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nVent Electric plc (NVT)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: first $1B+ sales with revenue $1.054B (+35% y/y; +16% organic), adjusted EPS $0.91 (+44% y/y); both exceeded guidance and Street consensus; orders and backlog hit records, cash flow was very strong . Q3 revenue and EPS beat S&P Global consensus of $1.006B and $0.884, respectively (11/10 ests)* .*
  • Growth drivers: AI data center programs and power utilities led infrastructure strength; organic orders rose ~65% (ex-DC high-single-digit) with visibility extending into 2026–2027; acquisitions (AVAIL EPG, Trachte) outperformed .
  • Margins mixed: adjusted ROS 20.2% (down 60 bps q/q; -130 bps y/y) on inflation, tariffs (~$90M FY impact), growth investments, and M&A dilution; price and productivity offset inflation, with sequential margin improvement expected in Q4 ex-EPG .
  • Guidance raised: FY25 reported sales growth to 27–28% (organic 10–11%), adjusted EPS to $3.31–$3.33; Q4 organic growth 15–17%, adj. EPS $0.87–$0.89; FCF conversion 90–95%; corporate costs now ~$120M . Dividend of $0.20 per share payable Nov 7, 2025 was previously declared .

What Went Well and What Went Wrong

  • What Went Well

    • “First billion-dollar sales quarter” with record sales, orders, backlog; adj. EPS and FCF surged; new products and acquisitions performed ahead; guidance raised .
    • AI data center demand accelerated: organic orders up ~65%; backlog up strong double digits sequentially; visibility into 2026–2027; new Nvidia partner status for liquid cooling architecture .
    • Cash generation inflected: Q3 CFO $271.7M and FCF $253.2M (+77% y/y), supporting growth investments and capital returns .

  • What Went Wrong

    • Margin compression: adjusted ROS 20.2% vs 20.8% in Q2 and 21.5% in Q3’24; Systems Protection ROS -150 bps y/y on inflation, M&A, ramp investments .
    • Tariffs and inflation still meaningful headwinds (~$90M FY tariffs); Q3 inflation >$45M including nearly $30M tariffs (offset by price/productivity) .
    • APAC softness and seasonality: APAC down low-single digits; Q4 revenue seasonally lower vs Q3 due to channel inventory behavior despite strong DC demand .

Financial Results

Overall results vs prior periods

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$782.0 $809.3 $963.1 $1,054.0
Gross Margin %39.8% 38.8% 38.6% 37.4%
Operating Income ($M)$133.2 $130.0 $156.7 $166.3
Reported ROS (%)17.0% 16.1% 16.3% 15.8%
Adjusted Operating Income ($M)$168.4 $162.2 $200.0 $213.3
Adjusted ROS (%)21.5% 20.0% 20.8% 20.2%
Diluted EPS – Continuing Ops ($)$0.47 $0.52 $0.65 $0.73
Adjusted Diluted EPS ($)$0.63 $0.67 $0.86 $0.91
Net Cash from Operations ($M)$158.4 $63.9 $91.0 $271.7
Free Cash Flow ($M)$142.9 $44.4 $74.1 $253.2

Segment breakdown

SegmentQ3 2024Q1 2025Q2 2025Q3 2025
Systems Protection Sales ($M)$477.1 $508.2 $632.0 $715.6
Systems Protection Adjusted ROS (%)21.9% 20.5% 21.7% 20.4%
Electrical Connections Sales ($M)$304.9 $301.1 $331.1 $338.4
Electrical Connections Adjusted ROS (%)30.4% 28.3% 28.7% 30.0%

Q3 vs S&P Global consensus

MetricQ3 2025 ConsensusQ3 2025 Actual
Revenue ($USD Millions)1,005.7*1,054.0
EPS (Primary/Adj.) ($)0.884*0.91

Values retrieved from S&P Global.*

Context and drivers

  • Organic sales +16% with infrastructure leading (+40%+), driven by AI data centers and power utilities; Americas grew high-teens, Europe ~10%, APAC down low single digits .
  • Price plus productivity offset inflation (>$45M in Q3; nearly $30M tariffs); adjusted ROS contracted y/y on inflation, M&A mix, and growth investments .
  • Cash performance inflected sharply on deliveries and working capital progress; CFO $271.7M and FCF $253.2M in Q3 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported Sales GrowthFY 202524%–26% 27%–28% Raised
Organic Sales GrowthFY 20258%–10% 10%–11% Raised
GAAP EPSFY 2025$2.48–$2.56 $2.57–$2.59 Raised
Adjusted EPSFY 2025$3.22–$3.30 $3.31–$3.33 Raised
Reported Sales GrowthQ4 2025—31%–33% New detail
Organic Sales GrowthQ4 2025—15%–17% New detail
GAAP EPSQ4 2025—$0.67–$0.69 New detail
Adjusted EPSQ4 2025—$0.87–$0.89 New detail
FCF ConversionFY 2025—90%–95% New framework
Corporate CostsFY 2025~$110M ~$120M Raised
Tariff Impact (incl. in outlook)FY 2025—~+$90M headwind New framework
DividendQ4 2025$0.20/sh declared May 16 for Aug 1 $0.20/sh payable Nov 7 Maintained cadence

