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    NVT
    Earnings call· Jun 2026(Q2 FY26)

    nVent Electric Q2 FY26 earnings call NVT

    Jul 31, 2026 Source

    Executive summary

    nVent Electric Q2 FY26 — Record Sales and Earnings Driven by AI Data Center Demand

    nVent delivered an outstanding quarter with record sales and earnings, significantly driven by accelerating AI data center demand within the infrastructure vertical. The company is aggressively expanding liquid cooling capacity with a third facility announced, and its portfolio transformation towards high-growth infrastructure is yielding strong results. Management remains confident in its strategy and ability to execute, raising full-year guidance on strong momentum.

    Highlights

    5

    • Achieved record sales and earnings, well ahead of guidance, with sales up 53% (47% organically).

    • Adjusted EPS grew 69% year-over-year to $1.45, exceeding the high end of guidance.

    • Free cash flow surged 125% year-over-year to $167 million.

    • Organic orders growth was broad-based, up low double digits, maintaining a healthy backlog of $2.5 billion.

    • Significantly raised full-year sales guidance to 37%-39% reported (32%-34% organic) and adjusted EPS to $5.00-$5.10.

    Concerns

    1

    • Full-year tariff impact is expected to be approximately $100 million, up from $80 million previously, though management expects to offset this through pricing and productivity.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year reported sales growth
    37% to 39%
    high materiality
    High
    Full-year organic sales growth
    32% to 34%
    high materiality
    High
    Full-year adjusted EPS
    $5.00 to $5.10
    high materiality
    High
    Full-year free cash flow conversion
    90% to 95%
    medium materiality
    High
    Q3 reported and organic sales growth
    32% to 35%
    high materiality
    High
    Q3 adjusted EPS
    $1.35 and $1.38
    high materiality
    High
    Full-year data center sales
    more than $2 billion
    high materiality
    High
    Infrastructure vertical growth
    strong double-digit growth
    medium materiality
    High
    Industrial and Commercial Resi growth
    mid-single digits
    low materiality
    Medium
    Second half incremental margins
    mid-20s
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Systems Protection
    This was Systems Protection's first $1 billion quarter, driven by strong volume and productivity. Infrastructure vertical growth was led by data centers.
    Organic sales growth: 62%EPG acquisition contribution to sales: 7 pointsReturn on sales: 23.2%Return on sales change: +150 bps YoYInfrastructure vertical sales growth: more than doubledIndustrial sales growth: flattishCommercial Resi sales growth: flattishAmericas sales growth: very strong double digitsEurope sales growth: mid-single digitsAsia Pacific sales growth: double digits
    		$1.072 billion70%—$248 million
    Electrical Connections
    Growth was broad-based across all verticals and geographies. Margin performance was impacted by inflation and mix, partially offset by improving price and volume, with margins improving sequentially back into the high 20s.
    Organic sales growth: 18%EPG acquisition contribution to sales: 2 pointsReturn on sales: 27.3%Return on sales change: -140 bps YoYInfrastructure sales growth: strong double digitsIndustrial sales growth: strong double digitsCommercial Resi sales growth: low teensAmericas sales growth: high teensEurope sales growth: low double digitsAsia Pacific sales growth: double digits
    		$399 million21%—$109 million

    Operational metrics

    26
    Sales
    $1.471 billionup 53%
    Q2 FY26

    Record sales for the quarter.

    Organic sales growth
    47%
    Q2 FY26

    Well ahead of guidance, driven by very strong data center sales.

    Acquisitions contribution to sales
    $52 million5 points to growth
    Q2 FY26

    EPG acquisition contributed to sales.

    Foreign exchange tailwind
    nearly 1 point
    Q2 FY26

    FX impact on sales growth.

    Adjusted operating income
    $323 millionup 61%
    Q2 FY26

    Strong growth in operating income.

