Good day, and thank you for standing by. Welcome to the Third Quarter 2024 Hubbell Incorporated Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Innamorato, VP of Investor Relations. Please go ahead.

Thanks, operator. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing our results for the third quarter of 2024. The press release and slides are posted to the Investors section of our website at hubbell.com. I'm joined today by Chairman, President and CEO, Gerben Bakker; and Executive Vice President and CFO, Bill Sperry. Please note our comments this morning may include statements related to the expected future results of our company and our forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Please note the discussion of forward-looking statements in our press release and considered incorporated by reference to this call. Additionally, comments may also include non-GAAP financial measures. Those measures are reconciled to the comparable GAAP measures and are included in the press release and slides. Now let me turn the call over to Gerben.

Great. Good morning, and thank you for joining us to discuss Hubbell's third quarter 2024 results. Hubbell delivered strong operating performance in the quarter, generating 14% year-over-year adjusted earnings per share and operating profit growth as well as 180 basis points of adjusted operating margin expansion. We are raising our full year outlook this morning, and we remain confident in delivering double-digit adjusted operating profit growth in 2024. In our Utility Solutions segment, grid modernization and electrification continue to drive strong growth in transmission, substation and grid automation markets as utility customers invest in grid infrastructure upgrades to accommodate electrification-driven load growth and interconnect new sources of renewable generation. We believe that we are at the early stages of a multiyear T&D investment cycle and that Hubbell's leading positions and service levels position us for sustained GDP+ growth over the long term. As anticipated, Telcom markets remained weak, and utility distribution markets continue to reflect the impact of customer inventory normalization. Operational execution was strong in the quarter, and Utility Solutions returned to year-over-year operating margin expansion. Electrical Solutions delivered another quarter of robust core operating performance, with solid organic growth and 190 basis points of adjusted operating margin expansion. Performance in the quarter was led by strength in data center and renewable markets, where we are executing effectively on our strategy to compete collectively in high-growth verticals with specified positions, innovative new products and an integrated solution-oriented service model for customers. From an operational standpoint, we continue to simplify our business to drive productivity and operating efficiencies, which, along with portfolio transformation efforts, contributed to robust margin expansion in the quarter. Overall, while we continue to navigate pockets of challenges in certain large high-margin businesses, Hubbell is proving the ability to compound off of recent outperformance. As we look ahead, our portfolio and strategy uniquely position Hubbell to capitalize on grid modernization and electrification megatrends. We are confident in our ability to deliver on our increased full year outlook as well as to achieve differentiated performance for our shareholders over the long term. Before I turn it over to Bill to discuss the quarter in more detail, I'd like to provide some additional context on recent storm activity and the potential implication to our business. First and foremost, our thoughts are with all the people and communities impacted by these catastrophes. Hubbell has a large manufacturing presence in the U.S. Southeast, and three of our manufacturing facilities were impacted and encountered disruptions as a result of Hurricanes Helene and Milton. However, all have quickly returned to full operation, and I'm relieved that all of our employees are safe. I am proud of how Hubbell and our employees have responded in support of all of those in need during this time as well as the collective efforts to serve our customers and ensure that critical infrastructure and the impacted community is restored safely and efficiently. When we highlight service as a key differentiator in our industry, storms are a prime example where our customers depend on trusted partners who can reliably serve their needs at scale and with agility. Our dedicated emergency response team is unique in this regard, providing customers with 24/7 support, dedicated storm inventory, prioritized production, engineering support to identify alternative restoration solutions and logistics capability to expedite delivery and never charging premiums or fees, but viewing it as our obligation and privilege to make a positive impact during these times of critical need. Bill will provide you with more specifics on the financial impact of the storms in the third quarter in a few minutes as well as the anticipated contribution of storm-related orders in the fourth quarter. As we have highlighted many times over the years, the impact of storms typically represents only a small portion of full year revenues, but more importantly, they highlight the ongoing need to harden our critical infrastructure in order to mitigate against the increasing impact of extreme weather events as well as the mission-critical nature of Hubbell product offerings and our commitments to service excellence for our customers. With that, let me now turn it over to Bill to walk you through some more details of the quarter.