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI Data Centers & OrdersQ1: raised FY guide; backlog up double digits; DC strength . Q2: record sales/orders/backlog; increasing DC momentum .Organic orders up ~65%; visibility into 2026–2027; large DC orders; backlog up double digits seq. .Accelerating
Liquid Cooling StrategyScaling capabilities; product innovation (Q1/Q2) .Leader in liquid cooling; Nvidia partner; new MN facility doubling footprint; >1GW deployed; >10 new products to debut .Strengthening
Capacity ExpansionIntegration playbooks (Trachte/EPG); growth investments (Q2) .Expanding 4 facilities; new Blaine, MN site; Eleanor, WV expansion adding 100+ jobs for large enclosures .Scaling up
Margins & Inflation/TariffsQ1/Q2 adjusted ROS 20.0%–20.8%; tariffs/inflection noted .Adjusted ROS 20.2%; price/productivity offset inflation; Q4 margins up sequentially ex-EPG; FY tariffs ~$90M .Improving sequentially in Q4
M&A (AVAIL EPG/Trachte)Q1: added utility/DC exposure; raised FY guide . Q2: performed ahead; growth synergies .Double-digit growth; ~$0.10 FY EPS impact vs prior ~$0.05; some margin dilution but improving with scale .Outperforming
Regional TrendsQ1/Q2: broad growth; Americas/Europe strength .Americas high-teens; Europe ~10%; APAC down low single digits .Mixed (APAC softer)
Cash FlowQ1/Q2 FCF $44M/$74M .FCF $253M; FY conversion 90–95% .Strong uptick

Management Commentary

  • “This was our first billion-dollar sales quarter, and we had record orders, backlog and strong cash flow... we are raising our full-year sales and EPS guidance to reflect our record third quarter performance and our significant momentum in data centers.” — Beth Wozniak, CEO .
  • “Organic orders were up approximately 65%, primarily driven by large orders for the AI data center buildout... backlog grew strong double digits sequentially.” — Beth Wozniak .
  • “We are a leader in liquid cooling... announced a new manufacturing facility in Minnesota... expected to begin production early next year and effectively double our overall footprint... Recently, we were named to NVIDIA's partner network as a solution advisor.” — Beth Wozniak .
  • “Price plus productivity offset inflation... we also continued to make investments for growth, particularly for data centers and our recent acquisitions.” — Gary Corona, CFO .

Q&A Highlights

  • Data center orders/backlog: DC orders up nearly 3x on some programs; visibility extends into 2026–2027; mix broadening beyond liquid cooling into cable management and PDUs; modular platform to scale through distribution over time .
  • Margins: Systems Protection margins faced M&A and investment headwinds but were better than expected; Q4 margins to improve sequentially ex-EPG; liquid cooling margins “healthy” and in line with segment averages .
  • Seasonality: Despite DC strength, Q4 revenue typically below Q3 due to channel inventory actions; acquisitions contribute ~15 pts to Q4 growth vs higher in Q3 .
  • AVAIL EPG: Performing ahead on top/bottom line; now ~$0.10 FY EPS contribution vs prior ~$0.05; double-digit apples-to-apples growth .
  • Book-to-bill: Not disclosed, but “healthy” in both segments; backlog up double digits sequentially; RPO to reflect similar directionality .

Estimates Context

  • Q3 2025 results beat consensus: revenue $1,054.0M vs $1,005.7M*, EPS (Primary/Adj.) $0.91 vs $0.884* (11 EPS est., 10 revenue est.) .*
  • Implications: Street models likely need to reflect raised FY25 adjusted EPS to $3.31–$3.33 (from $3.22–$3.30 prior) and stronger Q4 organic growth (15–17%) .
  • Operating assumptions: incorporate ~$90M FY tariff headwind, corporate costs ~$120M, and 90–95% FCF conversion .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Structural AI exposure: Rapidly scaling DC solutions (liquid cooling, enclosures, power distribution) with Nvidia partnership and expanded U.S. capacity underpin multi-year growth visibility; organic orders up ~65% and backlog up double digits sequentially .
  • Quality of beat: Broad-based top-line outperformance (organic +16%) with robust cash conversion; Q3 revenue/EPS beat consensus; FY sales/EPS guidance raised again .*
  • Margin narrative: Near-term dilution from M&A and investments, plus tariffs, but sequential margin improvement guided for Q4 ex-EPG; price/productivity offset inflation .
  • M&A synergy unlock: AVAIL EPG/Trachte delivering better-than-expected revenue and profit; FY EPS contribution doubled vs initial guide, supporting 2026 step-up as scale benefits accrue .
  • Execution risk: Scaling challenges (capacity, supply chain, talent) are acknowledged; management’s decade-long liquid cooling experience and localized expansions mitigate ramp risk .
  • Watch items into Q4: Seasonal revenue step-down vs Q3; monitor APAC softness and tariff pass-through; track DC order cadence and distribution sell-through .
  • Positioning: With electrification/digitalization tailwinds, record backlog, and strengthened infrastructure mix, NVT remains positioned for above-market growth with improving incrementals into 2026 .

Appendix: Additional Details

KPIs and liquidity

  • End-Q3 cash $126.9M; revolver availability ~$570M; net interest expense $20.9M in Q3 .
  • Working capital trends helped CFO/FCF inflection; FCF YTD $371.7M vs $277.1M prior year .

Data center and utility expansions (Q3 press releases)

  • Blaine, MN facility (117k sq ft) to expand DC solutions manufacturing; second DC capacity expansion in two years; >175 jobs when fully ramped; targeted early 2026 start .
  • Eleanor, WV expansion to add >100 jobs and 117k sq ft for large outdoor enclosures supporting DC power distribution; site to employ ~250 post expansion .

Notes on non-GAAP

  • Adjusted metrics exclude restructuring, acquisition/integration costs, intangible amortization, and related tax effects; reconciliations provided in 8-K Exhibits .