    Adjusted operating income return on sales
    21.9%up 110 basis points
    Q2 FY26

    Came in ahead of expectations.

    Price plus productivity offset inflation
    more than $50 million
    Q2 FY26

    Offsetting inflation, including tariff impact.

    Tariff impact
    more than $30 million
    Q2 FY26

    Part of inflation offset by price and productivity.

    Adjusted EPS
    $1.45up 69%
    Q2 FY26

    Record earnings, well ahead of guidance.

    New products contribution to sales growth
    over 30 points
    Q2 FY26

    New products driving significant sales growth.

    Infrastructure vertical sales as % of total
    nearly 60%up from 45% last year and 12% at spin
    H1 FY26

    Increased exposure to high-growth infrastructure vertical.

    Capital expenditures
    approximately $130 millionup 40%
    FY26

    Expected investment for growth, primarily new capacity.

    Capital expenditures spent
    nearly $60 millionup over 50%
    H1 FY26

    Investment for new capacity in data centers, power utilities, and supply chain resiliency.

    Cash on hand
    $256 million
    Q2 FY26

    Strong liquidity position.

    Available revolver capacity
    $600 million
    Q2 FY26

    Strong liquidity position.

    Total debt
    $1.5 billion
    Q2 FY26

    Debt balance after paydown.

    Debt paid down
    nearly $70 million
    Q2 FY26

    Prepayable term loan paid down.

    Net leverage
    1.2xwell below target range of 2 to 2.5x
    Q2 FY26

    Providing ample financial flexibility.

    Capital returned to shareholders
    $118 million
    H1 FY26

    Includes share repurchases and dividends.

    Share repurchases
    $50 million
    H1 FY26

    Part of capital returned to shareholders.

    Quarterly dividend increase
    5%
    Q2 FY26

    Increased compared to last year.

    Full-year tariff impact
    approximately $100 millionup from $80 million
    FY26

    Largely driven by significantly higher volume growth, expected to be offset.

    Q3 2-year stack growth
    50%versus 46% growth in H1
    Q3 FY26

    Accelerating growth in Q3.

    Liquid cooling share of data center cooling
    10% to 15%
    Current

    Indicates significant runway for growth as heat densities increase.

    LTM orders growth
    much higher than low double digit
    LTM Q2 FY26

    More relevant indicator of underlying momentum.

    Power utilities sales growth
    double digits
    Q2 FY26

    Very strong growth in the quarter.

    Industry KPIs

    5
    MetricValueDetails
    Orders bookings growthlow double digits%
    M a acquisition contribution7 points%
    Backlog by segment end market$2.5 billionUSD
    Data center exposure pipelinemore than $2 billionUSD
    Incremental flow through marginmid-20s%

    Orderbook & backlog

    1
    Total backlog$2.5 billionQ2 FY26

    flattish sequentially

    Provides visibility through the year and into 2027. Mostly 12 months or less.

    Product announcements

    2
    ProductTypeDetails
    New Productslaunch
    Modular Liquid Cooling Platformlaunch

    Deals & partnerships

    1
    EPGAcquisition contributing to sales growth

    The EPG acquisition continued to exceed expectations and became part of organic growth after May 1st.

    Capital programs

    2
    Blaine 1 Facility Expansionramping
    Start: beginning of this year (2026)

    Benefit: doubled liquid cooling capacity

    New facility near Anoka campus, opened within approximately 100 working days, progressing ahead of expectations.

    Blaine 2 Facility Expansionannounced

    Benefit: similar size to Blaine 1

    Third facility expansion in Minnesota, nearby Blaine 1, to meet strong orders, backlog, and liquid cooling demand. Expected to open in H1 2027.

    Risks & headwinds

    1
    Tariff ImpactFY26

    approximately $100 million (FY26 estimate), up from $80 million previously

    Mitigation: Expected to be offset through pricing, supply chain productivity, and operational mitigating actions.