Thanks very much, Gerben, and good morning, everybody. Appreciate you taking the time to be with us this morning. And I need to beg your patience. I’ve been fighting a cold this week and my voice is sharp, so I'm sorry about that. I'm going to start my comments on Page 4 of the slides that I hope you found and reiterate what Gerben said. Overall, very strong operating performance for Hubbell in the third quarter, 5% sales growth, 14% operating profit growth, 180 basis points of operating profit margin expansion, 14% growth of earnings per share and 19% growth in free cash flow. In addition to looking at these variances to the prior year, we sometimes look back at sequentials, and compared to the second quarter, we had growth in operating profit dollars, operating profit margins and earnings per share, all up sequentially, so we think these are signs of healthy financial performance. So returning to sales of up 5%, that's comprised of organic being down slightly and net M&A contributing about six points. The net M&A refers to the fact that we sold a lower-growth, lower-margin business of residential lighting and added some higher-margin, higher-growth businesses in the Utility segment, most notably, Systems Control, which we'll talk about the strong contributions we're getting from that acquisition when we get to the Utility segment. Inside of the organic story, we have strong end customer demand across the portfolio, the exception being a particularly weak Telcom industry. And as Gerben had mentioned, distribution utility is still working through an overstock situation between the channel and our end customers. Operationally, you see mid-teens growth of 14% to $4.49 of adjusted EPS, and the operating profit side equaled growth with 180 basis points of margin expansion. That also compares favorably to the second quarter where we had 40 basis points of sequential margin expansion from Q2 to Q3 in adjusted operating profit. There's improvement across both segments, and we'll talk about those in the next two pages, but structural improvements in the Electrical segment and on the Utility side, strong performance as well. I think you'll see good price cost, productivity execution and you'll see the impact of successful portfolio transformation by selling some lower-growth, lower-margin business and adding some higher-growth, higher-margin business. The EPS growth in that mid-teens is in line with operating profit growth. Below the line of OP, there was a little bit more interest expense due to the acquisition and a little bit lower tax rate that offset each other. And the cash flow is on track to hit our full year targets. So on Page 5, we'll start to disaggregate the company's performance into the two segments, and I'm going to start, as we usually do, with the Utility segment. So you see double-digit sales growth in the third quarter of 11% to $933 million. That's comprised of 15% via acquisition and minus 4% organic. If we were to unpack that into the different divisions, you'll see growth in both, with 15% growth in grid infrastructure and mid-single-digit growth in grid automation. Just to remind everybody what we have in those two divisions, we have the old transmission and distribution, the old Hubbell Power System in the grid infrastructure as well as specialty, which includes both enclosures and gas components plus Systems Control. In grid automation, we've got Aclara, which has both meters and comms, plus switching and fusing as well as some connected automation products. Sequentially, we saw sales growth from Q2 to Q3, which we think is a good sign of healthy seasonality. If we disaggregate a little bit into some of the markets, Telcom continues to be weak, down 30% in the third quarter. It represents a modest improvement over the first half as we're starting to flatten sequentially, but it remains pretty bumpy month-to-month, and we're expecting continued softness into the fourth quarter. However, the fourth quarter will have easier compares and it's important to note that flat from here would imply growth in 2025. On the T&D side, the real strength on the transmission piece, seeing double-digit growth, benefiting from megatrends of electrification and renewables, both requiring new miles and new grid interconnections, and that spending benefits Hubbell. On the distribution side, we continue to work through channel and customer overstocking, but we believe there's healthy demand as more equipment is being installed to harden the grid and for maintenance and repair. Thus, we believe that's obviously a temporary condition, and by the end of this morning, Gerben will give you some outlook ideas into 2025. Systems Control is worth pausing on. They're off to a really great start for us. This is our third quarter reporting with them in addition to a very short stub period in December. They are growing versus prior year at very healthy levels and delivering very attractive margins. The turnkey solution that they provide is proving to be very attractive for customers. Gerben and I had a chance to visit the team a couple of weeks ago. They're all very energized and excited to grow, very culturally consistent with Hubbell, and it was great to watch our sales force interact with their sales team. I think we can see some long-range growth there as our customer base converts to include Systems Control customers. The selling cycle is a little bit longer, so the backlog provides strong visibility into 2025 already. So you'll hear us be quite confident about Systems Control. And on the grid automation side, growth is up mid-single digits. We see good tailwinds in grid protection and control solutions as our customers continue to invest in grid resiliency and, in particular, switching and fusing are doing quite well in substation applications. So on the right side of the page, turning to margins, you see very strong margin performance, up 18% in dollars to $236 million. You see 130 basis points of margin expansion to over 25%, which is a nice benchmark, we think, and that represents over one point of sequential expansion from the second quarter. You have acquisitions contributing new dollars. You've got really strong price-cost management, and you see some returns on prior year investments in productivity, and all of that is absorbing some of the decrementals from the contraction in Telcom. So very strong performance in the Utility segment. Let me elaborate a little bit on Gerben's comments on the storms. So to the Utility segment, the storms had a neutral impact in the quarter. We have a couple of facilities in Aiken, South Carolina, and Largo, Florida, that were impacted and had to close for several days. We believe we lost about $5 million in shipments from those closures, but that was offset by about $5 million of shipments on storm orders that we had in inventory and represented about one-fourth of the $20 million in orders that we received. So net effect is, in the third quarter, it was neutral, and expected in the fourth quarter, we'll ship those out and we have included $15 million more in storm orders, which are already out there. So I'm going to turn to Page 6 and the Electrical segment. Another nice quarter for the Electrical segment as they've done in 2024. You see 3% organic growth with 190 basis points of margin expansion and 5% operating profit growth. The 3% organic growth nets out the effect of the disposition of residential lighting. If you also added back the effect of storms on the Electrical segment, there, we have a facility in Arden, North Carolina, near Asheville, the western part of North Carolina. We're estimating they lost about $5 million to $10 million in sales from having to close those several days of the quarter. Had those shipments gone out normally, you would have seen about 5% sales growth. So we think Electrical has good trends and is doing nicely on the sales side. That growth is being driven by data centers and renewable where we've enacted our vertical sales strategy, which is proving to be very effective. We've unified the marketing materials, integrated the sales force, becoming much more effective at cross-selling the balance of system products and becoming more innovative with our new product development and achieving great success with that strategy in those couple of verticals. Light Industrial continues to be very solid as the critical electrical content is installed in a wide range of products across various industries. Lesser contributions are seen from heavy industrial and commercial. There are decent trends across the portfolio, but the clear strength lies in data centers, renewables, and light industrial. On the right side of the page, operating profit continues the strong performance we've been seeing in 2024. You see a 5% increase in operating profit. That would be double digits if you netted out the residential from last year. So quite healthy growth, with 190 basis points of margin expansion. We're seeing good drop-through on that incremental growth, with effective price-cost management, and the impact of portfolio management is clearly visible. I think what portends best for the future is watching Mark, Mike and his team continue to simplify and streamline the business, continuing to compete collectively, reorganizing the sales force by geography versus product, eliminating functional redundancies and ultimately making the segments more efficient and more effective. So we're excited to see the path that Mark and his team have set on. I think they're set up for good multiyear performance. On Page 7, I'm going to give the remainder of '24 outlook, and then I was going to ask Gerben to comment on next year. So we're raising our full year guidance to $16.35 to $16.55. That's mid-single-digit growth. And just to remind everybody, that's off of a base that over the last two years, in '22 and '23, is up about 75%. To us, having what is in effect a 20% CAGR since 2020 levels is what we were trying to convey at Investor Day by describing kind of the new new, where we're going to be growing off of this base. We're going to be growing, we think, both sales and operating profit margin and that's quite important, we believe. The year specifically has evolved a little differently than we expected back in January, namely, we generated lower sales volume as the Telcom market weakness has persisted longer than we anticipated, and the utility customers on the distribution side are holding more inventory than we believed. So we are managing through those two headwinds, but we're quite pleased that the Hubbell business model is performing very nicely, and despite those volume challenges, is delivering at the high or above high end of the original EPS range. We have multiple levers to pull. This year, we’re relying on the acquisition level as well as the price-cost productivity lever and those are proving to be very effective. So just a comment on the fourth quarter itself. We're expecting revenues to be a little bit stronger seasonally as that storm has shifted some of the sales from Q3 into Q4 and created some new sales for the Utility segment. But we expect the operating performance to continue to increase margins. So that gets us to the high end or maybe modestly above the high end of the range for the balance of the year. And I'll ask Gerben to give you thoughts as we're considering next year at this point.

