nVent (NVT) Q1 2026 Earnings Call Transcript

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DATE

Friday, May 1, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Beth A. Wozniak
• Chief Financial Officer — Gary Corona
• Operator

TAKEAWAYS

• Revenue -- $1.242 billion, increasing 53%, with 34% organic growth driven by data center demand.
• Orders -- Organic orders rose approximately 40%, primarily attributed to the AI data center buildout; organic orders excluding data centers grew in the mid-teens range.
• Backlog -- Backlog grew to $2.6 billion, up low double digits sequentially.
• Adjusted Operating Income -- $249 million, rising 53%, with return on sales flat at 20% year over year.
• Adjusted EPS -- $1.09, up 63%, exceeding the previous guidance range and marking the first time above $1 per quarter.
• Free Cash Flow -- $54 million, growing 21% year over year.
• Segment Performance — Systems Protection -- Sales of $895 million, up 70%; organic growth of 50%, with Infrastructure increasing over 100% and high teens growth in Commercial/Resi.
• Segment Performance — Electrical Connections -- Sales of $347 million, climbing 15%, with organic growth of 8% and the EPG acquisition contributing an additional 6%.
• Americas Performance -- Revenue in the Americas increased over 40% overall and 65% within Systems Protection; Europe was up low single digits, Asia Pacific declined.
• Book-to-Bill Ratio -- Management confirmed a book-to-bill ratio of 1.2 times, driven by strength in data center and core verticals.
• Capital Expenditures -- Expected full-year CapEx of $130 million, up 40%, with $36 million spent in the first quarter to expand capacity for data centers and Power Utilities.
• Dividends and Share Repurchases -- $84 million returned to shareholders, including $50 million in share buybacks, and a 5% dividend increase.
• Full-Year Guidance — Sales -- Raised reported sales growth forecast to 26%-28%, expecting organic growth of 21%-23%, with approximately 5% contribution from acquisitions and little FX impact.
• Full-Year Guidance — Adjusted EPS -- Updated to $4.45-$4.55, up from the prior $4.00-$4.15 guidance.
• Full-Year Tariff Impact -- Maintaining an expected $80 million tariff headwind, after $90 million last year, totaling $170 million.
• Q2 Outlook -- Projected reported sales growth of 28%-30%, with organic growth of 23%-25%; adjusted EPS guided to $1.12-$1.15, reflecting over 30% year-over-year growth at midpoint.
• New Product Contribution -- New products drove over 20 percentage points of sales growth, with 11 launches in the quarter, primarily in data center categories.
• Infrastructure Vertical Shift -- Infrastructure now constitutes over 55% of total sales, compared to 45% last year and 12% at the spin-off.
• Liquidity and Leverage -- $109 million cash on hand, $600 million available via revolver, and net leverage at 1.5 times, below the 2-2.5 times target range.
• Blaine Facility Launch -- New production site in Blaine, Minnesota began operating during the quarter and is expected to ramp production through the year.

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RISKS

• Electrical Connections Margin Pressure -- Return on sales decreased 390 basis points year over year due to elevated raw material inflation, mainly driven by copper; management stated, "The margin performance was impacted by higher-than-expected raw material inflation."
• Inflation and Tariff Headwinds -- Management maintained an $80 million tariff headwind for the year and cited inflation totaling nearly $60 million in the quarter, requiring further price and productivity actions to offset rising costs.
• Asia Pacific Weakness -- Sales and segment performance in Asia Pacific declined in Systems Protection and total company results, while Electrical Connections saw mid-single-digit growth; no mitigation was cited for near-term recovery.

SUMMARY

nVent Electric (NYSE:NVT) reported record top-line and bottom-line results, highlighted by robust data center demand and an accelerating backlog. Segment highlights included significant outperformance in Systems Protection, with infrastructure sales doubling and new product launches exceeding prior contributions. Capital deployment remained focused on organic growth and M&A, supported by ample liquidity and below-target leverage. Guidance for both sales and adjusted EPS was raised due to visibility from the expanded order backlog and continued strength from AI data center buildouts. Portfolio transformation shifted company exposure further into Infrastructure, now representing the majority of total sales.

