HUBBELL INC - Quarter Report: 2025 March (Form 10-Q)

See notes to unaudited Condensed Consolidated Financial Statements.s to unaudited Condensed Consolidated Financial Statements.

See notes to unaudited Condensed Consolidated Financial

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Condensed Consolidated Balance Sheets (unaudited)


(in millions)	March 31, 2025	December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents	$	$
Short-term investments
Accounts receivable (net of allowances of $ and $)
Inventories, net
Other current assets
Total Current Assets
Property, Plant, and Equipment, net
Other Assets
Investments
Goodwill
Other intangible assets, net
Other long-term assets
TOTAL ASSETS	$	$
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt and current portion of long-term debt	$	$
Accounts payable
Accrued salaries, wages and employee benefits
Accrued insurance
Other accrued liabilities
Total Current Liabilities
Long-Term Debt
Other Non-Current Liabilities
TOTAL LIABILITIES
Commitments and contingencies (Note 15)
Hubbell Incorporated Shareholders’ Equity
Noncontrolling interest
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY	$	$

See notes to unaudited Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Cash Flows (unaudited)


	Three Months Ended March 31,
(in millions)	2025	2024
Cash Flows from Operating Activities
Net income	$	$
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Deferred income taxes
Stock-based compensation
Loss on disposition of business
Loss on sale of assets
Changes in assets and liabilities, excluding effects of acquisitions:
Increase in accounts receivable, net	()	()
Increase in inventories, net	()	()
(Decrease) increase in accounts payable	()
Decrease in current liabilities	()	()
Changes in other assets and liabilities, net	()
Contribution to qualified defined benefit pension plans	()
Other, net		()
Net cash provided by operating activities
Cash Flows from Investing Activities
Capital expenditures	()	()
Acquisitions, net of cash acquired	()
Proceeds from disposal of business, net of cash
Purchases of available-for-sale investments	()
Proceeds from available-for-sale investments
Other, net
Net cash (used in) provided by investing activities	()
Cash Flows from Financing Activities
Payment of long-term debt		()
Borrowing of short-term debt, net
Payment of dividends	()	()
Acquisition of common shares	()	()
Other, net	()	()
Net cash provided by (used in) financing activities		()
Effect of exchange rate changes on cash and cash equivalents		()
Increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Restricted cash, included in other assets, beginning of year
Less: Restricted cash, included in Other Assets
Cash and cash equivalents, end of period	$	$

See notes to unaudited Condensed Consolidated Financial Statements.

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Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 1

million and $ million was outstanding at March 31, 2025 and December 31, 2024, respectively. Either party may terminate the agreements with 30 days written notice. Cash flows under the program are reported in operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.

Commercial Card Program

days after the commercial card billing cycle. The Company receives the benefit of extended payment terms and a rebate from the financial institution. Either party may terminate the agreement with days written notice. The amount outstanding to the financial institution is presented as short-term debt in the Company’s Condensed Consolidated Balance Sheets, of which, $ million and $ million was outstanding at March 31, 2025 and December 31, 2024, respectively. Cash flows under the program are reported in financing activities in the Company’s Condensed Consolidated Statements of Cash Flows.

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NOTE 2

million, net of cash acquired, subject to customary purchase price adjustments. Ventev is a leading manufacturer and provider of a complete ecosystem of solutions to power, protect, and connect wireless networks. The Ventev business has been added to the Electrical Solutions segment.

This business acquisition has been accounted for as a business combination and has resulted in the recognition of goodwill. The goodwill relates to a number of factors implied in the purchase price, including the future earnings and cash flow potential of the business as well as the complementary strategic fit and resulting synergies that such business acquisition brings to the Company’s existing operations. The goodwill related to the Ventev acquisition is not deductible for tax purposes.

Preliminary Allocation of Consideration Transferred to Net Assets Acquired

The following table presents the preliminary determination of the fair values of identifiable assets acquired and liabilities assumed from the Company's acquisition of Ventev. The final determination of the fair value of certain assets and liabilities will be completed within the applicable one year measurement period as required by FASB ASC Topic 805, “Business Combinations.” As the Company finalizes the fair values of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company's results of operations and financial position. The finalization of the purchase accounting assessment may result in a change in the valuation of assets acquired and liabilities assumed and may have a material impact on the Company's results of operations and financial position.

Intangible assets Goodwill Deferred tax liabilities, net()Other liabilities assumed()Total Estimate of Consideration Transferred, Net of Cash Acquired$

Dispositions

In December 2023, the Company entered into a definitive agreement to sell its residential lighting business for a cash purchase price of $ million, subject to customary adjustments. The Company concluded the business met the criteria for classification as held for sale in the fourth quarter of 2023. The residential lighting business was reported within the Electrical Solutions Segment. The transaction closed in the first quarter of 2024 and the Company recorded a pre-tax loss on the sale of $ million, which is recorded within Total other expense in the Company's Condensed Consolidated Statement of Income.

Under the terms of the transaction, Hubbell and the buyer entered into a transition services agreement (“TSA”), pursuant to which the Company agreed to provide certain administrative and operational services for a period of 12 months or less. Income from the TSA for the three months ended March 31, 2025 and March 31, 2024 was $ million and $ million, respectively, and was recorded in Other expense, net in the Condensed Consolidated Statement of Income.

