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    HUBB
    Earnings call· Dec 2025(Q4 FY25)

    HUBBELL Q4 FY25 earnings call HUBB

    Feb 3, 2026 Source

    Executive summary

    Hubbell Q4 FY25 — Strong Growth Driven by Data Center and Grid Modernization

    Hubbell delivered a strong Q4 FY25, driven by robust demand in utility T&D and data center markets, leading to double-digit sales and profit growth. The company is well-positioned for continued organic growth and margin expansion in 2026, leveraging strategic investments and a multi-year investment cycle in its core end markets, while maintaining disciplined capital allocation.

    Highlights

    5

    • Achieved 12% total sales growth and 9% organic growth in Q4 FY25.

    • Expanded adjusted operating margin by 140 basis points and grew adjusted operating profit by 19% in Q4 FY25.

    • Delivered 15% adjusted earnings per share growth in Q4 FY25.

    • Electrical Solutions segment's full year adjusted operating margins exceeded 20% for the first time.

    • Generated strong full year 2025 free cash flow margin of 15% and return on invested capital of 19%.

    Concerns

    3

    • Grid automation sales were down 8% in Q4 FY25 due to weaker new project activity in meters and AMI.

    • Nonresidential and heavy industrial markets were softer in Q4 FY25 and are expected to be more muted in 2026.

    • Experienced accelerated cost inflation in Q4 FY25, with mid-single-digit cost inflation anticipated for 2026.

    Guidance & targets

    14
    CategoryTargetConfidence
    Full-year 2026 organic growth
    5% to 7%
    high materiality
    High
    Full-year 2026 Utility Solutions organic growth
    5% to 7%
    medium materiality
    High
    Full-year 2026 Electrical Solutions organic growth
    4% to 6%
    medium materiality
    High
    Full-year 2026 Electrical Solutions data center growth
    mid-teens
    medium materiality
    High
    Full-year 2026 total sales growth
    7% to 9%
    high materiality
    High
    Full-year 2026 adjusted earnings per share
    $19.15 to $19.85
    high materiality
    High
    Full-year 2026 free cash flow conversion
    approximately 90%
    medium materiality
    High
    Full-year 2026 adjusted operating profit growth
    approximately 10%
    high materiality
    High
    Full-year 2026 operating margin expansion
    ~50 bps
    medium materiality
    Medium
    Full-year 2026 restructuring investment
    $15 million to $20 million
    low materiality
    High
    Full-year 2026 free cash flow
    $900 million to $1 billion
    high materiality
    High
    Full-year 2026 cost inflation
    mid-single digits
    medium materiality
    High
    Full-year 2026 DMC Power revenue contribution
    $130 million
    medium materiality
    High
    Full-year 2026 DMC Power operating margin
    roughly 40%
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Utility Solutions
    Grid Infrastructure, representing approximately 3/4 of segment sales, saw broad-based strength across distribution, substation, and transmission markets. Grid automation declines were partially offset by solid growth in grid protections and controls.
    Organic growth: 7%Acquisitions contribution: 4%Grid Infrastructure organic growth: 12%Grid automation sales growth: -8%Adjusted operating profit growth: 20%Adjusted operating margin expansion: 200 bps
    		$936 million10%—$235 million
    Electrical Solutions
    Organic growth was driven by significant strength in data center markets and solid growth in light industrial markets, partially offset by softer heavy industrial and nonresidential markets. Data center performance was bolstered by capacity investments and modular power distribution skid business.
    Organic growth: 13%Data center growth: >60%Adjusted operating profit growth: 18%Adjusted operating margin expansion: 60 bps
    		$557 million——$114 million

    Operational metrics

    13
    Adjusted operating profit
    $349 million19% growth
    Q4 FY25

    Total company adjusted operating profit.

    Adjusted operating margin expansion
    140 bps
    Q4 FY25

    Total company adjusted operating margin expansion.

    Adjusted diluted EPS
    $4.7315% increase
    Q4 FY25

    Total company adjusted diluted earnings per share.

    Free cash flow conversion
    90%
    Full Year 2025

    Conversion on adjusted net income, in line with previous outlook.

    Net debt-to-EBITDA
    1.3x
    End of FY25

    Balance sheet remains strong.

    Free cash flow margin
    15%
    Full Year 2025

    Evidence of business model quality.

    Return on invested capital
    19%
    Full Year 2025

    Evidence of business model quality.

    Price realization
    incremental
    Q4 FY25

    Successful in offsetting cost inflation.

    Price realization
    3 points
    Full Year 2025

    Consistent with expectations.

    Cost inflation
    mid-single digits
    Full Year 2026

    Anticipated for the total cost pool, to be managed by price and productivity.

    Restructuring investment
    $15 million to $20 million
    Full Year 2026

    Anticipated investment for the year, with 2-3 year paybacks.

    DMC Power operating margin
    roughly 40%
    Full Year 2026

    Outlook for the acquired business, net of integration costs.

    Tariff and related cost
    ~$150 million
    Mid-2025

    Managed down in the back half of 2025; no significant recent changes in tariff rates.

    Industry KPIs

    6
    MetricValueDetails
    Equipment pricingincremental price actions
    Book to bill ratio1 or close to 1
    Orders bookings growth9%%
    M a acquisition contribution3%%
    Backlog by segment end marketsome backlog built
    Data center exposure pipeline>60%%

    Orderbook & backlog

    3
    Order strengthstrongQ4 FY25

    Drove organic sales growth in Q4 FY25, particularly in T&D and data center. Company is primarily a book-to-bill business.