• Management said, "Our backlog continues to grow sequentially," and noted that a majority extends over 8–12 months, providing forward visibility past 2026.
• The white space within data centers, particularly liquid cooling, delivered outstanding growth, while the gray space also saw healthy gains in engineered buildings and enclosures.
• New facilities and expanded capacity, including the Blaine, Minnesota site, are vital for accommodating surging customer orders.
• Return on investment in new products and productivity initiatives was significant, with new launches contributing more than six times the expected growth impact.
• Secular drivers—electrification, digitalization, and sustainability—were cited by management as tailwinds sustaining high growth expectations in Infrastructure, particularly data centers and Power Utilities.
• Despite margin pressures in Electrical Connections from inflation, overall adjusted operating income and free cash flow rose substantially, and pricing actions are expected to protect profitability going forward.
• The EPG acquisition delivered ahead of expectations in both revenue and profit, with management outlining plans for further M&A focused on high-growth verticals.
• Backlog and contract pipeline for key data center customers offer multi-year visibility, with supply-chain resilience efforts underway to maintain competitive lead times.

INDUSTRY GLOSSARY

• Gray Space / White Space: In data centers, "gray space" refers to areas housing supporting infrastructure such as power and cooling systems, while "white space" denotes the area where IT equipment—including servers, storage, and networking hardware—is deployed.
• CDU: Cooling Distribution Unit, a liquid cooling system component used to regulate temperature in data center and high-performance computing environments.
• Hyperscaler: A company operating hyperscale data centers (e.g., large-scale cloud providers) with extensive demand for scalable IT and power infrastructure.
• EPG: Electrical Products Group, an acquired business unit providing electrical enclosures and related solutions.

Full Conference Call Transcript

Beth A. Wozniak: I am pleased to share with you our outstanding first quarter results and cover some key business highlights. We had a tremendous start to the year with record sales, orders, and backlog exceeding our expectations. This was our third consecutive quarter with sales of more than $1 billion. Both sales and EPS significantly exceeded our guidance, driven by strong sales growth in the Infrastructure vertical led by data centers. Our data center business grew across the portfolio in both the gray and white spaces. In the gray space, we had strong growth in engineered buildings, enclosures, and power connections.

In the white space, we had outstanding growth in liquid cooling, along with strong growth in power distribution units and cable management. We are winning with a wide range of customers, from hyperscalers to neo-clouds and multitenants, and also through our distribution partners. Our investments in new products and capacity have been key to our ability to scale and respond to customer demand. The tremendous growth in data centers was accomplished by our team working tirelessly to increase and expand capacity in our facilities and across our supply base. Earlier this week, we celebrated the opening of our new Blaine, Minnesota facility that started production in Q1. We expect production to ramp throughout the year.

In Q1 for total nVent Electric plc, we had record orders and backlog. Organic orders were up approximately 40%, primarily driven by orders for the AI data center buildout. Excluding data centers, organic orders grew mid-teens. In addition, we continue to see our backlog grow, up low double digits sequentially to $2.6 billion, giving us visibility through the year. 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. We are raising our full year sales and EPS guidance to reflect our outstanding first quarter performance and significant momentum in data centers.

Now on to slide four for a summary of our first quarter performance. Sales were up 53% and 34% organically, led by the Infrastructure verticals. New products contributed over 20 points to our sales growth, and we launched 11 new products in the quarter. The EPG acquisition exceeded expectations, growing sales strong double digits year over year. Adjusted operating income grew 53% year over year, with return on sales of 20%. Adjusted EPS grew 63%, and free cash flow grew 21% year over year. Looking at our key verticals, sales grew across all verticals. Infrastructure led the way with organic sales up nearly 80% driven by outstanding growth in data centers and double-digit growth in power.

Both Industrial and Commercial/Resi grew mid-single digits. Turning to organic sales by geography, the Americas led, growing over 40%, Europe was up low single digits, while Asia Pacific was down. Looking ahead, we believe the Infrastructure vertical has the highest growth opportunity with the trends of electrification, sustainability, and digitalization. Infrastructure is expected to grow strong double digits this year, driven by AI data center CapEx acceleration. Our greatest growth opportunity within the Infrastructure vertical is data centers. Power Utilities is next, with strong secular tailwinds as the demand for electrical grid capacity is increasing with electrification and the need for power for AI data centers. Our expectations for Industrial and Commercial/Resi remain the same.

For Industrial, we expect mid-single-digit growth with increasing CapEx investment, automation, and reshoring. The Commercial/Resi vertical is expected to grow low single digits. Move 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, expanding to 45% last year, and now is over 55% in Q1. We have been significantly investing in our data center and Power Utilities which are rapidly growing, and more capacity is needed to meet customer demand.

