Q2 2026 nVent Electric PLC Earnings Call

July 31, 2026

Operator 2: Good day. Welcome to the nVent Electric Q2 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tony Riter, Vice President of Investor Relations. Please go ahead.

Operator: Good day. Welcome to the nVent Electric Q2 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tony Riter, Vice President of Investor Relations. Please go ahead.

Speaker #1: Good day, and welcome to the nVent Electric second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touchtone phone.

Speaker #1: To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Tony Riter, Vice President of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thank you, and welcome to nVent's second quarter 2026 earnings call. On the call with me are Beth Wozniak, our Chair and Chief Executive Officer, and Gary Corona, our Chief Financial Officer.

Tony Riter: Thank you, and welcome to nVent's Q2 2026 earnings call. On the call with me are Beth Wozniak, our Chair and Chief Executive Officer, and Gary Corona, our Chief Financial Officer. Today, we'll provide details on our Q2 performance, an outlook for the Q3, and an update to our full-year outlook. All results referenced throughout the presentation are on a continuing operation basis unless otherwise stated. Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in today's press release and nVent's filing with the Securities and Exchange Commission. Forward-looking statements are made as of today, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results.

Speaker #2: Today we'll provide details on our second quarter performance, and I'll look for the third quarter and update to our full year outlook. All results referenced throughout the presentation are on a continuing operation basis unless otherwise stated.

Speaker #2: Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties.

Speaker #2: Such as the risks outlined in today's press release and nVent's filing with the Securities and Exchange Commission. Forward-looking statements are made as of today, and the company undertakes no obligation to publicly update such statements to reflect subsequent events or circumstances.

Speaker #2: Actual results could differ materially from anticipated results. Today's webcast is accompanied by a presentation. Which you can find in the Investor section of nVent's website.

Tony Riter: Today's webcast is accompanied by a presentation, which you can find in the Investors section of nVent's website. References to non-GAAP financials are reconciled in the appendix of the presentation. We'll have time for your questions after prepared remarks. With that, please turn to slide three. I will now turn the call over to Beth.

Speaker #2: References to non-GAAP financials are reconciled in the appendix of the presentation. We will have time for your questions after I prepare remarks. With that, please turn to slide 3, and I'll now turn the call over to Beth.

Speaker #3: Good morning, everyone. I am pleased to share with you our outstanding second quarter results and cover some key business highlights. We had another tremendous quarter with record sales and earnings, well ahead of our guidance.

Beth Wozniak: Good morning, everyone. I am pleased to share with you our outstanding Q2 results and cover some key business highlights. We had another tremendous quarter with record sales and earnings well ahead of our guidance. The better-than-expected sales were primarily driven by the infrastructure vertical led by data centers, along with stronger demand in our short cycle business. This was our fourth consecutive quarter with sales of more than $1 billion, including Systems Protection sales of more than $1 billion for the first time. Our data center business grew across the portfolio in both the gray and white spaces. We had outstanding growth in liquid cooling, cable management, and Engineered Buildings. We are winning with a wide range of customers Neoclouds, multi-tenants, and also through our distribution partners.

Speaker #3: The better-than-expected sales were primarily driven by the infrastructure vertical, led by data centers, along with stronger demand in our short-cycle business. This was our fourth consecutive quarter with sales of more than $1 1 billion.

Speaker #3: Including systems protection sales of more than $1 billion for the first time. Our data center business grew across the portfolio in both the gray and white spaces. We had outstanding growth in liquid cooling, cable management, and engineered buildings.

Speaker #3: We are winning with a wide range of customers, from hyperscalers to neo clouds, multi-tenants, and also through our distribution partners. We have been investing in new products and our supply chain, to be able to scale and respond to customer demand.

Beth Wozniak: We have been investing in new products and our supply chain to be able to scale and respond to customer demand. Today, we announced another new location for further capacity expansion, which I will discuss shortly. In Q2 for total nVent, we continued to have strong orders and backlog. Organic orders growth was broad-based, up low double digits. In addition, backlog remained healthy at $2.5 billion, giving us visibility through the year and into 2027. As we have previously discussed, data center orders tend to be large and lumpy, impacting growth rates quarter to quarter. In fact, we've had strong data center orders thus far in Q3. Our free cash flow and balance sheet are strong. Our disciplined capital allocation is focused on growth and returning cash to shareholders for continued value creation.

Speaker #3: Today, we announced another new location for further capacity expansion, which I will discuss shortly. In Q2, for total nVent, we continue to have strong orders and backlog.

Speaker #3: Organic orders growth was broad-based, up low double digits. In addition, backlog remained healthy at 2.5 billion dollars, giving us visibility through the year and into 2027.

Speaker #3: As we have previously discussed, data center orders tend to be large and lumpy, impacting growth rates quarter to quarter. In fact, we've had strong data center orders thus far in Q3.

Speaker #3: Our free cash flow and balance sheet are strong, and our disciplined capital allocation is focused on growth and returning cash to shareholders for continued value creation.

Speaker #3: We are significantly raising our full-year sales and EPS guidance to reflect our outstanding second quarter and expected broad-based growth, including continuing momentum in AI data centers.

Beth Wozniak: We are significantly raising our full-year sales and EPS guidance to reflect our outstanding Q2 and expected broad-based growth, including continuing momentum in AI data centers. Now, onto slide four. For a summary of our Q2 performance, sales were up 53% and 47% organically, led by the infrastructure vertical. New products contributed over 30 points to our sales growth, and we launched 14 new products in the quarter. The EPG acquisition continued to exceed expectations, growing sales strong double digits year over year. Adjusted operating income grew 61% year over year, with return on sales of nearly 22%. Adjusted EPS grew 69%, and free cash flow grew 125% year over year. Looking at our key verticals, sales grew across all verticals. Infrastructure led the way with organic sales more than doubling, driven by outstanding growth in data centers and double-digit growth in power utilities.

Speaker #3: Now, on to slide 4. For a summary of our second quarter performance: sales were up 53%, and 47% organically, led by the Infrastructure vertical.

Speaker #3: New products contributed over 30 points to our sales growth, and we launched 14 new products in the quarter. The EPG acquisition continued to exceed expectations, growing sales strong double digits year over year.

Speaker #3: Adjusted operating income grew 61% year over year, with return on sales of nearly 22%. Adjusted EPS grew 69%, and free cash flow grew 125% year over year.

Speaker #3: Looking at our key verticals, sales grew across all verticals, infrastructure led the way with organic sales more than doubling, driven by outstanding growth in data centers and double-digit growth in power utilities.

Speaker #3: Commercial resi grew high single digits and industrial was up low single digits. Turning to organic sales by geography, all geographies grew, led by the Americas, growing very strong double digits.

Beth Wozniak: Commercial resi grew high single digits, industrial was up low single digits. Turning to organic sales by geography, all geographies grew, led by the Americas growing very strong double digits. Europe was up mid-single digits, and Asia Pacific grew double digits. Looking ahead, we believe infrastructure represents our largest long-term growth opportunity, driven by the powerful secular trends of electrification, sustainability, and digitalization. We expect the infrastructure vertical to deliver strong double-digit growth this year, supported by accelerating AI-related data center capital investment. Within infrastructure, data centers remains our most significant growth opportunity. We also see substantial opportunity in power utilities, where increasing electricity demand, grid modernization, and the growing power requirements of AI data centers are creating meaningful long-term tailwinds. Turning to industrial and commercial resi, we expect each to grow mid-single digits for the year, with improving demand trends in our short cycle business.

Speaker #3: Europe was up mid-single digits, and Asia Pacific grew double digits. Looking ahead, we believe infrastructure represents our largest long-term growth opportunity, driven by the powerful secular trends of electrification, sustainability, and digitalization.

Speaker #3: We expect the infrastructure vertical to deliver strong double-digit growth this year, supported by accelerating AI-related data center capital investment. Within infrastructure, data centers remain our most significant growth opportunity.

Speaker #3: We also see substantial opportunity in power utilities, where increasing electricity demand grid modernization and the growing power requirements of AI data centers are creating meaningful long-term tailwinds.

Speaker #3: Turning to industrial, and commercial resi, we expect each to grow mid single digits for the year, with improving demand trends in our short-cycle business.

Speaker #3: Moving to slide 5. Our portfolio transformation to become a more focused, higher-growth electrical connection and protection company is showing up in our results. We have intentionally increased our exposure to the high-growth infrastructure vertical, through both organic investments and M&A.

Beth Wozniak: Moving to slide five. Our portfolio transformation to become a more focused, higher growth electrical connection and protection company is showing up in our results. We have intentionally increased our exposure to the high-growth infrastructure vertical through both organic investments and M&A. Infrastructure made up 12% of sales at spin, expanded to 45% last year, and was nearly 60% in the H1 of this year. We have been significantly investing in our data center and power utilities businesses, which are rapidly growing, and more capacity is needed to meet customer demand. Overall, I am proud of our nVent team and how hard everyone is working to deliver these results and support our customers. We are on track for another strong year. This wraps up my opening remarks.

Speaker #3: Infrastructure made up 12% of sales at spin. Expanded to 45% last year, and was nearly 60% in the first half of this year. We have been significantly investing in our data center and power utilities businesses, which are rapidly growing and more capacity is needed to meet customer demand.

Speaker #3: Overall, I am proud of our nVent team and how hard everyone is working to deliver these results and support our customers. We are on track for another strong year.

Speaker #3: This wraps up my opening remarks. I will now turn the call over to Gary for further details on our second quarter results, as well as our updated outlook.

Beth Wozniak: I will now turn the call over to Gary for further details on our Q2 results, as well as our updated outlook. Gary, please go ahead.

Speaker #3: Gary, please go ahead.

Speaker #2: Thank you, Beth. We had another excellent quarter, exceeding our guidance with record sales and EPS. Let's turn to slide 6 to review our results.

Gary Corona: Thank you, Beth. We had another excellent quarter, exceeding our guidance with record sales and EPS. Let's turn to slide six to review our results. Sales of $1.471 billion were up 53% compared to last year. Organically, sales grew 47%, well ahead of our guidance, driven by very strong data center sales. Acquisitions added $52 million to sales or 5 points to growth. Sales from EPG after 1 May became part of our organic growth. Foreign exchange was nearly a 1-point tailwind. Adjusted operating income was $323 million, up 61%. Return on sales came in ahead of expectations at 21.9%, up 110 basis points versus last year. Price plus productivity offset inflation of more than $50 million, including more than $30 million in tariff impact. We also continued to make investments for growth in data centers and power utilities.

