nVent(NVT) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Overview nVent reports strong Q2 2025 results, driven by acquisitions and organic growth, leading to increased full-year guidance Second Quarter 2025 Financial Highlights nVent achieved record Q2 2025 results with 30% reported sales growth to $963 million and 28% adjusted EPS growth to $0.86, leading to raised full-year guidance - Portfolio transformation and recent acquisitions, including Trachte and Electrical Products Group, significantly drove strong performance in high-growth infrastructure verticals like power utilities, data centers, and renewables[3][4] Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Reported Sales | $963 million | $740 million | +30% | | Organic Sales Growth | 9% | N/A | N/A | | Reported EPS (cont. ops) | $0.65 | $0.55 | +18% | | Adjusted EPS (cont. ops) | $0.86 | N/A | +28% | | Operating Income | $157 million | $145 million | +8% | | Adjusted Operating Income | $200 million | $169 million | +18% | | Free Cash Flow | $74 million | $101 million | -27% | Second Quarter 2025 Performance Analysis nVent's Q2 2025 consolidated net sales grew 30% to $963 million, with both segments contributing, despite a 210 basis point decline in adjusted Return on Sales to 20.8% Consolidated Performance Consolidated net sales increased 30% to $963 million with 9% organic growth, while adjusted Return on Sales contracted 210 basis points to 20.8% nVent Consolidated Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $963M | $740M | +30% | | Organic Growth | 9% | N/A | N/A | | Operating Income | $157M | $145M | +8% | | Reported ROS | 16.3% | 19.6% | -330 bps | | Adjusted Operating Income | $200M | $169M | +18% | | Adjusted ROS | 20.8% | 22.9% | -210 bps | Segment Performance Systems Protection sales rose 43% to $632 million with 10% organic growth, and Electrical Connections sales increased 11% to $331 million with 7% organic growth, though both segments saw adjusted ROS decline Q2 2025 Segment Performance | Segment | Net Sales | YoY Change | Organic Growth | Adjusted ROS | ROS Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | | Systems Protection | $632M | +43% | +10% | 21.7% | -180 bps | | Electrical Connections | $331M | +11% | +7% | 28.7% | -220 bps | Full-Year and Third Quarter 2025 Guidance nVent raised full-year 2025 guidance, projecting 24-26% reported sales growth and adjusted EPS of $3.22-$3.30, with strong Q3 2025 forecasts Updated Full-Year 2025 Guidance | Metric | New Guidance | Prior Guidance | | :--- | :--- | :--- | | Reported Sales Growth | 24% to 26% | 19% to 21% | | Organic Sales Growth | 8% to 10% | 5% to 7% | | GAAP EPS | $2.48 to $2.56 | $2.48 to $2.58 | | Adjusted EPS | $3.22 to $3.30 | $3.03 to $3.13 | Third Quarter 2025 Guidance | Metric | Q3 2025 Guidance | | :--- | :--- | | Reported Sales Growth | 27% to 29% | | Organic Sales Growth | 11% to 13% | | GAAP EPS | $0.67 to $0.69 | | Adjusted EPS | $0.86 to $0.88 | Shareholder Returns A regular cash dividend of $0.20 per share was approved by the Board of Directors, payable on August 1, 2025 - A regular cash dividend of $0.20 per share was approved, payable in the third quarter on August 1, 2025[14] Consolidated Financial Statements (Unaudited) Unaudited financial statements provide a comprehensive view of nVent's financial health and operational results for the three and six months ended June 30, 2025 Condensed Consolidated Statements of Income Q2 2025 net sales reached $963.1 million, with net income from continuing operations increasing to $106.7 million and diluted EPS rising to $0.65 Income Statement Highlights (Three Months Ended June 30) | Metric (in millions, except EPS) | 2025 | 2024 | | :--- | :--- | :--- | | Net Sales | $963.1 | $739.8 | | Gross Profit | $371.8 | $307.6 | | Operating Income | $156.7 | $144.9 | | Net Income from Continuing Operations | $106.7 | $93.2 | | Diluted EPS from Continuing Operations | $0.65 | $0.55 | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $6,741.7 million, with a significant increase in Goodwill and Intangibles, and long-term debt decreasing to $1,752.1 million Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,484.6 | $1,389.3 | | Goodwill & Intangibles, net | $4,633.5 | $3,808.8 | | 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 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities for the six months ended June 30, 2025, was $154.9 million, while investing activities used $1,008.0 million primarily for acquisitions, and financing activities used $714.0 million Cash Flow Summary (Six Months Ended June 30, in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating (Continuing Ops) | $154.9 | $165.7 | | Net Cash from Investing (Continuing Ops) | $(1,008.0) | $(31.5) | | Net Cash from Financing | $(714.0) | $(83.2) | | Change in Cash and Cash Equivalents | $(64.1) | $88.9 | Supplemental Financial Information by Reportable Segment For the six months ended June 30, 2025, Systems Protection generated $1,140.2 million in sales and Electrical Connections $632.2 million, both showing sales and income growth despite declining Return on Sales percentages Segment Performance (Six Months Ended June 30) | Segment (in millions) | Net Sales 2025 | Net Sales 2024 | Segment Income 2025 | Segment Income 2024 | | :--- | :--- | :--- | :--- | :--- | | Systems Protection | $1,140.2 | $880.7 | $241.3 | $198.6 | | Electrical Connections | $632.2 | $591.2 | $180.0 | $177.7 | Non-GAAP Financial Measures and Reconciliations This section reconciles non-GAAP financial measures like organic sales, adjusted operating income, and free cash flow to GAAP equivalents, used to assess core operational performance - The company defines 'organic sales' as GAAP net sales excluding the impact of currency translation and revenue from acquisitions within their first year[30] - Adjusted measures are used to eliminate the distorting effects of certain items, such as restructuring costs, acquisition expenses, and amortization of intangible assets, to better assess the underlying strength of operations[31][33] Reconciliation of GAAP to Non-GAAP Measures (2025 Forecast) Q2 2025 operating income of $156.7 million was adjusted to $200.0 million, and diluted EPS of $0.65 was adjusted to $0.86, after accounting for specific items Q2 2025 GAAP to Non-GAAP Reconciliation | Metric (in millions, except EPS) | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Income | $156.7 | $43.3 | $200.0 | | Net Income (cont. ops) | $106.7 | $33.9 | $140.6 | | Diluted EPS (cont. ops) | $0.65 | $0.21 | $0.86 | Reconciliation of Net Sales Growth to Organic Net Sales Growth Q2 2025 total net sales growth of 30.2% comprised 8.7% organic growth and 20.7% from acquisitions, with full-year forecasts anticipating 24-26% total sales growth Q2 2025 Net Sales Growth Reconciliation | Segment | Organic | Currency | Acq./Div. | Total | | :--- | :--- | :--- | :--- | :--- | | nVent | 8.7% | 0.8% | 20.7% | 30.2% | | Systems Protection | 10.0% | 1.0% | 32.4% | 43.4% | | Electrical Connections | 6.8% | 0.3% | 3.6% | 10.7% | Reconciliation of Cash from Operating Activities to Free Cash Flow For Q2 2025, net cash from continuing operating activities was $91.0 million, resulting in a free cash flow of $74.1 million after capital expenditures Free Cash Flow Reconciliation (Three Months Ended June 30) | Metric (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities (cont. ops) | $91.0 | $117.1 | | Capital expenditures | $(16.9) | $(16.5) | | Free cash flow (non-GAAP) | $74.1 | $100.6 |