Overall, I am proud of our nVent Electric plc team and how we continue to perform and deliver for our customers. We are on track for another strong year. This wraps up my opening remarks. I will now turn the call over to Gary for further details on our first quarter results as well as our updated outlook. Gary, please go ahead.

Gary Corona: Thank you, Beth. We had another excellent quarter, exceeding our guidance with record sales, orders, backlog, and adjusted EPS. Let us turn to slide six to review our results. Sales of $1.242 billion were up 53% relative to last year. Organically, sales grew 34%, well ahead of our guidance, driven by very strong data center sales. Acquisitions added $138 million to sales, or 17 points to growth, ahead of our guidance. Foreign exchange was a two-point tailwind. Adjusted operating income was $249 million, up 53%. Return on sales came in ahead of expectations, percent flat to last year. Price plus productivity offset inflation of nearly $60 million, including approximately $40 million in tariff impact.

We also continue to make investments for growth in data centers and Power Utilities. We had record earnings, and it was the first time we reported quarterly adjusted EPS north of a dollar. Adjusted EPS grew 63% year over year to $1.09, well above the high end of our guidance range. We generated free cash flow of $54 million, up 21% year over year. Now please turn to slide seven for a discussion on the first quarter segment performance. Starting with Systems Protection, sales of $895 million increased 70%. Acquisitions contributed 24 points of sales and have performed ahead of expectations. Organically, sales grew 50% with all verticals growing.

Infrastructure grew more than 100%, largely due to continued strength in data centers. Industrial was up mid-single digits, and Commercial/Resi grew in the high teens. Geographically, the Americas grew by over 65%, while Europe was up low single digits. Asia Pacific was down in the quarter. First quarter segment income was $203 million, up 95%. Return on sales of 22.7% increased 220 basis points year over year on strong volume and productivity. Moving to Electrical Connections, sales of $347 million increased 15%. Organic sales were up 8%, and the EPG acquisition contributed six points to sales. From a vertical perspective, Infrastructure led, growing in the high teens. Industrial grew mid-single digits, and Commercial/Resi was up low single digits.

Geographically, all three regions grew. Sales were up high single digits in the Americas, Europe was up low single digits, and Asia Pacific grew mid-single digits. Segment income was $85 million, flat versus last year. Return on sales of 24.4% was down 390 basis points year over year. The margin performance was impacted by higher-than-expected raw material inflation. We have taken pricing and productivity actions and saw margins improve as the first quarter progressed. We expect margins to improve in Q2 and for the balance of the year. We ended the quarter with $109 million of cash on hand and $600 million available on our revolver, putting us in a strong liquidity position. Our debt stands at $1.6 billion.

Our healthy balance sheet and strong liquidity position give 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 investment and rigorous execution of our M&A strategy, 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. This year, we expect to invest approximately $130 million in CapEx, up 40%.

We spent $36 million in Q1, up over 70% versus last year. Most of this increased investment is for new capacity to support growth and gain in data centers, Power Utilities, and supply chain resiliency. In Q1, we returned $84 million to shareholders, including share repurchases of $50 million, and we recently increased our quarterly dividend by 5%. We exited the quarter with net leverage of 1.5 times, well below our target range of 2 to 2.5 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.

As Beth shared earlier, we are significantly raising our full year reported sales and adjusted EPS guidance, primarily due to our continued momentum in Infrastructure. We now forecast reported sales growth of 26% to 28%. This includes expected higher organic growth, approximately five points from acquisitions, and flattish on foreign exchange. For organic sales growth, we now expect to grow 21% to 23% versus our prior guidance of 10% to 13% due to our strong first quarter performance and momentum in Infrastructure. We are raising our full year adjusted EPS range to $4.45 to $4.55 versus our original guidance of $4.00 to $4.15. This new guidance continues to reflect tariff impacts of approximately $80 million.

We continue to expect to offset the impact of inflation, including tariffs, through pricing, supply chain productivity, and operational mitigating actions. For free cash flow, we still expect conversion of 90% to 95%. Looking at our second quarter outlook on slide 11, we forecast reported sales of 28% to 30%, with acquisitions contributing approximately five points to sales. Organic sales growth is expected to be up 23% to 25%. Pricing coupled with productivity are expected to offset the impact of inflation, including tariffs, in Q2. We also expect to continue to invest for growth, particularly in data centers and Power Utilities.

