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Core Viewpoint - Hubbell Incorporated (HUBB) is a significant player in the industrial manufacturing sector, focusing on electrical and utility infrastructure components, with a market cap of $27.8 billion [1] Financial Performance - For fiscal 2025 Q4, HUBB reported a revenue growth of 12% year-over-year to $1.49 billion and an adjusted EPS increase of 15% to $4.73, both slightly exceeding expectations [4] - The growth was broad-based, with Utility Solutions sales up 10% and Electrical Solutions up 14%, primarily driven by organic demand for grid and infrastructure products [4] - Adjusted operating profit increased by 19%, and profit margins expanded, indicating improved profitability [4] Stock Performance - HUBB shares have outperformed the broader market, surging 34.2% over the past 52 weeks, compared to an 11.7% increase in the S&P 500 Index [2] - Year-to-date, HUBB shares are up 18.6%, while the S&P 500 has shown only marginal gains [2] - The stock also outperformed the State Street Industrial Select Sector SPDR Fund (XLI), which returned 27.1% over the past 52 weeks [3] Analyst Expectations - For the fiscal year ending December 2026, analysts project HUBB's adjusted EPS to grow by 8.7% year-over-year to $19.79 [5] - The consensus rating among 15 analysts covering the stock is a "Moderate Buy," with seven "Strong Buy" ratings and eight "Holds" [5] Market Outlook - Management expressed confidence in a continued mid-single-digit organic growth outlook for 2026, supported by solid order trends and momentum in electrification and utility spending end markets [4]

Group 1 - The presentation features Hubbell's President and CEO Gerben Bakker and CFO Joe Capozzoli [1]

Hubbell (NYSE:HUBB) FY Conference Summary Company Overview - **Company**: Hubbell (NYSE:HUBB) - **Date of Conference**: February 19, 2026 - **Speakers**: Gerben Bakker (President and CEO), Joe Capozzoli (CFO) Key Points Industry and Market Outlook - **Volume Growth**: Company-wide volume growth was in the mid-single digits exiting 2025, with an outlook for 5%-7% organic growth in 2026, supported by strong order intake [2][3] - **Electricity Demand**: There is an expected acceleration in U.S. electricity consumption, driven by data centers and utility business growth, particularly in transmission and substation sectors, which saw double-digit growth last year [3][4][7] - **Utility Spending**: Utilities are prioritizing transmission and substation investments, with a bias towards these areas over distribution, although both segments are expected to grow [8][9][10] Financial Performance and Projections - **Distribution Growth**: Long-term growth in the distribution segment is projected at mid-single digits, driven by the need for grid investment, with over 6 million miles of aged distribution infrastructure [16][19] - **Meter Business**: The meter segment has faced disruptions due to chip shortages and is now stabilizing, representing about 10% of the portfolio. Future growth is expected to be muted as utilities focus on load growth [22][27] - **Data Center Revenue**: Anticipated mid-teens growth in data center-related revenue, with a cautious outlook on short-cycle business due to limited visibility [30][31] Operational Insights - **Operating Margins**: Operating margins have improved significantly, with expectations for continued expansion across both electrical and utility segments. Inflation is projected at mid-single digits, but effective pricing and productivity programs are in place to manage costs [48][49][50] - **Capital Deployment**: M&A remains a core strategy, with a focus on building scale and breadth in the market. The pipeline includes both bolt-on acquisitions and larger deals, although valuations have increased [61][65][66] Strategic Initiatives - **Product Development**: Hubbell is adapting its product offerings to meet the evolving demands of data centers, including higher voltage requirements. The company is well-positioned to develop products for the 800-volt DC transition [39][40][41] - **Long-term Planning**: The company is focused on a multi-year margin expansion program, with ongoing restructuring and portfolio management to enhance profitability [50][54] Market Dynamics - **Industrial Demand**: Light industrial business has shown mid-single-digit growth, while non-residential and heavy industrial segments remain soft. The company is prepared to scale operations if demand accelerates [36][37] - **Seasonality**: A more typical seasonal pattern is expected in 2026, with the first quarter anticipated to be the lowest in revenue and profitability [55][56] Investor Sentiment - **Valuation and Growth Expectations**: Investor sentiment is positive to neutral, with expectations for EPS growth in line with or above multi-industry averages. The main valuation headwind identified is core growth [76] Additional Insights - **Technology Changes**: The transition to higher voltages in data centers is not expected to significantly impact Hubbell's portfolio, as the company already offers a range of products suitable for various voltage requirements [39][40] - **Balance Sheet Strength**: The company has a stronger balance sheet than in the past, allowing for disciplined capital deployment, including share buybacks when appropriate [71][72] This summary encapsulates the key insights and strategic outlook for Hubbell as discussed in the FY conference, highlighting the company's growth prospects, market dynamics, and operational strategies.

