related costs will be offset over time through pricing and productivity enhancements [11][13] Future Outlook - nVent raised its full-year 2025 guidance, expecting reported sales growth of 24–26% and adjusted EPS in the range of $3.22–$3.30 [12] - For Q3, projected reported sales growth is 27–29%, with adjusted EPS between $0.86 and $0.88 [12] - The company is focused on margin recovery and capturing synergies from recent acquisitions [13]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents nVent Electric plc's unaudited condensed consolidated financial statements and management's analysis for H1 2025 [Item 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) H1 2025 unaudited consolidated financial statements reflect the Thermal Management sale and recent acquisitions [Condensed Consolidated Statements of Income and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Q2 2025 net sales grew **30.2%** to **$963.1 million**, with net income at **$109.5 million** impacted by discontinued operations Condensed Consolidated Statements of Income (Q2 & H1 2025 vs 2024) | In millions, except per share data | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | **$963.1** | **$739.8** | **$1,772.4** | **$1,471.9** | | Gross profit | $371.8 | $307.6 | $685.5 | $598.5 | | Operating income | $156.7 | $144.9 | $286.7 | $276.8 | | Net income from continuing operations | $106.7 | $93.2 | $193.7 | $178.4 | | Income from discontinued operations, net of tax | $2.8 | $17.8 | $276.5 | $37.7 | | **Net income** | **$109.5** | **$111.0** | **$470.2** | **$216.1** | | **Diluted EPS (Continuing operations)** | **$0.65** | **$0.55** | **$1.17** | **$1.06** | | **Diluted EPS (Total)** | **$0.67** | **$0.66** | **$2.84** | **$1.28** | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets were **$6.74 billion** as of June 30, 2025; long-term debt decreased to **$1.75 billion**, and equity increased to **$3.52 billion** Balance Sheet Summary (June 30, 2025 vs Dec 31, 2024) | In millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,484.6 | $1,389.3 | | Goodwill | $2,678.7 | $2,221.8 | | Intangibles, net | $1,954.8 | $1,587.0 | | **Total assets** | **$6,741.7** | **$6,734.9** | | Long-term debt | $1,752.1 | $2,117.5 | | **Total liabilities** | **$3,223.0** | **$3,497.3** | | **Total equity** | **$3,518.7** | **$3,237.6** | - The balance sheet no longer shows assets and liabilities held for sale as of June 30, 2025, following the completion of the Thermal Management business sale[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow decreased to **$43.3 million**; investing activities generated **$576.6 million** from the Thermal Management sale Cash Flow Summary (Six months ended June 30) | In millions | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $43.3 | $220.8 | | Net cash provided by (used for) investing activities | $576.6 | $(34.3) | | Net cash provided by (used for) financing activities | $(714.0) | $(83.2) | | **Change in cash and cash equivalents** | **$(64.1)** | **$88.9** | - Key investing activities included **$971.6 million** for acquisitions and **$1,584.6 million** in proceeds from discontinued operations (sale of Thermal Management)[15](index=15&type=chunk) - Key financing activities included **$866.3 million** in long-term debt repayments and **$253.1 million** in share repurchases, partially offset by **$275.0 million** in new long-term debt and **$200.0 million** from a revolving credit facility[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue, acquisitions, the Thermal Management sale, segment performance, debt, and capital returns [Note 2. Revenue](index=8&type=section&id=Note%202.%20Revenue) H1 2025 total revenue was **$1.77 billion**, with Americas contributing **$1.41 billion** and Infrastructure leading verticals Net Sales by Geography (Six months ended June 30, 2025) | In millions | Systems Protection | Electrical Connections | Total | | :--- | :--- | :--- | :--- | | Americas | $874.4 | $537.4 | $1,411.8 | | EMEA | $209.6 | $75.2 | $284.8 | | Asia-Pacific | $56.2 | $19.6 | $75.8 | | **Total** | **$1,140.2** | **$632.2** | **$1,772.4** | Net Sales by Vertical (Six months ended June 30, 2025) | In millions | Systems Protection | Electrical Connections | Total | | :--- | :--- | :--- | :--- | | Industrial | $479.1 | $84.7 | $563.8 | | Commercial & Residential | $132.4 | $318.4 | $450.8 | | Infrastructure | $510.4 | $203.9 | $714.3 | | Energy | $18.3 | $25.2 | $43.5 | | **Total** | **$1,140.2** | **$632.2** | **$1,772.4** | [Note 5. Acquisitions](index=11&type=section&id=Note%205.