We expect adjusted EPS to be between $1.12 and $1.15, which at the midpoint reflects over 30% growth relative to last year. Wrapping up, I am very pleased with our first quarter performance. We delivered strong sales and earnings growth, and are well positioned for another outstanding year. Through disciplined portfolio transformation and strong execution, our growth profile has meaningfully accelerated. We significantly raised our midterm financial targets at our Investor Day in March, and we are off to a great start. nVent Electric plc is well positioned for the secular trends in electrification, digitalization, and sustainability. We are confident in the growth and value creation opportunities ahead. I will now turn the call back over to Beth.

Beth A. Wozniak: Thank you, Gary. Please turn to slide 12 titled Our 2025 Sustainability Report. Last month, we published our latest sustainability report that outlines our commitment to sustainability and the meaningful progress we are making in our three pillars: people, products, and planet. A few highlights from the report. We achieved an employee satisfaction plus recommend score in our 2025 employee engagement survey that was three points above the global benchmark. 100% of our new products launched last year did not use single-use plastic packaging. We reduced our normalized CO2 emissions by 24%. We continue to receive accolades for our progress.

We were recognized as one of the world's most ethical companies by Ethisphere for the third consecutive year and received a gold sustainability rating from EcoVadis, placing us in the top 2% of our industry. Our sustainability efforts are key to our strategy and how we operate. I am proud of everything we have accomplished and the journey we are on. Wrapping up on slide 13, we are off to a tremendous start to the year with record sales, orders, backlog, and adjusted EPS. Our portfolio transformation and the AI data center buildout are accelerating our growth.

We expect another record year with strong sales and earnings growth, and we believe we are well positioned with the electrification, sustainability, and digitalization trends. Our future is bright. We will now open the call for questions.

Operator: We will now begin the question-and-answer session. To ask a question, you may press star then 1 on your touchtone 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 your question, please press star then 2. Our first question comes from Deane Michael Dray with RBC Capital Markets. Please go ahead.

Deane Michael Dray: Thank you. Good morning, everyone. Hey, Beth, I think you get the understatement of the year award for your analyst meeting just saying that orders were tracking above initial expectations, but that is a pleasant surprise. Would love to hear a bit more color in terms of what drove the outperformance. In your prepared remarks, you gave us some real highlights regarding what was the white space, what was the gray space. It really did sound broad based. But if we just kind of zero in on what drove the outperformance this quarter, that would be a good place to start.

Beth A. Wozniak: Thanks. As we said, first of all, our growth was broad based. We saw growth in all of our verticals. When it came to Infrastructure, certainly that was leading with the most growth. We saw nice growth in Power Utilities, but I would say a significant portion of our growth was coming from data centers. As you know, we have continued to expand capacity for liquid cooling, but we also saw nice growth across the entire portfolio. I would say white space was leading, stronger growth there, but continued growth as we focus on the gray space as well.

We were very pleased to see that where we have been investing in new products and capacity, we have seen strong orders and have been able to execute to deliver on that growth.

Deane Michael Dray: Alright, really good to hear. And I want to follow up on the new capacity adds. You reaffirmed CapEx at $130 million, that is up 40% year over year. You just had orders up 40% organically. Take us through the timeline for the new capacity that is coming online, and then when do you expect this new capacity to start to contribute to operating leverage for the firm?

Beth A. Wozniak: As I commented, we had our grand opening of our Blaine facility just this week. It took us 100 working days to sign a lease to get that facility up and running. We have been building our capability, training new operators, and we expect production to ramp as we go through the course of the year. A lot of the strength that you saw was our execution in our other plants, but this Blaine facility will be coming online and really ramping through the year.

Operator: The next question comes from Joseph Alfred Ritchie with Goldman Sachs. Please go ahead.

Joseph Alfred Ritchie: Hey, good morning. What a start to the year. Maybe just on that last point, Beth, let us talk about how you are thinking about capacity going forward. The data center market, the whole Infrastructure market is white hot. How are you thinking about maybe even incremental investment from here? And then secondly, I do not know that I heard a specific number, but I think last quarter you told us that Infrastructure was going to be up around 20% this year. Obviously, it seems like that number has been revised upward. Any updated thoughts on what Infrastructure is expected to grow in 2026?