Revenue Segmentation - The Utility Solutions segment accounted for 63% of consolidated revenues in 2025, 64% in 2024, and 61% in 2023[13] - The Electrical Solutions segment represented 37% of consolidated revenues in 2025, 36% in 2024, and 39% in 2023[15] - The Utility Solutions segment accounted for 63% of consolidated revenues in 2025, up from 61% in 2023, while the Electrical Solutions segment represented 37% of revenues in 2025, down from 39% in 2023[13] Order Backlog - The backlog of orders at December 31, 2025, was $2,159 million, up from $1,898 million at December 31, 2024[26] - The backlog of orders at December 31, 2025, was $2,159 million, an increase from $1,898 million at December 31, 2024, with substantial backlog expected to be shipped in 2026[26] Sales and Business Operations - The company sold its residential lighting business for a cash purchase price of $131 million, which generated $187.1 million in sales in 2023[17] - The company generated $187.1 million in sales from its residential lighting business in 2023, which was sold for a cash purchase price of $131 million[17] - Hubbell's products are primarily sold through distributors and directly to utilities, with a focus on electrical distribution and utility markets[14] - The Electrical Solutions segment products are primarily sold through distributors and retail outlets, catering to various markets including industrial and telecommunications[18] Customer Base - Approximately 42% of net sales are attributed to the top ten customers[21] - Top ten customers account for approximately 42% of the company's net sales, indicating a diversified customer base[21] Employee Information - As of December 31, 2025, Hubbell had approximately 18,000 employees, with 61% located in the United States[32] - As of December 31, 2025, Hubbell had approximately 18,000 employees, with 61% (about 10,900) located in the United States[32] - In 2025, over 87% of Hubbell's employees participated in the Elevate Employee Experience Survey, indicating strong engagement[37] - The company provides U.S. employees with up to 8 hours of paid time off annually for volunteer work with eligible charities[35] - Hubbell has expanded its leadership development programs to enhance career development opportunities for employees at all levels[34] - The company considers its labor relations satisfactory, with approximately 2,425 U.S. employees represented by 8 labor unions[32] - Hubbell's commitment to employee development includes competitive compensation and health programs tailored to local markets[31] Safety and Health Programs - The company has implemented a comprehensive safety program to protect employee health and safety, utilizing an enterprise-wide data management system[36] - Hubbell's myLife program offers competitive benefits aimed at supporting employees' health and well-being[36] Intellectual Property - The company has approximately 3,250 active patents covering its products[23] - The company has approximately 3,250 active patents, which it deems valuable but does not consider its business to be dependent on patent protection[23] International Operations - The company maintains operations in multiple countries, including the United States, Canada, and China[9] - The company operates several international facilities, including in Canada, Mexico, China, and the UK, to manufacture and market its products[9] Environmental Considerations - The company anticipates that environmental claims and costs will not materially affect its financial condition or competitive position[29] Product Segmentation - The Utility Solutions segment includes critical components for energy transmission and distribution, while the Electrical Solutions segment focuses on power management across various industries[10][15] Financial Performance - The company recorded a pre-tax loss of $5.3 million on the sale of its residential lighting business, which is included in total other expenses[17] - The company is not materially dependent on any single supplier for raw materials, which include steel, aluminum, and copper[22]

Core Insights - Hubbell (HUBB) is emerging as an unexpected beneficiary of the growth in AI data centers, despite not being a company typically associated with this sector [1] Group 1 - The impact of artificial intelligence on various industries is proving to be significant and sometimes surprising [1]

分组1 - Exxon Mobil Corporation reached a new 52-week high, closing at $143.73, with a gain of 3.9% on Tuesday [1][5] - TD Cowen analyst Jason Gabelman maintained a Buy rating on Exxon Mobil and raised the price target from $135 to $145, while Barclays analyst Betty Jiang also maintained an Overweight rating and increased the price target from $140 to $145 [1] 分组2 - iShares Russell 2000 ETF gained 0.2% during the session [2][5] 分组3 - Rockwell Automation is set to report its first quarter fiscal 2026 results, with analysts expecting earnings of $2.48 per share on revenue of $2.09 billion [3] - Rockwell Automation shares rose 0.3% to close at $430.31 on Tuesday [5] 分组4 - Hubbell Incorporated reported better-than-expected fourth quarter results, with earnings of $4.73 per share, surpassing the consensus estimate of $4.71 per share, and quarterly sales of $1.492 billion, exceeding the estimate of $1.489 billion [4] - Hubbell shares gained 1.7% to settle at $503.86 during the session [5]

