Hubbell Q1 2026 Earnings Results & Report

Hubbell EPS Results

• Actual EPS: $3.93
• Consensus EPS: $3.87
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: $3.50
• EPS Beat Rate: 7 of last 8 quarters

Hubbell Revenue Results

• Actual Revenue: $1.52 billion
• Expected Revenue: $1.50 billion
• Beat/Miss: Beat by +$15.70 million
• YoY Revenue Growth: +11.10%

Hubbell (NYSE:HUBB)orporated is a manufacturer of electrical and utility products serving customers in the energy, industrial, commercial and residential markets. Its products help support the generation, transmission and distribution of electricity, as well as the installation and use of electrical systems.

The company’s Utility Solutions business makes products such as connectors, insulators, arresters and other equipment used in electric utility networks. Its Electrical Solutions business supplies wiring devices, lighting and controls, enclosures and related products for buildings and industrial applications.

Founded by inventor Harvey Hubbell in 1888, the company serves customers primarily in North America, with operations and sales in other markets. Hubbell is headquartered in Shelton, Connecticut.

Hubbell Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Hubbell reported strong Q1 results with $1.517 billion in net sales (up 11%), 8% organic growth, adjusted operating profit up 18% and adjusted EPS of $3.93 (up 16%).
• Positive Sentiment: Management raised full‑year guidance to 8%–11% total sales growth, 6%–9% organic growth and adjusted EPS of $19.30–$19.85, and expects at least 90% free cash‑flow conversion on adjusted net income.
• Positive Sentiment: Company highlighted a long‑term opportunity in 765 kV high‑voltage transmission—an addressable market of about $1.5 billion over 10 years—with early project wins, product development and capacity investments that could add roughly a point of upside to transmission growth.
• Positive Sentiment: Segment trends are robust—Utility Solutions drove double‑digit growth led by grid infrastructure and margin expansion, while Electrical Solutions delivered ~40% growth in data center markets (now guided >25% for the year); meter/AMI and grid automation remain weak but are expected to stabilize.
• Neutral Sentiment: Inflation accelerated versus prior assumptions but management says pricing and productivity offset costs dollar‑for‑dollar in Q1; they are increasing capacity and restructuring investments (R&R roughly $13M in Q1) and repurchased $168M of stock that is neutral to 2026 EPS but expected to be accretive in 2027.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the First Quarter 2026 Hubbell Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To participate, you will need to press star one one on your telephone. You will hear a message advising your hand is raised. To withdraw the question, simply press star one one again. Please be advised that today's conference is being recorded. It's my pleasure to hand the conference over to the Senior Director of Investor Relations, Dan Innamorato. Please proceed.

[Dan Innamorato, Senior Director of Investor Relations at Hubbell]

Thanks, operator. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing our results for the first quarter of 2026. The press release and slides are posted to the investor section of our website at hubbell.com. I'm joined today by our Chairman, President, and CEO, Gerben Bakker, and our CFO, Joe Capozzoli. Please note our comments this morning may include statements related to the expected future results of our company. These are forward-looking statements defined by the Private Securities Litigation Reform Act of 1995. Please note the discussion of forward-looking statements in our press release and consider it incorporated by reference in this call. Additionally, comments may also include non-GAAP financial measures. Those measures are reconciled to the comparable GAAP measures, which are included in the press release and slides. Now let me turn the call over to Gerben.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Great. Thanks, Dan, good morning, everyone, and thank you for joining us to discuss Hubbell's first quarter 2026 results. Hubbell delivered strong financial performance to begin the year, with double-digit growth in sales, adjusted operating profit, and adjusted earnings per share. Organic growth of 8% in the first quarter was driven by double-digit organic growth in our Electrical Solutions segment, as well as our grid infrastructure businesses within the Utility Solutions segment. Our core Utility T&D markets remain strong, with highly visible load growth driving continued strong demand in transmission and substation markets and aging infrastructure resiliency investments driving strong demand in distribution markets. Electrical Solutions growth continues to be driven by strength in data center and light industrial markets, enabled by our leading brands and continued success in our strategy to compete collectively in high-growth verticals.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

We are raising our full year 2026 outlook for total sales growth, organic sales growth, and adjusted earnings per share this morning, as we are confident Hubbell's strong position in attractive end markets and continued execution of our long-term strategy will enable us to execute through a dynamic operating environment. Before I turn the call over to Joe to walk you through our financial performance in more detail, I would like to highlight an emerging growth opportunity for Hubbell in high voltage transmission, a long-term mega trend that sits squarely in our core, and we are demonstrating early success in a multi-year investment cycle. As background, 765 kV transmission represents one of the most efficient methods to move large amounts of power over long distances in order to accommodate accelerating electricity demand from electrification and load growth.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Operating transmission lines at higher voltages enables utilities to deliver more power per line with lower losses and fewer space requirements. For Hubbell, high voltage transmission represents a significant multi-year opportunity, which is largely incremental to existing strength in traditional 345 kV transmission markets. Our leading position and strong customer relationships position us well to capture this opportunity, and we are demonstrating early success with several key project wins supporting this initial phase of high voltage transmission buildup. Additionally, our portfolio depth and breadth positions us as a preferred partner who customers can trust to provide a full package of critical components. This solutions offering enables high service levels and reliability while driving installation efficiency and ease of doing business for our customers.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