    What to watch in Q3 FY26

    5

    Blaine 1 Facility Ramp-up

    Into 2027
    CurrentRamping through 2026 and into 2027, contributing to capacity.
    TargetStronger contributions from the facility.

    Why it matters

    Critical for meeting accelerating liquid cooling demand and supporting overall growth.

    As I think about our Blaine 1 facility, it's come online faster than we expected, but still ramping through the course of this year and into 2027. So it is starting to contribute, but we expect more -- stronger contributions from that facility as we go into '27.

    Q&A highlights

    6

    The 18% organic growth in Electrical Connections was much higher than expected. Is this an inflection point, broad-based, or due to one-time factors?

    Beth Wozniak confirmed it was a nice inflection point, broad-based across every vertical and geography, driven by strong orders through distribution partners, with no unusual one-time bookings.

    “As the quarter progressed, we saw strong orders and as I mentioned in my prepared remarks, we saw growth across every vertical and every geography. And we were -- our orders were very strong through our distribution partners, which is where we see a lot of that short-cycle industrial growth. So really, it was just a nice inflection point. And as you stated, our electrical connections business, which has a lot of short-cycle business performed very well to execute on those orders. And there was nothing unusual..”

    asked by Deane Dray · answered by Beth Wozniak

    2 min read7 chapters

    Detailed Narrative

    01

    Record Performance & Data Center Momentum

    nVent reported an outstanding second quarter with record sales and earnings, significantly exceeding guidance. Sales grew 53% (47% organically), primarily driven by the infrastructure vertical, particularly AI data centers. The company saw exceptional growth in liquid cooling, cable management, and engineered buildings, securing wins across hyperscalers, neo clouds, multi-tenants, and distribution partners.

    02

    Aggressive Capacity Expansion for AI Demand

    To meet accelerating demand for liquid cooling, nVent announced a third facility expansion, 'Blaine 2,' in Minnesota, expected to open in the first half of 2027. This facility is similar in size to 'Blaine 1,' which opened earlier in 2026 and is ramping faster than expected. These expansions are critical for supporting the AI data center buildout and the upcoming modular liquid cooling platform launch.

    03

    Portfolio Transformation & Vertical Focus

    The company's strategic portfolio transformation has increased its exposure to the high-growth infrastructure vertical, which now accounts for nearly 60% of first-half sales, up from 12% at spin. Significant investments are being made in data centers and power utilities, aligning with secular trends in electrification, sustainability, and digitalization. This intentional shift is a key driver of current and future growth.

    04

    Strong Orders & Healthy Backlog

    nVent experienced broad-based organic orders growth, up low double digits in Q2. The backlog remains healthy at $2.5 billion, providing strong visibility through the current year and into 2027. While data center orders can be lumpy, the company noted strong data center orders year-to-date in Q3, indicating continued demand momentum.

    05

    Electrical Connections Segment Strength

    The Electrical Connections segment delivered robust performance with 18% organic sales growth, significantly exceeding expectations. This growth was broad-based across all verticals and geographies, driven by strong distribution partnerships and healthy sell-through. Segment margins improved sequentially and are expected to continue expanding into the high 20s, reflecting effective pricing and productivity actions.

    06

    Power Utilities Growth & Drivers

    The power utilities business achieved strong double-digit growth in the quarter. This is fueled by increasing electricity demand, ongoing grid modernization efforts, and the growing power requirements of AI data centers. nVent is serving this demand both directly to utilities and through distribution channels, with opportunities also arising in engineered buildings within the gray space.

    07

    Disciplined Capital Allocation & Financial Strength

    nVent maintains a disciplined capital allocation strategy, prioritizing growth investments and shareholder returns. The company expects to invest approximately $130 million in CapEx for FY26, up 40%, with $60 million already spent in H1, primarily for new capacity. Net leverage stands at a healthy 1.2x, well below the target range, providing ample financial flexibility for future growth and M&A.

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