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NOTE 3

percent of total annual consolidated net revenue and those service contracts and post-shipment obligations are primarily within the Utility Solutions segment. Revenue from service contracts and post-shipment performance obligations is recognized when or as those obligations are satisfied. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations and on occasion will separately offer and price extended warranties that are separate performance obligations for which the associated revenue is recognized over-time based on the extended warranty period. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue.

Certain of our businesses require a portion of the transaction price to be paid in advance of transfer of control. Advance payments are not considered a significant financing component as they are received less than one year before the related performance obligations are satisfied. In addition, in the Utility Solutions segment, certain businesses offer annual maintenance service contracts that require payment at the beginning of the contract period. These payments are treated as a contract liability and are classified in Other accrued liabilities in the Condensed Consolidated Balance Sheets. Once control transfers to the customer and the Company meets the revenue recognition criteria, the deferred revenue is recognized in the Condensed Consolidated Statements of Income. The deferred revenue relating to the annual maintenance service contracts is recognized in the Condensed Consolidated Statements of Income on a straight-line basis over the expected term of the contract.

$ Grid Automation Total Utility Solutions$ $ Electrical Products$ $ Industrial Retail and Builder Total Electrical Solutions$ $ TOTAL$ $

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NOTE 5

$ Work-in-process Finished goods Subtotal Excess of FIFO over LIFO cost basis()()TOTAL$ $

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NOTE 6

$ $

Current year acquisitions(1)

Foreign currency translation BALANCE AT MARCH 31, 2025$ $ $

(1) Refer to Note 2 - Business Acquisitions for additional information.

$()$ $()Customer relationships, developed technology and other () ()TOTAL DEFINITE-LIVED INTANGIBLES$ $()$ $()Indefinite-lived: Tradenames and other TOTAL OTHER INTANGIBLE ASSETS$ $()$ $()

Amortization expense associated with definite-lived intangible assets was $ million and $ million during the three months ended March 31, 2025 and 2024, respectively. Future amortization expense associated with these intangible assets is estimated to be $ million for the remainder of 2025, $ million in 2026, $ million in 2027, $ million in 2028, $ million in 2029, and $ million in 2030. The Company amortizes intangible assets with definite lives using either an accelerated method that reflects the pattern in which economic benefits of the intangible assets are consumed and results in higher amortization in the earlier years of the assets' useful lives, or using a straight line method. Approximately % of the gross value of definite-lived intangible assets follow an accelerated amortization method.

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NOTE 7

$ Accrued income taxes Contract liabilities - deferred revenue Customer refund liability

Accrued warranties short-term(1)

Current operating lease liabilities Other TOTAL$ $

(1) Refer to Note 22 - Guarantees, in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding warranties.

NOTE 8

$ Other post-retirement benefits Deferred tax liabilities

Accrued warranties long-term(1)

Non-current operating lease liabilities Other TOTAL$ $

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NOTE 9

$ $ $()$ $ Net income— — — Other comprehensive (loss) income— — — — Stock-based compensation— — — —

Acquisition/surrender of common shares(1)

— ()()— ()—

Cash dividends declared ($ per share)

— — ()— ()— Dividends to noncontrolling interest— — — — — ()Directors deferred compensation— ()— — ()— BALANCE AT MARCH 31, 2025$ $ $ $()$ $

Common Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Total Hubbell
Shareholders'
Equity

Non-
controlling
interest

BALANCE AT DECEMBER 31, 2023

()

Net income

—

Other comprehensive (loss) income

—

()

—

Stock-based compensation

—

Acquisition/surrender of common shares(1)

—

()

—

()

—

Cash dividends declared ($ per share)

—

()

—

()

—

Dividends to noncontrolling interest

—

()

Directors deferred compensation

—

BALANCE AT MARCH 31, 2024

()

The Company did not have any significant anti-dilutive securities outstanding during the three months ended March 31, 2025 and 2024.

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NOTE 12

$ $ $ Interest cost Expected return on plan assets()() Amortization of prior service cost Amortization of actuarial losses (gains) ()()NET PERIODIC BENEFIT COST$ $ $ $

Employer Contributions

million to its U.S. qualified plans and made contributions to its foreign pension plans during the three months ended March 31, 2025. Although not required by ERISA and the Internal Revenue Code, the Company may elect to make additional voluntary contributions to its qualified domestic defined benefit pension plan in 2025.

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NOTE 13

$ Provision Expenditures/payments/other()()

BALANCE AT MARCH 31, (a)

$ $

(a) Refer to Note 7 – Other Accrued Liabilities and Note 8 – Other Non-Current Liabilities for a breakout of short-term and long-term warranties.

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NOTE 14

million, net of allowances of $ million. During the three months ended March 31, 2025, our allowances increased by approximately $ million.

Investments

At March 31, 2025 and December 31, 2024, the Company had $ million and $ million, respectively, of available-for-sale municipal debt securities. These investments had an amortized cost of $ million and $ million, respectively. allowance for credit losses related to our available-for-sale debt securities was recorded for the three months ended March 31, 2025 or March 31, 2024. As of March 31, 2025 and December 31, 2024, the unrealized losses attributable to our available-for-sale debt securities were $ million and $ million, respectively. The fair value of available-for-sale debt securities with unrealized losses was $ million at March 31, 2025 and $ million at December 31, 2024.