We are actively investing to support future growth in this market, including development and testing of new product offerings in collaboration with major customers, as well as in capacity expansion investments. Overall, we believe 765 kV transmission represents an addressable market opportunity of approximately $1.5 billion over the next 10 years, and we believe we are well-positioned to serve this attractive long-term investment cycle. With that, let me turn the call over to Joe to provide more details on our financial results.

[Joe Capozzoli, CFO at Hubbell]

Thank you, Gerben, good morning, everybody. I am starting my comments on slide five. Hubbell's first quarter financial performance was strong, with double-digit growth across sales, adjusted operating profit, and adjusted earnings per diluted share. Net sales of $1.517 billion in the first quarter of 2026 increased by 11% compared to the prior year, driven by 8% organic growth and acquisitions contributing 3%. Consistent with our fourth quarter 2025 performance, both Electrical Solutions segment and grid infrastructure products within our Utility Solutions segment delivered double-digit organic growth in the first quarter, partially offset by anticipated softness in grid automation. Acquisitions contributed three points to growth in the first quarter, with DMC Power off to a strong start and integrating nicely within our T&D business.

[Joe Capozzoli, CFO at Hubbell]

From an operational standpoint, Hubbell generated $301 million of adjusted operating profit in the first quarter, representing 18% growth versus the prior year, with adjusted operating margins expanding 110 basis points year-over-year. This improvement in adjusted operating profit and adjusted operating margin was primarily driven by strong volume growth in high-margin businesses. While cost inflation accelerated against 2025 exit rates, as anticipated, our pricing and productivity actions continued to keep pace, more than offsetting those higher levels of inflation on a dollar-for-dollar basis in the first quarter. We also accelerated our investment levels in the first quarter, as previously communicated, most notably to expand capacity in high-growth areas and generate future productivity.

[Joe Capozzoli, CFO at Hubbell]

As anticipated, we invested $7 million in our restructuring and related program to further streamline our operational footprint, primarily within our Electrical Solutions segment, which as a reminder, R&R is included in our adjusted results. Adjusted earnings per diluted share were $3.93 in the first quarter, representing a 16% increase versus the prior year, driven primarily by adjusted operating profit growth. Below the line, higher interest expense associated with borrowings from the DMC acquisition and a slightly higher year-over-year tax rate were partially offset with lower share count as a result of prior repurchase activity. Additionally, we repurchased $168 million worth of shares in the first quarter at a dollar cost average below $500 per share.

[Joe Capozzoli, CFO at Hubbell]

We expect the net impact of these repurchases to be neutral to 2026 earnings, as a lower share count will be offset by higher interest. The repurchases of shares at attractive valuations is expected to provide us with earnings accretion in 2027. Our balance sheet remains strong and is poised to invest on behalf of our shareholders. Our primary focus remains on internal reinvestments and acquiring differentiated businesses to bolt on to attractive areas of our portfolio. The pipeline of opportunities remains healthy and active, and we continue to remain disciplined in our approach. Share repurchases represents an additional lever that we can and will utilize to return cash to shareholders over time. Turning to page six to review our performance by segment. Utility Solutions delivered another strong quarter with double-digit growth in sales and adjusted operating profit.

[Joe Capozzoli, CFO at Hubbell]

First quarter performance overall reflected a continuation of the momentum we realized exiting 2025, with overall drivers very similar across end markets. Utility Solutions generated net sales in the first quarter of $949 million, which represented growth of 11% versus the prior year and includes organic growth of 7% and acquisitions contributing 3%. Organic growth of 7% in the first quarter was driven by 12% organic growth in our larger, higher margin grid infrastructure business, where demand strength was broad-based across T&D end markets. Utilities are investing at heavy rates and demand for Hubbell solutions to serve the expanding critical infrastructure needs of our customers is driving continued momentum in orders and providing visibility to further strength over the balance of 2026.

[Joe Capozzoli, CFO at Hubbell]

As we will highlight in a few minutes, we now anticipate our Utility Solutions segment to deliver high single-digit organic growth on a full year basis. Outside of our core T&D markets, telecom and gas distribution grew attractively in the first quarter, while meters and AMI markets remained weak as anticipated. While grid automation organic sales declined 7% year-over-year in the first quarter, sales increased slightly on a sequential basis. We remain confident that Meter and AMI markets have stabilized, and we anticipate easing comparisons and continued strength in protection and controls products will enable grid automation organic sales to return to slight year-over-year growth in the second quarter.

