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    HUBB
    Earnings call· Sep 2025(Q3 FY25)

    HUBBELL INC HUBB

    Oct 28, 2025 Source

    Executive summary

    Hubbell Q3 FY25 — Double-Digit EPS Growth and Raised Outlook

    Hubbell delivered strong Q3 FY25 results, driven by robust organic growth in Electrical Solutions and Grid Infrastructure, which offset declines in Grid Automation. The company raised its full-year EPS outlook, primarily due to a lower tax rate, and anticipates strong broad-based organic growth in 2026 as supply chain dynamics normalize and megatrends in grid modernization and electrification accelerate. The recent acquisition of DMC Power further strengthens its utility offerings.

    Highlights

    5

    • Adjusted diluted EPS increased 12% in Q3 FY25.

    • Electrical Solutions achieved 10% sales growth and 17% operating profit growth with 140 bps margin expansion in Q3 FY25.

    • Grid Infrastructure businesses achieved high single-digit organic growth in Q3 FY25.

    • Full-year 2025 adjusted EPS outlook raised by $0.30 at the midpoint to $18.10-$18.30.

    • DMC Power acquisition expected to contribute approximately $0.20 of adjusted EPS accretion in 2026.

    Concerns

    3

    • Grid Automation sales declined 18% in Q3 FY25 due to large project roll-offs.

    • The pace of inflection in Grid Infrastructure growth was steadier than anticipated in the July outlook.

    • Macroeconomic uncertainty drives a more modest preliminary growth outlook for nonresidential construction, heavy industrial, and renewables in 2026.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year 2025 Adjusted EPS
    $18.10-$18.30
    high materiality
    High
    Full-year 2025 Organic Growth
    3%-4%
    high materiality
    High
    Full-year 2025 Operating Profit Margins
    Expanding 50-100 basis points
    high materiality
    High
    Full-year 2025 Free Cash Flow Conversion
    90% of net income
    medium materiality
    High
    Q4 2025 Organic Growth
    8%-10%
    high materiality
    High
    DMC Power Adjusted EPS Accretion
    $0.20
    medium materiality
    High
    2026 Organic Growth
    In line with long-term targets
    high materiality
    Medium
    Long-term Organic Earnings Growth
    Double-digit pace
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Utility Solutions
    Sales up 1% with operating profit roughly comparable. Grid Infrastructure showed broad strength across end markets, while Grid Automation declined due to project roll-offs.
    Grid Infrastructure (3/4 of segment) organic growth: high single digitsTransmission organic growth: double digitSubstation organic growth: mid- to high single digitDistribution organic growth: double digitTelecom and Enclosures: returned to growthGrid Automation sales decline: 18%
    		$944M1%—$242M
    Electrical Solutions
    Achieved double-digit sales growth and significant operating profit growth and margin expansion, driven by strong organic growth in data centers and light industrial segments.
    Organic growth: 8%Operating margin expansion: 140 basis pointsData center performance: strongLight industrial performance: strongHeavy industrial performance: mixedNon-residential performance: soft
    		Double-digit sales growth10% sales growth—17% OP growth

    Operational metrics

    15
    Adjusted Diluted EPS
    12%YoY growth
    Q3 FY25

    Driven by strong organic growth and lower tax rate.

    Sales
    $1.5BUp 4%
    Q3 FY25

    Overall company sales.

    Operating Profit
    $358MUp 4%
    Q3 FY25

    Overall company operating profit.

    Free Cash Flow Conversion
    90%
    FY25

    Target for the full year.

    Share Repurchases
    $225M
    H1 FY25

    Contributed to lifting EPS.

    Tax Rate
    loweryear-on-year
    Q3 FY25

    Due to an international acquisition tax-friendly restructuring.

    Tax Rate
    lower
    FY25

    Lower full-year tax rate drives higher adjusted EPS relative to prior outlook.

    Price/Cost Productivity
    positive
    Q3 FY25

    Pricing and productivity actions more than offset cost inflation.

    Restructuring Spending
    higher
    Q3 FY25

    Offsetting pricing and cost management tailwinds in Utility segment.

    DMC Power Investment
    $825M
    Q4 FY25

    Investment for the acquisition of DMC Power.

    Organic Growth
    high single-digit
    Q3 FY25

    Combined growth for these segments.

    Grid Automation Sales Decline
    18%
    Q3 FY25

    Due to large project roll-offs.

    Grid Automation Quarterly Sales
    $230M-$240Msequentially flat
    Q4 FY24 to Q3 FY25

    Sequential flatness expected to turn into year-over-year flatness in Q4 FY25.

    Utility T&D Infrastructure CAGR
    double-digit
    last 5 years

    Underpinned by strong portfolio and secular megatrends.

    Pricing
    3%
    FY25

    Expected for the full year, reasonably balanced between segments.

    Industry KPIs

    4
    MetricValueDetails
    Orders bookings growthaccelerated
    M a acquisition contribution$0.20USD
    Data center exposure pipelinestrong performance
    Incremental flow through margin25-30%%

    Deals & partnerships

    1
    DMC PowerAcquisition of a business highly complementary to utility connector product offerings, providing unique technical solutions in high-growth substation markets.

