Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $3.07, an increase of 8% year-over-year, and segment margins reached a record 25%, up 70 basis points from the previous year [6][21] - Quarterly revenue was $7 billion, with organic growth of 7%, driven by strength in aerospace and Electrical Americas, partially offset by weakness in short-cycle markets [20][21] - The backlog grew by $2 billion, or 20%, to $12 billion, providing strong visibility for organic growth [22][88] Business Line Data and Key Metrics Changes - **Electrical Americas**: Organic sales growth of 9%, primarily driven by data centers, which saw a 40% increase. Operating margin was 30.3%, up 20 basis points year-over-year [21][22] - **Electrical Global**: Total growth of 10%, with organic growth of 8%. Operating margin increased to 19.1%, up 40 basis points from the prior year [22][23] - **Aerospace**: Organic sales growth of 13%, with operating margin expanding by 150 basis points to 25.9%. Orders increased by 11% on a rolling 12-month basis [24] - **Vehicle Segment**: Experienced a decline of 9% on an organic basis, primarily due to weaknesses in the North America truck and light vehicle markets [25] Market Data and Key Metrics Changes - Orders in Latin America accelerated by 7% on a rolling 12-month basis, with a backlog growth of 20% year-over-year [5] - The global liquid cooling market is expected to grow around 35% annually through 2028, driven by increasing power demands from AI chips [12] - EMEA orders increased by more than 30%, driven by data center orders, including sizable orders in the Middle East [23] Company Strategy and Development Direction - The company outlined a strategy with three pillars: lead, invest, and execute for growth, focusing on capitalizing on key megatrends [8] - The acquisition of Boyd's thermal business is aimed at enhancing the company's position in the liquid cooling market, which is expected to generate $1.7 billion in sales next year [9][10] - The company aims to provide comprehensive solutions for data centers, integrating power distribution and cooling technologies [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained growth due to strong demand indicators and a robust backlog, particularly in the data center market [5][19] - The company reaffirmed its 2025 guidance, expecting organic growth of 8.5%-9.5% and margin guidance of 24.1%-24.5% [26][27] - Management highlighted the importance of integrating various systems to drive technical performance and rapid deployments in data centers [15] Other Important Information - The company is experiencing unprecedented demand, reflected in continued order acceleration and growing backlogs [29] - The company is well-positioned for strong growth in 2026 and beyond, with confidence in its guidance for the remainder of the year [29] Q&A Session Summary Question: Outlook for Electrical Americas LTM orders - Management indicated strong visibility into Q4 orders, expecting continued growth based on momentum and project tracking [36][37] Question: Quarterly orders estimation for Electrical Americas - Management confirmed external estimates are in the ballpark, leaning towards the higher end of expectations for Q3 [39][40] Question: AI data centers sales per megawatt - Management stated that with recent acquisitions, total Eaton sales per megawatt could approach $3 million at the high end [52][56] Question: Drivers of aerospace performance and margins - Management highlighted historical wins in defense platforms and ongoing improvements in operational efficiency as key drivers [92][94]