Speaker #2: Sales of 1,471,000,000 dollars were up 53% compared to last year. Organically, sales grew 47%, well ahead of our guidance, driven by very strong data center sales.

Speaker #2: Acquisitions added 52,000,000 dollars to sales or 5 points to growth. Sales from EPG after May 1st became part of our organic growth. Foreign exchange was nearly a 1-point tailwind.

Speaker #2: Adjusted operating income was $323 million, up 61%. Return on sales came in ahead of expectations at 21.9%, up 110 basis points versus last year.

Speaker #2: Price plus productivity offset inflation of more than 50,000,000 dollars, including more than 30,000,000 dollars in tariff impact. We also continued to make investments for growth in data centers and power utilities.

Speaker #2: We had record earnings well ahead of the high end of our guidance, driven by exceptional sales growth and execution by the team. Adjusted EPS grew 69%, year over year, to $1.45.

Gary Corona: We had record earnings well ahead of the high end of our guidance, driven by exceptional sales growth and execution by the team. Adjusted EPS grew 69% year-over-year to $1.45. We generated very strong cash flow of $167 million, up 125% year-over-year. Now, please turn to slide seven for a discussion on the Q2 segment performance. Starting with Systems Protection, sales of $1.072 billion increased 70%. The EPG acquisition contributed 7 points to sales and has performed well. This was Systems Protection's first billion-dollar quarter. Organically, sales grew 62%, led by the infrastructure vertical, which more than doubled due to continued strength in data centers. Industrial and commercial resi were each flattish in the quarter. Geographically, Americas grew very strong double digits, while Europe was up mid-single digits. Asia Pacific grew double digits in the quarter. Q2 segment income was $248 million, up 81%.

Speaker #2: We generated very strong cash flow of $167 million, up 125% year over year. Now, please turn to slide 7 for a discussion on the second quarter segment performance.

Speaker #2: Starting with systems protection, sales of 1,072,000,000 dollars increased 70%. The EPG acquisition contributed 7 points to sales and has performed well. This was system protections first, billion dollar quarter.

Speaker #2: Organically, sales grew 62%, led by the infrastructure vertical, which more than doubled due to continued strength in data centers. Industrial and commercial resi were each flattish in the quarter.

Speaker #2: Geographically, Americas grew very strong double digits, while Europe was up mid single digits. Asia Pacific grew double digits in the quarter. Second quarter segment income was 248,000,000 dollars, up 81%.

Speaker #2: Return on sales of 23.2% increased 150 basis points year over year, on strong volume and productivity. Moving to electrical connections, sales of 399,000,000 dollars increased 21%.

Gary Corona: Return on sales of 23.2% increased 150 basis points year-over-year on strong volume and productivity. Moving to Electrical Connections. Sales of $399 million increased 21%. Organic sales were up 18%, and the EPG acquisition contributed 2 points to sales. Growth was broad-based across all verticals and geographies. From a vertical perspective, infrastructure and industrial each grew strong double digits. Commercial resi was up low teens. Geographically, sales were up high teens in the Americas. Europe was up low double digits, and Asia Pacific grew double digits. Segment income was $109 million, up 15% versus last year. Return on sales of 27.3% was down 140 basis points year-over-year. The margin performance was impacted by inflation and mix, partially offset by improving price and volume. Importantly, margins improved sequentially back into the high 20s. Turning to the balance sheet and cash flow on slide eight.

Speaker #2: Organic sales were up 18%. And the EPG acquisition contributed 2 points to sales. Growth was broad-based across all verticals and geographies. From a vertical perspective, infrastructure and industrial each grew strong double digits.

Speaker #2: Commercial resi was up low teens. Geographically, sales were up high teens in the Americas, Europe was up low double digits, and Asia Pacific grew double digits.

Speaker #2: Segment income was 109,000,000 dollars, up 15% versus last year. Return on sales of 27.3% was down 140 basis points year over year. The margin performance was impacted by inflation and mix, partially offset by improving price and volume.

Speaker #2: Importantly, margins improved sequentially back into the high 20s. Turning to the balance sheet and cash flow on slide 8. We ended the quarter with 256,000,000 dollars of cash on hand and 600,000,000 available on our revolver, putting us in a strong liquidity position.

Gary Corona: We ended the quarter with $256 million of cash on hand and $600 million available on our revolver, putting us in a strong liquidity position. Our debt stands at $1.5 billion after paying down nearly $70 million of our pre-payable term loan in the quarter. Our healthy balance sheet and strong liquidity position gives us financial flexibility to support our disciplined capital allocation strategy. Turning to slide nine on capital allocation, where we outline how we deploy capital to drive growth and sustain financial outperformance. Our framework has been consistent and is centered on disciplined growth investments and rigorous execution of our M&A strategy while maintaining the balance sheet flexibility to consistently return capital to shareholders. Our capital allocation priority is growth, and that starts with reinvesting in the business by funding capacity expansion, innovation, and the capabilities required to win in high-growth verticals.

Speaker #2: Our debt stands at 1.5 billion dollars after paying down nearly 70,000,000 dollars of our prepayable term loan in the quarter. Our healthy balance sheet and strong liquidity position gives us financial flexibility to support our disciplined capital allocation strategy.

Speaker #2: Turning to slide 9 on capital allocation, where we outline how we deploy capital to drive growth and sustain financial outperformance. Our framework has been consistent and is centered on disciplined growth investments and rigorous execution of our M&A strategy while maintaining the balance sheet flexibility to consistently return capital to shareholders.

Speaker #2: Our capital allocation priority is growth. And that starts with reinvesting in the business by funding capacity expansion, innovation, and the capabilities required to win in high-growth verticals.

Speaker #2: This year, we continue to expect to invest approximately 130,000,000 dollars in capex, up 40%. We spent nearly 60,000,000 dollars in the first half, up over 50% versus last year.

Gary Corona: This year, we continue to expect to invest approximately $130 million in CapEx, up 40%. We spent nearly $60 million in the H1, up over 50% versus last year. Most of this increased investment is for new capacity to support growth in data centers, power utilities, and supply chain resiliency. Through the H1 of the year, we returned $118 million to shareholders, including share repurchases of $50 million, and we have increased our quarterly dividend by 5% compared to last year. We exited the quarter with net leverage of 1.2 times, well below our target range of two to two and a half times, providing ample flexibility to invest in growth and acquisitions. Overall, our disciplined capital allocation approach positions us to prioritize growth and create long-term shareholder value. Moving to slide 10.

Speaker #2: Most of this increased investment is for new capacity, y, to support growth in data centers, power utilities, and supply chain resiliency. Through the first half of the year, we returned 118,000,000 dollars to shareholders, including share repurchases of 50,000,000 dollars.

Speaker #2: And we have increased our quarterly dividend by 5% compared to last year. We exited the quarter with net leverage of 1.2 times, well below our target range of 2 to 2 and a half times providing ample flexibility to invest in growth and acquisitions.

Speaker #2: Overall, our disciplined capital allocation approach positions us to prioritize growth and create long-term shareholder value. Moving to slide 10. As Beth shared earlier, we are significantly raising our full-year sales and EPS guidance again.

Gary Corona: As Beth shared earlier, we are significantly raising our full-year sales and EPS guidance again due to our strong performance in Q2 and momentum across our portfolio. We now forecast reported sales growth of 37% to 39%, up from 26% to 28% previously. We are significantly increasing our organic sales growth guidance. We now expect to grow 32% to 34%, versus our prior guidance of 21% to 23%. We are raising our full year adjusted EPS range to $5 to $5.10, versus our original guidance of $4.45 to $4.55. At the midpoint, adjusted EPS is expected to grow 50% versus last year. Our tariff out impact is expected to be approximately $100 million, up from $80 million previously. Largely, this is driven by our significantly higher volume growth. We continue to expect to offset the impact of inflation, including tariffs, through pricing, supply chain productivity, and operational mitigating actions.

Speaker #2: Due to our strong performance in Q2 and momentum across our portfolio. We now forecast reported sales growth of 37 to 39 percent, up from 26 to 28 percent previously.

Speaker #2: We are significantly increasing our organic sales growth guidance. We now expect to grow 32 to 34 percent versus our prior guidance of 21 to 23 percent.

Speaker #2: We are raising our full-year adjusted EPS range to $5 to $5.10 versus our original guidance of $4.45 to $4.55. At the midpoint, adjusted EPS is expected to grow 50% versus last year.

Speaker #2: Our tariff impact is expected to be approximately $100,000,000, up from $80,000,000 previously. Largely, this is driven by our significantly higher volume growth. We continue to expect to offset the impact of inflation including tariffs through pricing, supply chain productivity, and operational mitigating actions.

Speaker #2: For free cash flow, we still expect conversion of 90 to 95 percent. Looking at our third quarter outlook on slide 11, we forecast reported and organic sales growth of 32 to 35 percent.

Gary Corona: For free cash flow, we still expect conversion of 90% to 95%. Looking at our Q3 outlook on slide 11, we forecast reported and organic sales growth of 32% to 35%. Pricing is expected to offset the impact of inflation, including tariffs. We also expect to continue to invest in growth, particularly in data centers and power utilities. We expect adjusted EPS to be between $1.35 and $1.38, which at the midpoint reflects 50% growth compared to last year. Wrapping up, our nVent team delivered exceptional sales and earnings performance in the H1 of the year, growing sales by over 50% and adjusted EPS by over 65%. As we turn to the H2, we are well-positioned for another outstanding year. I will now turn the call back over to Beth.

Speaker #2: Pricing is expected to offset the impact of inflation including tariffs. We also expect to continue to invest in growth, particularly in data centers and power utilities.

Speaker #2: We expect adjusted EPS to be between $1.35 and $1.38. Which at the midpoint reflects 50% growth compared to last year. Wrapping up, our invent team delivered exceptional sales and earnings performance in the first half of the year, growing sales by over 50% and adjusted EPS by over 65%.

