Financial Data and Key Metrics Changes - Revenue for the first quarter totaled $625 million, up 17% year over year, exceeding the high end of guidance [7][14] - Earnings per share (EPS) came in at $1.60, up 29% compared to the prior year [7][14] - Gross margins were 39.8%, an increase of 40 basis points year over year, marking the highest since the strategic transformation began in 2020 [7][15] - Adjusted EBITDA margins improved to 16.6%, up 80 basis points year over year [7][14] Business Line Data and Key Metrics Changes - Automation Solutions revenue increased by 16% year over year, with orders up 22% [14][17] - Smart Infrastructure Solutions revenue grew by 17% year over year, with orders up 13% [14][18] - Organic growth for the overall business was 11%, with The Americas leading at 14% [8][14] Market Data and Key Metrics Changes - Orders were up 18% year over year, with a book-to-bill ratio of 1.05 [8][14] - The Americas and APAC regions showed strong growth, while EMEA was the slowest growing region but still achieved organic growth [17][18] - Broadband revenue increased year over year, driven by a 9% organic growth in fiber [19] Company Strategy and Development Direction - The company is focused on solutions transformation, which is expected to drive future growth opportunities [7][10] - There is a strategic emphasis on reshoring and IT/OT convergence, with increased interest from customers in investing in these areas [38][39] - The company aims to maintain a disciplined capital allocation strategy, targeting acquisitions and share repurchases [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth driven by trends such as reindustrialization, digitization, and automation [27][31] - There is an expectation of continued uncertainty in the near term due to trade policy, but a positive long-term outlook remains [28][29] - Signs of recovery in global manufacturing PMIs were noted, indicating potential for broader industrial recovery [30] Other Important Information - The company generated strong free cash flow of $220 million, representing 9% of total revenue [9][20] - The balance sheet remains strong, with a net debt to EBITDA ratio of 2.0 times [20] - The next debt maturity is not until 2027, with all debt fixed at an average rate of 3.5% [22] Q&A Session Summary Question: Comments on reshoring interest among manufacturers - Management noted increased confidence among large customers regarding reshoring manufacturing to the US, with discussions around long-term plans [36][38] Question: Insights on book-to-bill in smart infrastructure - Smart Buildings orders were up about 8%, while Broadband orders were up 18%, indicating stronger performance in broadband [40][41] Question: Quantifying discussions on reshoring - Management indicated that discussions around reshoring have increased significantly, with a sales funnel growth in the high teens [47][50] Question: Demand pull forward observations - No significant demand pull forward was observed, but there is increased interest and discussions from customers about future deployments [51][52] Question: Exposure to tariffs and sourcing changes - The largest exposure is to Mexico, with most products having exemptions under USMCA, and efforts are ongoing to adjust sourcing from China [56][57] Question: Long-term EPS growth target - The company reiterated its target of 10% to 12% EPS CAGR but did not provide updates on the specific $8 EPS goal for 2025 [58][59] Question: Margin performance between segments - Strong performance in Industrial Solutions was noted, while Smart Infrastructure experienced a sequential drop due to seasonal impacts [61][63] Question: Learnings from combined sales force - The transition to autonomous systems is seen as a multi-step journey, with customers increasingly seeking digitization and integration of IT and OT [66][68] Question: Free cash flow management - The focus remains on improving supply chain efficiency and managing working capital to enhance free cash flow margins [71][73]