What Belden (BDC) Said on Its Q3 Earnings Call

Key Points

• Belden reported record Q3 results: Revenue rose 38% year over year to $966 million, while organic growth reached 11%, adjusted EPS increased 15% to $2.26, and orders surpassed $1 billion for the first time.
• AI data center prospects expanded significantly. A new $100 million 2027 fiber-solutions agreement increased Belden’s expected 2027 data center revenue to approximately $275 million, up from a previously projected $175 million.
• RUCKUS demand remains strong but supply constraints weighed on results. Component shortages reduced quarterly RUCKUS revenue by an estimated $10 million to $15 million, though Belden characterized the issue as temporary and forecast fourth-quarter revenue of $960 million to $980 million.

Belden NYSE: BDC reported record third-quarter 2026 revenue and orders, supported by double-digit organic growth in its Automation and Smart Buildings businesses and the July acquisition of RUCKUS Networks. The company also raised the scale of its expected AI data center business for 2027 after securing a new fiber-solutions agreement.

Revenue rose 38% year over year to a record $966 million, including 11% organic growth. Adjusted earnings per share increased 15% to $2.26, within the company’s prior outlook. Orders exceeded $1 billion for the first time in a quarter, rising 46% from a year earlier and 16% organically, with a book-to-bill ratio of 1.05.

“The third quarter was another record quarter for Belden, and we are well-positioned for what’s ahead,” President and CEO Ashish Chand said during the company’s earnings call.

AI Data Center Business Expands

Belden said it signed an agreement to supply $100 million of fiber solutions in 2027 through channel partner Wesco. The contract expands an earlier disclosed $20 million fiber-assembly order with a Tier 1 hyperscale customer.

Chand said the new agreement lifts Belden’s anticipated data center business to approximately $275 million in 2027, compared with the roughly $175 million annual run rate discussed in the second quarter. The company said the $100 million agreement was not included in third-quarter orders.

The data center opportunity includes both “white space” products, such as fiber assemblies inside data halls, and “gray space” network infrastructure across broader data center campuses. Chand said white-space activity represents roughly two-thirds of the company’s expected 2027 data center business, with gray-space offerings accounting for the remainder.

Belden also reported more than $5 million in follow-on gray-space orders from an existing hyperscale customer. It said industrial switch orders related to that award are running about 50% above its original estimate, while a new specification position for cord sets could support additional future orders. The company also won gray-space specification positions with customers in Europe and Asia-Pacific.

During the question-and-answer session, Chand said Belden had secured the raw materials and internal capacity needed to support the expected $275 million of 2027 data center revenue. He said the company has fiber-related capacity in Tucson, Arizona, as well as supporting capacity in Pune, India, and Mexico.

RUCKUS Demand Remains Strong Amid Supply Constraints

RUCKUS Networks, which Belden acquired July 1, generated $168 million in third-quarter revenue, down 6% from the prior-year period. While RUCKUS orders rose 10% and its book-to-bill ratio was 1.09, shipments were constrained by component availability and longer supplier lead times, the company said.

Chand said demand for Wi-Fi 7 products and multi-gigabit Power over Ethernet switches was strong, with demand for multi-gigabit switches up more than 50% this year. RUCKUS also won business supporting a U.S. federal customer and a major European rail operator during the quarter.

However, the company said component orders placed during the first half of the year did not fully anticipate the subsequent rise in demand for Wi-Fi 7 products. Chief Financial Officer Jeremy Parks clarified that the issue was not related to memory supply, but to chipsets and computing components used in switches supporting Wi-Fi 7 solutions.

Parks said the supply issue reduced quarterly RUCKUS revenue by approximately $10 million to $15 million, based on an analyst’s estimate that he characterized as broadly correct. Belden has responded by pursuing alternative supply sources, increasing buffer inventories, combining RUCKUS and Belden procurement efforts, and using product substitutions where possible.

“We view this as a near-term supply issue, not a change in the long-term outlook,” Chand said. Parks added that some product lines could recover more quickly than others over the next quarter or two.

Belden said RUCKUS produced adjusted EBITDA margins of about 20% during the quarter, in line with expectations despite the shipment constraints. The company has also started manufacturing certain RUCKUS Ethernet switches at its Pune facility and is pursuing joint commercial opportunities across industrial, warehouse automation, campus and data center markets.

Growth Across Automation and Smart Buildings

Automation, Belden’s largest market category, delivered double-digit organic revenue growth, with orders up about 30% year over year. The company cited demand in discrete manufacturing and energy. Smart Buildings also produced double-digit organic growth and approximately 30% order growth, aided by data center activity and solution wins.

Among the larger projects highlighted during the call were a $10 million high-speed rail corridor project in Asia-Pacific, a $9 million U.S. hospital project, and two Canadian greenfield hospital projects worth approximately $20 million combined. The company said the projects involve integrated packages of cable, connectivity, racks, cabinets and network infrastructure.

Broadband posted low-single-digit organic growth as customers continued investments in DOCSIS 4.0 and fiber expansions, Parks said.

Margins, Cash Flow and Outlook

Adjusted gross profit rose 50% to $401 million, while adjusted gross margin expanded 330 basis points to 41.5%, reflecting the addition of RUCKUS and its higher gross-margin profile. Adjusted EBITDA increased 44% to $171 million, and adjusted EBITDA margin rose 70 basis points to 17.7%.

Belden generated $82 million in third-quarter free cash flow, compared with $65 million a year earlier. Cash on hand was $381 million, and trailing 12-month free cash flow reached $229 million. Net leverage was 3.9 times at quarter-end. The company expects leverage to decline to about 3.6 times by year-end, at or below 2.9 times by the end of 2027, and to its long-term target of 1.5 times by the end of 2029.

For the fourth quarter, Belden forecast revenue of $960 million to $980 million, representing year-over-year growth of 33% to 36%. It expects GAAP earnings per share of $0.24 to $0.39 and adjusted earnings per share of $2.20 to $2.35, which would represent adjusted EPS growth of 6% to 13% from the prior-year quarter.

About Belden (NYSE:BDC)

Belden Inc NYSE: BDC is a global provider of signal transmission and networking solutions. The company designs and manufactures products that support the secure movement of data, audio and video across enterprise, industrial and broadcast environments.

Its product portfolio includes copper and fiber-optic cable, connectors, patching and rack systems, industrial Ethernet equipment, network infrastructure, cybersecurity and software-enabled solutions. Belden's offerings are used in applications such as industrial automation, transportation, energy, enterprise networking, data centers, smart buildings and professional broadcasting.

Founded in 1902, Belden serves customers through operations and distribution channels spanning North America, Europe, Asia and other international markets.

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