Belden Inc. Q3 FY2025 earnings call

• Delivered record results with revenue at $698M, up 7% Y/Y, and adjusted earnings per share at $1.97, surpassing guidance. • Automation Solutions segment had 10% organic revenue growth, driven by discrete manufacturing. • Secured a $14 million multiyear solutions award with a utility provider to modernize communications infrastructure using XTran platform. • Collaborated with Accenture and NVIDIA on Physical AI, with a pilot program for virtual safety fence in manufacturing deployed commercially. • Trailing 12-month free cash flow was $214 million, and $150 million spent on share repurchases year-to-date.

For the third quarter, revenue was $698 million, up 7% year-over-year. Organic revenue grew 4% overall. The Automation Solutions segment had organic revenue growth of 10%, while Smart Infrastructure Solutions had organic revenue down 1%. Adjusted earnings per share were $1.97. Revenue contribution: Automation Solutions contributed with 10% organic growth, Smart Infrastructure Solutions had a 1% organic revenue decline.

• Fourth quarter revenue expected between $690 million and $700 million, a 4% to 5% increase over prior year quarter. • Adjusted EPS expected between $1.90 and $2, a 1% decrease to 4% increase over prior year quarter. • Projected tax rate for fourth quarter is 14%.

• Headwinds from tariff and copper pass-throughs impacted margins, though margins still performed well. • Uncertainties in the financial market environment and potential fluctuations in net leverage as pursuing strategic opportunities.

Q: How does Belden attack the utility market and penetrate it?

A: Focus on power transmission and distribution, targeting upgrade to packet-based IP-based networks. Differentiated by services and support, including deep network studies and consulting to provide tangible savings. Currently penetrating 7% to 10% of the market.

Q: Jeremy, can you be more specific about margin impacts from outside forces?

A: Copper prices impacted margins by about 50 basis points year-over-year via pass-through. Tariffs had a slightly lesser impact. Sequentially, copper and tariff pass-throughs were around 30-40 basis points, with some unfavorable mix due to industrial construction cable strength.

Q: Ashish, update on Physical AI and data center related opportunities?

A: Successful pilot of virtual safety fence with automotive customer using time-sensitive networking, Belden Horizon, and NVIDIA Omniverse. Data center practice growing double digits with converged IT/OT solutions, focusing on long-term application use rather than just capacity build.

Q: Mark, outlook for broadband segment and BEAD awards?

A: Broadband segment saw moderation in back half of 2025, but BEAD awards are helpful. Near term, broadband expected to be down sequentially, but optimistic about 2026 growth as MSOs continue upgrades.

Q: David, thoughts on reshoring trends and smart infrastructure 2026 outlook?

A: Reshoring trends are tangible, with automotive growth in Q3 due to this. Smart infrastructure buildings portion has strength in growth verticals like health care and data centers, with focus on KPI-focused networks, optimistic about 2026 with differentiated integrated offerings.

Q: Chris, R&D investment and go-to-market changes?

A: R&D investment focused on Belden Horizon orchestration platform and software capability. Go-to-market has consulting-driven front end, IT/OT converged approach, and solutions-oriented sales force, with consulting, solutions, and commercial sales teams orchestrated.