Speaker #2: As we turn to the second half, we are well positioned for another outstanding year. I will now turn the call back over to Beth.

Speaker #1: Thank you, Gary. Please turn to slide 12. We have been working on liquid cooling in data centers for over a decade. Three years ago, we executed our first significant expansion for liquid cooling, increasing our footprint to support the AI data center build-out.

Beth Wozniak: Thank you, Gary. Please turn to slide 12. We have been working on liquid cooling in data centers for over a decade. Three years ago, we executed our first significant expansion for liquid cooling, increasing our footprint to support the AI data center build-out. That expansion was not enough to keep up with the accelerating demand, so we added another facility at the beginning of this year in Blaine, Minnesota, effectively doubling our capacity. This new facility is near to our Anoka campus, and that proximity has allowed us to use the infrastructure, resources, and expertise nearby to quickly scale. We opened the Blaine site within approximately 100 working days from when we signed the lease. This site is progressing ahead of our expectations and will continue to ramp through this year.

Speaker #1: That expansion was not enough to keep up with the accelerating demand. So we added another facility at the beginning of this year in Blaine, Minnesota, effectively doubling our capacity.

Speaker #1: This new facility is near to our Anoka campus, and that proximity has allowed us to use the infrastructure, resources, and expertise nearby to quickly scale.

Speaker #1: We opened the Blaine site within approximately 100 working days from when we signed the lease. This site is progressing ahead of our expectations and will continue to ramp through this year.

Speaker #1: Now, as we look ahead, given the strong orders, backlog, and visibility we have with our customers on liquid cooling demand, this expansion is not going to be enough.

Beth Wozniak: Now, as we look ahead, given the strong orders, backlog, and visibility we have with our customers on liquid cooling demand, this expansion is not going to be enough. Thus, today, we have announced a third facility expansion in Minnesota that is of similar size to the Blaine location and nearby, which we are calling Blaine 2. This facility is expected to open in H1 2027. We expect our total data center sales to be more than $2 billion in 2026, more than double last year's sales. Wrapping up on slide 13, we had another tremendous quarter with record sales and EPS. Our portfolio transformation and the AI data center build-out are accelerating our growth. We expect another record year and have significantly raised our full-year sales and EPS guidance. We believe we are well-positioned with the electrification, sustainability, and digitalization trends. Our future is bright.

Speaker #1: Thus, today, we have announced a third facility expansion in Minnesota that is of similar size to the Blaine location and nearby, which we are calling Blaine 2.

Speaker #1: This facility is expected to open in the first half of 2027. We expect our total data center sales to be more than $2 billion.

Speaker #1: In 2026, more than double last year’s sales. Wrapping up on slide 13, we had another tremendous quarter with record sales and EPS. Our portfolio transformation and the AI data center build-out are accelerating our growth.

Speaker #1: We expect another record year and have significantly raised our full-year sales and EPS guidance. We believe we are well positioned with the electrification, sustainability, and digitalization trends.

Speaker #1: Our future is bright. With that, I will now turn the call over to the operator to start Q&A.

Beth Wozniak: With that, I will now turn the call over to the operator to start Q&A.

Speaker #3: We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator 2: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then two. Our first question comes from Deane Dray with RBC Capital Markets. Please go ahead.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then two. Our first question comes from Deane Dray with RBC Capital Markets. Please go ahead.

Speaker #3: If at any time your question has been addressed and you would like to withdraw the question, please press star, then 2. Our first question comes from Dean Dre with RBC Capital Markets.

Speaker #3: Please go ahead.

Speaker #4: Thank you. Good morning, everyone.

Deane Dray: Thank you. Good morning, everyone.

Speaker #5: Good morning.

Beth Wozniak: Good morning.

Speaker #6: Good morning.

Gary Corona: Morning.

Speaker #4: Hey, I realize there’s a lot of focus on the continued hypergrowth in your data center business, but I was hoping we could start off by walking through your industrial short-cycle businesses and electrical connections.

Deane Dray: Hey, I realize there's lots of focus on the continued hyper-growth in your data center business, I was hoping we could start off walking through your industrial short cycle businesses and Electrical Connections. The 18% organic was three times bigger than what we had been modeling for. Beth, I was hoping you could take us through. Are we seeing an inflection here? How broad-based is that? Just to make sure we're level set, were there any kind of thing unusual that got booked this quarter? Any one-timers that would have skewed that organic growth rate higher?

Speaker #4: I mean, the 18% organic was three times bigger than what we had been modeling for. So, Beth, I was hoping you could take us through.

Speaker #4: Are we seeing an inflection here? How broad-based is that? And just to make sure we're level set, were there any kind of thing unusual that got booked this quarter?

Speaker #4: Any one-timers that would have skewed that organic growth rate higher?

Speaker #1: All right, Dean, thank you for the question. 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.

Beth Wozniak: All right, Deane, thank you for the question. As the quarter progressed, we saw strong orders. As I mentioned in my prepared remarks, we saw growth across every vertical and every geography. Our orders were very strong through our just Distribution partners, which is where we see a lot of that short cycle industrial growth. 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. There was nothing unusual.

Speaker #1: And our orders were very strong through our distribution partners, which is where we see a lot of that short-cycle industrial growth.

Speaker #1: 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.

Speaker #1: And there's nothing unusual to yeah.

Deane Dray: Great.

Beth Wozniak: Just, yeah-

Deane Dray: Great.

Beth Wozniak: Just, yeah-

Speaker #4: All right, good.

Deane Dray: All right, good

Speaker #1: Unusual.

Speaker #4: All right. That's great to hear. And then the second question, and I know you guys hinted pretty strongly that there was more capacity expansion coming at your analyst day.

Beth Wozniak: unusual.

Deane Dray: All right. That's great to hear. The second question, I know you guys hinted pretty strongly that there was more capacity expansion coming at your Analyst Day. Seeing the announcement today makes sense. Couple questions here. How do you land on, I think it's a 60% increase in capacity, and where does this take you in terms of your current order funnel? Does it take you into 2028? Gary, how are you managing as you ramp each new line, just in terms of the margin impact, so there's not too much pressure on the incrementals? I know a lot of work goes into that. Thanks.

Speaker #4: So seeing the announcement today makes sense. A couple of questions here. How do you land on I think it's a 60% increase in capacity and where does this take you in terms of your current kind of order funnel?

Speaker #4: Does it take you into 2028 and just and then Gary, how are you managing the as you ramp each new line, just in terms of the margin impact?

Speaker #4: So there's not too much pressure on the incrementals. I know a lot of work goes into that. Thanks.

Speaker #1: Well, Dean, as we look at the demand and as we look at what our customers and the visibility that we have there, and as we are launching also our modular platform and in fall time frame, we knew that we needed to expand our capacity.

Beth Wozniak: Well, Deane, as we look at the demand and as we look at what our customers and the visibility that we have there, and as we are launching also our modular platform in fall timeframe, we knew that we needed to expand our capacity. We're looking out. As you know, our Blaine facility, Blaine I, that is coming online right now, is still ramping through this year and into 2027. As we looked at that, we knew with the demand that we're seeing, that we needed to ramp another facility because it takes time to get them online, and we do believe that that takes us through 2027 and into 2028 at this time.

Speaker #1: And we're looking out. So as you know, our Blaine facility Blaine 1 that is coming online right now is still ramping through this year and into 2027.

Speaker #1: So as we looked at that, we knew with the demand that we're seeing that we needed to ramp another facility because it takes time to get them online.

Speaker #1: And we do believe that that takes us through '27 and into '28 at this time.

Speaker #6: Dean, and just to pick up on the margins, as we have said, consistently, we expect to continue to invest to support the infrastructure vertical, to serve the backlog that Beth talked about.

Gary Corona: Deane, just to pick up on the margins. As we have said consistently, we expect to continue to invest to support the infrastructure vertical to serve the backlog that Beth talked about. That's all embedded in our guide, which is assuming mid-20s incrementals in the H2.

Speaker #6: That's all embedded in our guide, which is assuming mid-20s incrementals in the second half.

Speaker #4: Good to hear. Congrats to the team. Thank you.

Deane Dray: Good to hear. Congrats to the team. Thank you.

Speaker #1: Thank you.

Beth Wozniak: Thank you.

Speaker #3: Our next question comes from Jeff Sprog with Vertical Research. Please go ahead.

Operator 2: Our next question comes from Jeff Sprague with Vertical Research. Please go ahead.

Operator: Our next question comes from Jeff Sprague with Vertical Research. Please go ahead.

Speaker #4: Hey, thanks. Good morning, everyone.

Jeff Sprague: Hey, thanks. Good morning, everyone.

Speaker #5: Good morning.

Beth Wozniak: Good morning.

Speaker #6: Good morning.

Gary Corona: Morning.

Speaker #4: Got to add some width to my columns here, to fit all this organic growth. Hey, just thinking about the ramp here. I mean, looking at systems protection, I think we have 8 or 10 quarters now of sequential revenue growth as sort of this bow wave of activity has come through.

Jeff Sprague: Got to add some width to my columns here to fit all this organic growth. Just thinking about the ramp here. Looking at Systems Protection, I think we have 8 or 10 quarters now of sequential revenue growth. A sort of this bow wave of activity has come through. It appears the guide sort of levels out here, though. Looks like maybe even the guide is for a little bit down revenues sequentially in Q3 and more so in Q4. Isn't the seasonality of the business sort of being ironed out by this level of activity? Perhaps there's something going on with how you stage the new production. Could you just address that, please?

Speaker #4: It appears the guide sort of levels out here, though. It's like maybe even the guide is for a little bit down revenue sequentially in Q3, and more so in Q4.

Speaker #4: Isn't the seasonality of the business sort of being ironed out by this level of activity or perhaps there's something going on with how you stage the new production?

Speaker #4: Could you just address that, please?

Speaker #6: Sure, Jeff. This is Gary. I'll start off and just mention we expect good organic growth in the second half and in the third quarter, certainly.