%20Acquisitions) nVent acquired Electrical Products Group for **$975.4 million** and Trachte, LLC for **$687.5 million**, significantly increasing goodwill - On May 1, 2025, nVent acquired the Electrical Products Group for a purchase price of **$975.4 million** in cash, funded with cash on hand[33](index=33&type=chunk) - The preliminary purchase price allocation for the Electrical Products Group acquisition includes **$440.9 million** of goodwill and **$429.8 million** of identifiable intangible assets[35](index=35&type=chunk)[36](index=36&type=chunk) - The acquisition of Trachte, LLC was completed on July 16, 2024, for approximately **$687.5 million** in cash, primarily funded through debt[38](index=38&type=chunk) [Note 6. Discontinued Operations](index=14&type=section&id=Note%206.%20Discontinued%20Operations) Thermal Management business sold for **$1.7 billion** on January 30, 2025, generating **$1.585 billion** net proceeds and a **$435.4 million** gain - The sale of the Thermal Management business was completed on January 30, 2025, for a purchase price of **$1.7 billion**, resulting in net cash proceeds of **$1,585.2 million**[45](index=45&type=chunk) - The sale resulted in a pre-tax gain of **$435.4 million**, net of **$32.8 million** in transaction costs, during the six months ended June 30, 2025[46](index=46&type=chunk) [Note 10. Debt](index=19&type=section&id=Note%2010.%20Debt) Total debt decreased to **$1.77 billion** by June 30, 2025, with new **$275.0 million** term and **$600.0 million** revolving credit facilities established Debt Outstanding (June 30, 2025 vs Dec 31, 2024) | In millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Revolving credit facility | $200.0 | $— | | Term loan facilities | $275.0 | $866.3 | | Senior notes - fixed rate | $1,300.0 | $1,300.0 | | **Total debt (before issuance costs)** | **$1,775.0** | **$2,166.3** | - In June 2025, nVent entered into an amended and restated credit agreement, establishing a new five-year **$275.0 million** term loan facility and a **$600.0 million** revolving credit facility[65](index=65&type=chunk) - The company repaid the remainder of borrowings on its 2021, 2023, and 2024 term loan facilities in 2025[64](index=64&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 12. Shareholders' Equity](index=21&type=section&id=Note%2012.%20Shareholders%27%20Equity) H1 2025 saw **4.8 million** shares repurchased for **$253.1 million** under the **$500 million** 2024 Authorization, with **$146.9 million** remaining - In the first six months of 2025, the company repurchased **4.8 million** ordinary shares for **$253.1 million**[75](index=75&type=chunk) - A new **$500.0 million** share repurchase authorization (the "2024 Authorization") was approved by the Board on May 17, 2024, and is effective until July 22, 2027. As of June 30, 2025, **$146.9 million** was available under this plan[74](index=74&type=chunk)[75](index=75&type=chunk) - On May 16, 2025, the Board declared a quarterly cash dividend of **$0.20** per ordinary share[77](index=77&type=chunk) [Note 13. Segment Information](index=22&type=section&id=Note%2013.%20Segment%20Information) H1 2025 Systems Protection sales were **$1.14 billion** (**21.2%** margin); Electrical Connections sales were **$632.2 million** (**28.5%** margin) Segment Performance (Six months ended June 30, 2025 vs 2024) | In millions | Systems Protection 2025 | Systems Protection 2024 | Electrical Connections 2025 | Electrical Connections 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | **$1,140.2** | **$880.7** | **$632.2** | **$591.2** | | **Reportable segment income** | **$241.3** | **$198.6** | **$180.0** | **$177.7** | | **Segment income margin** | **21.2%** | **22.6%** | **28.5%** | **30.1%** | - In Q1 2025, the company renamed its segments from Enclosures to Systems Protection and from Electrical & Fastening Solutions to Electrical Connections[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2025 financial results, highlighting **20.4%** sales growth from acquisitions and organic expansion, and capital deployment [Consolidated Results of Operations](index=28&type=section&id=Consolidated%20Results%20of%20Operations) H1 2025 net sales grew **20.4%** to **$1.77 billion** from acquisitions and organic growth, but margins contracted due to inflation Components of Net Sales Change (H1 2025 vs H1 2024) | Component | % Change | | :--- | :--- | | Organic growth | 5.2% | | Acquisition | 15.3% | | Currency | (0.1)% | | **Total** | **20.4%** | - Gross profit margin declined due to inflationary increases in raw materials and labor, and investments in capacity. This was partially offset by higher sales volume and productivity gains[105](index=105&type=chunk)[107](index=107&type=chunk) - SG&A as a percentage of sales increased due to higher intangible amortization from acquisitions, inflation, and investments in capacity and new products[105](index=105&type=chunk)[107](index=107&type=chunk) - Net interest expense decreased primarily due to interest income earned on the cash proceeds from the sale of the Thermal Management business[106](index=106&type=chunk) [Segment Results of Operations](index=31&type=section&id=Segment%20Results%20of%20Operations) Systems Protection sales grew **29.5%** (acquisitions **24.3%**), margin **21.2%**; Electrical Connections sales grew **6.9%** (organic **5.4%**), margin **28.5%** Systems Protection Performance (H1 2025 vs H1 2024) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,140.2M | $880.7M | +29.5% | | Segment Income | $241.3M | $198.6M | +21.5% | | Segment Income % | 21.2% | 22.6% | -1.4 pts | - Systems Protection sales growth was driven by a **24.3%** contribution from acquisitions and **5.1%** organic growth, primarily from the infrastructure business[113](index=113&type=chunk)[114](index=114&type=chunk) Electrical Connections Performance (H1 2025 vs H1 2024) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $632.2M | $591.2M | +6.9% | | Segment Income | $180.0M | $177.7M | +1.3% | | Segment Income % | 28.5% | 30.1% | -1.6 pts | - Electrical Connections sales growth was driven by **5.4%** organic growth, led by the infrastructure and industrial businesses[117](index=117&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, liquidity included **$125.8 million** cash and **$400.0 million** credit facility; H1 2025 free cash flow was **$118.5 million** - As of June 30, 2025, the company had **$125.8 million** of cash on hand and **$400.0 million** of borrowing capacity under its Revolving Credit Facility[120](index=120&type=chunk)[136](index=136&type=chunk) Free Cash Flow Reconciliation (Six months ended June 30) | In millions | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities of continuing operations | $154.9 | $165.7 | | Capital expenditures | $(38.0) | $(31.8) | | Proceeds from sale of property and equipment | $1.6 | $0.3 | | **Free cash flow of continuing operations** | **$118.5** | **$134.2** | - During H1 2025, the company used cash for **$866.3 million** in debt repayments, **$253.1 million** in share repurchases, and **$65.7 million** in dividends[127](index=127&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes in market risk were reported for the quarter ended June 30, 2025, with further details in the 2024 Form 10-K - There have been no material changes in market risk during the quarter ended June 30, 2025[150](index=150&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of June 30, 2025, with ongoing integration into the newly acquired Electrical Products Group - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[151](index=151&type=chunk) - The company is in the process of incorporating its controls and procedures into the newly acquired Electrical Products Group business[152](index=152&type=chunk) [PART II OTHER INFORMATION](index=37&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other disclosures for the period [Item 1. Legal Proceedings](index=37&type=section&id=ITEM%201.%20Legal%20Proceedings) No material developments in legal proceedings were reported since the 2024 Annual Report on Form 10-K disclosures - No material developments in legal proceedings were reported for the period[154](index=154&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the period - No material changes to risk factors were reported for the period[155](index=155&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Q2 2025 saw **3,864,207** shares repurchased under the **$500 million** 2024 Authorization, with **$146.9 million** remaining Share Repurchases (Q2 2025) | Period | Total number of shares purchased | Average price paid per share | | :--- | :--- | :--- | | April 1 - April 26, 2025 | 3,154,657 | $51.22 | | April 27 - May 24, 2025 | 708,516 | $54.85 | | May 25 - June 30, 2025 | 1,034 | $68.80 | | **Total** | **3,864,207** | | - As of June 30, 2025, **$146.9 million** remained available for share repurchases under the 2024 Authorization, which expires on July 22, 2027[158](index=158&type=chunk) [Item 5. Other Information](index=37&type=section&id=ITEM%205.%20Other%20Information) No directors or Section 16 officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025 - No directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading arrangements during Q2 2025[157](index=157&type=chunk) [Item 6. Exhibits](index=38&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including credit agreements and officer certifications

