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BELDEN INC. (BDC)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue and Adjusted EPS exceeded the high end of Q2 guidance; revenues were $672M (+11% y/y; +5% organic) and Adjusted EPS was $1.89 (+25% y/y), driven by stronger orders (+16% y/y; +8% q/q), margin expansion and a lower-than-expected tax rate benefit of ~$0.11 to Adjusted EPS .
  • Guidance for Q3 2025: revenues $670–$685M, GAAP EPS $1.33–$1.43, Adjusted EPS $1.85–$1.95; tax rate ~12.5% for Q3 and slightly over 15% for FY25, with management reiterating constructive medium-term secular drivers (reindustrialization, automation, IT/OT convergence) .
  • Segment performance solid: Automation Solutions revenue $366M (+10% y/y) with EBITDA margin 21.4% and Smart Infrastructure Solutions revenue $306M (+13% y/y) with EBITDA margin 11.8%; book-to-bill of 1.0 (Automation) and 1.1 (SIS) signal healthy backlog conversion .
  • Strategic wins: multi-site solutions award at a leading hyperscale data center (gray space, PLC-enabled modular cooling) and a global specification with a major U.S. auto OEM (~$40M over three years), expanding pipeline in data center and automotive/reshoring themes .
  • Street consensus (S&P Global) for Q2/Q3 was unavailable in our feed; comparisons are vs company guidance and prior periods. Values retrieved from S&P Global were unavailable.

What Went Well and What Went Wrong

What Went Well

  • Orders and backlog: “Order activity remained strong, with orders up 8% sequentially and 16% year-over-year. We ended the quarter with a book-to-bill ratio of 1.05…” .
  • Margin expansion and EPS: Adjusted EBITDA margin rose to 17.0% (+50 bps y/y) and Adjusted EPS grew 25% y/y; tax planning and geographic mix drove an effective tax rate of 12.3%, adding ~$0.11 to Adjusted EPS vs guidance .
  • Strategic wins in secular growth areas: “Multi-Site Solutions award with a leading hyperscale data center customer… industrial-grade switch in a high-demand AI data center application…,” and “global specification by a major U.S. automotive manufacturer… approximately $40 million over three years” .

What Went Wrong

  • Sequential margin cadence impacted by pass-throughs: Management acknowledged sequential incrementals were dampened by copper and tariff pass-through effects; removing copper pass-through, incrementals approximate 25% .
  • Smart Infrastructure Solutions margins modest: SIS EBITDA margin was 11.8%; management cited deliberate OpEx investments to accelerate solutions and slight dilutive impact from copper/tariff pass-throughs, with expected leverage improvement over time .
  • Free cash flow down y/y in the quarter: Q2 FCF was $56.9M vs $61.0M in Q2 2024; H1 FCF was $32.2M vs $39.5M in H1 2024, reflecting higher capex and capital deployment (buybacks) .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$604.3 $666.0 $624.9 $672.0
GAAP Diluted EPS ($)$1.19 $1.42 $1.27 $1.53
Adjusted EPS ($)$1.51 $1.92 $1.60 $1.89
Gross Margin % (GAAP)37.5% 37.5% 39.3% 38.5%
Adjusted EBITDA ($USD Millions)$99.4 $114.1 $104.0 $114.1
Adjusted EBITDA Margin %16.5% 17.1% 16.6% 17.0%
GAAP Net Income ($USD Millions)$49.0 $58.4 $51.9 $61.0
Net Income Margin % (GAAP)8.1% 8.8% 8.3% 9.1%

Actual vs Guidance and Street (S&P Global):

MetricQ2 2025 Guidance (issued on May 1)Q2 2025 ActualBeat/Miss vs GuidanceStreet Consensus (S&P Global)Beat/Miss vs Street
Revenue ($USD Millions)$645–$660 $672.0 Beat (above high end)n/a – unavailablen/a
GAAP EPS ($)$1.25–$1.35 $1.53 Beat (above high end)n/a – unavailablen/a
Adjusted EPS ($)$1.67–$1.77 $1.89 Beat (above high end)n/a – unavailablen/a

Segment Breakdown:

Segment MetricQ2 2024Q1 2025Q2 2025
Automation Solutions Revenue ($MM)$333.9 $350.8 $366.0
Automation Solutions EBITDA ($MM)$67.7 $73.3 $78.2
Automation Solutions EBITDA Margin %20.3% 20.9% 21.4%
Smart Infrastructure Solutions Revenue ($MM)$270.5 $274.1 $306.0
Smart Infrastructure Solutions EBITDA ($MM)$31.5 $31.1 $36.2
Smart Infrastructure Solutions EBITDA Margin %11.6% 11.4% 11.8%

KPIs and Operating Metrics:

KPIQ1 2025Q2 2025
Orders YoY Growth (%)+18% +16%
Orders Sequential Growth (%)modestly up +8%
Book-to-Bill (Total)1.05 1.05
Book-to-Bill (Automation)1.09 1.0
Book-to-Bill (SIS)0.98 1.1
Book-to-Bill (Broadband)—1.14
Free Cash Flow TTM ($MM)$220 $216
Free Cash Flow ($MM, quarter)—$56.9
Cash & Equivalents ($MM)$259.0 $301.5
Net Debt / EBITDA (x)2.0x 2.1x
Shares Repurchased YTD1.0M shares; $100M 1.0M shares YTD
Remaining Buyback Authorization ($MM)$240 $240