Beth A. Wozniak: The way that we have been looking at our capacity—and by the way, it is not just our new Blaine facility. We have expanded our capabilities globally to be able to support some of the data center product growth that we are seeing, liquid cooling and others. We have been investing across multiple factories. We also have been investing and expanding some of our engineered building solutions sites because we have seen growth there from both data centers and utilities. We have expanded within existing sites as well.

We continue to look at the orders as we are winning more customers and launching new products—what do we view as that order acceleration or order growth, and what do we need to do to support that. This is an area where we are going to continue to make those investments for growth. As far as Infrastructure, we gave that back in our Investor Day that our outlook on Infrastructure was really strong, and that is what is playing out. Our ability to expand capacity and execute and manage our supply base has really been a differentiator for us in terms of realizing that growth. The teams are working really hard.

It is a lot of work to be able to grow at these double-digit rates.

Joseph Alfred Ritchie: Great. My second question, Gary, bringing you into the discussion, just on margins, talking through Electrical Connections for a second. I think you made a comment that sequentially, as the year progresses, things should get better. Help us understand the margin progression a little bit for that segment going forward.

Gary Corona: Thanks, Joe. I will start with our margins for nVent Electric plc across the company—they were higher than we guided. That was driven by the strength of Systems Protection and leverage that more than offset the headwind that we saw in Electrical Connections, where we saw higher-than-expected inflation, primarily due to copper. We took pricing and productivity actions, as I mentioned, leading to improved margins month over month throughout the quarter. We expect our margins to improve in Q2 and the balance of the year more towards historical levels that segment has delivered. We are seeing proof of that in market and expect improvement in the balance of the year.

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

Nigel Edward Coe: Not a bad start—I will put it that way. Congratulations. On that last one, Gary, do you expect to be sort of flat margins by the end of the year, and getting there pretty progressively? How do you think about that?

Gary Corona: We should see meaningful improvement in Q2, Nigel. As I mentioned, we will get towards more historical levels of margin in Electrical Connections as we move throughout the year. Overall, in our initial guidance, we had those headwinds coming into the first half of the year on margin, and we will be essentially flattish for the first half versus year ago. We will see nice sequential improvement overall in Q2, have nice margin growth and healthy incrementals overall in the second half.

Nigel Edward Coe: Thanks. And then thinking about the framework, your Q2 guide embeds pretty flat sales with Q1, and I think the sales are pretty flat for the year. Normally, we have a nice pickup in Q2, Q3, and then coming down Q4. Is the data solutions business flattening out the seasonality? With Blaine still ramping, I would expect some lift there. What are you seeing?

Gary Corona: We have organic sales growth in Q2 of 23% to 25%, so all in, almost 30% growth for the quarter. We feel really good about the progression we are making on growth. We start to ramp with higher comparisons as we get into Q2 and then in the back half of the year. Our historical seasonality has become a bit reshaped as our portfolio has changed. We are excited about the growth that we will post in Q2 and in the back half of the year, and you see that very meaningful guidance raise.

Operator: Next question comes from Julian C.H. Mitchell with Barclays. Please go ahead.

Julian C.H. Mitchell: Maybe I just wanted to circle back to the organic sales growth assumptions. First, with that backlog of $2.6 billion at March, how much visibility are you now having into second-half revenues? Has there been any change in lead time or ordering patterns from customers? And on the revenue point, it looks like on a two-year stack basis you are assuming maybe mid-30s organic sales growth year on year each quarter. Is that the right framework?

Beth A. Wozniak: Let me start with our backlog. Our backlog continues to grow sequentially, and as we look at it, most of it is over an 8–12 month period, the majority of it. So that takes us into 2027. Our view is we are trying to ensure that we are being competitive on our lead times. Of course, we have to work with our supply base. As we are ramping, a significant part of our effort is to make sure that our supply base can ramp with us. We are making good investments that are allowing us to get there. I will let Gary talk to the guidance and the organic growth numbers.

Gary Corona: Yeah, Julian, you have it exactly right. We are looking at mid-30s two-year stack growth pretty much throughout the year.

Julian C.H. Mitchell: Great. And then a follow-up on margins. Is it fair to say the operating margin expansion guide for the year is largely similar to what you said three months ago—up maybe some tens of basis points total company? And within that, how much extra cost inflation dollar headwind are you now assuming, with that extra price offset in turn?