Great. Thanks, Bill. I am confident in our ability to deliver on our raised full year 2024 outlook and believe that Hubbell is well-positioned for 2025 and beyond. With unique leading positions across energy infrastructure in front of the meter, behind the meter and at the edge, we believe that Hubbell will achieve attractive GDP+ growth throughout the cycle as secular grid modernization and electrification megatrends accelerate. In Utility Solutions, we anticipate that robust T&D budgets will drive attractive growth across most of our end markets, as utility customers continue to invest in making grid infrastructure more reliable, resilient, and renewable. Project pipelines and interconnection backlogs provide high visibility to continued strength in transmission and substation markets. We are confident that our sales and distribution markets will return to growth levels corresponding with healthy end customer demand. While our exposure in Telcom markets will be reduced heading into next year, easing comparisons and stabilizing markets provide a constructive setup. In grid automation, we anticipate that meter project roll-offs will be more than offset by strength in Protection & Control Solutions. In Electrical Solutions, secular growth markets of data centers, renewables, and T&D make up over 25% of our portfolio and are positioned for continued strength. While macroeconomic conditions drive some uncertainty in pockets of our business, we are well-positioned to continue executing on our growth and productivity playbook to achieve differentiated performance. Hubbell has demonstrated over the last several years its ability to execute across a wide range of environments and market conditions, driving over 20% compounded growth in adjusted operating profit and earnings per share. We expect to continue building off this strong base of performance in 2025 and beyond, and we look forward to sharing more details with you when we provide our initial outlook next year. With that, let me turn the call over to Q&A.