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($MM)Q2 2025$645–$660 Actual $672.0 Beat above high end
GAAP EPS ($)Q2 2025$1.25–$1.35 Actual $1.53 Beat above high end
Adjusted EPS ($)Q2 2025$1.67–$1.77 Actual $1.89 Beat above high end
Effective Tax Rate (%)Q2 2025~17.5% 12.3% Lowered (discrete benefits; mix)
Revenue ($MM)Q3 2025N/A$670–$685 New
GAAP EPS ($)Q3 2025N/A$1.33–$1.43 New
Adjusted EPS ($)Q3 2025N/A$1.85–$1.95 New
Effective Tax Rate (%)Q3 2025N/A~12.5% (Q3); ~15% FY25 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/data center initiativesBuilding IT/OT solutions momentum; margin uplift from solutions; broadband fiber strength (Q4’24); Q1 highlighted automated warehouse IT/OT spec wins Hyperscale “gray space” win leveraging PLC and industrial switches for modular cooling; pipeline across hyperscalers Expanding engagement; repeatable model; pipeline building
IT/OT convergenceQ1 case: unified IT/OT solutions in automated warehousing; combining industrial and enterprise stack Converged solutions showcased in hyperscale use case; SIS OpEx investments to accelerate solutions Accelerating solutions mix and capability
Supply chain & tariffs/copperQ1: in-region production, sourcing changes, pricing offsets; net guidance impact ~0 Sequential incrementals tempered by copper/tariff pass-through; ~2-month price change lag; guidance assumes copper ~current levels Manageable headwind; pricing discipline maintained
Broadband/DOCSIS/fiberQ1: fiber +9% organic; neutral near-term posture; Precision Optical enhances electronics portion Fiber ~50% of broadband revenue; book-to-bill 1.14; robust DOCSIS and FTTx programs; some interoperability delays Improving orders; steady medium-term outlook
Regional trendsQ1: strength in Americas/APAC; EMEA improved y/y Growth across regions, including Germany and China; discrete manufacturing and energy double-digit growth Broadening recovery; green shoots in SIS verticals
Tax rate outlookQ4’24 tax tailwind; Q1 guided Q2 ~17.5% and FY ~18% Q2 actual 12.3%; Q3 ~12.5%; FY slightly over 15%; LT rate ~20% beyond 2025 Near-term tailwind; normalization longer term
Capital allocationQ4: $55M buybacks; FY FCF $223M; Q1: $100M YTD buybacks; $240M remaining authorization $216M TTM FCF; $240M authorization remaining; all debt fixed ~3.5%; next maturity 2027 Continued flexibility; disciplined M&A pipeline

Management Commentary

  • “Both revenue and earnings per share surpassed the high end of our guidance, reflecting the ongoing progress of our solutions transformation. Revenue reached $672M, up 11% y/y, while earnings per share grew 25% to $1.89” (Adjusted) .
  • “We secured a Multi-Site Solutions award with a leading hyperscale data center customer… leveraging Belden switches to support a critical PLC system embedded in an advanced modular cooling system… industrial-grade switch… in a high-demand AI data center application” .
  • “We secured a global specification by a major U.S. automotive manufacturer… approximately $40 million over three years… positioning Belden as a single source supplier” .
  • CFO: “Our effective tax rate was 12.3%… benefited adjusted EPS by $0.11… discrete tax benefits and favorable geographic mix of earnings” .
  • CFO: “Continue to model us with a roughly 25% incremental EBITDA margin… no real changes in the underlying business” .

Q&A Highlights

  • Demand outlook and guidance posture: Management is “balanced but optimistic,” modeling Q3 similar to Q2 amid policy uncertainty; trailing 12 months plus Q3 low-end guidance would set new records in revenue and EPS .
  • Margin dynamics: Sequential incrementals dampened by copper/tariff pass-through; stripping copper pass-through yields ~25% incrementals; pricing adjustments implemented with ~2-month lag .
  • AI/hyperscale exposure: Focus on gray space energy management; repeatable solution; pursuing both white and gray space selectively given competitiveness; pipeline expanding .
  • Solutions mix trajectory: Automation Solutions tracking toward 20%; pulling SIS into integrated solutions with OpEx investments (active products and software) to reach ~20% solutions mix longer-term .
  • Broadband focus: Fiber at ~50% of segment revenue; strong DOCSIS/FTTH programs; distribution segment focus avoids trunking cyclicality; orders healthy (book-to-bill 1.14) .

Estimates Context

  • Street consensus via S&P Global was unavailable in our data feed for Q2 2025 and Q3 2025, so we benchmarked performance against company guidance and prior periods. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • Q2 beat on revenue and EPS above the high end of guidance, aided by stronger orders and a favorable tax rate; watch for potential short-term estimate revisions reliant on tax and mix sustainability .
  • Q3 guide implies flat-to-up revenue sequentially (2–5% y/y), maintaining elevated EPS levels; supports a steady near-term setup despite policy noise .
  • Secular catalysts strengthening: concrete hyperscale data center award and auto OEM global spec reinforce IT/OT convergence narrative, pipeline durability, and multi-year growth visibility .
  • Margin resilience continues with ~25% incremental EBITDA when removing commodity pass-through effects; copper/tariff pass-throughs are manageable with pricing adjustments .
  • SIS margins modest due to deliberate OpEx investments to scale solutions; expect leverage as revenue grows and solutions mix increases .
  • Healthy cash and balance sheet with $240M buyback authorization and fixed-rate debt (~3.5%) due 2027 provide flexibility for disciplined M&A and returns .
  • Trading implications: Near-term catalysts include ongoing AI/data center engagements and automotive spec ramp, while tax tailwind and book-to-bill>1 underpin confidence; monitor policy/tariff developments and copper volatility for incremental margin effects .