HUBBELL INC

Hubbell Incorporated is a world-class manufacturer of electrical and utility solutions, with more than 75 brands used around the world. The company provides utility and electrical solutions that enable customers to operate critical infrastructure reliably and efficiently, supporting energy infrastructure In Front of the Meter, on The Edge, and Behind the Meter. In Front of the Meter is where utilities transmit and distribute energy to their customers, The Edge connects utilities with owners and operators and allows energy and data to be distributed back and forth, and Behind the Meter is where owners and operators of building and other critical infrastructure consume energy. Products are either sourced complete, manufactured or assembled by subsidiaries in the United States, Canada, Puerto Rico, Mexico, China, the United Kingdom, Brazil, Australia, Spain, Ireland, and the Republic of the Philippines, and the Company also participates in joint ventures in Hong Kong and the Republic of the Philippines, and maintains offices in Singapore, Italy, China, India, Mexico, South Korea, Chile, and countries in the Middle East.

Hubbell experiences substantial competition in all categories of its business, but does not compete with the same companies in all of its product categories. Some of its competitors are larger companies with substantial financial and other resources. The company considers product performance, reliability, quality and technological innovation to be important factors relevant to all areas of its business and considers its reputation as a manufacturer of quality products to be an important factor in its business. In addition, product price, service levels and other factors can affect Hubbell's ability to compete. The company's top ten customers account for approximately 42% of its Net sales.

The company generates revenue through two reporting segments: the Utility Solutions segment and the Electrical Solutions segment. The Utility Solutions segment (63% of consolidated revenues in 2025, 64% in 2024 and 61% in 2023) consists of businesses that enable the grid to conduct, communicate and control energy across utility applications, providing critical components that allow the grid to reliably transmit and distribute energy, as well as the communications and controls technologies to make the grid smarter and more flexible. The Electrical Solutions segment (37% of consolidated revenues in 2025, 36% in 2024 and 39% in 2023) comprises businesses that sell stock and custom products including standard and special application wiring device products, rough-in electrical products, and connector and grounding products, as well as other electrical equipment, with applications in the non-residential, light industrial, heavy industrial, datacenter, electric transmission and distribution, and renewables markets. The majority of the company's revenue is recognized at a point in time when the product is shipped to the customer, with a relatively small amount of transactions in the Utility Solutions segment recognized upon delivery of the product at the contractually specified destination, and the company also has performance obligations, primarily within the Utility Solutions segment, that are recognized over time due to the customized nature of the product and the company's enforceable right to receive payment for work performed to date in the event of a cancellation.

The Utility Solutions segment provides utility transmission and distribution components such as arresters, insulators, connectors, anchors, bushings, enclosures, cutouts and switches, and also offers solutions that serve The Edge of the utility infrastructure, including smart meters, communications systems, and protection and control devices. The segment supports the electrical distribution, electrical substation, electrical transmission, gas distribution, telecommunications, utility meters and AMI, and grid protection and controls markets. Products are sold under various brands including Aclara, Chance, Anderson, PenCell, Fargo, Hubbell, Polycast, Opti-loop Design, Quazite, Quadri*sil, Trinetics, Reuel, Electro Composites, USCO, CDR, RFL Design, Hot Box, PCORE, Delmar, Turner Electric, EMC, Longbow, Ohio Brass, Meramec, Reliaguard, Greenjacket, Armorcast, Beckwith Electric, Continental, R.W. Lyall, Gas Breaker, AEC, Ripley, Electro Industries / Gauge Tech, Balestro, Systems Control, Nicor, and DMC Power. Within the segment, Grid Infrastructure net sales were $2,748.2 million ¹ in 2025, $2,531.3 million ² in 2024, and $2,259.2 million ³ in 2023, while Grid Automation net sales were $924.1 million ⁴ in 2025, $1,069.4 million ⁵ in 2024, and $1,002.5 million ⁶ in 2023.

The Electrical Solutions segment comprises businesses that sell stock and custom products including standard and special application wiring device products, rough-in electrical products, and connector and grounding products, as well as other electrical equipment, with applications in the non-residential, light industrial, heavy industrial, datacenter, electric transmission and distribution, and renewables markets. Products are sold under various brands including Hubbell, Bell, Raco, Gleason Reel, ACME Electric, Kellems, TayMac, Hipotronics, Powerohm, EC&M Design, Bryant, Wiegmann, AccelTex Solutions, iDevices, Austdac, Burndy, Killark, GAI-Tronics, Connector Products, Chalmit, CMC, Hawke, PCX, and Ventev. Within the segment, Electrical Products net sales were $885.2 million ⁷ in 2025, $835.3 million ⁸ in 2024, and $823.0 million ⁹ in 2023, Industrial net sales were $1,287.1 million ¹⁰ in 2025, $1,171.3 million ¹¹ in 2024, and $1,101.1 million ¹² in 2023, and Retail and Builder net sales were $0 ¹³ in 2025, $21.2 million ¹⁴ in 2024, and $187.1 million ¹⁵ in 2023.