    BacklogbuiltQ4 FY25

    Built in some businesses, like the T&D business, due to order strength.

    Meters and AMI book-to-bill1 or close to 1Q4 FY25

    Indicates stabilization of the business off a lower base.

    Deals & partnerships

    1
    DMC Poweracquisition

    High-growth and margin acquisition, closed in Q4 FY25. Positions Hubbell well to continue reinvesting in its business and deploying capital for shareholders.

    Capital programs

    1
    Burndy copper lug production automationcompleted

    Benefit: Increased output, reduced factory processing time from days to minutes, reduced manufacturing complexity, reduced labor and factory floor space

    Investment in 4 specialized enclosed automation work cells, combining 6 manual production processes into single flow automated lines for high-running SKUs. Demonstrates ability to utilize CapEx for growth and margin expansion.

    Risks & headwinds

    6
    Weakness in grid automation marketQ4 FY25, ongoing

    Sales down 8% in Q4 FY25

    Mitigation: Reshaped the business, took out costs, focused on core market where the company has a strong position; expects modest growth from a lower base going forward.

    Softer nonresidential and heavy industrial marketsQ4 FY25, expected to be muted in 2026

    Flattish, low growth for the last couple of years

    Mitigation: Focusing on light industrial and renewable markets where mega project activities are driving solid growth.

    Accelerated cost inflationQ4 FY25, Full Year 2026

    Mid-single digits anticipated for 2026

    Mitigation: Proactive pricing and productivity actions are expected to offset these costs, aiming for neutral to positive price/cost productivity.

    Higher interest expenseQ4 FY25

    Higher year-over-year

    Mitigation: Associated with the DMC Power acquisition.

    Higher tax rateQ4 FY25, Q1 FY26

    Higher year-over-year

    Restructuring investment impact on near-term marginsFull Year 2026, front-end loaded (1/3 in Q1)

    $15 million to $20 million in 2026

    Mitigation: These investments are expected to yield attractive 2-3 year paybacks and drive future productivity benefits.

    Q&A highlights

    8

    Can you provide more color on order trends, particularly the complexion across the business? Is strong CapEx negatively impacting MRO activity in the core legacy business?

    Order momentum has been strong since September, especially in T&D and data center, driving Q4 organic sales growth. The company is primarily a book-to-bill business, but order strength has built some backlog in T&D. It's hard to distinguish CapEx vs. OpEx impact on MRO as materials are fungible, but generation investments are strong, and T&D/distribution markets are supportive of long-term growth.

    “the order strength over the fourth quarter really drove our organic sales growth. So it wasn't working backlog or anything. This was reflected in the actual orders that we saw.”

    asked by Jeffrey Sprague · answered by Gerben Bakker

    2 min read6 chapters

    Detailed Narrative

    01

    Q4 FY25 Performance Highlights

    Hubbell reported strong financial results for Q4 FY25, with total sales growing 12% to $1.493 billion, driven by 9% organic growth and 3% from acquisitions. Adjusted operating profit increased 19% to $349 million, leading to a 140 basis point expansion in adjusted operating margins. Adjusted diluted EPS rose 15% to $4.73, reflecting robust operational execution and strong market demand.

    02

    Electrical Solutions Segment Transformation

    The Electrical Solutions (HES) segment made significant progress in 2025, unifying its operations to compete collectively and driving above-market growth in attractive verticals. This strategy, combined with business simplification and operational efficiencies, resulted in 7% organic growth and 14% adjusted operating profit growth for the full year. For the first time, HES achieved full year adjusted operating margins exceeding 20%.

    03

    Utility Solutions Grid Infrastructure Strength

    In the Utility Solutions (HUS) segment, Grid Infrastructure businesses, representing approximately three-quarters of segment sales, delivered double-digit growth for the full year 2025. This was driven by strong positions in transmission and substation markets, benefiting from utility investments in grid interconnections and aging infrastructure resiliency. Distribution markets also accelerated throughout 2025 as customer inventories normalized.

    04

    Strategic Investments and Capital Allocation

    Hubbell continues to invest in high-return areas, including the acquisition of DMC Power, investments in automation, and expanded production capacity in high-growth sectors. The company's disciplined capital allocation is evidenced by a 2025 free cash flow margin of 15% and a return on invested capital of 19%, demonstrating its ability to generate strong shareholder returns. Net debt-to-EBITDA stood at 1.3x at year-end.

    05

    2026 Outlook and Market Trends

    For 2026, Hubbell anticipates 5% to 7% organic growth and 7% to 9% total sales growth, with adjusted EPS projected between $19.15 and $19.85. The outlook is supported by broad-based strength in utility T&D, data center, and light industrial end markets, which are considered to be in the early stages of multi-year, highly visible investment cycles. The company expects approximately 90% free cash flow conversion on adjusted net income.

    06

    Operational Efficiency and Productivity

    The company expects another year of margin expansion in 2026, driven by effective price and productivity management to offset anticipated mid-single-digit cost inflation. Hubbell plans to invest $15 million to $20 million in restructuring initiatives, which are expected to be front-end loaded and yield attractive 2-3 year paybacks, contributing to future productivity benefits.

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