[Joe Capozzoli, CFO at Hubbell]

Operationally, HUS delivered $207 million of adjusted operating profit in the first quarter, representing 21% growth in adjusted operating profit versus the prior year, with adjusted operating margins expanding 190 basis points year-over-year. Operating profit growth was primarily driven by strong volumes in high-margin grid infrastructure products, favorable price cost productivity and acquisitions, which were partially offset by grid automation volumes decline. Moving to page seven. Electrical Solutions results were also strong in the quarter, with double-digit growth in net sales and adjusted operating profit. For the first quarter, Electrical Solutions generated sales of $568 million, which represented growth of 12% versus the prior year. Organic growth of 11% was again driven by strength in data center and light industrial markets, as well as solid non-residential growth, partially offset by softer heavy industrial markets.

[Joe Capozzoli, CFO at Hubbell]

The Electrical Solutions segment achieved approximately 40% growth in data center markets in the first quarter. Driven by strength in both balance of system component demand, as well as sales of our modular power distribution skids. Data center order activity remained robust in the first quarter as build-out activity continues to accelerate across hyperscaler and colocation customers, providing enhanced visibility for us to increase our full-year outlook in data center markets to more than 25%. Broader light industrial markets remain healthy as solid U.S. manufacturing activity generated demand for electrical components. Our strategy to compete collectively in vertical markets continues to drive out growth. Operationally, HES delivered $93 million of adjusted operating profit in the first quarter, representing 10% growth in adjusted operating profit versus the prior year, reflecting strong volume growth.

[Joe Capozzoli, CFO at Hubbell]

Adjusted operating margins of 16.4% were down 30 basis points versus the prior year, as benefits from volume growth and the associated operating leverage were offset by higher investments in restructuring and growth initiatives. As you'll see in our press release financials, within the Hubbell Electrical Solutions segment, we invested $6 million in restructuring initiatives in the first quarter of 2026 versus only $2 million in the prior year, which impacted year-over-year margins by approximately 80 basis points as we execute on footprint optimization projects, which we are confident will continue to drive long-term productivity and margin expansion. Price realization remained strong, which combined with productivity more than offset cost inflation on a dollar-for-dollar basis in the first quarter. Turning to page eight to discuss our full-year outlook.

[Joe Capozzoli, CFO at Hubbell]

We are raising our full-year sales growth outlook to 8%-11% and our organic sales growth outlook to 6%-9%. This represents an increase of one point to the lower end and two points to the higher end of our prior full-year outlook, and is driven by both incremental price realization to offset increased inflation relative to our initial outlook, as well as enhanced visibility to continued demand strength in our T&D and data center end markets. Operationally, we anticipate double-digit growth in adjusted operating profit at the midpoint of our guidance range for 2026, driven primarily by strong sales growth in high-margin areas of our portfolio. We remain confident in managing price cost productivity to neutral or better on a dollar-for-dollar basis over the full year.

[Joe Capozzoli, CFO at Hubbell]

The math on higher inflation, as well as planned investments to support accelerated growth initiatives, results in a slightly more modest outlook for the full-year margin expansion versus our initial outlook. Below the line, we anticipate that lower share count of 53.1 million shares on a full-year basis will be fully offset by higher net interest, while our assumptions for the other expense and tax rate remain unchanged. Overall, we continue to anticipate at least 90% free cash flow conversion on adjusted net income in 2026, and we are raising our full-year adjusted earnings per diluted share outlook to $19.30-$19.85 per share. Now let me turn the call back over to Gerben to give you some more color on our confidence to deliver on this increased full-year outlook as we continue to navigate a dynamic macroeconomic and geopolitical environment.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Okay. Thanks, Joe. Turning to page nine and concluding our prepared remarks. While the current operating environment poses macroeconomic and geopolitical uncertainty, as well as dynamic inflationary and supply chain conditions, we are confident in our ability to deliver on an increased organic growth outlook while continuing to manage price and productivity in 2026 and beyond. From an end market standpoint, our largest and most profitable businesses are exposed to end markets such as utility T&D and data center CapEx, where secular growth is being driven by long-term investment cycles. Our recent order patterns and key project wins, along with customer conversations around long-term investment planning, are providing us enhanced visibility to continued strength in these end markets.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

From a price cost standpoint, while inflation has increased relative to our initial full-year outlook, we have implemented additional price and productivity actions, which we are confident will offset. We anticipate that recent updates to various tariff frameworks are largely neutral to existing tariff cost structure. Overall, we have demonstrated our ability to manage through an inflationary environment successfully over the last several years. We are confident in our ability to continue to do so in 2026 and beyond. While we are closely monitoring macroeconomic and geopolitical conditions, our short cycle demand is holding up solidly. Price and productivity actions are being realized.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Hubbell's portfolio is well-positioned with more than 90% sales exposure to the U.S. and over two-thirds of our portfolio exposed to secular growth markets in data center and utility, which we anticipate will continue to perform well through a broad range of economic environments. In short, we are confident that Hubbell's leading position in attractive end markets, as well as continued execution on our long-term strategy, will enable us to deliver attractive financial performance over both the near term and long term. With that, let's turn the call over to Q&A. Operator?

