Hubbell (NYSE:HUBB) reported what executives described as a strong finish to 2025, driven by accelerating demand in utility transmission and distribution markets and continued momentum tied to data center build-outs. On the company’s fourth-quarter earnings call, management pointed to broad-based order strength, margin expansion, and steady free cash flow conversion, while also outlining a 2026 outlook that assumes continued organic growth and further operating margin improvement.
Fourth-quarter results show double-digit growth and margin expansion
Chairman, President and CEO Gerben Bakker said Hubbell delivered “strong financial results” in the fourth quarter, highlighted by 12% total sales growth, 140 basis points of adjusted operating margin expansion, 19% adjusted operating profit growth, and 15% adjusted earnings per share growth. Organic growth was 9% in the quarter, supported by double-digit organic growth in the Electrical Solutions segment and in grid infrastructure within Utility Solutions.
Adjusted operating profit totaled $349 million, with adjusted operating margins expanding 140 basis points. Capozzoli said cost inflation accelerated as expected in the quarter, but pricing and productivity actions “more than offset” those costs, generating positive price-cost-productivity results. Adjusted diluted earnings per share were $4.73, up 15%, aided by operating profit growth and partially offset by higher interest expense tied to the DMC Power acquisition and a higher year-over-year tax rate.
Free cash flow was $389 million in the quarter, and full-year 2025 free cash flow totaled $875 million, representing 90% conversion on adjusted net income, consistent with prior company expectations. Hubbell ended the year with net debt to EBITDA of 1.3x, which management said preserves flexibility for reinvestment and shareholder returns.
Segment performance: grid infrastructure strength and data center surge
Utility Solutions posted fourth-quarter net sales of $936 million, up 10% year over year, including 7% organic growth and 4% from acquisitions. Capozzoli said grid infrastructure—about three quarters of segment sales—grew 12% organically, with strength across distribution, substation, and transmission markets. He attributed demand to utility investments in new transmission and substation infrastructure to connect new load and generation, while aging infrastructure trends supported hardening and resiliency activity in distribution markets.
Grid Automation sales declined 8% in the quarter. Capozzoli said growth in protection and control solutions was outweighed by weaker new project activity in meters and AMI. Utility Solutions delivered $235 million of adjusted operating profit, up 20%, with adjusted operating margins expanding 200 basis points year over year, driven by strong volumes in grid infrastructure, favorable price-cost-productivity, and acquisitions, partially offset by volume declines in Grid Automation.
Electrical Solutions generated fourth-quarter net sales of $557 million, with 13% organic growth. Capozzoli said performance was driven by significant strength in data center markets, solid light industrial growth, and strong price realization, partially offset by softer heavy industrial and non-residential markets. Data center growth exceeded 60% in the quarter, supported by capacity investments in “balance of systems” components and strong activity in modular power distribution skids.
Electrical Solutions delivered $114 million of adjusted operating profit, up 18%, with adjusted operating margins expanding 60 basis points. Capozzoli also highlighted manufacturing investments at the Burndy brand, including automation work cells for copper lug production that consolidated multiple manual processes into automated lines, reducing processing time and manufacturing complexity while increasing output.
Orders and market commentary: momentum into 2026, while meters/AMI remain subdued
In Q&A, Bakker said orders strengthened beginning around September, particularly in transmission and distribution and data center. He emphasized Hubbell is “primarily a book-to-bill business” and said fourth-quarter organic sales growth reflected current orders rather than backlog burn. He added the company built some backlog in parts of the T&D business and that order momentum continued into 2026, supporting confidence in the company’s outlook, though visibility is limited by the short-cycle nature of much of the portfolio.
On meters and AMI, management said large project activity has not returned after prior backlog was worked through. Bakker described the current environment as smaller projects and replacement product, noting book-to-bill around 1 suggests stabilization at a lower base. From that lower level, he said the company expects the business to “modestly grow” sequentially, even if year-over-year comparisons remain affected early in 2026.
Management also addressed electric distribution channel conditions, saying customer inventories have normalized after an extended destocking cycle. Bakker said the company did not see customers “overshoot” by drawing inventories down too far, implying the 2026 outlook reflects underlying demand rather than a restocking benefit.
2026 outlook: mid-single-digit organic growth and further margin expansion
For 2026, Hubbell projected 5% to 7% organic growth across the portfolio. Utility Solutions is expected to grow organically 5% to 7%, with management citing continued strength in transmission and substation project pipelines and healthy distribution activity driven by maintenance and upgrades to aging infrastructure. In Grid Automation, Hubbell expects modernization initiatives to support protection and control strength, more than offsetting a “more modest” outlook for meters and AMI markets.
Electrical Solutions is expected to grow organically 4% to 6%, led again by data center markets, which now represent more than 10% of segment sales and are expected to expand in the mid-teens. Management said non-residential and heavy industrial markets are expected to be muted, while reshoring and megaproject activity should support light industrial and renewable markets.
The company initiated 2026 guidance for 7% to 9% total sales growth, adjusted earnings per share of $19.15 to $19.85, and approximately 90% free cash flow conversion on adjusted net income. Capozzoli said the midpoint implies roughly 10% year-over-year growth in adjusted operating profit, driven by organic growth, operating leverage, and contribution from DMC Power.
Management said it expects another year of margin expansion in 2026 and anticipates price and productivity will at least offset inflation, while also “reaccelerating investment” after a period of proactive cost management. Executives discussed expected restructuring spend of roughly $15 million to $20 million in 2026, which Capozzoli said may be somewhat front-end loaded.
Inflation, pricing, tariffs, and capital deployment
On costs, Capozzoli said Hubbell is planning for mid-single-digit cost inflation in 2026, including metals and other inputs, based on levels seen exiting 2025, after copper, aluminum, and steel rose coming out of the fourth quarter. He said the company expects to manage inflation through wraparound pricing and modest incremental price actions, along with productivity initiatives. Management also reiterated that price contributed about three points for the full year, consistent with prior expectations.
On tariffs, Capozzoli said the company saw roughly $150 million of tariff and related costs around mid-2025 and managed that number lower in the back half, adding that tariff rates have not changed materially recently, though the company remains prepared to respond if they do.
Regarding capital deployment, Capozzoli said Hubbell expects roughly $900 million to $1 billion of free cash flow in 2026 and plans to deploy capital similarly to 2025—balancing capital expenditures, M&A, and share repurchases depending on opportunities. Bakker said capital allocation priorities include capex as the highest-return use, followed by acquisitions, and noted the M&A pipeline includes both bolt-ons and larger deals, while emphasizing continued discipline. Capozzoli added that DMC Power is expected to contribute about $130 million of revenue and roughly 40% operating margins in 2026, net of integration costs, consistent with prior communications.
About Hubbell (NYSE:HUBB)
Hubbell Incorporated (NYSE: HUBB) is an industrial manufacturer and distributor of electrical and electronic products serving a range of end markets including commercial and residential construction, industrial, and utility customers. Founded in 1888 by Harvey Hubbell, the company has a long history in electrical innovation and product development and is headquartered in Connecticut. Hubbell designs, manufactures and sells components and systems that enable the distribution and control of electrical power and provide lighting solutions for indoor and outdoor environments.
The company’s offerings span a broad portfolio of products used by contractors, utilities, original equipment manufacturers and facility owners.
