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nVent Electric plc (NVT)·Q2 2025 Earnings Summary

Executive Summary

  • Strong quarter with broad-based growth: revenue $963.1M (+30% YoY, +9% organic), adjusted EPS $0.86 (+28% YoY), both above guidance; record orders (organic orders >20%) and backlog (>4x YoY) highlight accelerating demand in data centers and power utilities .
  • Clear beat vs S&P Global consensus: revenue beat by ~$54.7M and adjusted EPS beat by ~$0.07; EBITDA also exceeded estimates; acquisitions (Trachte, EPG) added ~21 pts to growth and performed “better than expected” .
  • Guidance raised: FY25 reported sales growth to 24–26% (from 19–21%), organic to 8–10% (from 5–7%); adjusted EPS to $3.22–$3.30 (from $3.03–$3.13). Q3 guide: revenue +27–29%, adjusted EPS $0.86–$0.88; tariff headwind now ~$90M for FY (down from ~$120M), largely offset by price/productivity .
  • Key stock catalysts: accelerating AI/data center cycle (liquid cooling, modular/gray-space enclosures), enlarging multi-year backlog (visibility into 2026+), and disciplined capacity expansions; margin drag from tariffs/acquisitions is being mitigated by pricing and productivity .

What Went Well and What Went Wrong

  • What Went Well

    • Demand/Backlog: Record orders and backlog; organic orders up >20% led by data solutions; backlog visibility extends into 2026+ .
    • Strategic M&A execution: Trachte and EPG performed above plan, strengthening data center/power utility positioning and enabling modular gray-space solutions; identified new growth opportunities and synergies .
    • Beat and raise: Q2 revenue/EPS ahead of guidance; FY25 sales and adjusted EPS guidance raised; Q3 implies continued double-digit organic growth; tariffs impact cut to ~$90M with offsetting price/productivity .

  • What Went Wrong

    • Margin compression: Reported ROS fell 330 bps YoY to 16.3%; adjusted ROS down 210 bps to 20.8%, reflecting inflation, tariffs (~$15M in Q2), acquisitions, and growth investments .
    • Gross margin pressure: Gross margin 38.6% vs 41.6% YoY; price/productivity actions still ramping through 2H to fully offset tariffs .
    • Mixed end-markets: Industrial down slightly and energy down mid-single-digits; management remains cautious on commercial/resi despite Q2 strength, guiding “flattish” for the year .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($M)$739.8 $809.3 $963.1
GAAP Diluted EPS – Continuing Ops$0.55 $0.52 $0.65
Adjusted EPS – Continuing Ops$0.67 $0.67 $0.86
Gross Margin %41.6% 38.8% 38.6%
Operating Income ($M)$144.9 $130.0 $156.7
Reported ROS %19.6% 16.1% 16.3%
Adjusted Op Income ($M)$169.4 $162.2 $200.0
Adjusted ROS %22.9% 20.0% 20.8%
Cash from Ops – Cont. Ops ($M)$117.1 $63.9 $91.0
Free Cash Flow ($M)$100.6 $44.4 $74.1
  • Estimates vs Actuals (S&P Global):
    | Metric | Q1 2025 Estimate | Q1 2025 Actual | Q2 2025 Estimate | Q2 2025 Actual | |---|---|---|---|---| | Revenue ($M) | 790.3* | 809.3 | 908.4* | 963.1 | | Adjusted EPS ($) | 0.664* | 0.67 | 0.789* | 0.86 | | EBITDA ($M) | 178.9* | 172.9 [functions.GetEstimates] | 202.1* | 210.1 [functions.GetEstimates] |

Values with asterisks (*) retrieved from S&P Global.

  • Segment Breakdown (Q2 YoY):
    | Segment | Q2 2024 Sales ($M) | Q2 2025 Sales ($M) | Organic Growth | Adj ROS Q2’24 | Adj ROS Q2’25 | |---|---|---|---|---|---| | Systems Protection | $441 | $632 | +10% | 23.5% | 21.7% | | Electrical Connections | $299 | $331 | +6.8% | 30.9% | 28.7% |

  • Additional KPIs:
    | KPI | Q2 2025 | YoY/Context | |---|---|---| | Organic Orders Growth | >20% | Accelerating demand, led by data solutions | | Backlog | >4x YoY | Visibility into 2026+ | | New Product Contribution | >3 pts to growth | 50 NPIs launched in 1H | | Tariff Impact (Q2/FY) | ~$15M / ~$90M FY | Down from ~$120M FY prior |