[Operator]

Thank you, sir. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. We ask that you please limit yourself to one question and one follow-up. One moment for our first question. It comes from Jeffrey Sprague with Vertical Research. Please proceed.

[Jeffrey Sprague, Analyst at Vertical Research]

Hey, thank you. Good morning, everyone. I was wondering if you could provide a little more color on the high voltage transmission outlook, just the level of project rollout there, how you see that pacing, and you gave a little bit of color there, obviously. Is that $1.5 billion CapEx all incremental relative to your prior view on the market? Maybe we could start there.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah. Maybe I'll start overall, Jeff, with transmission. Substation, I'd probably categorize in that same area, is that's continuing to do really well for us. You know, we're, you know, communicated high single digits growth there, and certainly I would say we're off to a very good start against that background. Particularly, the comments around 765 kV, it's the ability for utilities to bring more bulk power into areas where they're needed. It's a very efficient way to do that. We have some lines in the U.S. that were built, I think over 20 years ago, that were 765 kV. There just wasn't a need for it.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

I think that's becoming very clear right now, that the ability to drive more bulk power is actually a very efficient way to do so. We are very well-positioned. You know, we have products today that can serve it already. We've won a couple of orders already in this. We're continuing to develop products, and these are, you know, just taking it to the next higher voltages. You know, we're able to do that with our capabilities, certainly with our labs. I'd say very well-positioned. We look at this truthfully as incremental, Jeff. We see this as upside to what's already needed. You know, anytime you have a 765 kV, you need off-ramps for that, right, where you take the power down.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Think highways and, you know, offshoots of that, off-ramps with substations, and then you step the voltages down. We think it's an upside for us, and we think it can drive a point of growth above what we're currently projecting with transmission already.

[Jeffrey Sprague, Analyst at Vertical Research]

It sounds like you don't see this squeezing out spending elsewhere. There's obviously been a little bit of concern that all the generation spending may eat into T&D spending. Are you calling the kind of the core distribution side of the business also growing at a stable rate?

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah, you need it both, Jeff. That's why we don't see it crowding out. Certainly, we're not seeing that in the projects that are ahead of us, at the orders that we're winning. I mean, it's a logical question certainly to ask is that, you know, how far can budgets flex up? You see too that utilities are continually increasing their CapEx budgets, and I think that's a reflection of acknowledging and realizing that you really need to spend it on all these areas to get the outcome you need.

[Jeffrey Sprague, Analyst at Vertical Research]

Okay, great. Thank you. I'll leave it there.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Thanks, Jeff.

[Operator]

Thank you. Our next question comes from Julian Mitchell with Barclays. Please proceed.

[Julian Mitchell, Analyst at Barclays]

Yes. Hi. Maybe just a question, please, around how we should think about operating margins through the balance of the year and the operating leverage kind of cadence, if that's changed at all versus prior thinking, please.

[Joe Capozzoli, CFO at Hubbell]

Yeah. Good morning, Julian. Yeah, as far as the operating margin goes for the year, you know, we're really looking at the full year with a 20 basis point margin expansion. That's gonna lean a little heavier towards utility with more expansion and about flattish on electrical. As the year progresses, I think we see the utility side of margin expansion being pretty consistent. Certainly on the electrical side, we see a little bit of headwind just on the year-over-year comp from last year's second quarter in electrical and the back half probably flattish. That's kinda how we're thinking about margin for this year.

[Joe Capozzoli, CFO at Hubbell]

Keep in mind, there's a lot of inflation that's come on, and as we cover that inflation with price and productivity, that is certainly margin dilutive. In our 20 basis point of margin expansion at the midpoint of the guide, there's about one point of dilution just from that price cost math.

[Julian Mitchell, Analyst at Barclays]

That's helpful. Thank you. Then maybe just my follow-up on the thoughts on sort of first half and sort of second quarter. Maybe I missed it, but did you clarify the sort of share of earnings in the first half? Is it still mid-high 40s, and so we're looking at kind of a $5.20-ish EPS for Q2? Any pointers on second quarter or halves, phasing, please? Thank you.

[Joe Capozzoli, CFO at Hubbell]

Yeah. Second quarter, we would think about normal seasonal setup for this year, and let's think about that on the sequential. Typically, you know, with our strong orders coming through first quarter. What we would anticipate a second quarter step up like we would normally see high single digits organic growth. Add to that, we're looking at price cost productivity at about neutral on the dollars. That's really the constructive way to think about 2Q.

[Julian Mitchell, Analyst at Barclays]

That's great. Thank you.

[Operator]

Thank you. Our next question is from Tommy Moll with Stephens. Please proceed.

[Tommy Moll, Analyst at Stephens]

Good morning, and thanks for taking my questions.

[Joe Capozzoli, CFO at Hubbell]

Hi, Tommy.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Hey, Tommy.