Gary Corona: We are essentially in line with what we had guided previously—mid-20s incrementals in the second half and, call it, 30–40 basis points overall for the year in margin expansion. As we think about inflation, we have updated our expectations. We shared mid-single digits at the initial guide; it is up a little bit—under a point of inflation—still mid-single digits. We have taken action with additional pricing in the first quarter to offset that inflation.

Operator: The next question comes from Jeffrey Todd Sprague with Vertical Research. Please go ahead.

Jeffrey Todd Sprague: Thanks. Good morning, everyone. A couple from me. Just on Blaine—do these orders represent filling the book for the year? I think you were holding off taking orders on a lot of those new products that you introduced and the factory was not ready. I know the sales need to ramp, but do the orders reflect booking the year out?

Beth A. Wozniak: Some of our new products are launching in Q2 and Q3, and we expect that as those products get launched, the orders will follow. With respect to Blaine, we are currently building out for the orders that we have but expanding our capabilities within that site for both new products and existing business.

Jeffrey Todd Sprague: Thinking about Systems Protection structural margins—you clearly would have had factory inefficiencies in the quarter; you also would have had more inflation than you expected. It is not visible given the volumes, but there are naturally factory inefficiencies in any startup. Should we be thinking about structurally higher margins as we look forward for Systems Protection? I understand the margin should probably ramp somewhat over the course of the year, but thinking beyond that.

Gary Corona: We were very pleased with the margin expansion that we saw in the quarter from Systems Protection. We will continue to see nice leverage, and we will also continue to see investment. We will continue to invest both in capacity expansion as Beth talked about, as Blaine ramps throughout the year, and also in our capabilities as I mentioned in my remarks. I think we will see margin expansion throughout the year for Systems Protection, but we will continue to invest to set us up for the future.

Jeffrey Todd Sprague: Great. And just a quick follow-up. Incremental tariffs $80 million—what is the all-in tariff expectation for the year now?

Gary Corona: Incremental is $80 million this year following $90 million last year—so $170 million all in. The U.S. tariff environment remains highly fluid, and we did have a lot of puts and takes since we were last talking to you 90 days ago, but we landed essentially in the same spot, with an $80 million headwind primarily in the first half of this year.

Jeffrey Todd Sprague: We had an unrelated CEO say the administration is opening up discussion on this. Are you aware of that? Do you see any possibility of tariff relief relative to your current position?

Beth A. Wozniak: We have kept to our current outlook, and I guess we will wait and see.

Jeffrey Todd Sprague: Great. Thank you. Awesome results.

Beth A. Wozniak: Thank you.

Operator: The next question comes from Vladimir Benjamin Bystricky with Citi. Please go ahead.

Vladimir Benjamin Bystricky: Hey, good morning, Beth and Gary. Thanks for taking my questions here. Congrats on a nice quarter and nice start to the year. I just wanted to ask you about the orders we are seeing here because I know you have talked in the past about how orders can be lumpy quarter to quarter, but my math is that orders have grown almost 40% a quarter on average over the past year, and you are seeing accelerating contributions from NPIs with more products to come. Can you talk about how you are thinking about the durability of this accelerated orders pace over the coming quarters?

Beth A. Wozniak: You are correct in that orders can be lumpy and can vary month to month. As we broke it out, we said our orders were still very strong when you exclude data centers. That is really great—broad based across all of our verticals outside of data centers. With data centers, they tend to be lumpy, but we believe, and this is part of why we took up our guidance, that the backlog and the current order book give us visibility to a stronger growth year.

Vladimir Benjamin Bystricky: Appreciate that. And then stepping back to capital allocation, you highlighted net leverage back down at 1.5 times, well below your longer-term target. Can you talk about what you are seeing in the M&A pipeline and how we should think about your operational capacity to potentially digest a meaningful acquisition even as you are still ramping production and still integrating prior acquisitions?

Beth A. Wozniak: At our Investor Day six weeks ago, we raised our outlook in terms of what we thought acquisitions or inorganic growth could contribute, and that speaks to our confidence and our ability to do large deals. We have a really robust pipeline and, consistent with how we talked about Infrastructure being the highest-growth vertical, our focus is there. We believe there is opportunity for M&A. We remain very disciplined, and we continue to develop our execution capability. We are very thoughtful about the different targets that we go after and how they would integrate into nVent Electric plc, ensuring that we have the right teams and capability to do that.