Our first question comes from Jeffrey Sprague with Vertical Research. Your line is open.

Hi, thanks. Good morning, everyone. In terms of getting level set on the actual results, on Slide 5, you used to kind of give us the organics. I've got Systems Control, looks like it's about $120 million in revenues in the quarter. If you could maybe let us know if that's right. And I guess that implies sort of grid infrastructure is down, I don't know, 6% organic or so. But maybe you could just share those numbers?

Yes. You’ve got Systems Control. Yes, that's right, Jeff.

And how about grid automation? There's a little bit of M&A in there too? Or is that 4% a good organic number?

That's organic, yes.

That's all organic. And then on the storm impact itself, is there any confidence that this flushes out remaining channel inventory? I suppose if you need inventory in North Carolina and it's sitting in Arizona, it's not moving across the country, so maybe you don't really know. But you've been trying to solve this riddle all year. Where do you think we're at on the channel, and kind of getting the normalization?

Yes, Jeff, maybe I'll take that one. And the short answer is yes. This is helping to flush out the inventory. As you well point out, this is in with very specific customers in very specific regions. I would even say within those customers, as they prepare for storm, they're playing storm orders looking at their inventories, not necessarily what exists across the whole enterprise network perhaps. But yes, this is clearly going to help flush that inventory through.

And maybe just kind of a separate follow-on. Bill mentioned strong price cost. Could you give us a sense of how price performed in the quarter across the two segments?

Yes. So price was positive in both segments, about a point to the enterprise. And I think, I didn't want to mention it in my remarks just, because I think it's going to - we're pivoting, Jeff, to a period where it's just going to be a smaller part of the price/cost equation versus in '22 and '23, it was such a large thing. But about a point for the enterprise, and positive on both.

Hi, good morning. Can you hear me okay?

Yes, great.

Great. Thanks. Just following up on that last question from Jeff on pricing. How should we think about that next year, particularly with utility? I mean, I'm sure you're talking to your customers. How are those negotiations playing out here for you guys passing utility for next year?