[Tommy Moll, Analyst at Stephens]

Sounds like versus last quarter, we're expecting more pricing for the year, perhaps also better volumes than originally expected. I was hoping you could unpack that 6%-9% organic for us. How much of that is price versus volume, and how do those compare to what you provided last quarter? Thank you.

[Joe Capozzoli, CFO at Hubbell]

Coming into the year, we were anticipating about two points of price, and the majority of that was coming from wraparound from actions that we had implemented last year. As we saw some of that inflation, mostly on the metals side, copper, aluminum, steel in the first quarter, we went out with price actions in the second quarter, and that added about a point to our full year price outlook. Our full year 6%-9% organic has about three points price, but with the rest being volume. If you think, Tommy, about the way that that price rolled on last year, the year-over-years are gonna start to wrap here 2Q, 3Q. We would anticipate that our contribution from price fades as the year progresses, and our contribution from volume growth kind of increases as we step through the year sequentially.

[Tommy Moll, Analyst at Stephens]

Thank you. That's very helpful. I wanted to follow up on DMC. What update can you provide for us there? In particular, are there any elements that you're seeing unfold better versus worse than the original plan? Thank you.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah. I would say, Tommy, DMC, as we stated, I think in our last calls, to a really good start. I mean, this is squarely in the area of where the highest investment is going on in the utility, which is transmission, and particularly this is a substation application. I would say so far it's meeting and even exceeding a little bit our expectations. It's also an area where we're really focused in adding capacity. I think our ability to get more out of that factory this year and next year is perhaps more a function of our ability to get capacity in place because orders are really supporting. We're very pleased with it.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

You know, as we are with System-Control was another acquisition we did last year, also in this space and with very similar dynamics of good demand and need to add capacity. We're very pleased with them.

[Tommy Moll, Analyst at Stephens]

Thank you, Gerben. I'll turn it back.

[Operator]

Thank you. Our next question comes from Nigel Coe with Wolfe Research. Please proceed.

[Nigel Coe, Analyst at Wolfe Research]

Thanks. Good morning. I just wanna go back to the margins. Hi, good morning. How are the Section 232 tariffs sort of changing the landscape, you know, and maybe talk about, you know, both businesses. I believe that you were utilizing U.S. Steel down in Mexico. Just so any more color there would be helpful and any thoughts on how to think about margins by segment as well.

[Joe Capozzoli, CFO at Hubbell]

Sure. Starting with the tariff, I'd probably start just answering it maybe more broadly with the events of tariff changes in the first quarter, of which, yes, Section 232 was a piece of what changed. We also saw the repeal of IEEPA. We saw Section 122 come online, and we saw some of those changes in Section 232. The sum of all of that is about neutral to us for the year. That impact was not significant. We were paying Section 232, you know, going back to Liberation Day. Section 232 with that with product lines that would have had U.S. melted steel, the changes there were entirely offset by some other impacts on some other product lines. Overall, not significant.

[Joe Capozzoli, CFO at Hubbell]

On the, your question about margins, you know, quarter-to-quarter, we have that 20 basis points of expansion embedded in the guide at the midpoint for the full year. The, the margin expansion is gonna lean more heavy towards utility, and that utility is looking at margin expansion pretty ratably across each of the four quarters. Electrical is a little bit of headwind on the margin in the first half of the year, and that normalizes in the second half of the year to get to about flattish on the full year margin for electrical.

[Nigel Coe, Analyst at Wolfe Research]

Oh, that's-

[Joe Capozzoli, CFO at Hubbell]

That's how we see that.

[Nigel Coe, Analyst at Wolfe Research]

Yeah. That's great, Joe. Thanks. Thank you. Just a quick follow-on, maybe on the back of Jeff's question on transmission. Obviously very healthy growth, very sort of vibrant end market. Some of the big players in that space, you know, GE and others of the world are growing strong double digits in transmission, grid transmission. I'm just wondering, do you see scope for that to, you know, for your business to get up to those kinds of levels? Is the scope of your content increasing with time?

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah, I would say maybe on the first one, on the scope, you know, we continue to develop products. We continue to do acquisitions and the, you know, both the DMC and Systems Control are two examples where scope is increasing if you, if you have additional product lines. Also, as you look at where the voltages go, you know, when we talk about 765 kV, our content on that per mile would also go up slightly from the lower voltages. I think in net, both on what we're adding to the portfolio and kind of where the investment's going in, it does increase our content a little bit. You know, certainly what we're seeing is double-digit growth. Our scope is broad.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

You know, we serve the majority of, right? If you think about a transmission line, you know, 85%-90% of material that goes up on that, we source that. I would say we're gonna get our fair share of that growth. Specifically how maybe generator asset short term, it's maybe a little harder for me to comment on that dynamic. I would certainly say we will participate and get our fair share of the build-out.

[Nigel Coe, Analyst at Wolfe Research]

Okay, thanks, Gerben. That's great.

