Financial Data and Key Metrics Changes - Adjusted diluted earnings per share (EPS) was $0.95, up approximately 42% from Q2 2024, primarily driven by higher adjusted operating profit [9][27] - Organic sales grew 34% year-on-year, with strong performance in The Americas (up mid-40s) and APAC (up mid-30s), while EMEA delivered high single-digit growth [10][28] - Adjusted operating profit was $489 million, up 28% year-on-year, with an adjusted operating margin of 18.5%, approximately 110 basis points lower than the prior year due to tariffs [12][28] - Free cash flow for Q2 was $277 million, lower year-on-year, but adjusted free cash flow for the first half was $542 million, a robust growth of 24% year-on-year [13][30] - Full-year adjusted free cash flow guidance raised to $1.4 billion, with net sales guidance increased by $550 million to $10 billion [14][36] Business Line Data and Key Metrics Changes - Americas organic sales increased by 43%, driven by strength in colocation and hyperscale markets, with an adjusted operating margin of 24% [30] - APAC saw a 37% organic sales increase, with margin expansion to 10.6% [30] - EMEA's organic sales grew 7%, but are expected to be flat for the full year due to operational execution challenges and investments in fixed costs [31][32] Market Data and Key Metrics Changes - Q2 orders were up approximately 15% from Q2 2024 and up 11% sequentially from Q1 2025, with a trailing twelve-month organic orders growth of 11% [11][15] - Backlog stood at $8.5 billion, up 21% year-on-year and 7% sequentially from Q1, supporting increased guidance for the year [15][36] Company Strategy and Development Direction - The company continues to focus on organic expansion and strategic acquisitions to extend market leadership, with the recent acquisition of Great Lakes showcasing this approach [7][24] - Investments in R&D and capacity expansion are aimed at staying ahead of market demand and delivering innovative solutions [8][18] - The company is adapting to a changing regulatory environment that is becoming more conducive to AI infrastructure investment [16][104] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on long-term opportunities in the digital revolution and data center market [6][8] - The operational challenges faced in Q2 are expected to be resolved by year-end, with a projected adjusted operating margin improvement in Q4 [29][96] - The company anticipates continued strong growth in 2025, raising guidance for adjusted diluted EPS and net sales [14][35] Other Important Information - The company plans to communicate projected full-year orders rather than quarterly orders starting from Q4 2025 to better align with business operations [16] - The tariff situation remains dynamic, with ongoing countermeasures being executed to mitigate impacts [17][18] Q&A Session Summary Question: Margin expectations for 2026 - Management believes that 2026 could be a more normal year for margins, with a positive long-term trajectory expected [44][45] Question: Strength in backlog and order duration - Backlog duration remains similar to historical trends, with some customers seeking earlier deliveries, indicating a healthy demand [48][50] Question: Tariffs and inflation recovery - The company has commercial leverage to recover tariffs, and relationships with hyperscalers are strong, allowing for co-engineering opportunities [54][56] Question: Win rates and procurement changes - Win rates remain stable, with no significant changes in how hyperscalers procure equipment [62][66] Question: Operational inefficiencies - Inefficiencies are attributed to tariff transitions and the need for increased capacity to meet growth demands, with expectations for normalization [74][78] Question: Growth rates for thermal service contracts - Liquid cooling is expected to drive growth in thermal service contracts, as the complexity of systems increases [83][85] Question: Current product footprint evolution - The company is evolving its product offerings to accommodate higher voltage power distribution and increasing rack density [88][90] Question: Free cash flow allocation - Free cash flow will be prioritized for strategic acquisitions, with a strong process in place for capital allocation [129][131] Question: Modular and prefab solutions trend - There is an acceleration in modular business, with prefabrication of technology being a key focus for the company [134][135]

RT Jyotiraditya M. Scindia (@JM_Scindia)Had a productive meeting with Ms. @Gwynne_Shotwell, President & COO of @SpaceX, on India’s next frontier in connectivity. We delved into opportunities for collaboration in satellite communications to power Digital India’s soaring ambitions and empower every citizen across the country.With India’s digital revolution under the leadership of PM @narendramodi ji, satellite technologies are not just relevant, they’re transformative.Ms. Shotwell appreciated the license gran ...