Yes. Maybe - Steve, let me provide you just some broader comments on the discussions. I’d say our price traction this year in both segments have been good, right? The outlier to that is in Telcom. We've given back some price to get specifics on targeted projects. But if you look at the T&D part of the business and the rest of the business, the price stick and the price actually - additional pricing that we've taken has held. We're coming into what we call blanket season again, with utilities right now. As we think about it, price will still be a lever for us going forward. There's still inflation in the market. It will be much more modest levels, but we continue to focus on what our true value proposition is, right, which is service first. And the storms - the recent storms have shown our customers why they do business with us. So, we still believe that while much at a more modest level, our customers will value first and foremost, the quality and the service and, of course, then at a competitive price. So as stated before, our whole construct is not to go backwards, and I think we've proven that in '24, and that's our views set up for '25 as well.

So when you look at kind of the margin you guys put up this year, pretty strong result. Was there anything in the comps, as we look to next year that plays out as a bit of a headwind? So should we assume the '24 margins are kind of a base to at least grow off of for next year for utility margins? Because you just keep beating those numbers, obviously?

Yes. Look, I think, Steve, the way we wanted to set up the future, with our Investor Day outlook, was shifting the idea of our OP walk to be going from a price cost kind of, really big step up in '22, '23 and still a little bit in '24. As you think about us going forward, think a little bit more about that volume driving incrementals. And that's why you sort of saw us in that 25% to 30% drop-through that we're sort of expecting. There's a little bit of investment activity still, but I would think of our ability to drive margins next year to be largely driven on incrementals from volume.

Yes. Maybe the other thing to keep in mind, Steve, is, as we were at the second half of last year, we really stepped up the investment levels to prepare for areas of visible demand. That's driving our margins now as well, right, in the absence of some of those investments.

Right. And then sorry, just one last quick one on utility. Should we think of next year as like an easy comp, because you still have destocking this year, so it should be above your long-term average on some of these more stock-and-flow items?

Yes. I mean, I think that we are anticipating transmission to remain really strong. You're right that the D should be able to bounce back. And so, I would agree with your statement.

Thanks. Good morning. Bill, you do sound like you're struggling there, so hopefully it won't take too long to answer this question. The way I'm trying to decompose here, I mean, I think Jeff's math is right down 6%, for core utility components. It looks like telcom is the bulk of that. So I'm getting to sort of ex-telcom flattish, maybe down 1% core. Is that correct? And then just kind of going from there, if that is correct, number one, what do you estimate to be your sort of end customer utility customer spending across your businesses, their distribution and maybe an infrastructure side? And then is this the weakness in residential new zones, have an impact on that business, or is this really just a destocking impact?

Yes. Your math is correct in what you pointed out with both what the closures or telcom contributes and then the rest of T&D. I'd say end demand is mid-single digits, which we've been talking about. But I think you have it all assessed, right?

Yes. And on the residential side, you continue to see – we had a residential lighting business we divested. On the electrical side, we still have some exposure through the big box that goes into residential applications. But that's – I think your question was as it affects utility. We think maintenance and repair are really what's driving that and that is still strong. The effect of what's happening in new developments would be a smaller effect, I think.

Okay. And then a quick one on the margins. Utility margins were really impressive, especially given the mix impact, etc. SG&A came in a lot lighter than what we had. I think SG&A was down 4%. And obviously, we’ve got some portfolio changes going on here. But is that a sustainable level of SG&A? Were there some one-timers in there? And did that land primarily within utility components in terms of the SG&A impact?

I would say the SG&A was spread. I would say the level of spending is sustainable. As Gerben was saying, there was some elevated investments happening at the end of last year. So between last year's SG&A and this year's, I think this year's is kind of the durable maintainable level.

Yes. And maybe as a - Nigel, as a percentage, certainly with the addition of Systems Control that right, in sales growth, that reduces SG&A as a percentage. And then I'd say the other area in some of the business, particularly in the telcom and enclosures business, we've taken some actions to address costs appropriately for that decline in volume.

