Belden (NYSE:BDC) Q4 2025 Earnings call February 12, 2026 08:30 AM ET Company ParticipantsAaron Reddington - VP of Investor RelationsAshish Chand - CEOChris Dankert - Senior VP, Equity ResearchJeremy Parks - EVP and CFORob Jamieson - Industrial Tech Equity ResearchSteven Fox - Founder & CEOConference Call ParticipantsDavid Williams - Senior Equity Research AnalystMark Delaney - Managing Director and Senior Equity AnalystWilliam Stein - Managing Director and Senior Equity AnalystOperatorLadies and gentlemen, ...

Financial Data and Key Metrics Changes - For Q4 2025, the company reported record revenue of $720 million, exceeding guidance, with adjusted EPS at a record $2.08, also surpassing expectations [4][5] - Full year 2025 revenue reached approximately $2.7 billion, a 10% increase year-over-year, with adjusted EPS of $7.54, reflecting a 19% increase year-over-year [5][17] - Free cash flow for the year was $219 million, with share repurchases totaling 1.7 million shares for $195 million, reducing share count by over 11% since 2021 [5][21] Business Line Data and Key Metrics Changes - Automation Solutions revenue for the year was nearly $1.5 billion, a 14% improvement year-over-year, with EBITDA increasing by 16% [18] - Smart Infrastructure Solutions revenue topped $1.2 billion, a 7% improvement year-over-year, with EBITDA increasing by 6% [19] - Solutions wins as a percentage of total revenue crossed 15% for the year, indicating a significant increase from the previous year [6][24] Market Data and Key Metrics Changes - Orders for Q4 were up 12% year-over-year and 5% quarter-over-quarter, indicating strong demand across the business [5][13] - The company noted robust demand in automation sectors, particularly in energy and discrete manufacturing, with double-digit growth in these areas [29][44] - Broadband experienced a softer second half of the year but is expected to stabilize and rebound in 2026 due to new fiber product adoption [19][36] Company Strategy and Development Direction - The company is transitioning to a unified functional operating model effective January 1, 2026, to enhance customer focus and streamline operations [7][9] - The strategic realignment aims to maximize long-term growth and improve the delivery of integrated solutions [9][25] - The company is committed to leveraging trends such as digitization and IT/OT convergence to drive future growth [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage near-term variability despite ongoing market uncertainty [22] - The first quarter 2026 revenue guidance is expected to be between $675 million and $690 million, with adjusted EPS between $1.65 and $1.75 [23][24] - The company anticipates continued strong demand in key verticals, including energy and discrete manufacturing, as well as growth in smart buildings [44][48] Other Important Information - The company successfully refinanced debt by issuing EUR 450 million of senior subordinated notes, extending its debt maturity profile [22] - The balance sheet remains strong, with cash and cash equivalents at $390 million, and financial leverage at 1.9x net debt to EBITDA [20] Q&A Session Summary Question: Demand trends and outlook for 2026 - Management noted a 26% growth in the total solutions pipeline at the end of 2025, with strong demand in automation sectors like energy and hospitality [29][30] Question: Supply chain concerns regarding metals and semiconductors - Management indicated confidence in managing supply chain risks and emphasized a shift towards regional manufacturing to mitigate risks [32][33] Question: Insights on broadband and overall business performance - Management highlighted a temporary slowdown in architectural upgrades in broadband but expects recovery due to resolved interoperability issues and BEAD funding [36][37] Question: Organizational realignment impact on costs - The realignment is focused on enhancing customer-centricity rather than immediate cost reductions, though efficiencies are expected to arise from pooled resources [49][50] Question: Cash flow and working capital considerations - Management does not anticipate significant impacts on cash flows from copper price volatility, as they have mechanisms to pass on costs [58][60]

EARNINGS RESULTS Q4 2025 February 2026 Forward-Looking Statements Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the first quarter of 2026 and beyond. Forward-looking statements include projections of sales, earnings, general economic conditions, market conditions, working capital, market shares, free cash flow, pricing levels, and effective tax rates. Belden disclaims any obligation to update any such statements to reflect later developments ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report emphasizes the need for utilities to adapt to a rapidly evolving energy landscape driven by technological advancements, regulatory changes, and customer expectations [4][6][106] - It highlights the importance of aligning digital technology investments with overall business objectives to drive measurable outcomes [4][6][107] Summary by Sections Aligning AI with Business Outcomes - AI has the potential to drive innovation and efficiency, but many utility companies struggle to align AI initiatives with core business objectives, leading to a disconnect between costs and business value [19][22] - Opportunities for AI include process automation, data-driven decision-making, enhanced security, and the creation of new business models [22][24] - Utilities should develop a clear AI strategy aligned with business goals and invest in talent development to leverage AI effectively [30][29] Cloud Enables Business Innovation - Cloud computing is essential for utilities to innovate and meet growing customer and operational demands, offering flexibility and cost-effectiveness compared to traditional IT systems [32][36] - The report outlines three main cloud service models: SaaS, PaaS, and IaaS, each providing different levels of control and responsibility [34] - Utilities must embrace cloud technologies to enhance innovation and agility while ensuring cybersecurity measures are in place [42][41] IT/OT Convergence - The convergence of IT and OT is critical for achieving operational efficiency, but cultural differences, technological disparities, and security concerns have hindered progress [45][52] - A pragmatic approach to alignment is recommended, focusing on collaboration and targeted integration rather than full convergence [51][53] - Organizations should promote cross-disciplinary collaboration and pursue incremental integration to realize the benefits of IT/OT alignment [52][54] Digitalization and Data Culture - Digitalization is transforming utility operations, but success depends on establishing a strong data culture that prioritizes data as a strategic asset [56][60] - A robust data culture enables utilities to leverage data for informed decision-making, operational efficiency, and enhanced customer engagement [62][65] - Utilities must address challenges such as resistance to change and data quality to fully capitalize on digitalization opportunities [66][67] Technology Driving Electrification Outcomes - The transition to electrification requires utilities to modernize the grid and invest in advanced technologies like AI and data analytics to enhance grid readiness [75][76] - Cybersecurity is a critical concern as the digitalization of the grid introduces new vulnerabilities that must be managed [80][84] - Strategic investments in emerging technologies are essential for utilities to navigate the evolving energy landscape and meet customer expectations [84][86] Technology Risk Management - The electric utility sector faces significant technology risks, including cybersecurity threats, integration of renewable energy sources, and aging infrastructure [88][89] - Utilities must enhance cybersecurity measures, invest in infrastructure modernization, and strengthen data governance to mitigate these risks [96][97] - Collaboration and knowledge sharing within the industry are vital for addressing emerging technology risks and ensuring compliance with evolving regulations [99][103]