[Operator]

Thank you. Our next question comes from Joe O'Dea with Wells Fargo. Please proceed.

[Joe O'Dea, Analyst at Wells Fargo]

Hi, good morning. Just wanted to touch on grid infrastructure growth expectations throughout the year. Is it reasonable to see something like low double-digit organic through the first few quarters of the year? I think, you know, the comp gets a little bit tougher as you get into the end of the year, so maybe that's more, you know, mid-single, high single digit. Along with that, just any color on electrical distribution. You know, understandably the transmission and substation sort of driving strength, but just what you're seeing on the distribution side.

[Joe Capozzoli, CFO at Hubbell]

Yeah, good morning, Joe. I'll take the first part of that question on the utility organic. You are thinking about it the right way in terms of mid to high single digit organic growth as the year progresses. That we're anticipating is gonna be pretty consistent, you know, 1Q, 2Q, 3Q, 4Q, so.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah, maybe on the distribution side of it. You know, we've been talking for this for quite some time now, is what's driving the need to invest there. A lot of it is driven by, you know, just upgrading and resiliency of the grid. We dealt last year and the last couple of years really with that destock, where we talked about that underlying demand was still solid, but we, you know, we're dealing with something very specific. I think that's proving out now with the destocking behind us, that we're actually seeing the underlying demand and, you know, the drivers of it are really, you know, continued hardening.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

I, you know, I think it is slightly lower than the transmission and substation for the reasons that we talked of, you know, getting that power that's so needed in data centers and other areas. We're very optimistic. There too, you know, if we think about the start to the year, it's not just off to a good start in transmission and substation, but distribution as well.

[Joe O'Dea, Analyst at Wells Fargo]

Then just on the timing of pricing and the impact on demand, I think that the price announcements in the quarter, were those in place middle of the quarter, beginning of the second quarter? Really just around any influence on demand pull forward. It sounds like, you know, no incremental pricing required to tariffs. I think over the course of kind of what we're hearing through reporting season right now, you know, there's some debate on what kind of pull forward dynamics there were, but, you know, broadly across industrials. But the degree to which you saw any of that in the quarter, it doesn't sound like much sort of carryover impact anticipated throughout the year.

[Joe Capozzoli, CFO at Hubbell]

Price increases went in for us in the beginning of the second quarter. That typically takes, you know, 30-60 days to kind of work its way through the backlog and to kind of get to a point of fully realizing that the run rate of that new price. That all sets in in the course of second quarter. We did not see any significant impacts or unusual behavior with pull forward on demand. That order momentum that we've kind of seen continue going back to the fourth quarter throughout the first quarter and into the second quarter here, nothing unusual in terms of how that sets up around our the price increases that we have implemented. Price increases so far have been sticking.

[Joe Capozzoli, CFO at Hubbell]

Conversations with customers have been very constructive. The basis for our price increase has been around metals, and that metals inflation has been very visible and very well, well accepted in the channel, so.

[Joe O'Dea, Analyst at Wells Fargo]

That's helpful. Thank you.

[Operator]

Thank you. Our next question is from Chris Snyder with Morgan Stanley. Please proceed.

[Chris Snyder, Analyst at Morgan Stanley]

Thank you. I wanted to ask about data center. You know, obviously came through a really good 40% in Q1. And you guys did raise the full year data center guide, now I think over 25%, previously up 15%. I guess my question is. Is this new 25%+, is that, you know, basically all of your available capacity? Or if demand strength is sustained, you know, is there opportunity to ship more this year? Thank you.

[Joe Capozzoli, CFO at Hubbell]

Yeah, we spend a lot of time and, good morning, Chris, on that topic with all the activity and the significant demand that's out there in data center. You'd recall that we've got roughly half of our data center exposure is in our long cycle power distribution modular skid business, for which we've got good visibility to demand. Orders are booked out through the year, and there's little incremental capacity, and that feels pretty well situated, and that was well situated in our original guide. No real change on how we're thinking about the long cycle piece. On the short cycle book and bill side, we do continue to see strong order demands coming through. We continue to add capacity in that space.

[Joe Capozzoli, CFO at Hubbell]

You know, every quarter, we're adding more and more capacity, and we continue to add inventory to every extent possible so that we've got stock on the shelf for that, you know, that short cycle book and bill side of products that are needed for data center. We think we've got a little more capacity, and again, we continue to invest in that productive capacity coming online, and we'll continue to do that as the year unfolds, so as to increase our capacity and serve that growing demand.

[Chris Snyder, Analyst at Morgan Stanley]

Thank you. I appreciate that. I wanted to follow up on price cost. It seems like a year ago, you guys led on price cost, and then over time into Q1, the cost inflation caught up, and that was kind of maybe netting you closer to neutral. I mean, I guess, let me know if that's wrong. I guess the question is, should we expect the same thing into this next round of price increases? Like you guys will lead a little bit off the bat because you're now FIFO, and then it catches up a little bit, in maybe, you know, two, three quarters out? Thank you.

