Hubbell Incorporated — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 net sales reached $1,872.5 million, a 25% increase year-over-year (YoY), driven by 11% organic growth and 13% from M&A.
• Q3 diluted EPS was $4.94; adjusted diluted EPS was $5.91, representing a 14% YoY increase.
• Q3 operating margin was 21.8%; adjusted operating margin was 25.5%, an increase of 160 basis points YoY.
• Net cash provided by operating activities was $323 million in Q3 2026, up from $284 million in Q3 2025.
• Free cash flow was $280 million in Q3 2026, compared to $254 million in the prior year period.
• Total debt increased to $5,120.2 million as of September 30, 2026, from $2,325.4 million as of December 31, 2025.
• Net debt (total debt less cash and investments) was $4,664.7 million as of September 30, 2026, compared to $1,729.1 million at year-end 2025.
• Total Debt to Total Capital ratio was 55% as of September 30, 2026, up from 38% at December 31, 2025.
• Adjusted EBITDA for Q3 2026 was $506.9 million, up 32% YoY from $383.1 million.
• Restructuring and related costs totaled $6.7 million in Q3 2026, compared to $4.2 million in Q3 2025.

Guidance and Future Outlook:

• Full-year 2026 total sales growth is anticipated to be 18-19%, with organic sales growth of 10-11%.
• Full-year 2026 GAAP diluted EPS is expected in the range of $17.30 to $17.50.
• Full-year 2026 adjusted diluted EPS is raised to a range of $20.40 to $20.60.
• The adjusted tax rate for the full year is expected to be 22.0% to 22.5%.
• Full-year 2026 free cash flow conversion is expected to be approximately 90% on adjusted net income.
• Full-year adjusted EPS excludes approximately $2.50 per share for amortization of acquisition-related intangible assets and $0.60 per share for transaction, integration, and separation costs.
• The outlook includes approximately $20 million of anticipated restructuring and related investment.

Business Segments and Product Lines:

• Utility Solutions: Net sales increased 9% YoY to $1,028 million, with organic growth of approximately 5%. Grid Infrastructure sales grew approximately 13%, while Grid Automation sales decreased approximately 4%. Segment operating income was $241 million (23.5% margin), and adjusted operating income was $267 million (26.0% margin).
• Electrical Solutions: Net sales surged 51% YoY to $845 million, driven by 22% organic growth and 29% from acquisitions. Segment operating income was $168 million (19.8% margin), and adjusted operating income was $210 million (24.8% margin).
• Electrical Solutions growth was led by strong datacenter markets, content gains, and capacity expansion investments.
• Utility Solutions performance was driven by distribution, transmission, and substation markets.
• NSI results were strong, with performance and integration efforts trending ahead of initial expectations.

Market and Competitive Landscape:

• End market demand remained strong, driving continued backlog growth in the quarter.
• The company is proactively investing in capacity expansion to serve customers in high-growth areas.
• Market trends include continued strength in datacenter markets, though some opposition exists.
• The company noted continued softness in the heavy industrial and residential markets of Electrical Solutions.

Risks and Challenges:

• Risks include substantial uncertainty regarding the duration of trade tariffs, import quotas, and trade actions by the U.S., China, Mexico, the UK, and the EU.
• Inflation impacts on raw materials, elevated interest rates, and increased energy costs may affect the ability to maintain pricing actions and margin profiles.
• Supply chain disruptions and availability of raw materials, purchased components, energy, and freight pose risks.
• Integration risks associated with acquisitions (NSI, Ventev, Nicor, DMC Power) include failure to realize expected synergies and potential adverse reactions to business relationships.
• Potential impacts from geopolitical conflicts (Ukraine, Middle East, U.S.-Israel-Iran) on global trade, energy markets, and financial markets.
• Cybersecurity threats, including breaches and AI-related issues, could disrupt operations or internal controls.
• Regulatory changes, including global minimum tax rules (Pillar Two) and potential U.S. tax modifications.

Management Commentary and Tone:

• Chairman, President, and CEO Gerben Bakker described the quarter as delivering "strong financial performance" with double-digit growth in organic sales, adjusted operating profit, adjusted EPS, and free cash flow.
• Management highlighted that third-quarter results were highlighted by >20% organic growth in Electrical Solutions.
• Bakker stated the company is raising its full-year 2026 outlook primarily driven by stronger anticipated Electrical Solutions growth.
• The tone reflects confidence in the integration of acquired businesses and the ability to invest in capacity expansion.

Other Key Points:

• The company acquired NSI Electrical Buyer, Inc. (NSI Industries business), Alliance USAcqCo 2, Inc. (Ventev business), Nicor, Inc. (Nicor business), and Power Rose Acquisition, Inc. (DMC Power business) during the period.
• The company sold its residential lighting business, which resulted in a $0.4 million pre-tax loss on disposition recognized in Q2 2025.
• Cash and cash equivalents decreased to $334.5 million as of September 30, 2026, from $482.5 million at December 31, 2025.
• Inventories increased to $1,327.2 million as of September 30, 2026, from $1,083.8 million at December 31, 2025.
• Goodwill increased to $4,368.2 million as of September 30, 2026, from $3,060.8 million at December 31, 2025.
• Other intangible assets increased to $3,143.4 million as of September 30, 2026, from $1,394.3 million at December 31, 2025.
• Capital expenditures for the nine months ended September 30, 2026, were $119.8 million.
• Acquisition of businesses, net of cash acquired, totaled $3,005.7 million for the nine months ended September 30, 2026.
• Issuance of long-term debt was $2,787.5 million for the nine months ended September 30, 2026.
• Repurchase of common shares totaled $203.5 million for the nine months ended September 30, 2026.
• Payment of dividends totaled $225.4 million for the nine months ended September 30, 2026.