Gary Corona: Sure, Jeff. This is Gary. I'll start off and just mention, we expect a good organic growth in H2 and in Q3, certainly. We guided 32% to 35% in Q3. Keep in mind, we're going to be lapping 20% organic and 50% EPS growth in H2. Last quarter, we talked about mid-30s two-year stack growth. Actually in Q3, we're going to significantly accelerate 50% in Q3 at the midpoint versus 46% growth in H1. We're seeing nice acceleration. I understand your question, we really feel like the team is delivering and delivering nice momentum.

Speaker #6: We guided 32 to 35% in the third quarter. And keep in mind, we're going to be lapping 20% organic and 50% EPS growth in the second half.

Speaker #6: Last quarter, we talked about mid-30s two-year stack growth. And actually, in the third quarter, we're going to significantly accelerate—to 50% in Q3 at the midpoint versus 46% growth in the first half.

Speaker #6: So we're seeing nice acceleration. So I understand your question, but we really feel like the team is delivering and delivering nice momentum.

Speaker #4: But is there any particular internal or external supply chain issue that might hold back kind of the sequential trajectory in Q3 versus Q2?

Jeff Sprague: Is there any particular internal or external supply chain issue that might hold back kind of the sequential trajectory in Q3 versus Q2?

Speaker #1: I think, Jeff, this is just our planning. And we're being very prudent because as you know, as we ramp capacity, we're having to add in equipment.

Beth Wozniak: I think, Jeff, this is just our planning, we're being very prudent because as you know, as we ramp capacity, we're having to add in equipment, we're having to add in labor, we're having to make sure that our suppliers can respond. Certainly, in Q2, we were managing those things, it worked out more favorable in terms of the growth that we saw. As we look forward, we're just being prudent, as we ramp up two new facilities, we want to ensure that we're doing all the right planning.

Speaker #1: We're having to add in labor. We're having to make sure that our suppliers can respond. Certainly, in Q2, we were managing those things, and it worked out more favorably in terms of the growth that we saw.

Speaker #1: But as we look forward, we're just being prudent. And as we ramp up two new facilities, we want to ensure that we're putting the right doing all the right planning.

Speaker #4: And then maybe just to follow on, I think we talked about this a little bit before, but could you just maybe address the kind of service opportunity that is being created or should be being created on the back end of all this installed base growth that you're capturing here?

Jeff Sprague: Maybe just to follow on, I think we talked about this a little bit before, could you just maybe address the kind of service opportunity that is being created or should be being created on the back end of all this installed base growth that you're capturing here? Kind of the opportunity set there. Are you seeing traction in that regard?

Speaker #4: Kind of the opportunity set there. Are you seeing traction in that regard?

Speaker #1: So yes, as we designed our product portfolio and liquid cooling, we always designed it with modularity in mind so that parts could be hot-swappable.

Beth Wozniak: Yes, as we designed our product portfolio in Liquid Cooling, we always designed it with modularity in mind so that parts could be hot-swappable. As we are also investing in a service capability to support the products. As we move and see our growth from hyperscalers to other less sophisticated customers, let's say, we have that ability to help commission, install, and provide that service. That is building as we go, certainly as we launch in the fall timeframe here, our new modular portfolio, that is a big element for us to support that portfolio, which we see will be very broad-based in terms of its appeal to the customer set.

Speaker #1: And as we are also investing in a service capability to support the products. And as we move and see our growth from hyperscalers to other less sophisticated customers, let's say, we have that ability to help commission install and provide that service.

Speaker #1: So that is building. As we go. And certainly, as we launch in the fall time frame here, our new modular portfolio, that is a big element for us to support that portfolio which we see will be very broad-based in terms of its appeal to the customer set.

Speaker #4: Great. Thank you very much.

Gary Corona: Great. Thank you very much.

Speaker #1: Thank you.

Beth Wozniak: Thank you.

Speaker #3: Our next question comes from Nigel Coe with Wolf Research. Please go ahead.

Operator 2: Our next question comes from Nigel Coe with Wolfe Research. Please go ahead.

Operator: Our next question comes from Nigel Coe with Wolfe Research. Please go ahead.

Speaker #7: Oh, thanks. Good morning, everyone. Thanks for the question. So Beth, I hate to be the annoying analyst asking the question about orders, but I know they're lumpy, so we get it.

Nigel Coe: Oh, thanks. Good morning, everyone. Thanks for the question. Beth, I hate to be the annoying analyst asking the question about orders, I know they're lumpy, so we get it. Is there anything around just the cadence of product launches and the capacity ramp that's pushed orders around a little bit here, made them perhaps a bit lumpier? I'm thinking, obviously, about the modular product launches, et cetera. Anything around those factors driving a bit more lumpiness in orders?

Speaker #7: But is there anything around just the cadence of product launches and the capacity ramp that's pushed orders around a little bit here and made them perhaps a bit lumpier?

Speaker #7: And I'm thinking, obviously, about the modular product launches, etc. So, anything around those factors driving a bit more lumpiness in orders?

Speaker #1: No, not really. I would say we've seen this over the last several years—that these orders come in at various times, and usually they're large.

Beth Wozniak: No, not really. I would say we've seen this over the last several years, that these orders come in at various times, and usually they're large. As I commented through Q3 year to date, we've seen very strong orders. This is just normal in terms of these large orders that drop in.

Speaker #1: And as I commented through Q3, year-to-date, we've seen very strong orders. So this is just normal, right, in terms of these large orders that drop in.

Speaker #7: I get it. No, that's good. I just wanted to say just to double-check on that. And then obviously, really good news on the Blaine 2 facility.

Nigel Coe: I get it. No, that's good. I just wanted to just double-check on that. Obviously, really good news on the Blaine 2 facility. Can you maybe just bring us up to speed in terms of where we are on the production ramp in Blaine One? What's the capitalization and where do you think we'll be by the end of the year? I'm just kind of amazed that you're not seeing any capacity headwinds or supply chain bottlenecks, unlike a lot of your competitors and peers in data centers. Just maybe just touch on where you are right now in your supply chain, et cetera.

Speaker #7: Could you maybe just bring us up to speed in terms of where we are on the production ramp in Blaine 1? What's the capacitization and where do you think we'll be by the end of the year?

Speaker #7: And I'm just kind of amazed that you're not seeing any capacity headwinds or supply chain bottlenecks unlike a lot of your competitors and peers in data centers.

Speaker #7: So, just maybe touch on where you are right now in your supply chain, etc.

Speaker #1: Okay. Well, as you know, when you're ramping up, it's not just our capacity. It's also ensuring that our suppliers' capacity is also expanding. So as we've ramped our own facilities, we've continued to work with our supply base to ensure that they're ramping.

Beth Wozniak: Well, as you know, when you're ramping up, it's not just our capacity, it's also ensuring that our suppliers' capacity is also expanding. As we've ramped our own facilities, we've continued to work with our supply base to ensure that they're ramping, and that's a lot of work. As I think about our Blaine One facility, it's come online faster than we expected, but still ramping through the course of this year and into 2027. It is starting to contribute, but we expect more stronger contributions from that facility as we go into 2027.

Speaker #1: And that's a lot of work. And as I think about our Blaine 1 facility, it's come online faster than we expected, but it's still ramping through the course of this year.

Speaker #1: And into 2027. So, it is starting to contribute, but we expect stronger contributions from that facility as we go into 2027.

Speaker #7: Great. Thanks, Beth.

Nigel Coe: Great. Thanks, Beth.

Speaker #1: Thank you.

Beth Wozniak: Thank you.

Speaker #3: Our next question comes from Joe Richie with Goldman Sachs. Please go ahead.

Operator 2: Our next question comes from Joe Ritchie with Goldman Sachs. Please go ahead.

Operator: Our next question comes from Joe Ritchie with Goldman Sachs. Please go ahead.

Speaker #8: Hey, good morning, everyone.

Joe Ritchie: Hey, good morning, everyone.

Speaker #1: Good morning.

Beth Wozniak: Good morning.

Gary Corona: Good morning.

Beth Wozniak: Good morning.

Gary Corona: Good morning.

Speaker #8: So obviously, incredibly good results. And demand remains really healthy. Your backlog is now kind of sitting at two and a half billion dollars. Basically kind of flattish, maybe down a little bit sequentially.

Joe Ritchie: Obviously, incredibly good results, demand remains really healthy. Your backlog is now kind of sitting at $2.5 billion, basically kind of flat-ish, maybe down a little bit sequentially. I am curious, with the capacity ramp that you have coming and what you see in your pipeline, is this kind of the right backlog level for you going forward? Do you expect backlog to continue to increase from here? I know that you have a really tough comp, obviously, in Q3. Any comments around that would be helpful.

Speaker #8: I'm just curious—with the capacity ramp that you have coming and what you see in your pipeline, is this kind of the right backlog level for you going forward?

Speaker #8: Do you expect backlog to continue to increase from here? I know that you have a really tough comp, obviously, in the third quarter. Any comments around that would be helpful.

Speaker #1: Yeah. I mean, I think it's around the right level. I mean, it's hard to say because, again, when you get these lumpy orders that come in that can increase the backlog.

Beth Wozniak: I think it is around the right level. It is hard to say because, again, when you get these lumpy orders that come in, that can increase the backlog. We are trying to turn it as well, because it is important as we have a backlog that we are responding to the demand from our customers. We worked hard in Q2 to really execute on that backlog because we know it is important to have good lead times for our customers. Maybe is my answer to that question, that that is around the right level.

Speaker #1: But we're trying to turn it as well because it is important as we have a backlog that we're responding to the demand from our customers.

Speaker #1: So, we worked hard in Q2 to really execute on that backlog because we know it's important to have good lead times for our customers.

Speaker #1: So maybe is my answer to that question that that's around the right level?

Speaker #8: Okay. Yeah. No, fair enough. And look, it's great to see you guys turning the backlog and really impressive growth. I guess my second question is just around the electrical connections margins.

Joe Ritchie: Okay. Yeah. No, fair enough. Look, it is great to see you guys turning the backlog, and really impressive growth. I guess my second question is around the Electrical Connections margins. I know that you guys have been dealing with some inflationary pressures as well. The growth is really good in the segment. How do we think about the trajectory of the margins going forward and whether you are going to be able to kind of expand those margins?

Speaker #8: I know that you guys have been dealing with some inflationary pressures as well. The growth is really good in the segment. Just how should we think about the trajectory of the margins going forward, and whether you're going to be able to expand those margins?