The Company also had trading securities of $ million at March 31, 2025 and $ million at December 31, 2024 that are carried on the balance sheets at fair value. Unrealized gains and losses associated with available-for-sale debt securities are reflected in Accumulated other comprehensive loss, net of tax, while unrealized gains and losses associated with trading securities are reflected in the Condensed Consolidated Statement of Income.

Fair value measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly.

Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions.

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$ $ $

Time Deposits(b)

Available for sale investments Trading securities Deferred compensation plan liabilities() ()Derivatives:

Forward exchange contracts-Assets(c)

TOTAL$ $ $ $ Asset (Liability)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)Quoted Prices in
Active Markets for
Similar Assets
(Level 2)Unobservable inputs
for which little or no
market data exists
(Level 3)TotalDecember 31, 2024

Money market funds(a)

$ $ $ $

Time Deposits(b)

Available for sale investments Trading securities Deferred compensation plan liabilities() ()Derivatives:

Forward exchange contracts-Assets(c)

TOTAL$ $ $ $

(a) Money market funds are reflected in Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

(b)Time deposits are reflected in current and long term investments depending on their maturity date in the Condensed Consolidated Balance Sheets.

(c) Forward exchange contracts-Assets are reflected in Other current assets in the Condensed Consolidated Balance Sheets.

The methods and assumptions used to estimate the Level 2 fair values were as follows:

Forward exchange contracts – The fair value of forward exchange contracts was based on quoted forward foreign exchange prices at the reporting date.

Available-for-sale municipal bonds classified in Level 2 – The fair value of available-for-sale investments in municipal bonds is based on observable market-based inputs, other than quoted prices in active markets for identical assets.

Deferred compensation plans

The Company offers certain employees the opportunity to participate in non-qualified deferred compensation plans. A participant’s deferrals are invested in a variety of participant-directed debt and equity mutual funds that are classified as trading securities. The Company purchased $ million and $ million of trading securities related to these deferred compensation plans during the three months ended March 31, 2025 and 2024, respectively. As a result of participant distributions, the Company sold $ million of these trading securities during the three months ended March 31, 2025 and $ million during the three months ended March 31, 2024. The unrealized gains and losses associated with these trading securities are directly offset by the changes in the fair value of the underlying deferred compensation plan obligation.

Long Term Debt

As of March 31, 2025 and December 31, 2024, the carrying value of long-term debt, net of unamortized discount and debt issuance costs, including the $ million and $, respectively, current portion of the Senior notes due in 2026 (the “2026 Notes”), was $ million and $ million, respectively. The estimated fair value of the long-term debt as of March 31, 2025 and December 31, 2024 was $ million and $ million, respectively, using quoted market prices in active markets for similar liabilities (Level 2).

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NOTE 15

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NOTE 16

$ $ $ $ $ Electrical Solutions Total Pre-Tax Restructuring Costs$ $ $ $ $ $

$ $()$ Asset write-downs () Facility closure and other costs Total 2025 Restructuring Actions$ $ $()$ 2024 and Prior Restructuring ActionsSeverance$ $ $()$ Asset write-downs Facility closure and other costs () Total 2024 and Prior Restructuring Actions$ $ $()$ Total Restructuring Actions$ $ $()$

The actual costs incurred and total expected cost in each of our reporting segments of our on-going restructuring actions are as follows (in millions):

Total expected costs

Costs incurred during 2024

Costs incurred in the first three months of 2025

Remaining costs at 3/31/2025

2025 Restructuring Actions

Utility Solutions

Electrical Solutions

Total 2025 Restructuring Actions

2024 and Prior Restructuring Actions

Utility Solutions

Electrical Solutions

Total 2024 and Prior Restructuring Actions

Total Restructuring Actions

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NOTE 17

%(a)2026$ $

Senior notes at %

2027

Senior notes at %

2028

Senior notes at %

2031

TOTAL LONG-TERM DEBT(b)

$ $

(a)The Senior notes at % have been reclassified to current at March 31, 2025.

2025 Credit Facility

On March 25, 2025, the Company, as borrower, and each foreign subsidiary borrower from time to time party thereto (collectively, the “Foreign Subsidiary Borrowers”) entered into a credit agreement with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, that provides for a $ billion committed unsecured revolving credit facility (the “Revolving Credit Agreement”). The obligations of the Foreign Subsidiary Borrowers (if any) under the Revolving Credit Agreement are guaranteed by the Company.

Commitments under the Revolving Credit Agreement may be conditionally increased to an aggregate amount not to exceed $ billion. The Revolving Credit Agreement includes a $ million sub-limit for the issuance of letters of credit. The sum of the dollar amount of loans and letters of credits to the Foreign Subsidiary Borrowers under the Revolving Credit Agreement may not exceed $ million.

The interest rate applicable to borrowings under the Revolving Credit Agreement is either (i) the alternate base rate (as defined in the Revolving Credit Agreement) or (ii) the term SOFR rate (as defined in the Revolving Credit Agreement) plus an applicable margin based on the Company's credit ratings.

All revolving loans outstanding under the Revolving Credit Agreement will be due and payable on March 25, 2030. The Revolving Credit Agreement provides for up to maturity extensions. As of March 31, 2025, the credit facility was undrawn.

The Revolving Credit Agreement contains a sole financial covenant requiring that, as of the last day of each fiscal quarter, the ratio of total indebtedness to total capitalization shall not be greater than %. The Company was in compliance with this covenant as of March 31, 2025.