In 2025, the company invested $958 million ¹⁶ in acquisitions, including the acquisitions of Ventev for approximately $73 million ¹⁷, Nicor for approximately $56 million ¹⁸, and DMC Power for approximately $829 million ¹⁹, net of cash acquired. On February 12, 2025, the Board of Directors approved a share repurchase program that authorized the repurchase of up to $500 million ²⁰ of common stock and expires in February 2028. In October 2025, the Company's Board of Directors approved an increase in the common stock dividend rate from $1.32 ²¹ to $1.42 ²² per share per quarter. On November 14, 2025, the Company completed a public offering of $400 million ²³ aggregate principal amount of its 4.800% Senior Notes due 2035, and on December 1, 2025 used the net proceeds together with cash on hand to redeem in full all of the Company's outstanding 3.350% Senior Notes due in 2026 for an aggregate principal amount of $400 million ²⁴. On September 29, 2025, the Company entered into a Term Loan Agreement and on October 1, 2025 borrowed $600 million ²⁵ under the 2025 Term Loan to finance a portion of the DMC Power purchase price. The company also repurchased $225.0 million ²⁶ of shares in 2025.

Net sales increased by 3.8% ²⁷ or $216 million ²⁸ in 2025 to $5,844.6 million ²⁹, compared to $5,628.5 million ³⁰ in 2024 and $5,372.9 million ³¹ in 2023. Organic net sales increased by $186 million ³² on favorable price realization and higher unit volumes. Operating margin increased in 2025 by 130 basis points ³³ and adjusted operating margin increased by 80 basis points ³⁴, driven by favorable price realization and improved operational productivity, partially offset by material and other cost inflation, including tariff expense. Net income attributable to Hubbell increased by 13.9% ³⁵ in 2025 to $887.1 million ³⁶ compared to $779.0 million ³⁷ in 2024, and diluted earnings per share increased by 14.9% ³⁸ to $16.54 ³⁹ compared to $14.39 ⁴⁰ in 2024. Operating cash flow increased in 2025 to $1,029.8 million ⁴¹ as compared to $991.2 million ⁴² in the prior year, and free cash flow increased in 2025 to $874.7 million ⁴³ as compared to $810.8 million ⁴⁴ in the prior year.

The company's long-term strategy is to complement organic revenue growth with acquisitions that enhance its product offerings, focused on acquiring assets that extend capabilities, expand product offerings, and present opportunities to compete in core, adjacent or complementary markets. In 2025, the company invested $958 million ⁴⁵ in acquisitions that meet these objectives, including Ventev, Nicor, and DMC Power. The company's strategy to deliver products through a competitive cost structure has resulted in an ongoing program of restructuring and related activities, including the consolidation of manufacturing and distribution facilities, and workforce actions, as well as streamlining and consolidating back-office functions, with the primary objectives of optimizing manufacturing footprint, cost structure and effectiveness and the efficiency of the workforce. The company's goal is to have pricing and productivity programs that offset the impact of cost increases as well as pay for investments in key growth areas.

The company's strategy to deliver products through a competitive cost structure has resulted in an ongoing program of restructuring and related activities. The primary objectives of the company's restructuring and related activities are to optimize its manufacturing footprint, cost structure and effectiveness and the efficiency of its workforce. The company's goal is to have pricing and productivity programs that offset the impact of cost increases as well as pay for investments in key growth areas. The company expects investments in restructuring and related activities to continue in 2026 as it continues to invest in previously initiated actions and initiatives, further footprint consolidation, and other cost reduction initiatives. As of December 31, 2025, the company had incurred $9.1 million ⁴⁶ in costs for 2025 restructuring actions with additional expected costs of $1.9 million ⁴⁷ and expected completion in 2026, and incurred $2.9 million ⁴⁸ in costs for 2024 and prior restructuring actions with additional expected costs of $2.1 million ⁴⁹ and expected completion in 2026.

The company expects investments in restructuring and related activities to continue in 2026 as it continues to invest in previously initiated actions and initiatives, further footprint consolidation, and other cost reduction initiatives. The company's cost structure may be subject to material and production cost increases from inflationary periods within the U.S. and global economies, and from trade and other tensions. Because material costs are approximately half of the company's cost of goods sold, volatility in this area can significantly impact profitability. The company's pricing and productivity programs are intended to mitigate the risk to its operating margins related to these inflationary pressures and cost increases as a result of tariffs.