[Joe Capozzoli, CFO at Hubbell]

You're, you're definitely right in your first comment in terms of how last year played out. We were ahead of price versus cost, dating back to Liberation Day tariffs and that benefit of being ahead kind of situated in the second quarter of last year, and we continued to run positive on PCP in each of the quarters of, you know, 2Q, 3Q, 4Q last year. We were positive PCP on a dollar basis to start this year, and we're anticipating to manage that equation on a dollar neutral or better basis. That does have an impact on margins as you know that math well. Do we think we can continue to hold the line on margin neutral on price cost?

[Joe Capozzoli, CFO at Hubbell]

No, I think that was a little beneficial to us last year, but we're very focused on managing to positive or better and driving that double-digit operating profit growth for this year.

[Chris Snyder, Analyst at Morgan Stanley]

Thank you.

[Operator]

Thank you. Our next question is from the line of Chad Dillard with Bernstein. Please proceed.

[Chad Dillard, Analyst at Bernstein]

Hey, good morning, guys.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Morning.

[Chad Dillard, Analyst at Bernstein]

-for you is on Aclara. Can you talk about the sales in the quarter and how that's trended sequentially? Then just more broadly, how that business is positioned for AMI 2.0, and how should I think about when that cycle kicks off?

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah. Maybe I'll start. As you know, Aclara is part of the grid automation business and, you know, that business, you know, continues to inflect up. You know, we're down. The decline started to shrink and, you know, while we still are a little bit down year-over-year in the first quarter, you know, as we communicated, we expect that to start turning to growth. If you then peel that apart, and specifically to your question of Aclara versus the rest, clearly Aclara had been declining higher while the other part of the business was growing.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

I think, you know, what you, what you have seen is that the Aclara decline is just starting to, you know, get smaller and smaller and, you know, we still in the first quarter saw a decline in that business. You know, as you, as you look ahead, that is an area that's been more challenged, you know, as utility, and it maybe goes back a little bit to Jeff's very first question of how are utility managing budgets. You know, our view and certainly indications with conversation is that they are deselecting this a little bit over the other areas of investments while we've seen, you know, lesser projects come through. The challenge for utility is gonna be this equipment is gonna fail at some point, right?

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

The lifespan of this is not, you know, in the range of what our components, our typical components are. You know, what we're seeing is more projects discussions right now. We're quoting more projects. You know, we recently, you know, won a pretty nice piece of business that's multi-year. You know, I think from where we sit today, where this business declined, you know, we should expect going forward to start seeing, you know, this business realizing modest growth. But, you know, we feel it's been it's stabilized, and maybe that's another, you know, really important that we've seen the bottom. We're now starting to come up. We're not super expecting, you know, great growth rates, but, you know, the dynamics are such that this business should grow from here.

[Chad Dillard, Analyst at Bernstein]

Great. That's helpful. Moving over to grid infrastructure. I know in the past you guys have talked about your order rates within distribution. I was hoping you'd give an update on how those trended for the quarter, and then can you maybe break down, you know, how much of the demand that you're seeing is restock in the channel versus just like pure sell-through into the end market?

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah. Maybe start with the second one. That our view is that the demand is what's going up on infrastructure and not going to stock. You know, we talked we're off to a good start on revenue, and that's of course driven by order rates. That's on both the electrical and utility side. But particularly to T&D, also up, you know, nicely in the quarter. For us, I mean, we generally don't talk about book and bill a lot because it's about order rates because we're a more short cycle business. You know, our orders were up, you know, over one.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

That's not atypical in the first quarter where, you know, people are starting to get their orders in to get ready for construction season, and that's typically a little bit over one, where we're up stronger over that. We're, you know, closer to 1.2 to start off the quarter. I'd say that's both a mix of short cycle or book and bill that was, you know, solid, as well as projects. We talked a little bit earlier about some of these projects. We feel really good about the start to the year, and it's what's driven us to raise our organic guidance. I've realized there's a piece of that that's price, but there's a piece of that that's volume as well.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

We feel really good about how we started the year and, you know, as a matter of fact, we see a continuation certainly of this. Nothing unusual in it.

[Chad Dillard, Analyst at Bernstein]

Great. Thank you.

[Operator]

Thank you. Our next question comes from the line of Scott Graham with Seaport Research Partners. Please proceed.

[Scott Graham, Analyst at Seaport Research Partners]

Yeah. Hi, good morning. Thank you for taking my question. I was just wondering, you've got a global manufacturing footprint, global company. You know, with inflation higher, with some of this geopolitical uncertainties, how is your supply chain behaving? Are you getting what you need? Are you getting any pushback in any corners? I think I heard Joe say, no, not yet on pricing, but we are starting to hear, you know, enough is enough. Some corners are pushing back on pricing in different markets. How is your supply chain behaving overall? Then I'm hoping the follow-up would be, how is your acquisition pipeline? Is there anything? It looks like your pretty balance sheet is very lean right now, and was just wondering what the outlook was for 2026. Anything you can say. Thanks.