2021 Credit Facility

The Company had a credit agreement with a syndicate of lenders and JPMorgan Chase, N.A., as administrative agent, that provided a $ million committed revolving credit facility, which was terminated in connection with entry into the Revolving Credit Agreement.

Short-Term Debt and Current Portion of Long-Term Debt

The Company had $ million and $ million of short-term debt and current portion of long-term debt outstanding at March 31, 2025 and December 31, 2024, respectively, composed of the following:

•$ million of the Senior notes due in 2026 are listed as current as of March 31, 2025, as the 2026 Notes are due in March 2026.

•$ million of commercial paper borrowings outstanding at March 31, 2025, and $ million of commercial paper borrowings outstanding at December 31, 2024. The increase in commercial paper during the first three months of 2025 was utilized to repurchase $ million of treasury stock and to fund the $ million acquisition of Ventev.

million and $ million of other short-term debt outstanding at March 31, 2025 and December 31, 2024, respectively, which consisted of borrowings to support our international operations in China and amounts outstanding under our commercial card program.

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Note 18

million shares of common stock to settle awards of restricted stock, performance shares, or SARs. The Company issues new shares to settle stock-based awards. During the three months ended March 31, 2025, the Company's grant of stock-based awards included restricted stock, SARs and performance shares.

Each of the compensation arrangements is discussed below.

Restricted Stock

The Company issues various types of restricted stock, of which the restricted stock awards are considered outstanding at the time of grant, as the award holders are entitled to dividends and voting rights. Unvested restricted stock awards are considered participating securities when computing earnings per share. Restricted stock unit award holders are not entitled to dividends or voting rights until settlement. Restricted stock grants are not transferable and are subject to forfeiture in the event of the recipient's termination of employment prior to vesting.

Restricted Stock Awards Issued to Employees - Service Condition

Restricted stock awards that vest based upon a service condition are expensed on a straight-line basis over the requisite service period. These awards generally vest either in equal installments on each of the first anniversaries of the grant date or on the third-year anniversary of the grant date. The fair value of these awards is measured by the average of the high and low trading prices of the Company’s common stock on the most recent trading day immediately preceding the grant date (“measurement date”).

In February 2025, the Company granted restricted stock awards with a fair value per share of $.

Restricted Stock Units Issued to Employees - Service Condition

Restricted stock units that vest based upon a service condition are expensed on a straight-line basis over the requisite service period. These awards generally vest in equal installments on each of the first anniversaries of the grant date. The fair value of these awards is measured by the average of the high and low trading prices of the Company’s common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period.

In February 2025, the Company granted restricted stock units with a fair value per share of $.

Stock Appreciation Rights

SARs grant the holder the right to receive, once vested, the value in shares of the Company's common stock equal to the positive difference between the grant price, as determined using the mean of the high and low trading prices of the Company’s common stock on the measurement date, and the fair market value of the Company’s common stock on the date of exercise. This amount is payable in shares of the Company’s common stock. SARs vest and become exercisable in equal installments during the first following the grant date and expire from the grant date.

In February 2025, the Company granted SAR awards. The fair value of each SAR award was measured using the Black-Scholes option pricing model.

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%%% years$

The expected dividend yield was calculated by dividing the Company’s expected annual dividend by the average stock price for the past three months. Expected volatilities are based on historical volatilities of the Company’s stock for a period consistent with the expected term. The expected term of SARs granted was based upon historical exercise behavior of SARs. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the award.

Performance Shares

Performance shares represent the right to receive a share of the Company’s common stock subject to the achievement of certain market or performance conditions established by the Company’s Compensation Committee and measured over a period. Partial vesting in these awards may occur after separation from the Company for retirement eligible employees. Shares are not vested until approved by the Company’s Compensation Committee.

Performance Shares - Market Condition

In February 2025, the Company granted performance shares that will vest subject to a market condition and service condition through the performance period. The market condition associated with the awards is the Company's total shareholder return (“TSR”) compared to the TSR generated by the companies that comprise the S&P Capital Goods 900 index over a performance period. Performance at target will result in vesting and issuance of the number of performance shares granted, equal to % payout. Performance below or above target can result in issuance in the range of %-% of the number of shares granted. Expense is recognized irrespective of the market condition being achieved.

The fair value of the performance share awards with a market condition for the 2025 grant was determined based upon a lattice model.

%%% years$

Expected volatilities are based on historical volatilities of the Company’s and members of the peer group's stock over the expected term of the award. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the expected term of the award.

Performance Shares - Performance Condition

In February 2025, the Company granted performance shares that will vest subject to an internal Company-based performance condition and service requirement.

percent of these performance shares granted will vest based on Hubbell’s compounded annual growth rate of Net sales as compared to that of the companies that comprise the S&P Capital Goods 900 index. percent of these performance shares granted will vest based on achieved adjusted operating profit margin performance as compared to internal targets. Each of these performance conditions is measured over the same performance period. The cumulative result of these performance conditions can result in a number of shares earned in the range of %-% of the target number of shares granted.

The fair value of the award is measured based upon the average of the high and low trading prices of the Company's common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period. for the awards granted during February 2025.