In 2025, the company invested $155.1 million ⁵⁰ in capital expenditures supporting footprint optimization, automation and productivity initiatives. The company also paid $286.6 million ⁵¹ in shareholder dividends in 2025, an increase of 7.2% ⁵² as compared to the prior year. As of December 31, 2025, the company had a total outstanding share repurchase authorization of approximately $500.0 million ⁵³. The company's Revolving Credit Agreement provides a $1.0 billion ⁵⁴ committed revolving credit facility and commitments under the Revolving Credit Agreement may be increased to an aggregate amount not to exceed $1.5 billion ⁵⁵.

The company's operating results can be sensitive to changes in general economic conditions, macro-economic effects of the U.S. government federal deficit, inflation, economic slowdowns, stagflation and recessions. The company's sales are subject to market conditions that may cause customer demand for its products to be volatile and unpredictable. Product demand can be affected by fluctuations in domestic and international economic conditions, as well as currency fluctuations, commodity costs, and a variety of other factors. The company has in the past experienced, and may continue to experience, significant inflationary pressure across much of its business. Global supply chain issues and increased demand have in the past led to, and may continue to lead to, increased freight, labor and commodity costs. Various factors, including the level of economic activity in China, the war between Ukraine and Russia and the conflict in the Middle East, have added, and may continue to add, to the volatility in energy costs. The company has had to take various pricing actions to cover the increase in its costs associated with inflationary pressure and protect its margin profile, but there can be no assurance that it will be able to maintain its margins in response to further changes in inflationary pressures.

The company faces risks related to changes in U.S. and international trade policies. The U.S. announced a series of significant new tariffs to be imposed on goods from a broad set of countries, including Canada, China, Mexico, European Union member states and various other countries around the world, and also announced new tariffs on foreign steel and aluminum, which took effect in March 2025. The company utilizes materials (such as steel, aluminum and copper), components and finished goods that are sourced from or manufactured in foreign countries, including Canada, China, Mexico and countries in Europe. Import tariffs and potential additional import tariffs have resulted or may result in increased prices for these imported goods and materials and, in some cases, may result or have resulted in price increases for domestically sourced goods and materials. These measures could also result in increased costs for goods imported into the U.S. or may lead to disruptions in the supply of goods and materials that could cause the company to adjust its worldwide supply chain. This could require the company to increase prices to its customers which may reduce demand, or, if the company is unable to increase prices, result in lowering its margin on products sold.

The company's operating results can be sensitive to changes in general economic conditions, and the company has experienced significant inflationary pressure across much of its business, with global supply chain issues and increased demand leading to increased freight, labor and commodity costs. The company's top ten customers account for approximately 42% ⁵⁶ of its Net sales, and deterioration in the credit quality of, loss of, significant decline in business with, or pricing pressure from one or more of these major customers could adversely affect results. The company faces risks related to changes in U.S. and international trade policies, including the imposition of new tariffs on goods imported into the United States, particularly tariffs on products manufactured in Canada, Mexico, China, and in Europe, which could adversely impact demand for products, disrupt supply chains, increase manufacturing costs and adversely affect revenues and costs of sales. As of December 31, 2025, the net carrying value of the company's goodwill and other intangible assets totaled approximately $4,455 million ⁵⁷, and deteriorating economic conditions, technological changes, disruptions to the business, or other factors may impair these assets. The company's international operations accounted for approximately 7% ⁵⁸ of its Net sales in 2025, exposing it to the effects of fluctuating exchange rates.

Management's message emphasizes the company's long-term strategy to serve customers with reliable and innovative electrical and related infrastructure solutions with desired brands and high-quality service, delivered through a competitive cost structure; to complement organic revenue growth with acquisitions that enhance its product offerings; and to allocate capital effectively to create shareholder value. The company's strategy to complement organic revenue growth with acquisitions is focused on acquiring assets that extend its capabilities, expand its product offerings, and present opportunities to compete in core, adjacent or complementary markets. Management states that in 2025 the company invested $958 million ⁵⁹ in acquisitions that meet these objectives. The company's strategy to deliver products through a competitive cost structure has resulted in an ongoing program of restructuring and related activities, with the primary objectives of optimizing its manufacturing footprint, cost structure and effectiveness and the efficiency of its workforce. Management notes that the company's goal is to have pricing and productivity programs that offset the impact of cost increases as well as pay for investments in key growth areas.