[Joe Capozzoli, CFO at Hubbell]

Good morning, Scott. Maybe I'll take the first one and I'll hand it to Gerben for the second. On the supply chain front, we're not seeing any significant impacts or constraints on the supply chain side. I'd say what would be more noteworthy is over the course of the last couple of months with some of the disruption over in the Middle East, we did have a little bit of aluminum that we were purchasing out of that region, would be a noteworthy area. We do have other qualified sources of supply around the globe. We were able to move that to other suppliers and we weren't, at the end of the day, impacted by that. It was something we had to address.

[Joe Capozzoli, CFO at Hubbell]

We're not seeing constraints in other areas yet, chips or metals or component parts of any substance. I would say the supply chain, as we see it right now, is holding up well and supporting what we need to do to service our customer demand.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Let me take the second one on M&A. You're right to point out that our balance sheet certainly supports, you know, doing acquisitions at larger scale than perhaps we were able to afford in the past. If we look at the, maybe even before we look at the pipeline, we are focused clearly around the core areas of our business.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

If you think, you know, anything in T&D, if you think about things around the data center, if you think, you know, lines around the our light industrial markets, those are all areas that we find very attractive. There's still, based on our pipeline of deals that we're looking at, plenty of opportunity to deploy our capital there. Of course, timing isn't always very predictable. You know, you've also seen, and Joe highlighted what we did in share buyback during the first quarter, that in periods where, you know, perhaps there is a little bit of a void in acquisition, we think, you know, utilizing our balance sheet to do buybacks is an other attractive area, to deploy our capital.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Of course, you know, our preference, highest preference goes to CapEx. we're, you know, certainly have increased that. You know, based on some of my comments of areas where we're investing, you should expect to continue to see that elevated. The second one being M&A, I'd say there's a good pipeline there, both You know, what we'd call maybe the bolt-ons, even though they are getting larger, as well as larger deal. Then, you know, we have buyback as an option. You know, we see within those areas that we could fully deploy our balance sheet.

[Scott Graham, Analyst at Seaport Research Partners]

Thanks a lot.

[Operator]

Thank you. Our last question comes from the line of Neil Konigsberg with UBS. Please proceed.

[Neil Konigsberg, Analyst at UBS]

Thank you. I wanted to come back to the high voltage opportunity through 2035. Apologies if I missed this, but is the $1.5 billion opportunity relative to Hubbell's $400 million or $500 million transmission business today? I just wanna get a sense of how to think about the growth opportunity.

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

Yeah. If you think about that math a little bit, I'll help you. It represents about 7,000 miles of high voltage transmissions, how we get to the $1.5 billion with our content. That's over 10 years, and, you know, who knows if that's longer or shorter. If you use that as a basis, and then, you know, we're not the only participant in that, so, you know, we, you know, certainly have, you know, a very good position in that market with our customer. If you add all those things up, we believe it can drive a point of growth above the, you know, high single digits that we provided for transmission and substations in the absence of it.

[Neil Konigsberg, Analyst at UBS]

That's helpful. The RTO/ISO recommendation for 7,000 miles, I mean, I think there are a few hundred thousand miles of high voltage transmission in the U.S. overall. I mean, could that be more market opportunity if there's increasing, you know, content of 765 kV in the U.S. like on top of that $1.5 billion, or is it sort of too early to say?

[Gerben Bakker, Chairman, President, and CEO at Hubbell]

I think the $1.5 billion was related to high voltage transmission overall, Neil. Obviously, there's a baseline market of transmission that's also growing strongly, as we've said. Not sure what the question was driving at, but.

[Neil Konigsberg, Analyst at UBS]

No, no. No, that's clear. That's clear. Thank you.

[Operator]

Thank you. Ladies and gentlemen, this concludes our Q&A session. I will turn the call back to Dan Innamorato for closing remarks.

[Dan Innamorato, Senior Director of Investor Relations at Hubbell]

Great. Thanks, operator. Thank you everyone for joining us. We'll be around all day for follow-ups. Thank you.

[Operator]

Thank you. This will conclude our conference. Thank you for participating, and you may now disconnect.

Participants

Executives

• Dan Innamorato, Senior Director of Investor Relations
• Joe Capozzoli, CFO

Analysts

• Chad Dillard, Analyst at Bernstein
• Chris Snyder, Analyst at Morgan Stanley
• Gerben Bakker, Chairman, President, and CEO at Hubbell
• Jeffrey Sprague, Analyst at Vertical Research
• Joe O'Dea, Analyst at Wells Fargo
• Julian Mitchell, Analyst at Barclays
• Neil Konigsberg, Analyst at UBS
• Nigel Coe, Analyst at Wolfe Research
• Scott Graham, Analyst at Seaport Research Partners
• Tommy Moll, Analyst at Stephens