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

Nicole Sheree DeBlase: Thanks. Good morning, and I will add my congratulations on a great start to the year. Starting with a question on the order pipeline, the book-to-bill that we calculated is also really strong, 1.2 times this quarter. When you look at the pipeline of orders and the magnitude of customer conversations that you are having, what would you say about the strength of the pipeline and the sustainability of that 1.2 times book-to-bill ratio?

Beth A. Wozniak: A couple of comments. Some of the new products that we are working on launch in Q2 and Q3, and we know we have a lot of customer interest. In data centers, we are seeing a wide range of customer interest from hyperscalers, neo-cloud, multi-tenant, and we are seeing strength through distribution as well. That diversification and breadth of customers is a real positive. Second, excluding data centers, organic orders grew in the mid-teens, again across all of our verticals and through distribution, which is a good indicator that we are seeing momentum.

Nicole Sheree DeBlase: One thing that stood out in the prepared remarks was that within Systems Protection, Commercial/Resi was up high teens in the quarter, which is stronger than expected. Can you give us some color on what you are seeing in the Commercial/Resi vertical—where that improvement is coming from?

Beth A. Wozniak: In both Systems Protection and Electrical Connections, we are seeing Commercial/Resi growth. Some product sold through distribution is sold to our contractor base, and it is sometimes hard to distinguish exactly where it ends up. It may be sold to a commercial contractor and then ends up in a data center; we may not necessarily know that. Some of our products—core enclosures or power connections—are seeing uplift with construction buildout, leading to stronger orders.

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

Brian Paul Drab: Six weeks ago you said you were expecting about three points of growth from new products, and then first quarter new products contributed over 20 points—that is incredible. Can you elaborate on which categories are seeing the most success? Do you feel like you are taking share? How do you expect that contribution from new product to play out throughout the year?

Beth A. Wozniak: We have continued to see strength, and it is a big focus for us to drive velocity through our new product pipeline. Our new products that contributed so strongly in Q1 were really related to data centers—liquid cooling and some of our other offerings were the strong contributors.

Brian Paul Drab: Can you comment more on new versions of the CDU or anything more specific?

Beth A. Wozniak: Back at Supercomputing in the fall, we showcased a lot of our new products, and many of those are still to launch through this year. We think we are going to have continued momentum with these new offerings.

Brian Paul Drab: In terms of visibility, you mentioned backlog takes you into 2027. Can you talk about some of the projects with hyperscale or colocators—how far out are these projects going? We are hearing five-plus years of visibility, even talking about projects for 2030.

Beth A. Wozniak: With some of our key customers, we have a view to their demands several years out. As we think about making investments in our capacity—for liquid cooling, engineered building solutions for data centers or Power Utilities—we are getting a multi-year view and staying very close to those customers to make sure we are making the right investments for expansion.

Operator: The next question comes from David Tarantino with KeyBanc Capital Markets, on for Jeff Hammond. Please go ahead.

David Tarantino: Hey, morning, everyone. Could you give us an update on Trackd and EPG as it seems the modular theme is playing out quite well here? What are you expecting from a growth perspective, and can you give some color on driving margin improvement in the deals as well?

Beth A. Wozniak: With Trackd and EPG, we decided that was a great platform because it extended capabilities from enclosures and integration, and we thought it was a good way to strengthen what we do in utilities. That continues to grow nicely. In addition, we have found significant opportunities in data centers—modular data centers and the gray space. We are seeing a really nice pipeline and are looking at how we expand across our current sites to drive throughput and capture opportunities. I will let Gary talk to margins.

Gary Corona: It is one year to the day that we closed on EPG, so they will flip to organic as we move through the second quarter. We are running the playbook on both Trackd and EPG, leveraging our scale to drive synergy. EPG has exceeded our expectations not just on the top line but on the bottom line as well. We are focused on growth, and margin expansion is impacting our results as well.

David Tarantino: You highlighted orders outside of data center were quite strong as well. How much was driven by Power Utilities, and are you starting to see some broadening out of the order growth outside of Infrastructure?

Beth A. Wozniak: We had double-digit growth in Power Utilities from a sales standpoint and nice orders there. Overall, orders were up mid-teens, and we see strength through our distribution channel, which is where we see that broadening across all verticals.

Operator: The next question comes from Analyst with Evercore ISI. Please go ahead.

