Financial Data and Key Metrics Changes - Organic sales grew 7% in Q2, following a 6% increase in Q1, with preliminary July sales per workday up approximately 10% year over year [5][12] - Adjusted EBITDA margin increased by 90 basis points sequentially, while adjusted EPS rose 6% compared to the prior year [6][14] - Total data center sales surpassed $1 billion in Q2, marking a 65% year-over-year increase [5][21] Business Line Data and Key Metrics Changes - Communications and Security Solutions (CSS) achieved 17% organic growth, driven by strong data center performance, while Electrical and Electronic Solutions (EES) grew 6% [5][18] - Utility and Broadband Solutions (UBS) experienced a 4% decline in sales, although investor-owned utilities showed signs of recovery [24][27] - CSS data center sales represented nearly 40% of CSS revenue in Q2, up from approximately 30% in the prior year [19][21] Market Data and Key Metrics Changes - The utility market faced headwinds but is expected to return to growth in the second half of the year, with preliminary July sales for UBS showing slight improvement [24][39] - Backlog increased across all business units, with CSS backlog up 36% year over year [40][41] - The overall demand for data centers remains strong, with no slowdown in customer demand reported [19][21] Company Strategy and Development Direction - The company is focused on executing cross-sell initiatives, managing margins, and delivering operational improvements through technology [10][42] - The outlook for organic sales growth has been revised upward to 5% to 7% for the year, driven by strong data center performance and broader electrical sales trends [37][39] - The company plans to prioritize deleveraging the balance sheet while remaining opportunistic regarding share repurchases and acquisitions [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the utility business, supported by trends in electrification and green energy [27][39] - The company acknowledged the uncertainty surrounding tariffs and the overall economy but remains optimistic about demand for data centers and improving electrical end markets [39][40] - Management highlighted the importance of strong customer relationships and visibility into future demand, particularly in the data center segment [65][68] Other Important Information - The company redeemed $540 million of Series A preferred stock, improving its capital structure and extending debt maturities [29][30] - Free cash flow for Q2 was $87 million, representing approximately 45% of adjusted net income, with a trailing twelve-month free cash flow of $644 million [27][28] Q&A Session Summary Question: Clarification on pricing and guidance - Management confirmed that no tariff impacts are included in the second half outlook, and July's strong start reflects genuine demand increase rather than just easier comparisons [49][50] Question: Insights on utility business trends - Management noted that investor-owned utilities returned to growth in Q2, with expectations for public power customers to follow suit in the second half [59][62] Question: Data center growth metrics - Management indicated strong visibility into data center demand, with significant growth in both white space and gray space, particularly driven by AI applications [65][68] Question: Net working capital intensity targets - Management aims to return to pre-COVID levels of around 19% for net working capital intensity, with ongoing improvements noted [79][80] Question: Pricing impacts and inventory gains - Management clarified that known price increases are factored into guidance, but future pricing actions related to tariffs are not included due to uncertainty [84][86]