Jan 2025 - Dec 2027

%-%

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ITEM 2			Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview of the Business

Hubbell is a global manufacturer of quality electrical products and utility solutions for a broad range of customer and end market applications. We provide utility and electrical solutions that enable our customers to operate critical infrastructure reliably and efficiently, and we empower and energize communities through innovative solutions 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 owner and operators and allows energy and data to be distributed back and forth. Behind the Meter is where owners and operators of buildings 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 UK, Brazil, Australia, Spain, Ireland and the Republic of the Philippines. 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. The Company employed approximately 17,700 individuals worldwide as of March 31, 2025.

The Company’s reporting segments consist of the Utility Solutions segment and Electrical Solutions segment.

Results for the three months ended March 31, 2025 by segment are included under “Segment Results” within this Management’s Discussion and Analysis.

The Company's long-term strategy is to serve its 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.

Our strategy to complement organic revenue growth with acquisitions is focused on acquiring assets that extend our capabilities, expand our product offerings, and present opportunities to compete in core, adjacent or complementary markets. Our acquisition strategy also provides the opportunity to advance our revenue growth objectives during periods of weakness or inconsistency in our end-markets.

Our strategy to deliver products through a competitive cost structure has resulted in past and ongoing restructuring and related activities. Our restructuring and related efforts include the consolidation of manufacturing and distribution facilities, and workforce actions, as well as streamlining and consolidating our back-office functions. The primary objectives of our restructuring and related activities are to optimize our manufacturing footprint, cost structure, and the effectiveness and efficiency of our workforce.

Productivity improvement also continues to be a key area of focus for the Company and efforts to drive productivity complement our restructuring and related activities to minimize the impact of rising material costs and other administrative cost inflation. Because material costs are approximately half of our cost of goods sold, continued volatility in this area could significantly impact profitability. Our goal is to have pricing and productivity programs that offset material and other inflationary cost increases as well as pay for investments in key growth areas.

Productivity programs affect virtually all functional areas within the Company by reducing or eliminating waste and improving processes. We continue to expand our efforts related to global product and component sourcing, as well as supplier cost reduction programs. Value engineering efforts, product transfers and the use of lean process improvement techniques are expected to continue to increase manufacturing efficiency. In addition, we continue to build upon the benefits of our enterprise resource planning system across all functions.

Our sales are also subject to market conditions that may cause customer demand for our products to be volatile. 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. Since early 2021, we have experienced significant inflationary pressure across much of our business. As a result, we have taken various pricing actions to cover the higher costs and to protect our profitability. Although inflation has moderated since its high point in 2022, we expect inflation to remain a factor for the foreseeable future and we expect to continue to take these pricing actions subject to demand and market conditions. Accordingly, there can be no assurance that we will be able to maintain our margins in response to further changes in inflationary pressures. In addition, macroeconomic effects such as increases in interest rates and other measures taken by central banks and other policy makers could have a negative effect on overall economic activity which could reduce our customers’ demand for our products, and cause the continuation of relatively high market interest rates that increase our borrowing costs.

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Additionally, international tensions, such as the conflicts in the Middle East and Ukraine, as well as trade and other tensions, including those with China, may affect demand for our products, as well as our production costs. In particular, recent tariff actions by the U.S. and other countries and the widespread uncertainty and international tensions resulting therefrom, including, without limitation, the effect on the value of the U.S. dollar relative to other currencies, may adversely affect demand for our products, disrupt our supply chains, increase manufacturing costs and adversely affect our revenues, cost of sales and production volumes, any of which could materially and adversely harm our business, financial condition and results of operations. See also Item 1A Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for further information.

In the first quarter of 2025, the Company acquired all of the issued and outstanding equity of Alliance USAcqCo2, Inc. (“Ventev”), a leading manufacturer and provider of a complete ecosystem of solutions to power, protect, and connect wireless networks. The Ventev business has been added to the Electrical Solutions segment.

Results of Operations – First Quarter of 2025 compared to the First Quarter of 2024

The following is a discussion and analysis of our business, financial condition and results of operations as of and for the three months ended March 31, 2025 and 2024. This discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and notes thereto in Item 1 of this Quarterly Report on Form 10-Q (the “Condensed Financial Statements”), and the audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Overview

First quarter 2025 net sales were $1,365.2 million and decreased by 2.4%, driven by a 1.2% decline from divestitures net of acquisitions, and a 0.6% contraction of organic net sales driven by lower volume.

In December 2023, the Company entered into a definitive agreement to sell its residential lighting business for a cash purchase price of $131 million, subject to customary adjustments. The residential lighting business was reported within the Electrical Solutions Segment. The decline from divestitures reflects the sale of that business, which contributed $21.1 million to first quarter 2024 net sales prior to the closing of that transaction, and is partially offset by a modest contribution to net sales from the acquisition of Ventev in the first quarter of 2025.

Organic net sales in the Electrical Solutions segment grew by 4.8% in the first quarter of 2025 led by continued strength in the datacenter vertical. In the Utility Solutions segment, organic net sales contracted 3.7% on lower volume from Grid Automation products due to the timing of large metering and AMI projects which drove a strong first quarter of 2024, as well as in our enclosures products on continued weakness in telcom markets.

Operating margin in the first quarter of 2025 expanded by 120 basis points to 17.5% and includes the effect of lower amortization of acqusition-related intangibles and transaction, integration and separation costs in the first quarter of 2025. Adjusted operating margin, which excludes amortization of acquisition-related intangibles and transaction, integration and separation costs, was 19.3% and contracted by 40 basis points. That result includes margin expansion in the quarter primarily driven by benefits from operational productivity and favorable price realization, however, those factors were more than overcome by contraction driven by continued material and other cost inflation, including tariff expense and the impact of lower volumes. See the further discussion within Segment Results below.