Speaker #6: Yeah, Joe, I'll take this. This is Gary. The first comment I'll make is about the great growth. Both on the top line and the bottom line, mid-teens profit growth for EC is a tremendous contributor to our performance.

Gary Corona: Yeah, Joe, I will take this. This is Gary. The first comment I will make is about the great growth. Both on the top line and the bottom line. Mid-teens profit growth for EC is a tremendous contributor to our performance. On the margin front, we did see a significant sequential step-up, and we expect margins to continue to improve as the pricing and productivity actions that we talked about last quarter take hold. Again, that is going to be in those high twenties, in line with what we discussed as that segment continues to deliver really nice growth on the top and bottom line for nVent.

Speaker #6: And on the margin front, we did see a significant sequential step-up. And we expect margins to continue to improve as the pricing and productivity actions that we talked about last quarter take hold.

Speaker #6: And again, that's going to be in those high 20s, in line with what we discussed, as that segment continues to deliver really nice growth on the top and bottom line for nVent.

Speaker #8: Great. Thank you, guys.

Joe Ritchie: Great. Thank you, guys.

Speaker #1: Thank you.

Beth Wozniak: Thank you.

Speaker #3: Our next question comes from Jacob Levinson with Melius. Please go ahead.

Operator 2: Our next question comes from Jacob Levinson with Melius. Please go ahead.

Operator: Our next question comes from Jacob Levinson with Melius. Please go ahead.

Speaker #9: Hi, good morning, everyone.

Jake Levinson: Hi. Good morning, everyone.

Speaker #1: Good morning.

Beth Wozniak: Good morning.

Speaker #6: Good morning, Jacob.

Gary Corona: Morning, Jacob.

Speaker #9: I think you mentioned there was a pretty strong tailwind in the distribution channel. And can you give us a sense of maybe inventory has got a little too low over the last couple of years?

Jake Levinson: I think you mentioned there was a pretty strong tailwind in the distribution channel. Can you give us a sense of maybe inventory has got a little too low over the last couple of years? Just how much of that is maybe an inventory restock versus real underlying sell-through demand?

Speaker #9: And just how much of that is maybe an inventory restock versus real underlying sell-through demand?

Speaker #1: Well, we look at both the sell-in and sell-out from our distributors, and it's actually been well balanced. So, the positive note is that they're seeing strong sell-through.

Beth Wozniak: Well, we look at both the sell-in and sell-out from our distributors. It's actually been well-balanced. The positive note is that they're seeing strong sell-through. We actually think it's very healthy. It's real demand that we're seeing. That's the short cycle strength.

Speaker #1: So we actually think it's very healthy. And it's real demand that we're seeing. And that's the short cycle strength.

Speaker #9: Okay, fair enough. And just on the Utility side, I'm not sure if you mentioned how much that market grew in the quarter, but that would be helpful to know for one.

Jake Levinson: Okay. Fair enough. Just on the utility side, I'm not sure if you mentioned how much that market grew in the quarter, but that would be helpful to know, for one. Two, just how do you balance the demand in that space with data center? Because I know there's not a lot of overlap with some of those products, particularly with the acquisitions that you did recently.

Speaker #9: And two, just how do you balance the demand in that space with data center? Because I know there's not a lot of overlap with some of those products, particularly with the acquisitions that you did recently.

Speaker #1: Well, yeah, power utilities grew double digits for us in the quarter, so it was very strong growth. And as we look at our whole portfolio—again, I've commented before—we intentionally have shifted to data centers and power utilities.

Beth Wozniak: Well, yeah. Power utilities grew double digits for us in the quarter, so it was very strong growth. As we look at our whole portfolio, again, I've commented before, we intentionally have shifted to data centers and power utilities. Certainly as we look at opportunities, we want to ensure that we're serving our core customers, so we make prudent decisions if there has to be trade-offs. In some cases, we have separate facilities or depending on the product line. Liquid cooling is in separate facilities from where we're doing some of our power utility business. It's overall part of our planning to ensure that we're looking far enough out, talking to our customers, and ensuring we can execute on all that customer demand.

Speaker #1: And certainly, as we look at opportunities, we want to ensure that we're serving our core customers, and so we make prudent decisions if there have to be trade-offs.

Speaker #1: But in some cases, we have separate facilities, or depending on the product line, liquid cooling is in separate facilities from where we're doing some of our power utility business.

Speaker #1: But it's overall part of our planning to ensure that we're looking far enough out, talking to our customers, and ensuring we can execute on all that customer demand.

Speaker #9: Great. Thank you, Beth. I appreciate it. I'll pass it on.

Jake Levinson: Great. Thank you, Beth. I appreciate it. I'll pass it on.

Speaker #1: Thank you.

Beth Wozniak: Thank you.

Speaker #6: Thanks, Jake.

Gary Corona: Thanks, Jay.

Speaker #3: Our next question comes from Jeff Hammond with KeyBank Capital Markets. Please go ahead.

Operator 2: Our next question comes from Jeff Hammond with KeyBanc Capital Markets. Please go ahead.

Operator: Our next question comes from Jeff Hammond with KeyBanc Capital Markets. Please go ahead.

Speaker #10: Hey, good morning, everyone. Beth is counting on—could we count on 100 days to get Blaine 2 opened, or is that too aggressive?

Jeff D. Hammond: Hey, good morning, everyone.

Jeff Hammond: Hey, good morning, everyone.

Beth Wozniak: Good morning.

Jeff D. Hammond: Beth, could we count on 100 days to get Blaine 2 opened, or is that too aggressive?

Jeff Hammond: Beth, could we count on 100 days to get Blaine 2 opened, or is that too aggressive?

Speaker #1: I think that's too aggressive. I mean, we are running flat out. So I don't think we can have that repeat performance.

Beth Wozniak: I think that's too aggressive. We are running flat out. I don't think we can have that repeat performance.

Speaker #10: All right. All right. It's good to talk about electrical connections again. I know you mentioned a lot about the short cycle, but I'm just wondering, with this step-up and acceleration, how sustainable do you think it is?

Jeff D. Hammond: All right. It's good to talk about Electrical Connections again. I know you mentioned a lot about the short cycle, I'm just wondering if this step up in acceleration, how sustainable do you think it is? Just Gary, you had some price cost issues, nice recovery there. Are we where we want to be, or is there more price for us cost recovery into H2? I guess, how should margins look on EC as we go forward? Thanks.

Jeff Hammond: All right. It's good to talk about Electrical Connections again. I know you mentioned a lot about the short cycle, I'm just wondering if this step up in acceleration, how sustainable do you think it is? Just Gary, you had some price cost issues, nice recovery there. Are we where we want to be, or is there more price for us cost recovery into H2? I guess, how should margins look on EC as we go forward? Thanks.

Speaker #10: And then, just Gary, on the—you had some price-cost issues, nice recovery there. Are we where we want to be, or is there more kind of price-cost recovery into the second half?

Speaker #10: I guess, how should margins look on EC as we go forward? Thanks.

Speaker #1: Yeah. On electrical connections growth, one of the things that we've really focused on is ensuring that our product portfolio is positioned well. We have cable management, for example, that is used in data centers, and there's a lot of construction that goes on in the gray space of data centers.

Beth Wozniak: Yeah. On Electrical Connections growth, one of the things that we've really focused on is ensuring that our product portfolio, which is positioned well in, we have cable management, for example, that is used in data centers, and there's a lot of construction that goes on in the gray space of data centers. We've done a lot of work to ensure that our sales teams and our portfolio is positioned there. We feel very good about that. Again, the growth was broad-based across Electrical Connections. Like what we do overall in nVent, we continue to come out with new products, and we also have added capacity for some of those core lines in Electrical Connections as well to be able to really perform and execute on all that growth. We feel good about the trajectory of that business.

Speaker #1: So we've done a lot of work to ensure that our sales teams and our portfolio are positioned there, so we feel very good about that.

Speaker #1: And again, the growth was broad-based across electrical connections. And like what we do overall in invent, we continue to come out with new products that and we also have added capacity for some of those core lines in electrical connections as well to be able to really perform and execute on all that growth.

Speaker #1: So we feel good about the trajectory of that business. And I'll let Gary respond to the second part of that question.

Beth Wozniak: I'll let Gary respond to the second part of that question.

Speaker #6: Yeah, Jeff. As I mentioned earlier, we're really pleased with the profit contribution. To invent EC delivering mid-teens is certainly far higher than they've contributed previously.

Gary Corona: Yeah, Jeff. As I mentioned earlier, we're really pleased with the profit contribution to nVent EC. Delivering mid-teens is certainly far higher than they've contributed previously. On the margin front, we saw the progress that we expected in the quarter, and we expect to see continued progress as that pricing fully takes hold. One of the things I would mention is, keep in mind we've got some acquisition contribution in that business as well. We love that business in the high twenties, and that's where I expect it to be this year.

Speaker #6: On the margin front, we saw the progress that we expected in the quarter. And we expect to see continued progress as that pricing fully takes hold.

Speaker #6: And one of the things I would mention is keep in mind we've got some acquisition contribution in that business as well. We love that business in the high 20s and that's where that's where I expect it to be this year.

Speaker #10: Okay, great. And then just two quick ones on liquid cooling. One, just early feedback on your modular product offering and uptake? And then, if you could level set us on the $2 billion revenue for 2026 data center, what do you think the mix of liquid cooling versus other is?

Jeff D. Hammond: Okay, great. Then just two quick ones on liquid cooling. One, just early feedback on your modular product offering and uptake. Then just if you could level set us on the $2 billion revenue for 2026 data center, what you think the mix of liquid cooling versus other is. Thanks.

Jeff Hammond: Okay, great. Then just two quick ones on liquid cooling. One, just early feedback on your modular product offering and uptake. Then just if you could level set us on the $2 billion revenue for 2026 data center, what you think the mix of liquid cooling versus other is. Thanks.

Speaker #10: Thanks.

Speaker #1: So, our modular platform is going to launch later this fall. The interest is very high with a broad set of customers, so we feel very confident about our new product offering and the growth that it's going to provide us.