Hi, good morning. Just wanted to circle back on the HUS sales outlook again. So perhaps maybe help us understand the telcom piece, how much are you thinking that's going to be down this year? I think before you'd said maybe down in the mid-20s. Wondering if that's still held. When we're thinking about 2025, what slope of sort of telcom bounce should we see? On the transmission side of utility, is that kind of steady growth next year? Any kind of acceleration, because of what's going on in backlog, maybe help us understand on that piece as well?

Yes, on the telcom side, it's more like down 30% this year. It was, of course, stronger in the first half. And we're very careful about how to build that business back up. Our goal is not to try to recapture that volume, but to grow that profitably going forward. Even now, as we see some projects come back and we're quoting some sizable projects for next year, we're just being very, very thoughtful not to just capture that volume at any price. So, I wouldn't expect it to bounce back at those kind of levels that have declined, but more steady growth from here forward.

And I think your second half was around transmission, and transmission has been growing at double-digits, and we’re anticipating that to continue. I wouldn’t - I think your question was whether there was some acceleration, but I would say we're expecting it to continue to grow in double-digits.

Thank you. I wanted to follow up on the utility organic growth commentary. It seems like - at least based on my kind of back of the envelope math, it seems like utility is up low single-digits organic in Q4, and really, all of that is driven by the storm, whether it's the deferment out of Q3, or just the storm orders you guys got. I guess my question is, how fast do you think this business can get back to that mid-single-digit growth target? It sounds like you guys think next year at or above. Is that more of like a back half that we get there? Or do you think you could start the year at that level? It just seems like a big step up from what's implied on Q4?

Yes. I mean I think that our view is that it could bounce back when the inventory levels find their natural level. We think, at market level, materials are getting installed at a level higher than our shipments are right now. As Gerben said, I think the situation keeps getting better every day. There’s a mathematical point at which, you can still grow even if customers are destocking. We haven't given you our guidance for '25 yet, but we do anticipate organic utility growth starting at the beginning of next year. Yes. We expect transmission to remain really strong. As you pointed out, the distribution side should bounce back. I would agree with your statement.

I appreciate that. Thank you. And then maybe just following up on that. Can you talk a little bit about what's expected for Aclara? It came out of a period of really strong growth, but a lot of that was driven by kind of working down the backlog. Is the expectation that Aclara kind of flatlines? Or should we expect Aclara to enter a period of decline just given how some of the comps are? Thank you.

Yes. I think Aclara has the ability to grow its comps, half of its business. Your question is pointed, I think, at the meter piece. There are a couple of big projects rolling off, and the business has become a little more of a maintenance and repair-type business. When new projects get added back, ultimately, that would provide the next surge of growth.

As we look to '25, we expect meters to be down, but more than offset by AMI and Protection & Controls growth. That’s how we look at grid automation as a whole.

Thanks. Good morning, and feel better Bill. Just wanted to ask about the heavy industrial and commercial markets. You said a little softer. It didn’t sound like it was particularly maybe flattening. Does that feel like just kind of wonkiness in the end market, or some fundamental slowing, maybe the facility impact hit those products?

Yes. I think it's interesting. When we look at it, Chris, if you start on the heavier industrial side, we're serving, for example, steel plants. When you see steel prices down, that tells you something about demand, which gives us an indication that demand is not strong for steel. It’s interesting that copper has kind of been running in the opposite direction of that. The contributions have just been very modest comparatively, and something that we'll keep our eye on as we give you guidance for '25 when we’re together in January, we’ll have more to say about what we're expecting there. In the commercial markets, the non-residential setting, it has been modest for us right now. In terms of distribution products, I don't think anything too enlightening happened in the third quarter's book-to-bill compared to the first half.

Hi, good morning. This is Peter Costa on for Brett. So just one on the BEADs program. Is there any update on how you're thinking about the impact of the funding? Are you worried about any political risk there, just should there be a Trump presidency, particularly with Musk trying to cut costs and being more outspokenly opposed to the program? Thanks.