The first quarter of 2024 also includes a $5.3 million loss on the sale of the residential lighting business, which is recorded within Total other expense in the Company's Condensed Consolidated Statement of Income.

HUBBELL INCORPORATED-Form 10-Q 30

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SUMMARY OF CONDENSED CONSOLIDATED RESULTS (IN MILLIONS, EXCEPT PER SHARE DATA):


	Three Months Ended March 31,
	2025		% of Net sales		2024		% of Net sales
Net sales	$	1,365.2			$	1,399.1
Cost of goods sold	914.0		66.9	%	951.4		68.0	%
Gross profit	451.2		33.1	%	447.7		32.0	%
Selling & administrative (“S&A”) expense	212.2		15.6	%	219.2		15.7	%
Operating income	239.0		17.5	%	228.5		16.3	%
Net income	171.0		12.5	%	149.1		10.7	%
Less: Net income attributable to non-controlling interest	(1.3)		(0.1)	%	(1.3)		(0.1)	%
Net income attributable to Hubbell Incorporated	169.7		12.4	%	147.8		10.6	%
Less: Earnings allocated to participating securities	(0.3)				(0.3)
Net income available to common shareholders	$	169.4			$	147.5
Average number of diluted shares outstanding	53.8				54.0
DILUTED EARNINGS PER SHARE	$	3.15			$	2.73

HUBBELL INCORPORATED-Form 10-Q 31

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In the following discussion of results of operations, we refer to “adjusted” operating measures. We believe those adjusted measures, which exclude the impact of certain costs, gains and losses, may provide investors with useful information regarding our underlying performance from period to period and allow investors to understand our results of operations without regard to items that, in management's judgement, significantly affect the comparability of operating results, or are not considered to be components of our core operating performance.

Significant items impacting comparability comprise the following:

Transaction, integration and separation costs

The effect that acquisitions and divestitures may have on our results fluctuate significantly based on the timing, size and number of transactions, and therefore result in significant volatility in the costs to complete transactions and to integrate or separate the businesses.

Transaction costs are primarily professional services and other fees incurred to complete the transactions. Integration and separation costs are the internal and external incremental costs directly relating to these activities for the acquired or divested business.

The acquisition and divestiture actions taken by the Company in the fourth quarter of 2023 resulted in a significant increase in integration and separation costs. As a result, we believe excluding costs relating to these 2023 fourth quarter transactions provides useful and more comparable information for investors to better assess our operating performance.

Gains or losses on disposition of a business

Certain of the Company's adjusted measures exclude these gains or losses because we believe they enhance management's and investors' ability to analyze underlying business performance and facilitate comparisons of our financial results over multiple periods. In the first quarter of 2024 the Company recognized a $5.3 million pre-tax loss on the disposition of the residential lighting business and also recognized $6.8 million of income tax expense relating to that transaction, primarily driven by differences between book and tax basis in goodwill. That loss and the related income tax expense are excluded from our adjusted operating measures.

Amortization of intangible assets

Adjusted operating measures exclude amortization of all intangible assets associated with our business acquisitions, including inventory step-up amortization associated with those acquisitions. The intangible assets associated with our business acquisitions arise from the allocation of the purchase price using the acquisition method of accounting in accordance with Accounting Standards Codification 805, “Business Combinations.” These assets consist primarily of customer relationships, developed technology, trademarks and tradenames, and patents, as reported in Note 7 – Goodwill and Other Intangible Assets, under the heading “Total Definite-Lived Intangibles,” within the Company’s audited consolidated financial statements set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

The Company believes that the exclusion of these non-cash expenses (i) enhances management’s and investors’ ability to analyze underlying business performance, (ii) facilitates comparisons of our financial results over multiple periods, and (iii) provides more relevant comparisons of our results with the results of other companies as the amortization expense associated with these assets may fluctuate significantly from period to period based on the timing, size, nature, and number of acquisitions. Although we exclude amortization of these acquired intangible assets and inventory step-up from our non-GAAP results, we believe that it is important for investors to understand that revenue generated, in part, from such intangibles is included within revenue in determining adjusted net income attributable to Hubbell Incorporated.

Adjusted results also excluded the income tax effects of the above adjustments which are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction, unless otherwise noted.

Organic net sales (or organic net sales growth), a non-GAAP measure, represents Net sales according to U.S. GAAP, less Net sales from acquisitions and divestitures during the first twelve months of ownership or divestiture, respectively, less the effect of fluctuations in Net sales from foreign currency exchange. The period-over-period effect of fluctuations in Net sales from foreign currency exchange is calculated as the difference between local currency Net sales of the prior period translated at the current period exchange rate as compared to the same local currency Net sales translated at the prior period exchange rate. We believe this measure provides management and investors with a more complete understanding of the underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency as these activities can obscure underlying trends. When comparing Net sales growth between periods, excluding the effects of acquisitions, business dispositions and currency exchange rates, those effects are different when comparing results for different periods. For example, because Net sales from acquisitions are considered inorganic from the date we complete an acquisition through the end of the first year following the acquisition, Net sales from such acquisitions are reflected as organic net sales thereafter.

