Hubbell Incorporated Q1 FY2026 earnings call

• Hubbell started the year with strong financial performance, 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 the electrical solution segment and grid infrastructure businesses within the utility solution segment. • Core utility T&D markets remained 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 continued to be driven by strength in data center and light industrial markets. • Hubble raised its full - year 2026 outlook for total sales growth, organic sales growth, and adjusted earnings per share. • High - voltage transmission represents an emerging growth opportunity for Hubble, with an addressable market opportunity of approximately $1.5 billion over the next 10 years. • In the first quarter, Hubble generated $301 million of adjusted operating profit, up 18% year - over - year, with adjusted operating margins expanding 110 basis points. Pricing and productivity actions offset cost inflation. Hubble also accelerated investment levels, including $7 million in restructuring and related programs. • Utility Solutions delivered strong performance in the quarter with double - digit growth in net sales and adjusted operating profit. Electrical solution results were also strong with double - digit growth in net sales and adjusted operating profit.

Hubbell delivered strong financial performance in the first quarter of 2026. Organic growth was 8%, driven by double-digit organic growth in the electrical solution segment and grid infrastructure businesses within the utility solution segment. Utility Solutions generated net sales of $949 million in the first quarter, up 11% year - over - year, with organic growth of 7% and adjusted operating profit of $207 million, up 21% year - over - year. Electrical Solutions generated sales of $568 million in the first quarter, up 12% year - over - year, with organic growth of 11% and adjusted operating profit of $93 million, up 10% year - over - year.

• Raised full - year sales growth outlook to 8% - 11% and organic sales growth outlook to 6% - 9%. • Anticipates double - digit growth in adjusted operating profit at the midpoint of the 2026 guidance range, primarily driven by strong sales growth and high - margin areas. • Expect to have at least 90% free cash flow conversion on adjusted net income in 2026. • Raised full - year adjusted earnings per diluted share outlook to $19.30 to $19.85 per share.

• Current operating environment poses macroeconomic and geopolitical uncertainty, as well as dynamic inflationary and supply chain conditions.

Q: Please provide a little more color on the high voltage transmission outlook.

A: Transmission and substation have been doing really well. We are very well positioned for high - voltage transmission. It's an upside for us and can drive a point of growth above what we're currently projecting with transmission already. Utilities are continually increasing their CapEx budgets.

Q: How should we think about operating margins through the balance of the year and the operating leverage kind of cadence?

A: For the full year, we're looking at a 20 basis point margin expansion. The utility side of margin expansion being pretty consistent and the electrical side having a little bit of headwind from the year - over - year comp from last year's second quarter in electrical and the back half probably flattish.

Q: How much of the 6% - 9% organic growth is price versus volume and how do those compare to what was provided last quarter?

A: Full - year 6% - 9% organic has about three points from price, but the rest being volume. The contribution from price fades as the year progresses and the contribution from volume growth increases sequentially.

Q: What update can you provide for DMC?

A: DMC is off to a really good start, squarely in the area of where the highest investment is going on in the utility, particularly substation application, and is meeting and even exceeding our expectations.

Q: How are the Section 232 tariffs changing the landscape?

A: The sum of all tariff changes in the first quarter is about neutral to us. The impact of 232 was entirely offset by some other impacts on some other product lines.

Q: Do you see scope for your business to get up to double - digit growth levels in transmission and is the scope of your content increasing with time?

A: We continue to develop products and do acquisitions. The scope of our content increases as we develop new products and as voltages go up. We serve a large share of the material in a transmission line and will participate and get our fair share of the build - out.

Q: Is it reasonable to see something like low double - digit organic through the first few quarters of the year for grid infrastructure growth expectations and what about the distribution side?

A: For utility organic, mid to high single - digit organic growth is anticipated to be pretty consistent throughout the year. On the distribution side, the need to invest is driven by upgrading and resiliency of the grid, and it's slightly lower than transmission and substation for the reasons mentioned. Price increases went in for us in the beginning of the second quarter and typically take 30 - 60 days to work its way through the backlog.

Q: Is the new 25% plus data center growth basically all of your available capacity or is there an opportunity to ship more this year?

A: Half of our data center exposure is in the long - cycle power distribution modular SCID business with good visibility to demand. On the short - cycle book and bill side, we continue to see strong order demands, add capacity, and invest to increase capacity to serve growing demand.

Q: Should we expect the same thing into this next round of price increases as last year?

A: We will manage to be positive or better on price cost, and we're focused on driving double - digit operating profit growth for this year.

Q: Can you talk about the sales and the quarter and how that's turned in sequentially for Clara and how that business is positioned for AMI 2.0?

A: Clara is part of the grid automation business which continues to inflect up. The decline started to shrink and we expect this business to start seeing modest growth as it has stabilized.

Q: How did the order rates within distribution trend for the quarter and how much of the demand is restocking the channel versus pure sell - through into the in - market?

A: Our view is that the demand is not about restocking the channel but going up on infrastructure. Orders were up over 1.2 at the start of the quarter, both a mix of short cycle or book and bill that was solid and projects.

Q: How is your supply chain behaving and what's the outlook for the acquisition pipeline in 2026?

A: We're not seeing significant impacts or constraints on the supply chain. Our balance sheet supports doing acquisitions in core areas, there's a good pipeline of deals, and we also consider share buyback as an option to deploy capital.

Q: How to think about the high voltage opportunity through 2035?

A: The $1.5 billion opportunity represents about 7,000 miles of high - voltage transmission over 10 years and can drive a point of growth above the high single - digits we provided for transmission substations in the absence of it.