Analyst: Thanks very much. Good morning. I appreciate the opportunity to ask a question. Could I dig into the order development for a little more color? To double check, you said Power Utilities up mid-teens. And then on data centers, can you give us a sense—qualitative is fine—of liquid cooling versus others? And with about $1.5 billion in the quarter, how much of that is actually data centers?

Beth A. Wozniak: As we mentioned on orders, outside of data centers our orders grew mid-teens across Commercial/Resi, Infrastructure, and Industrial. Organic orders were up 40% overall, with most of that being from data centers. We have seen very good strength in liquid cooling, but also in other product lines. In the gray space: engineered buildings, enclosures, and power connections. In the white space: very strong liquid cooling, but also power distribution units and cable management. We are seeing good order growth across the board.

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

Neil Burke: Good morning, everyone. I had a question on the competitive landscape. There are a lot of relatively new players in liquid cooling, and you have talked about having the largest install base. How do you see the competitive environment evolving, and does a strong quarter like this give you confidence you are maintaining or even taking share in liquid cooling?

Beth A. Wozniak: Our liquid cooling capability was developed organically, starting pre–data centers in industrial and medical applications. Because we have been working in liquid cooling for a while, we have strong application expertise, modeling capability, and field experience. We are continuing to invest in new products, strengthen our portfolio, and work with our supply base. The space is growing significantly, so it is not a surprise that there are more entrants. We have confidence in our strategy and our ability to work with partners from chip manufacturers to hyperscalers and others. We have a roadmap in some cases for our next CDUs out to 2030 with some chip manufacturers.

We will continue to invest, build our portfolio, and, importantly, scale and deliver for customers.

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

Scott Graham: Good morning, Beth, Gary, and Tony. Great quarter, flat out. I wanted to ask about inflation a little bit more. I know you said ex-tariffs inflation was $20 million. We have seen commodities prices rise across the board. What was the run rate of that number at the end of the quarter? If it was a higher run rate, are you still increasing prices to catch up to that?

Gary Corona: We did see elevated inflation in the quarter. As I mentioned earlier, we have raised our expectations for inflation—a little under a point for the year. It is really driven by fuel and copper. We have taken actions on pricing in the quarter, and we feel like we can offset this emerging inflation with pricing and productivity for the year. We have a playbook to do this, and we have taken action.

Scott Graham: Thank you. A seldom-discussed subject—because you are so U.S.-centric and doing so well stateside. Electrification is a secular trend in Europe as well. Do you have plans to move into Europe more aggressively over the next couple of years to tap some of that opportunity?

Beth A. Wozniak: The answer is yes. One of the changes we made a year ago was to put in place a president for both Europe and Asia Pacific to ensure we had focus on our customers, growth opportunities, and channel partners. We had growth in Europe. We see growth and need for power, and data centers are expected to grow more globally. We have been making investments for manufacturing capacity in our plants as well as our commercial teams.

Operator: The next question comes from Analyst with GLJ Research. Please go ahead.

Analyst: Hi, guys. Congratulations on a great quarter. If you back out the lion's share of the inorganic sales for the quarter, you can get to an incredible organic growth rate for the total Infrastructure vertical that is kind of in the 80s for Q1. I know it is chunky and early in the year, but is it fair to think that both overall data centers and liquid cooling and power within data centers are growing around the overall growth rate for that as well? How do you want us thinking about those businesses growing this year as we head into more difficult comparisons in the balance of the year?

Beth A. Wozniak: As you try to look at those different pieces, you are right—it is very strong growth. Liquid cooling is growing significantly, but we are also seeing other portfolios beyond liquid cooling growing at significant rates in both gray and white space. Looking to our backlog and orders gave us confidence to raise our guidance—that is the runway we have. As we add capacity and new products, we are confident in what we will be able to execute through the back half of the year and set up for 2027.

Analyst: Could we get a handle on the size of the gray space business last year? I know some acquisitions make it messy, but maybe as a percentage of overall sales.

Gary Corona: What we said at Investor Day was 80% white space and 20% gray space within the total data center business.

Analyst: Got it. Thank you so much.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Beth A. Wozniak for any closing remarks.

Beth A. Wozniak: I want to end by saying today is May 1, which actually is our birthday, so it is a great day for our employees to celebrate. 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, and we significantly raised our midterm targets at our Investor Day to reflect these opportunities. I am proud of our performance in the first quarter. We will continue to focus on delivering for our customers, employees, and shareholders. nVent Electric plc 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.

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

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