Financial Data and Key Metrics Changes - Hubbell reported a 12% total sales growth in Q4 2025, with adjusted operating profit growth of 19% and adjusted earnings per share growth of 15% [5][10] - Organic growth for the fourth quarter was 9%, driven by strong performance in the Electrical Solutions segment and grid infrastructure businesses [5][10] - The company achieved a free cash flow margin of 15% and a return on invested capital of 19% for 2025, indicating strong business model quality [9] Business Line Data and Key Metrics Changes - **Electrical Solutions Segment**: Achieved 7% organic growth and 14% adjusted operating profit growth for the full year 2025, with adjusted operating margins exceeding 20% for the first time [7][8] - **Utility Solutions Segment**: Generated net sales of $936 million in Q4 2025, representing a 10% growth, with grid infrastructure showing strong performance and 12% organic growth [13][15] Market Data and Key Metrics Changes - The utility market remains strong, driven by investments in aging infrastructure and data center build-outs, contributing to robust project activity [5][8] - Grid automation sales declined by 8% in Q4, primarily due to weaker project activity in meters and AMI, although growth in grid protections and controls was noted [15][11] Company Strategy and Development Direction - Hubbell is focused on unifying its Electrical Solutions segment to enhance competitiveness and drive operational efficiencies [7] - The company plans to continue investing in high-return areas and innovative solutions to maintain growth and productivity benefits in 2026 and beyond [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong outlook for 2026, anticipating 5%-7% organic growth across the portfolio, particularly in utility T&D and data center markets [20][22] - The company expects to manage price and productivity effectively to offset inflation while continuing to invest in business growth [23] Other Important Information - Hubbell's acquisition of DMC Power is expected to contribute positively to growth and margins, with ongoing investments in automation and production capacity [8][9] - The company is initiating a 2026 outlook for 7%-9% total sales growth and adjusted earnings per share between $19.15 and $19.85 [22] Q&A Session Summary Question: Can you provide more color on orders and their impact on MRO activity? - Management noted strong order momentum, particularly in T&D and data center markets, with visibility into 2026 remaining positive [27][28] Question: What is the outlook for meters and AMI? - The business is stabilizing after working through backlog, with expectations for modest growth moving forward [31][32] Question: How should we think about margin expansion throughout the year? - Management anticipates solid margin expansion, with Q1 expected to be stronger than typical due to easier year-over-year comparisons [39][45] Question: What is the expectation for raw materials prices and cost inflation? - Anticipated mid-single-digit cost inflation for 2026, with ongoing management of price and productivity to address this [54][70] Question: What is the growth outlook for grid infrastructure? - Management expects high single-digit to low double-digit growth in transmission and substation markets, with continued investment in distribution [60][61] Question: How will free cash flow be utilized? - The company plans to deploy free cash flow for high-quality CapEx, M&A opportunities, and share repurchases [63][65]

Financial Data and Key Metrics Changes - The company reported a 12% total sales growth in Q4 2025, with net sales reaching $1.493 billion, driven by 9% organic growth and 3% from acquisitions [4][9] - Adjusted operating profit grew by 19%, with adjusted operating margins expanding by 140 basis points [4][10] - Adjusted diluted earnings per share increased by 15% to $4.73 [10] - Free cash flow for Q4 was $389 million, contributing to a full-year total of $875 million, representing a 90% conversion on adjusted net income [11] Business Line Data and Key Metrics Changes - **Utility Solutions Segment**: Generated net sales of $936 million in Q4, a 10% increase year-over-year, with organic growth of 7% and acquisitions contributing 4% [12] - **Grid Infrastructure**: Achieved 12% organic growth, driven by strong demand in transmission and substation markets [13] - **Electrical Solutions Segment**: Reported net sales of $557 million in Q4, with 13% organic growth, primarily from data center markets [14][15] Market Data and Key Metrics Changes - The utility market remains strong, with significant investments in transmission and substation infrastructure, driven by aging infrastructure and new load generation [4][19] - Data center markets showed exceptional growth, exceeding 60% in Q4, supported by targeted capacity investments [15][21] Company Strategy and Development Direction - The company is focused on unifying its electrical solutions segment to enhance competitiveness and drive operational efficiencies, achieving above-market growth [6] - Continued investment in automation and production capacity is planned to support high-growth areas [7][8] - The company anticipates 5%-7% organic growth across its portfolio for 2026, with a strong focus on utility T&D and data center markets [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong order momentum and visibility into favorable end markets for 2026 [27][28] - The company expects to manage cost inflation effectively while continuing to invest in growth initiatives [23][24] - The outlook for 2026 includes total sales growth of 7%-9% and adjusted earnings per share between $19.15 and $19.85 [22][23] Other Important Information - The company closed a high-growth acquisition in DMC Power, enhancing its portfolio in grid infrastructure [7] - Free cash flow margin for 2025 was reported at 15%, with a return on invested capital of 19% [8] Q&A Session Summary Question: Can you provide more color on orders and their impact on MRO activity? - Management noted strong order momentum, particularly in T&D and data center markets, with visibility into 2026 remaining positive [27][28] Question: What is the outlook for meters and AMI? - Management indicated that the business is stabilizing and expects modest growth moving forward after a period of decline [32][33] Question: How should we think about margin expansion throughout the year? - Management confirmed expectations for margin expansion, with a focus on maintaining strong performance in Q1 [41][50] Question: What is the current assumption on raw materials prices? - The company anticipates mid-single-digit cost inflation for 2026, with ongoing management of price and productivity to address this [58][59] Question: What is the outlook for grid infrastructure growth in the first and second half of the year? - Management expressed optimism for high single-digit to low double-digit growth in transmission and substation markets, with expectations for continued strength in distribution [64][66] Question: How will free cash flow be utilized in 2026? - The company plans to deploy free cash flow towards high-quality CapEx, M&A opportunities, and share repurchases [67][70]