Beth Wozniak: Our modular platform is going to launch later this fall, and the interest is very high with a broad set of customers. We feel very confident about our new product offering and the growth that it's going to provide us. On the $2 billion, certainly we haven't broken that down yet, but it's a significant contribution coming from liquid cooling.

Speaker #1: On the $2 billion, certainly, we haven't broken that down yet, but it's a significant contribution coming from liquid cooling.

Speaker #5: Okay.

Jeff D. Hammond: Okay.

Jeff Hammond: Okay.

Speaker #6: I would just say we have broad-based impact on data centers from our portfolio, and it's really nice to see that growth contribution, as Beth talked about.

Gary Corona: I would just say we have broad-based impact on data centers from our portfolio, and it is really nice to see that growth contribution, as Beth Wozniak talked about. The infrastructure vertical is a significant part of our business.

Speaker #6: The infrastructure vertical is a significant part of our business.

Speaker #5: Thanks for the time.

Jeff D. Hammond: Thanks for the time.

Jeff Hammond: Thanks for the time.

Speaker #3: Our next question comes from Neil Burke with UBS. Please go ahead.

Operator 2: Our next question comes from Neil Burke with UBS. Please go ahead.

Operator: Our next question comes from Neil Burke with UBS. Please go ahead.

Speaker #11: Good morning. Thanks. I wanted to ask about customer purchasing behavior for data center. I mean, it's clear that demand overall for NVENT is very strong.

Neil Burke: Good morning. Thanks. I wanted to ask about customer purchasing behavior for data center. It is clear that demand overall for nVent is very strong. Within your data center portfolio, can you talk about how customers are purchasing your products? Like for example, are there customers for large projects who are buying just liquid cooling from nVent? Or would you say that it is generally more balanced for a typical customer between power and cooling?

Neal Burk: Good morning. Thanks. I wanted to ask about customer purchasing behavior for data center. It is clear that demand overall for nVent is very strong. Within your data center portfolio, can you talk about how customers are purchasing your products? Like for example, are there customers for large projects who are buying just liquid cooling from nVent? Or would you say that it is generally more balanced for a typical customer between power and cooling?

Speaker #11: But within your data center portfolio, can you kind of talk about how customers are purchasing your products? For example, are there customers or large projects who are buying just liquid cooling from NVENT, or would you say that it's generally more balanced for typical customer between power and cooling?

Speaker #1: Well, it really depends. We have customers who will buy lots that we have to offer—from cooling, power, and cable management—to customers who might just buy a portion of a liquid cooling system as well.

Beth Wozniak: Well, it really depends. We have customers who will buy lots that we have to offer, from cooling, power, cable management, to customers who might just buy a portion of a liquid cooling system as well. We try and ensure that we understand what our customer is looking for. Are they looking for more integration? Are they looking for just a part of a solution? We're very flexible to serve across that value chain, because recall, we're working with hyperscalers, we're working with colos, we're working with distribution integrators. That's one of the things about nVent, we're able to provide solutions across that continuum of from a product all the way up through an integrated solution that you might see in an e-house.

Speaker #1: So we try and ensure that we understand what our customers are looking for. Are they looking for more integration? Are they looking for just a part of a solution?

Speaker #1: And we're very flexible to serve across that value chain. Because recall, we're working with hyperscalers. We're working with colos. We're working with distribution. Integrators.

Speaker #1: So that's one of the things about nVent. We're able to provide solutions across that continuum, from a product all the way up through an integrated solution that you might see in an e-house.

Speaker #11: Right. And as a follow-up to that, I mean, on the power utilities growth, Beth, you mentioned double-digit growth. It seems like very strong double digits.

Neil Burke: Right. As a follow-up to that, on the power utilities growth, Beth, you mentioned double-digit growth. It seems like very strong double digits. Can you just talk about the kind of drivers there? I think of this business, power utilities, as typically dependent on utility spending, and maybe the mix is benefiting nVent particularly. Are you dealing more with data center customers directly, given the power constraints to the industry? Thank you.

Neal Burk: Right. As a follow-up to that, on the power utilities growth, Beth, you mentioned double-digit growth. It seems like very strong double digits. Can you just talk about the kind of drivers there? I think of this business, power utilities, as typically dependent on utility spending, and maybe the mix is benefiting nVent particularly. Are you dealing more with data center customers directly, given the power constraints to the industry? Thank you.

Speaker #11: Can you just talk about the kind of drivers there? I mean, I think of this business power utilities as typically kind of dependent on utility spending and maybe the mix is benefiting NVENT particularly.

Speaker #11: Are you dealing more with data center customers directly, given the power constraints in the industry? Thank you.

Speaker #1: Yeah, certainly, the demand for power is being driven by data centers. And when we think about what we do for power utilities, again, there's a lot that we're selling direct to utilities as well as through the distribution channel.

Beth Wozniak: Yeah. Certainly, the demand for power is being driven by data centers, by an aging grid, et cetera. When we think about what we do for power utilities, again, there's a lot that we're selling direct to utilities as well as through the distribution channel. I would say there's also some integration or opportunities as we think of our engineered buildings and in that gray space. We're trying to be able to serve all of those opportunities. In general, the demand for power is just increasing.

Speaker #1: But I would say there's also some integration or opportunities as we think of our engineered buildings and in that gray space. So we're trying to be able to serve all of those opportunities.

Speaker #1: But in general, the demand for power is just increasing.

Speaker #11: Great. Thank you.

Neil Burke: Great. Thank you.

Neal Burk: Great. Thank you.

Speaker #3: Our next question comes from Varun Govindaraj with Bernstein. Please go ahead.

Operator 2: Our next question comes from Varun Govindaraj with Bernstein. Please go ahead.

Operator: Our next question comes from Varun Govindaraj with Bernstein. Please go ahead.

Speaker #11: Good morning, everyone. Morning, everyone. Congratulations.

Varun Govindaraj: Good morning, everyone.

Beth Wozniak: Good morning.

Varun Govindaraj: Congratulations. A quick question from my end. What's next in terms of product vitality? Obviously, you have the new PDUs coming in the back half of the year. As you think about your content per megawatt, where are you really looking to expand looking ahead?

Speaker #1: Good morning.

Speaker #11: Quick question from my end: what's next in terms of product vitality? Obviously, you have the new CDUs coming in the back half of the year.

Speaker #11: But as you think about your content per megawatt, where do you really looking to expand looking ahead?

Speaker #1: Well, as we think about our overall product portfolio and new products, we're looking at how do we launch new products for these high-growth verticals in general.

Beth Wozniak: Well, as we think about our overall product portfolio, and new products, we're looking at how do we launch new products for these high-growth verticals in general. Whether that's our modular liquid cooling, whether that's looking at some of our PDUs and new capability there, whether it's looking at our AeroFlex flexible bus that can be used for even medium voltage applications, we really are thinking about where are those opportunities where we're going to see some differentiated growth in those high-growth verticals. It's broad. We've been improving our new product vitality across the entire company. That's been one of the core tenets behind our growth strategy and working well for us.

Speaker #1: So whether that's our modular liquid cooling, whether that's looking at some of our PDUs and new capability there, whether it's looking at our Aeroflex flexible bus that can be used for even medium-voltage applications.

Speaker #1: We really are thinking about where are those opportunities where we're going to see some differentiated growth in those high-growth verticals. So it's broad. I mean, we look at we've been improving our new product vitality across the entire company.

Speaker #1: And I mean, that's been one of the core tenets behind our growth strategy. And working well for us.

Speaker #11: All right. I hear you. Thank you. And then how do you look at 800-volt DC and how that really impacts your opportunity? Any concerns about potential headwinds there?

Varun Govindaraj: Got it. I hear you. Thank you. How do you look at 800 Volt DC and how that really impacts your opportunity? Any concerns about potential headwinds there? Are you already working with customers and talking about what the outlook for that is going to be? Would just love any color that you could add.

Speaker #11: Are you already working with customers and talking about what the outlook for that is going to be? We'd just love any color that you could add.

Speaker #1: All right. As we think about 800-volt DC, and again, for us, there are others who are more power players so to speak. For us, we think about in terms of cooling and what is that going to mean at the rack level and what is that going to mean for rising heat densities and what is our offering need to support.

Beth Wozniak: All right. As we think about 800 Volt DC, again, for us, there are others who are more power players, so to speak. For us, we think about in terms of cooling and what is that going to mean at the rack level, and what is that going to mean for rising heat densities, and what does our offering need to support? We think about it in terms of our rack PDUs. A lot of our portfolio, by the way, whether it's just in some of our power connections, is already rated to support higher surge capacity or load capacity. We look at it as the industry is evolving. 800 Volt DC is going to have some application in data centers, but you'll still have lower voltage requirements.

Speaker #1: We think about it in terms of our rack PDUs. A lot of our portfolio, by the way—whether it's just in some of our power connections—is already rated to support higher surge capacity or low capacity.

Speaker #1: So we look at it as the industry is evolving. Eight hundred-volt DC is going to have some application in data centers, but you'll still have lower voltage requirements.

Speaker #1: And we just make sure we understand what it means for our roadmaps as we look at next generation products and what they need to be capable of meeting.

Beth Wozniak: We just make sure we understand what it means for our roadmaps as we look at next generation products and what they need to be capable of meeting. I think it's an opportunity for us to continue to extend what we do.

Speaker #1: So, I think it's an opportunity for us to continue to extend what we do.

Speaker #11: Thank you so much. I'll pass it on.

Varun Govindaraj: Thank you so much. I'll pass it on.

Speaker #3: Our next question comes from Vlad Bystricki with Citigroup. Please go ahead.

Operator 2: Our next question comes from Vlad Bystricky with Citigroup. Please go ahead.

Operator: Our next question comes from Vlad Bystricky with Citigroup. Please go ahead.

Speaker #5: Hey, good morning. Beth and Gary congrats on a nice quarter. Thank you, Beth. I just want yeah. So I just wanted to ask in terms of order patterns from customers, particularly on the utilities and data center side, are you seeing any change in sort of timing of how orders are coming in?

Vlad Bystricky: Hey, good morning, Beth and Gary. Congrats on a nice quarter.

Gary Corona: Thanks.

Beth Wozniak: Thanks.

Gary Corona: Thanks, Vlad.