    The acquisition closed at the beginning of October. Hubbell plans to utilize its sales force and portfolio breadth to drive penetration and accelerate DMC's growth trajectory.

    Risks & headwinds

    3
    Grid Automation project roll-offsQ3 FY25, fading in Q4 FY25

    18% sales decline in Q3 FY25

    Mitigation: Headwinds anticipated to fade in Q4 FY25 as the business returns to more normalized comparisons; refocusing on more predictable MRO and public power projects.

    Slower-than-anticipated inflection in Grid Infrastructure growthQ3 FY25

    Pace was steadier than anticipated in July outlook

    Mitigation: Markets and order activity are strong, with anticipation of further improvement in year-over-year organic growth in Q4 FY25, driven by accelerated order book in September and October.

    Macroeconomic uncertainty2026

    Drives a more modest preliminary growth outlook

    Mitigation: Impacts areas like nonresidential construction, heavy industrial, and renewables. Management expects to drive above-market growth and long-term margin expansion through strategy in HES.

    What to watch in Q4 FY25

    5

    Grid Automation sales trend

    Q4 FY25
    CurrentDeclined 18% in Q3 FY25, sequential sales $230M-$240M
    TargetYear-over-year flatness

    Why it matters

    Removal of the drag on the Utility segment's overall growth, indicating a stabilization of the business.

    I think what's important here about the Grid Automation is, we're really coming up to the point where we've had 4 quarters in a row now sequentially bouncing around between about $230 million to $240 million of quarterly sales. And so that started in the fourth quarter of 2024. So as we get to the fourth quarter of 2025, we're going to start to see that sequential flatness turn into year-over-year flatness and really remove the drag on this segment that we've been experiencing.

    Q&A highlights

    5

    Given the strong Q4 implied for Utility, could 2026 see double-digit growth, and is Q4 strength due to Q3 slippage?

    Management acknowledges the potential for a very strong 2026 but prefers a prudent approach. Q4 benefits from easier year-over-year comparisons and strong, broad-based T&D orders in September and October, setting up a good sequential trend for 2026.

    “I do think that there's a chance you could see a very strong year. I think -- we think, as you say, it's prudent for us to plan our resources around that sort of long-term guidance that we've had.”

    asked by Jeffrey Sprague · answered by William Sperry

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 Performance Highlights

    Hubbell reported double-digit adjusted EPS growth in Q3 FY25, with sales up 4% to $1.5 billion and operating profit up 4% to $358 million. This was driven by high single-digit organic growth in Electrical Solutions and Grid Infrastructure, while a lower tax rate also contributed to EPS. Free cash flow increased 34% to $254 million, on track to deliver 90% adjusted income conversion for the full year.

    02

    Electrical Solutions Segment Strength

    The Electrical Solutions segment delivered strong performance with 10% sales growth and 17% operating profit growth, leading to 140 basis points of margin expansion. This was fueled by 8% organic growth, particularly in data centers (driven by new product introduction and capacity additions) and light industrial segments. The segment's unification efforts and strategy are driving outgrowth in key vertical markets.

    03

    Utility Segment Dynamics and Outlook

    The Utility segment saw 1% sales growth to $944 million, with operating profit roughly comparable at $242 million. Grid Infrastructure, representing three-quarters of the segment, grew high single-digits across transmission (double-digit), substation (mid- to high single-digit), and distribution (double-digit). However, Grid Automation sales declined 18% due to project roll-offs, though this headwind is expected to fade in Q4 FY25 as comparisons normalize.

    04

    Raised FY25 Outlook and Q4 Confidence

    Hubbell raised its full-year 2025 adjusted EPS guidance to $18.10-$18.30, primarily due to a lower expected tax rate. Management expressed confidence in achieving a stronger-than-normal Q4, projecting 8-10% organic growth. This confidence is based on the fading Grid Automation drag, incremental pricing, strong data center visibility, new capacity in the Burndy business, and a substantial pickup in T&D orders in September and October.

    05

    Strategic Acquisition and Leadership Transition

    The company closed the acquisition of DMC Power, a highly complementary business in utility connectors, which is expected to be $0.20 accretive to adjusted EPS in 2026. The call also marked the announcement of CFO Bill Sperry's retirement at year-end, after 18 years of service, and the appointment of Joe Capozzoli as his successor, highlighting a seamless transition and strong internal talent development.

    06

    Preliminary 2026 End Market Views

    Preliminary views for 2026 anticipate continued strength in Utility Solutions (substation, transmission, distribution, grid protection/controls) and Electrical Solutions (data center, light industrial, T&D). Meters/AMI and telecom are expected to return to growth. Macroeconomic uncertainty🌐 suggests a more modest outlook for non-residential construction, heavy industrial, and renewables, but overall, an attractive end market environment is expected to enable organic growth in line with long-term targets.

    AI-generated summary of the company’s earnings call. Not investment advice.