HUBBELL INCORPORATED-Form 10-Q 32

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There are limitations to the use of non-GAAP measures. Non-GAAP measures do not present complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported GAAP financial results, and should be viewed in conjunction with the most comparable GAAP financial measures and the provided reconciliations thereto. We believe, however, that these non-GAAP financial measures, when viewed together with our GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

The following table reconciles Adjusted operating income, a non-GAAP measure, to Operating income, the directly comparable GAAP financial measure (in millions):


	Three Months Ended March 31,
	2025		% of Net sales			2024		% of Net sales
Operating income (GAAP measure)	$	239.0	17.5		%	$	228.5	16.3		%
Amortization of acquisition-related intangible assets	24.5		1.8		%	39.4		2.8		%

Transaction, integration & separation costs	0.4		—		%	7.3		0.6		%
Adjusted operating income (non-GAAP measure)	$	263.9	19.3		%	$	275.2	19.7		%






The following table reconciles Adjusted net income attributable to Hubbell Incorporated, Adjusted net income available to common shareholders, and the diluted per share amounts thereof, each a non-GAAP measure, to the directly comparable GAAP financial measures (in millions, except per share data).


	Three Months Ended March 31,
	2025		Diluted Per Share			2024		Diluted Per Share
Net income attributable to Hubbell Incorporated (GAAP measure)	$	169.7	$	3.15		$	147.8	$	2.73
Amortization of acquisition-related intangible assets	24.5		0.46			39.4		0.73


Transaction, integration & separation costs	0.4		0.01			7.3		0.14
Loss on disposition of business	—		—			5.3		0.10
Subtotal	$	194.6	$	3.62		$	199.8	$	3.70
Income tax effects(1)	6.0		0.11			4.6		0.09
Adjusted net income attributable to Hubbell Incorporated (non-GAAP measure)	$	188.6	$	3.51		$	195.2	$	3.61
Less: Earnings allocated to participating securities	(0.3)		(0.01)			(0.4)		(0.01)
Adjusted net income available to common shareholders (non-GAAP measure)	$	188.3	$	3.50		$	194.8	$	3.60

Net Sales

Net sales of $1,365.2 million in the first quarter of 2025 decreased by $33.9 million compared to the first quarter of 2024. Organic net sales decreased by 0.6% driven by a low single digit percentage decrease in volumes, partially offset by a low single digit increase in price realization. Divestitures net of acquisitions reflect a 1.2% reduction to net sales, while foreign exchange resulted in a 0.6% decrease in net sales. These changes are discussed in more detail in the Segment Results section below.

Cost of Goods Sold and Gross Profit

As a percentage of Net sales, cost of goods sold decreased by 110 basis points to 66.9% in the first quarter of 2025, resulting in gross profit margin expanding to 33.1%. Approximately four percentage points of gross profit margin expansion was driven by lower acquisition-related intangible asset amortization, improved operational productivity and favorable price realization, partially offset by three percentage points of gross profit margin contraction due to material and other cost inflation, including tariff expense and lower volume.

Selling & Administrative Expenses

S&A expense in the first quarter of 2025 was $212.2 million and decreased by $7.0 million or 3.2% compared to the prior year period. This decrease was primarily driven by lower transaction, integration and separation costs in the current year compared to the prior year. S&A expense as a percentage of Net sales was 15.6% in the first quarter of 2025, compared to 15.7% in the first quarter of 2024.

Total Other Expense

Total other expense decreased by $8.0 million in the first quarter of 2025 to $19.1 million, primarily due to lower net interest expense of $7.3 million, due to lower outstanding debt balances, along with the $5.3 million loss recognized on the disposition of the residential lighting business during the first quarter of 2024. These decreases were partially offset by an unfavorable impact of foreign exchange and higher non-service pension cost in the first quarter of 2025 compared to the same period in 2024.

Income Taxes

The effective tax rate in the first quarter of 2025 decreased to 22.2% as compared to 26.0% in the first quarter of 2024, primarily due to income tax expense incurred in the first quarter of 2024 relating to the divestiture of our residential lighting business.

Net Income Attributable to Hubbell Incorporated and Earnings Per Diluted Share

Net income attributable to Hubbell Incorporated was $169.7 million in the first quarter of 2025 and increased 14.8% as compared to the same period of the prior year, reflecting the factors described above. As a result, earnings per diluted share in the first quarter of 2025 increased 15% as compared to the first quarter of 2024. Adjusted net income attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangible assets and transaction, integration & separation costs for both periods and the loss on disposition of a business for the first quarter of 2024, was $188.6 million in the first quarter of 2025 and decreased by 3.4% as compared to the first quarter of 2024.