Vlad Bystricky: Yeah. I just wanted to ask, in terms of order patterns from customers, particularly on the utilities and data center side, are you seeing any change in sort of timing of how orders are coming in? Are customers ordering with sort of longer lead times, trying to lock in capacity, if you will?

Speaker #5: Are customers ordering with longer lead times, trying to lock in capacity, if you will?

Speaker #1: Yeah. I would say this, that not necessarily. For the in the product portfolios that we play, we certainly are getting visibility from our customers what their future demand is so that we understand that when we're planning out our capacity.

Beth Wozniak: Yeah. I would say this, that not necessarily in the product portfolios that we play. We certainly are getting visibility from our customers what their future demand is, so that we understand that when we're planning out our capacity. For the portfolios that we have, and keep in mind, there's different programs, so some programs are rolling off, and new ones are coming in. We're having those discussions on what's next, is what I would say.

Speaker #1: But we're not for the portfolios that we have and keep in mind, there's different programs. So some programs are rolling off and new ones are coming in.

Speaker #1: We're typically just getting—we're having those discussions on what's next, is what I would say.

Speaker #5: And Vlad, as we think about the backlog, we've said previously and continue to say that the backlog is mostly 12 months or less. And that has an extended out.

Gary Corona: Vlad, as we think about the backlog, we've said previously and continue to say that the backlog is mostly 12 months or less, and that hasn't extended out.

Vlad Bystricky: Yeah, that's really helpful. Appreciate that. Then, can you just talk about, in terms of data center opportunities and potential that you see outside of North America, how you're seeing those markets develop and evolve and how you're thinking about nVent's ability to meet demand overseas as data center investment ramps in other regions?

Speaker #5: That's really helpful. Appreciate that. And then can you just talk about in terms of data center opportunities and potential that you see outside of North America?

Speaker #5: How you're seeing those markets develop and evolve and how you're thinking about NVENTs ability to meet demand overseas as data center investment ramps in other regions?

Speaker #1: Well, we certainly see that trend that data centers are expanding in both Europe and Asia. And what we've been ensuring is that we're both investing in our commercial capabilities in those regions as well as setting up our manufacturing we do have a footprint that is global.

Beth Wozniak: Well, we certainly see that trend, that data centers are expanding in both Europe and Asia. What we've been ensuring is that we're both investing in our commercial capabilities in those regions, as well as setting up our manufacturing. We do have a footprint that is global. Some of our products today for our data centers, we do manufacture in Europe. We're thinking about, or we have plans, I would say, just to continue to extend what we've done here in North America to be able to capture that opportunity around the world.

Speaker #1: And some of our products today for our data centers are we do manufacturing in Europe. And so we're thinking about or we have plans, I would say, just to continue to extend what we've done here in North America to be able to capture that opportunity around the world.

Speaker #5: Thanks, Beth. I'll get back on to you.

Vlad Bystricky: Thanks, Beth. I'll give it back to you.

Speaker #1: Thanks.

Beth Wozniak: Thanks.

Speaker #3: Our next question comes from Nicole DeBlasi with Deutsche Bank. Please go ahead.

Operator 2: Our next question comes from Nicole DeBlase with Deutsche Bank. Please go ahead.

Operator: Our next question comes from Nicole DeBlase with Deutsche Bank. Please go ahead.

Speaker #2: Yeah. Thanks. Good morning, guys.

Nicole DeBlase: Yeah, thanks. Good morning, guys.

Speaker #1: Morning.

Beth Wozniak: Morning.

Speaker #5: Morning, Nicole.

Gary Corona: Morning, Nicole.

Speaker #2: Maybe just a backlog question. Backlog did tick down a little bit sequentially, which is high-quality problem because you were able to get so much out the door this quarter.

Nicole DeBlase: Maybe just a backlog question. Backlog did tick down a little bit sequentially, which is high quality problem because you were able to get so much out the door this quarter. I guess if you look across the full year and considering the customer pipeline and your production plans, as we exit 2026, do you think backlog kind of grows from these levels?

Speaker #2: But I guess if you look across the full year and considering the customer pipeline and your production plans, as we exit 2026, do you think backlog kind of grows from these levels?

Beth Wozniak: Well, as we indicated, and you're exactly right. We had a strong quarter because we were executing on some of that backlog. As Gary just commented, our backlog is typically within 12 months. We keep adding capacity. We want to see that we're in balance, that we're able to respond to that demand to support our customers, because that's really important to have very good lead times. It's hard to say. As I mentioned, we get these lumpy orders. At some point in a quarter, backlog could go up, but we want to work it down. It's hard to say, but we're probably around the right level that we think we should be.

Speaker #1: Well, as we indicated, right, part of our and you're exactly right. I mean, we had a strong quarter because we were executing on some of that backlog.

Speaker #1: And as Gary just commented, our backlog is typically within 12 months. So we keep adding capacity. So we want to see that we're in balance, that we're able to respond to that demand to support our customers because that's really important to have very good lead times.

Speaker #1: So it's hard to say. And as I mentioned, we get these lumpy orders. So at some point in a quarter, backlog could go up, but we want to work it down.

Speaker #1: So it's hard to say, but we're probably around the right level that we think we should be.

Speaker #5: And just to reiterate what Beth mentioned in her prepared comments, we're off to a really strong start here in Q3 on the order front.

Gary Corona: I just reiterate what Beth mentioned in her prepared comments is we're off to a really strong start here in Q3 on the order front.

Speaker #2: Got it. Thanks, Gary. And maybe just to follow up on that, does off to a strong start I'm sorry to ask this annoying question.

Nicole DeBlase: Got it. Thanks, Gary. Maybe just to follow up on that, does off to a strong start, I'm sorry to ask this annoying question, but does that mean that order growth is actually accelerating from what you saw in Q2? Any comment on that? No one's asked a question about the M&A pipeline yet, so I'll throw that in there too, what you're seeing and the level of activity.

Speaker #2: But does that mean that orders are actually order growth is actually accelerating from what you saw on the second quarter? Any comment on that?

Speaker #2: And then no one's asked the question about the M&A pipeline yet, so I'll throw that in there too—what you're seeing and the level of activity.

Speaker #1: Well, two things I would say on orders. One, we're seeing that short-cycle strength. And the other would be some of those lumpy-type orders—we were seeing some of those come in at the start of this quarter.

Beth Wozniak: Well, two things I would say on orders. One, we're seeing that short cycle strength, the other would be some of those lumpy type of orders. We were seeing some of those come in in the start of Q3. On M&A, we have a very good pipeline, I think we continue to be disciplined, we continue to look at opportunities that are going to help position us further in that infrastructure space. Our balance sheet is in a very healthy position.

Speaker #1: And on M&A, we have a very good pipeline, and I think we continue to be disciplined and continue to look at opportunities that are going to help position us further in that infrastructure space.

Speaker #1: And our balance sheet is in a very healthy position.

Speaker #2: Thank you. I'll pass it on.

Nicole DeBlase: Thank you. I'll pass it on.

Speaker #3: Our next question comes from Luke Junk with Baird. Please go ahead.

Operator 2: Our next question comes from Luke Junk with Baird. Please go ahead.

Operator: Our next question comes from Luke Junk with Baird. Please go ahead.

Speaker #4: Good morning. Thanks for taking the questions. To start with, just Beth, curious to what extent you think we're seeing any company-specific elements, especially within nVent, contributing to the short cycle strength beyond just end market improvement?

Luke Junk: Good morning. Thanks for taking the questions. To start with, just curious to the extent you think we're seeing any company specific elements, especially One nVent contributing to the short cycle strength beyond just end market improvement.

Beth Wozniak: Can you clarify that question? I'm sorry. Are we seeing-

Speaker #1: Can you clarify that question? Are we saying—I'm sorry—are we seeing?

Speaker #4: Yeah, yeah. Just in terms of the short-cycle strength, especially into distribution—and there was a lot of discussion at Investor Day about improving channel-to-market coverage, those types of things—it seems like we're seeing that show up in the short-cycle strength.

Luke Junk: Yeah. Just in terms of the short cycle strength, especially into distribution and a lot of discussion at Investor Day about improving channel to market coverage, those types of things. It seems like we're seeing that show up in the short cycle strength to some extent, just how you would attribute what is nVent specific growth versus market tailwinds in the short cycle.

Speaker #4: To some extent, just how you would attribute kind of what is nVent-specific growth versus market tailwind in the short cycle.

Speaker #1: Yeah. So in terms of just that short cycle growth and through distribution, and you're right, it's been a key strategy for us is to ensure that we've got strong partnerships, to ensure we're doing integrated marketing planning, to ensure that we're driving our vertical growth strategies.

Beth Wozniak: Yeah. In terms of just that short cycle growth and through distribution, and you're right, it's been a key strategy for us is to ensure that we've got strong partnerships, to ensure we're doing integrated marketing planning, to ensure that we're driving our vertical growth strategies. Introduce new products, also very important. I think it's a combination of those actions that is strongly positioning us across those distribution partners. We see strength there, and again, that sell out and sell in is well balanced.

Speaker #1: So I do think and introduce new products also very important. So I think it's a combination of those actions that is strongly positioning us across those distribution partners.

Speaker #1: And we just see strength there. And again, that sell-out and sell-in is well balanced.

Speaker #4: Got it. And then in terms of the capacity increase in liquid cooling, just a couple of facets to that, I'd be curious to hear thoughts on.

Luke Junk: Got it. In terms of the capacity increase in liquid cooling, just a couple of facets to that I'd be curious to hear your thoughts on. First, in terms of the order book, does it enable you to open up the order book anymore? I don't know to what extent there were any constraints in terms of taking orders in the near term before you get this capacity schedule to come online. As you step into these three large facilities now, just curious how you think about there being any inherent flexibility in that, especially as you're bringing modular online and theoretically ramping multiple customer programs as part of this as well. Thank you.

Speaker #4: First, in terms of the order book, does it enable you to open up the order book any more? I don't know to what extent there were any constraints in terms of taking orders in the near term before you get this capacity scheduled to come online.

Speaker #4: And then as you step into these three large facilities now, just curious how you think about there being any inherent flexibility in that, especially as you're bringing modular online and if you're radically ramping multiple customer programs as part of this as well.