Financial Data and Key Metrics Changes - Hubbell reported a strong financial performance in Q4 2025, with total sales growth of 12%, adjusted operating margin expansion of 140 basis points, adjusted operating profit growth of 19%, and adjusted earnings per share growth of 15% [4][8] - Net sales for Q4 2025 reached $1.493 billion, driven by 9% organic growth and 3% from acquisitions [8][10] - Free cash flow for Q4 was $389 million, contributing to a full-year free cash flow of $875 million, representing 90% conversion on adjusted net income [10] Business Line Data and Key Metrics Changes - The electrical solutions segment achieved 13% organic growth in Q4, primarily driven by strong demand in data center markets, which saw growth exceeding 60% [13][14] - Utility solutions generated net sales of $936 million in Q4, reflecting a 10% increase, with organic growth of 7% and acquisitions contributing 4% [11] - Grid infrastructure within utility solutions experienced 12% organic growth, supported by strong performance in distribution, substation, and transmission markets [11][12] Market Data and Key Metrics Changes - The utility market remains robust, with significant investments in transmission and substation infrastructure, driven by aging infrastructure and new load generation [4][6] - The data center market is a key growth driver, with expectations for continued strong performance in 2026, particularly in modular power distribution [19][74] - The grid automation market faced challenges, with an 8% decline in sales, primarily due to reduced project activity in meters and AMI [12][30] Company Strategy and Development Direction - Hubbell's strategy focuses on unifying its electrical solutions segment to enhance competitiveness and drive organic growth, achieving 7% organic growth and 14% adjusted operating profit growth for the full year 2025 [5][6] - The company plans to continue investing in high-return areas, including automation and production capacity expansion, to support growth and margin expansion [6][16] - The outlook for 2026 anticipates 5%-7% organic growth across the portfolio, with strong demand expected in utility T&D, data center, and light industrial markets [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong order momentum and visibility into favorable end markets, particularly in T&D and data center sectors [25][26] - The company expects to navigate cost inflation effectively through pricing and productivity actions, maintaining a positive outlook for margin expansion in 2026 [21][50] - Management highlighted the importance of ongoing investments in infrastructure and modernization initiatives to support long-term growth [19][20] Other Important Information - Hubbell's adjusted operating margins for the electrical solutions segment exceeded 20% for the first time in history [5] - The company closed a high-growth acquisition in DMC Power, enhancing its capabilities in the utility solutions segment [6] - The balance sheet remains strong, with a net debt to EBITDA ratio of 1.3 times, positioning the company well for future investments [10] Q&A Session Summary Question: Can you provide more color on orders and their impact on MRO activity? - Management noted strong order momentum, particularly in T&D and data center, with visibility into favorable end markets providing confidence for 2026 [25][26] Question: What is the outlook for meters and AMI? - The business is stabilizing at a lower base, with expectations for modest growth moving forward after a period of backlog consumption [30][31] Question: How should we think about margin expansion throughout the year? - Management anticipates solid margin expansion throughout 2026, with a seasonal pattern expected [39][46] Question: What is the expectation for raw materials prices and cost inflation? - Anticipated mid-single digits for cost inflation in 2026, with ongoing management of price and productivity to address this [55][70] Question: What is the outlook for the transmission and substation market? - Management expressed optimism for high single-digit to low double-digit growth in transmission and substation markets, supported by ongoing investments [61][62] Question: Can you discuss the long-term fit of the Aclara business? - The business has been reshaped to focus on markets where Hubbell has a strong position, with expectations for improved margins moving forward [86][88]