Financial Data and Key Metrics Changes - The company reported record sales of $963 million, up 30% year-over-year, with organic growth of 9% driven by both volume and price [13] - Adjusted EPS grew 28% to $0.86, exceeding guidance [15] - Adjusted operating income increased 18% year-over-year with a return on sales of nearly 21% [9][15] Business Line Data and Key Metrics Changes - Systems Protection sales increased 43% to $632 million, with organic growth of 10% [15][16] - Electrical Connections sales rose 11% to $331 million, with organic sales up 7% [17] - Infrastructure vertical led with organic sales growth over 20%, while commercial residential sales grew mid-single digits and industrial sales were down slightly [9][10] Market Data and Key Metrics Changes - All key geographic regions experienced growth: Americas up 9%, Europe up 10%, and Asia Pacific up low single digits [10][16] - The backlog increased more than fourfold compared to the previous year, driven by strong demand in data centers and power utilities [7][39] Company Strategy and Development Direction - The company is focused on becoming a higher growth electrical connection and protection company, with significant investments in data solutions and infrastructure [6][26] - The infrastructure vertical is expected to account for over 40% of sales, with data centers and power utilities each contributing approximately 20% [27] - The company is prioritizing growth initiatives, including new products and acquisitions, to enhance its market position [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance and growth outlook, particularly in data centers and power utilities [11][12] - The company raised its full-year sales and adjusted EPS guidance, reflecting strong Q2 results and increased visibility in growth areas [22][24] - Management acknowledged the dynamic tariff environment but emphasized their ability to manage pricing and productivity to offset impacts [11][92] Other Important Information - The company launched 50 new products in the first half of the year, contributing over three points to sales growth [9] - Free cash flow for the quarter was robust at $74 million, with a strong balance sheet supporting capital allocation strategies [19][20] Q&A Session Summary Question: What is the timing of converting the backlog? - Management indicated that the backlog is expected to convert into sales through 2026, driven by growth in the data center solutions business and recent acquisitions [39] Question: How does the company view competition from hyperscalers developing their own cooling solutions? - Management stated that partnerships with hyperscalers remain crucial, as many do not wish to manufacture their own solutions, allowing for continued collaboration [42] Question: What is the outlook for commercial residential performance? - Management noted healthy performance in commercial residential but remained cautious, expecting it to be flattish for the year due to market uncertainties [51][102] Question: How is the company managing tariff and inflation pressures? - Management confirmed that pricing strategies are in place to offset tariff impacts, with expectations for improved margins in the second half of the year [92] Question: What is the expected growth for the Tracke business in 2025? - Management reported that the Tracke business is growing at double digits, with strong orders and healthy backlog contributing to raised guidance [52] Question: How is the company approaching modular data centers? - Management indicated that they are expanding capacity for modular data centers and integrating other OEMs' equipment, which will enhance overall margins [68][94] Question: What is the company's strategy for acquisitions? - Management emphasized a disciplined approach to acquisitions, focusing on high-growth verticals and complementary products to enhance capabilities [131]