Speaker #4: Thank you.

Speaker #1: Well, certainly. Extending capacity as a result of us looking into getting visibility into what our customers' demands are, as well as our orders, backlog, and also because we are launching a new platform coming up here.

Beth Wozniak: Well, certainly, extending capacity as a result of us looking into getting visibility into what our customers' demands are, as well as our orders backlog, and also because we are launching a new platform coming up here. It's all of those factors. I think the flexibility that we have, and I made this comment, is the fact that we have opened up these facilities very close to our core Anoka center allows us to flex our resources, our infrastructure, our labor. Certainly already we've mentioned that certain programs with hyperscalers have come online and moved to the next revision, flexibility is really key for us. There's been a lot of thought into that as we expand this capacity, kind of all in a larger extended campus here in Minnesota.

Speaker #1: So it's all of those factors. And I think the flexibility that we have and I made this comment is the fact that we have opened up these facilities very close to our core ANOCA center allows us to flex our resources, our infrastructure, our labor.

Speaker #1: And certainly, already, we've mentioned that certain programs with hyperscalers have come online and moved to the next revision. So flexibility is really key for us.

Speaker #1: And so there's been a lot of thought into that as we expand this capacity kind of all in a larger extended campus here in Minnesota.

Speaker #4: Great. I'll leave it there. Thank you.

Luke Junk: Great. I'll leave it there. Thank you.

Speaker #5: Thank you.

Gary Corona: Thank you.

Speaker #3: Our next question comes from Scott Graham with Seaport. Please go ahead.

Operator 2: Our next question comes from Scott Graham with Seaport. Please go ahead.

Operator: Our next question comes from Scott Graham with Seaport. Please go ahead.

Scott Graham: Hi, good morning. Beth, Gary, Tony, congratulations on the quarter. I wanted to ask about Q3 organic guidance, which is obviously slower than what we just saw, but it's on about a 10-point more difficult comp. The orders this past quarter were, in your growth business of liquid cooling, seemed a little slower, I understand the lumpiness, of course. You also said that you're trying to be prudent with some guidance areas. Could you kind of wrap all that together for Q3 still looks pretty good organically. Is there upside to that organic number? Is that being maybe more driven by shipments from the backlog in liquid cooling?

Speaker #4: Hi, good morning. Beth, Gary, Tony, congratulations on the quarter. I wanted to ask about third quarter organic guidance, which is obviously slower than what we just saw.

Speaker #4: But it's on about a 10-point more difficult comp. And then the orders this past quarter in your growth business of liquid cooling seemed a little slower.

Speaker #4: And I understand the lumpiness, of course. But then you also said that you're trying to be prudent with some guidance areas. Could you kind of wrap all that together for third quarter—still looks pretty good organically?

Speaker #4: Is there upside to that organic number? And is that being maybe more driven by shipments from the backlog in liquid cooling?

Speaker #5: Yeah, I'll take that one. And look, we're really pleased with the guide that we laid out—32 to 35 percent in the third quarter.

Gary Corona: Yeah. I'll take that one. Look, we're really pleased with the guide that we laid out, 32% to 35% in Q3. I think I mentioned it earlier, the two-year stack, because as you mentioned, the comps get tougher. We're being very mindful of that. The two-year stack in Q3 is 50% growth at the midpoint, that's acceleration from what we saw in H1. Certainly, as Beth talked about, as we went into Q2, there's a lot going on. The teams did a great job to deliver against it. It's important that we're prudent in our guidance. We'll continue to be that way to give ourselves the flexibility to execute as well as invest to support the growth in H2 and in the future.

Speaker #5: I think I mentioned it earlier—the two-year stack—because, as you mentioned, the comps get tougher. So we're being very mindful of that. The two-year stack in the third quarter is 50% growth at the midpoint.

Speaker #5: And that's acceleration from what we saw in the first half. Certainly, as Beth talked about, as we went into the second quarter, there's a lot going on.

Speaker #5: And there's a lot going on and the teams did a great job to deliver against it. So it's important that we're prudent in our guidance.

Speaker #5: And we'll continue to be that way to give ourselves the flexibility to execute as well as invest to support the growth in the second half and in the future.

Speaker #4: All right. Thank you, Gary. The other question was the mid-20s incremental margin in the second half of the year. In the past, and this was before the sale of thermal, the 30% number was sort of bandied about.

Scott Graham: All right. Thank you, Gary. The other question was the mid-20s incremental margin in H2 of the year. In the past, and this was before the sale of thermal, the 30% number was sort of bandied about. I was wondering if that's still maybe a stretch target for you.

Speaker #4: I was wondering if that's still maybe a stretch target for you.

Speaker #5: Yeah. As we said at Investor Day, our midterm target was mid-20s for incrementals, and that's to ensure that we can invest to support the growth.

Gary Corona: Yeah. As we said at Investor Day, our midterm target was mid-20s for incrementals. That's to ensure that we can invest to support the growth. That's what we'll see in the H2. It's worth mentioning, we feel really good about the growth and returns that we're delivering. At the midpoint of our guidance, our EPS this fiscal year will be more than double what we delivered in 2024, the team's doing a great job delivering not just growth, but returns as well.

Speaker #5: And that's what we'll see in the second half. It's worth mentioning, we feel really good about the growth and returns that we're delivering. At the midpoint of our guidance, our EPS this fiscal year will be more than double what we delivered in 2024.

Speaker #5: And the teams doing a great job delivering not just growth, but returns as well.

Speaker #4: All righty. Thank you.

Scott Graham: All righty. Thank you.

Speaker #3: Our next question comes from Brian Drab with William Blair. Please go ahead.

Operator 2: Our next question comes from Brian Drab with William Blair. Please go ahead.

Operator: Our next question comes from Brian Drab with William Blair. Please go ahead.

Speaker #4: Sure. Thank you. I want to ask a bigger picture question because I think a lot of the concerns around companies that have similar exposure to NVENT, the concerns lately have just been around the longer term and it's really nothing new, but the question is is 26 and 27 going to be great and what happens in the out years?

Brian Drab: Thank you. I want to ask a bigger picture question, because I think a lot of the concerns around companies that have similar exposure to nVent, the concerns lately have just been around the longer term. The question is 2026 and 2027 going to be great, and what happens in the out years? I'm wondering over the last few months, how your conversations with hyperscaler and large customers have developed, what kind of visibility you're getting. Your broader pipeline and longer-term pipeline, how far out do you have visibility to some of these projects at this point?

Speaker #4: So I'm wondering, over the last few months, how your conversations with hyperscalers and large customers have developed, and what kind of visibility you're getting.

Speaker #4: Are there your broader pipeline and longer-term pipeline? How far out do you have visibility to some of these projects at this point?

Speaker #1: Well, look, we've got visibility several years out, but I will also tell you, because we are in liquid cooling, we're working with NVIDIA and others on their roadmaps out through 2030 and trying to future-proof our projects.

Beth Wozniak: Well, look, we've got a visibility several years out, but I will also tell you because we are in liquid cooling, we're working with NVIDIA and others on their roadmaps out through 2030 and trying to future-proof our projects. Keep in mind, liquid cooling is maybe it's now 10% to 15% of cooling in data centers. As we see these high-performance AI chips and we see these higher heat densities, liquid cooling is going to have a very long runway in terms of just the replacement cycle and being able to match these next-generation chips. We've always said that maybe the build-out of data centers at some point down the road slows, but that white space and that refresh cycle, liquid cooling capabilities are going to continue to expand.

Speaker #1: And keep in mind, liquid cooling is—maybe it's now 10% to 15% of cooling in data centers. And as we see these high-performance AI chips and we see these higher heat densities, liquid cooling is going to have a very long runway in terms of just the replacement cycle and being able to match these next-generation chips.

Speaker #1: So, we've always said that maybe the build-out of data centers at some point down the road slows, but that white space and that refresh cycle, liquid cooling capabilities, are going to continue to expand.

Speaker #4: I appreciate that. Okay. Thanks, Beth. And then I know this is obvious, but maybe you could just comment on LTM orders? I think is probably a much more relevant in my mind.

Brian Drab: Appreciate that. Okay, thanks, Beth. I know this is obvious, but maybe you could just comment on LTM orders, I think is probably a much more relevant, in my mind, indicator of how things are going. Obviously, data center revenue up 100% tells us how it's going. Are LTM orders, that growth rate, much higher than the low double digit that you mentioned for this quarter?

Speaker #4: Indicator of how things are going. I mean, obviously, data center revenue up 100% is tells us how it's going. But are LTM orders that growth rate much higher than the low double-digit that you mentioned for this quarter?

Speaker #5: Yes. Brian, they are.

Beth Wozniak: Yes, Brian, they are.

Gary Corona: Yes, Brian, they are.

Speaker #4: Thank you very much.

Brian Drab: Thank you very much.

Speaker #1: Thank you.

Beth Wozniak: Thank you.

Speaker #3: This concludes our question and answer session. I would like to turn the conference back over to Beth Wozniak, Chair and Chief Executive Officer, for any closing remarks.

Operator 2: This concludes our question and answer session. I would like to turn the conference back over to Beth Wozniak, Chair and Chief Executive Officer, for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Beth Wozniak, Chair and Chief Executive Officer, for any closing remarks.

Beth Wozniak: Thank you for joining us today. We are confident in our strategy, which has remained consistent, and our ability to execute. We have many growth opportunities and multiple levers to expand margins. I'm proud of our performance in the Q2. We will continue to focus on delivering for our customers, employees, and shareholders. nVent is a top-tier, high-performance electrical company, well-positioned for the electrification, sustainability, and digitalization trends. Thanks again for joining us. This concludes the call.

Speaker #1: Thank you for joining us today. We are confident in our strategy, which has remained consistent, and in our ability to execute. We have many growth opportunities and multiple levers to expand margins.

Speaker #1: I'm proud of our performance in the second quarter. We will continue to focus on delivering for our customers, employees, and shareholders. nVent is a top-tier, high-performance electrical company, well-positioned for the electrification, sustainability, and digitalization trends.

Speaker #1: Thanks again for joining us. This concludes the call.

Operator 2: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q2 2026 nVent Electric PLC Earnings Call

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