HUBBELL INCORPORATED-Form 10-Q 34

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Segment Results

UTILITY SOLUTIONS

The following table reconciles our Utility Solutions segment adjusted operating income and adjusted operating margin to the directly comparable GAAP financial measures (in millions and percentage change):


	Three Months Ended March 31,
(In millions)	2025			2024
Net sales	$	857.1		$	894.0
Operating income (GAAP measure)	160.0			157.5
Amortization of acquisition-related intangible assets	19.8			35.2
Transaction, integration & separation costs	0.1			2.5
Adjusted operating income (non-GAAP measure)	$	179.9		$	195.2
Operating margin (GAAP measure)	18.7		%	17.6		%
Adjusted operating margin (non-GAAP measure)	21.0		%	21.8		%

The following table reconciles our Utility Solutions segment organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):


	Three Months Ended March 31,
Utility Solutions	2025		Inc/(Dec) %	2024		Inc/(Dec) %
Net sales growth (decline) (GAAP measure)	$	(36.9)	(4.2)	$	112.4	14.4
Impact of acquisitions	—		—	108.5		13.9
Impact of divestitures	—		—	—		—
Foreign currency exchange	(4.2)		(0.5)	1.3		0.2
Organic net sales growth (decline) (non-GAAP measure)	$	(32.7)	(3.7)	$	2.6	0.3

Net sales in the Utility Solutions segment in the first quarter of 2025 were $857.1 million, and decreased by $36.9 million, or 4.2%, as compared to the first quarter of 2024. That decrease was driven by a 3.7% decrease in organic net sales, and a 0.5% decrease due to foreign exchange. The decrease in organic net sales was driven by a mid single digit percentage decrease in unit volume, partially offset by a low single digit increase in price realization. The decrease in unit volume resulted largely from volume declines in Grid Automation products on the timing of large metering and AMI projects which drove a stronger first quarter of 2024, as well as in enclosures products led by lower volume in telcom markets.

Operating income in the Utility Solutions segment for the first quarter of 2025 was $160.0 million, an increase of 1.6% compared to the first quarter of 2024. Operating margin increased by 110 basis points to 18.7% in the first quarter of 2025, and includes the effect of lower amortization of acqusition-related intangible assets and transaction, integration & separation costs. Excluding amortization of acquisition-related intangible assets and transaction, integration & separation costs, the adjusted operating margin decreased by 80 basis points to 21.0%. That decrease includes approximately four percentage points of margin contraction due to material and other cost inflation, including tariff expense and the impact of lower unit volume, which was partially offset by three percentage points of margin expansion from improved operational productivity and favorable price realization.

HUBBELL INCORPORATED-Form 10-Q 35

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ELECTRICAL SOLUTIONS

The following table reconciles our Electrical Solutions segment adjusted operating income and adjusted operating margin to the directly comparable GAAP financial measures (in millions and percentage change):


	Three Months Ended March 31,
(In millions)	2025			2024
Net sales	$	508.1		$	505.1
Operating income (GAAP measure)	79.0			71.0
Amortization of acquisition-related intangible assets	4.7			4.2
Transaction, integration & separation costs	0.3			4.8
Adjusted operating income (non-GAAP measure)	$	84.0		$	80.0
Operating margin (GAAP measure)	15.5		%	14.1		%
Adjusted operating margin (non-GAAP measure)	16.5		%	15.8		%

The following table reconciles our Electrical Solutions segment organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):


	Three Months Ended March 31,
Electrical Solutions	2025		Inc/(Dec) %	2024		Inc/(Dec) %
Net sales growth (GAAP measure)	$	3.0	0.6	$	1.3	0.3
Impact of acquisitions	4.5		0.9	—		—
Impact of divestitures	(21.1)		(4.2)	(28.1)		(5.6)
Foreign currency exchange	(4.4)		(0.9)	1.9		0.4
Organic net sales growth (non-GAAP measure)	$	24.0	4.8	$	27.5	5.5

Net sales in the Electrical Solutions segment in the first quarter of 2025 were $508.1 million and increased by $3.0 million, or 0.6%, as compared to the first quarter of 2024. That increase includes 4.8% growth in organic net sales, which was partially offset by a 3.3% decline in net sales resulting from divestitures net of acquisitions and a 0.9% decline due to foreign exchange. The increase in organic net sales was driven by a low single digit percentage increase in unit volume and a low single digit percentage increase in price realization. Volume growth in the first quarter of 2025 was driven primarily by strength in the datacenter market, while broader industrial markets were steady and commercial markets were softer.

Operating income in the Electrical Solutions segment for the first quarter of 2025 was $79.0 million and increased by 11.3% compared to the first quarter of 2024, while operating margin in the first quarter of 2025 expanded by 140 basis points to 15.5%. Excluding amortization of acquisition-related intangibles and transaction, integration and separation costs, the adjusted operating margin expanded by 70 basis points to 16.5%. The increase in operating margin was primarily due to approximately four percentage points of margin expansion from improved operational productivity, favorable price realization, lower transaction, integration & separation costs and higher volume. Those factors were partially offset by approximately three percentage points of margin contraction driven by higher material and other cost inflation, including tariff expense and mix.

HUBBELL INCORPORATED-Form 10-Q 36

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Financial Condition, Liquidity and Capital Resources

Cash Flow


	Three Months Ended March 31,
(In millions)	2025		2024
Net cash provided by (used in):
Operating activities	$	37.4	$	92.2
Investing activities	(99.3)		88.6
Financing activities	75.0		(125.3)
Effect of foreign currency exchange rate changes on cash and cash equivalents	4.1		(3.5)
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	17.2	$	52.0

HUBBELL INCORPORATED-Form 10-Q 46

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 2, 2025

HUBBELL INCORPORATED

/s/ William R. Sperry

/s/ Jonathan M. Del Nero

William R. Sperry

Jonathan M. Del Nero

Executive Vice President and Chief Financial Officer

Vice President, Controller (Principal Accounting Officer)

HUBBELL INCORPORATED-Form 10-Q 47

HUBBELL INC - Quarter Report: 2025 March (Form 10-Q)

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