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported Sales GrowthFY 202519–21% 24–26% Raised
Organic Sales GrowthFY 20255–7% 8–10% Raised
GAAP EPS ($)FY 20252.48–2.58 2.48–2.56 Updated (slightly lower high end)
Adjusted EPS ($)FY 20253.03–3.13 3.22–3.30 Raised
Free Cash Flow ConversionFY 2025—90–95% Initiated
CapEx ($M)FY 2025~100 ~110 Raised (capacity expansion)
Corporate Costs ($M)FY 2025~100 ~110 Raised
Reported Sales GrowthQ3 2025—27–29% New
Organic Sales GrowthQ3 2025—11–13% New
GAAP EPS ($)Q3 2025—0.67–0.69 New
Adjusted EPS ($)Q3 2025—0.86–0.88 New
Dividend/ShareQ3 2025$0.20 (declared May 16) $0.20 payable Aug 1 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2025)Trend
AI/Data Center cycle, liquid coolingFY24: Data Solutions +~30%; 2025 guide set; portfolio transformation noted . Q1: Raised FY guide; backlog up double-digits seq; strength in data centers/power utilities .Organic orders >20%; strength across white- and gray-space; liquid cooling “essential,” growing 3x faster; data centers ~20% of sales .Accelerating
Tariffs/Inflation & PricingFY24: tariff pressures cited . Q1: included tariff impacts in FY raise .Q2 inflation >$35M incl. ~$15M tariffs; FY tariff now ~$90M (from ~$120M); price/productivity to offset .Improving mitigation
Backlog/VisibilityQ1: backlog up double digits seq; visibility through year .Backlog >4x YoY; visibility into 2026+ .Strengthening duration
M&A integration (Trachte, EPG)FY24/early 2025: acquisitions reshaped portfolio .“Better than expected” performance; synergies; enabling modular data center enclosures .Positive
Capacity/CapExQ1: executing growth capex; capital allocation for growth .CapEx raised to ~$110M; expanding data solutions & acquired facilities; disciplined ROI .Upward investment
Regional trendsFY24: broad growth; mixed . Q1: solid backdrop .Americas/Europe up low double digits in Systems Protection; APAC low single digits; all regions grew .Broadening growth
End-market mixFY24: core growth, some variability . Q1: data centers/power utilities strong .Infrastructure up ~30% (data centers, utilities); industrial slightly down; energy down mid-single digits; commercial/resi mid-teens in Q2 but flattish FY .Mixed; infra-led

Management Commentary

  • “We delivered record results in the second quarter with both sales and adjusted EPS exceeding our guidance. We also had record orders and backlog... organic orders accelerated up over 20%” — Beth Wozniak, CEO .
  • “Trachte and EPG performed better than expected… strengthening our position in power utilities, data centers and renewables… we are raising our full-year sales and adjusted EPS guidance” — Beth Wozniak .
  • “Sales of $963 million were up 30%… acquisitions added 21 points to growth… inflation was more than $35 million, including approximately $15 million in tariff impact. Price plus productivity partially offset inflation” — Gary Corona, CFO .
  • “We now forecast reported sales growth of 24% to 26%… adjusted EPS $3.22 to $3.30… expected tariff impacts of approximately $90 million versus $120 million previously… price and productivity to offset” — Gary Corona .
  • “Liquid cooling is essential for the new chips for AI… growing three times faster than legacy cooling” — Beth Wozniak .

Q&A Highlights

  • Backlog duration/conversion: Backlog now extends through 2026 and beyond, driven by data solutions and Trachte/EPG; Systems Protection expected to grow ahead of Electrical Connections given backlog mix .
  • Disintermediation concerns: CEO emphasized partnerships with hyperscalers, often providing specific subsystems (e.g., CDUs, manifolds); many customers prefer not to manufacture in-house; runway for liquid cooling remains strong .
  • Margins and tariffs: Price and productivity actions are ramping in 2H to largely offset tariff impacts; exiting FY25 with margins in a “healthy place” excluding EPG; investments continue alongside growth .
  • Modular/gray-space opportunity: Trachte/EPG enable outdoor enclosures and integrated solutions, with margin expectations in line with those portfolios; standardized liquid cooling products through distribution can carry higher margins .
  • Capacity/CapEx: CapEx raised to ~$110M for data solutions and acquired businesses; disciplined returns with attractive paybacks; further investments likely into 2026+ .

Estimates Context

  • Q2 2025 vs S&P Global consensus: revenue $963.1M vs $908.4M* (beat ~$54.7M); adjusted EPS $0.86 vs $0.789* (beat ~$0.07); EBITDA $210.1M vs $202.1M* (beat) .
  • Q1 2025 also exceeded consensus on revenue and adjusted EPS; Q4 2024 was slightly below on revenue but near-line on adjusted EPS (contextualizes momentum) .
  • FY25 guide vs S&P: Company adjusted EPS $3.22–$3.30 vs consensus $3.33*; midpoint modestly below consensus, despite raised outlook (potential for Street to fine-tune FY mix while acknowledging Q3 acceleration) .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • The AI data center cycle is materially re-rating NVT’s growth profile; orders/backlog acceleration and visibility into 2026+ de-risk near-to-intermediate term top-line delivery .
  • Near-term beats are translating into a “beat-and-raise” cadence; FY25 organic growth raised to 8–10% and adjusted EPS to $3.22–$3.30, implying durable 2H momentum .
  • Tariff/inflation pressure remains the key margin governor, but management is executing price/productivity to largely offset in 2H; watch for ROS stabilization and mix benefits from standardized liquid cooling .
  • Strategic M&A flywheel (Trachte/EPG) is working: better-than-expected performance, gray-space expansion, and capacity adds underpin multi-year growth and share gains in utilities/data centers .
  • Segment mix favors Systems Protection given backlog concentration; EC should grow “healthily,” but SP leads near term; this mix plus new products (>3 pts) should support growth despite pockets of softness in industrial/energy .
  • Capital deployment remains growth-first with disciplined ROI; CapEx lifted to support demand; FCF conversion guided to 90–95% offers flexibility for continued buybacks/dividends and pipeline M&A .
  • Near-term trading setup: positive skew from Q3 acceleration and AI/utility catalysts; watch for incremental pricing realization vs tariff cadence and updates on standardized cooling launches later this year .