ETH is digital oil. Why the digital oil metaphor. What's the market value of oil.I mean, I think people are pretty familiar with gold, something like $20 trillion, something like this. How about oil. What's the market cap of oil.$85 trillion. So, there's some upside. So, we like it cuz it's a bigger number. Is that why we like it. We like it for a lot of reasons.One is it's a bigger number. Oil is a strategic asset. It is a strategic reserve asset.It powers economies. It's stockpiled on a national level. It ...

Financial Data and Key Metrics Changes - In Q1 2025, adjusted diluted EPS increased by 49% to $0.64, driven by higher adjusted operating profit and lower interest expenses [31][32] - Organic net sales rose by 25% year-over-year, exceeding sales guidance by over $100 million [32][33] - Adjusted operating profit increased by 35% to $337 million, with a 130 basis point expansion in adjusted operating margin [16][33] - Adjusted free cash flow reached $265 million, up 162% year-over-year, with a free cash flow conversion of over 100% [17][34] - Net leverage currently stands at 0.8%, with an investment-grade credit rating recently assigned by Fitch [35][36] Business Line Data and Key Metrics Changes - Strong growth was observed in both the Americas and APAC regions, while EMEA's growth lagged due to slower AI infrastructure build [37] - Adjusted operating margin increased across all three regions, with a notable 160 basis point expansion in the Americas [38] Market Data and Key Metrics Changes - The trailing 12-month organic orders growth was reported at 20%, with Q1 orders up 21% sequentially and 13% year-over-year [15][16] - In the Americas, TTM organic orders increased by over 30%, while APAC showed order strength and pipeline growth [21][22] - EMEA's order pipeline is robust and growing, despite lagging behind other regions [37][38] Company Strategy and Development Direction - The company is focused on capitalizing on the digital revolution and robust data center demand, particularly around AI infrastructure [8][14] - A strong emphasis on operational excellence and supply chain resilience has been established to navigate tariff challenges [24][30] - The company is committed to maintaining a strong balance sheet and cash generation to support future investments and M&A opportunities [36][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to handle tariff situations and emphasized the importance of operational flexibility [10][11] - The outlook for 2025 remains strong, with expectations for continued growth driven by demand signals from customers and technology partners [20][52] - The company raised its full-year organic sales growth guidance to 18%, supported by a strong backlog and pipeline [51][43] Other Important Information - The company is actively working on a project with NVIDIA to deliver a prefabricated AI factory, showcasing its capabilities in advanced AI infrastructure [54][57] - The company has developed a detailed tariff playbook to monitor and respond to evolving trade dynamics [30] Q&A Session Summary Question: How do you see the mitigation efforts phasing in through '25? - Management indicated that countermeasures include price actions on new contracts and existing backlog repricing, with benefits expected to increase as the year progresses [61][64] Question: What is driving the impressive performance on orders? - Management noted that growing pipelines and order durability are key factors, with stable pipeline velocity indicating consistent demand [72][74] Question: Can you provide details on China import exposure? - Management refrained from disclosing specific numbers but confirmed that supply reconfiguration and pricing are both contributing to mitigation efforts [80][82] Question: How are you managing production given market dynamics? - Management stated that demand remains strong across various segments, allowing for increased capacity and delivery to the market [98][100] Question: What is the ability to reprice the backlog regarding tariffs? - Ongoing conversations with customers are taking place, with a general understanding of the unique challenges posed by the current tariff environment [103][105] Question: Will Europe start to contribute to bookings? - Management expressed cautious optimism about European growth, while the Americas continue to be a primary growth engine [114][115] Question: What is the total gross tariff-related pressure for 2025? - Management did not disclose specific figures but emphasized a focus on reducing gross impact through pricing and supply chain countermeasures [89][90]