Yes. I mean, what we've said, Peter, is limited contributions this year and probably not until later next year until BEAD funding starts to flow. There's been a couple of approvals recently for money to flow in terms of big projects associated with BEAD. It's not something we've seen yet. I think later next year was sort of our base case of when some of that could start to contribute.

Yes. I think the M&A pipeline is pretty robust right now. A couple of things are swirling around, and I would say, of the traditional sizes, there's more in our typical $50 million to $100 million size range, but there are also things in the billion-ish range where you've seen us do a couple of things recently. So it’s something we continue to feel there will be opportunities for us to strengthen both the Electrical and Utility segments. There continues to be good brands out there. We can buy, ways to strengthen our product and solutions suite. We continue to look for growth rates and margin potential that’s additive to us. One of the interesting implications is, we are seeing higher multiples yet, because of the higher margin and higher growth rates, we're still able to deliver the same or even often better rates of return. It’s an interesting outcome that I feel like the multiples have crept up on us in the last year or two, but I think it’s warranted and justified given the return potential.

Yes, thanks guys. Good morning. A lot of questions have been asked already. But I guess maybe just on channel inventory, I mean, obviously there's a lot of discussion around what's happening at the end customer level. But I want to confirm that you guys still feel comfortable with where channel inventory is today?

Yes, I'd say yes. Yes, it's working out.

Okay. Got it. That was clear. Okay cool. And then I guess on the 4Q outlook, it seems like you guys are saying this, but just wanted to confirm, like we should be kind of assuming a normal seasonal outcome, and then just layer on the impact of the storm pushout from 3Q to 4Q. So you guys expect to recapture all of that in the fourth quarter?

Yes. That's a better way. I think I said better than seasonal, but you've said it better, which is it will be seasonal plus a pickup from the storms. You said it better than I did.

Yes. Hi, good morning. Thank you for taking my question. Two questions really. The renewables and the data center businesses, were those up sort of in the 15%, 20% territory? Or was it actually 20%?

It's up strong double-digits, Scott.

Fair enough. Okay. There was a comment made earlier about POS utility level, being sort of running up mid-single. Is that across both grid infrastructure and automation? Or was that just a comment on just infrastructure?

There's a comment on distribution markets, within utility and some of the customers that aren't in an overstock position.

I just want to come back to Systems Control. I think we were working with the assumption that was a $400 million business last year. You kind of confirmed you just did $120 million in revenues here in Q3. I’m sure there’s some seasonality. I mean, is this business growing 15%, 20% organically currently? Maybe you could just give us a sense. You mentioned order strong and modularization offering getting traction. Just kind of a little bit more color on how that business is performing.

Yes. So first of all, we didn't have it last year. So I'm comparing...

No, I know, but yes, whatever the business impact?

But yes, growth rate is strong. It isn't perfectly linear. I would say the third quarter was particularly strong. But I think you're right to infer that it's growing very handsomely and at nice margins, and I believe, over the long-term, this would require investment on our part. I think we've proven over the last couple of years whether it's tariff, or other inflation that we've reacted much better to those challenging conditions. So I'd say I'm confident when tariffs do arise that it would have a smaller impact on our business.

Just a point of clarification, $400 million was the expectation for revenues this year, Jeff.

It was. Okay. Thanks, Dan.

Hi, good morning. Thanks for taking my question. I wanted to circle back. I thought, Gerben, your comment on telcom and being selective on the volume to go after is interesting. Just any perspective on kind of margin mix within HUS as we think about the transmission distribution substation versus telco and gas distribution? Trying to think about, as telco comes back, but you're more selective with it, just some of the margin considerations there, as well as with the growth contributions may change a little bit next year, any margin mix considerations?

Yes, Joe. It's interesting thinking about mix, specifically with telcom. The margins have been really high, and as we've worked through this volume decline, they have come down. But you'd expect, as it comes back, the margins to return to attractive levels. I wouldn't say there's a ton of mix drivers in those pieces. It’s much more consistent, I would say.

Got it. And then just anything on tariff scenario considerations, in particular as it relates to sourcing? I think the portfolio moves would have diminished some of the direct exposure that you have, but I'm not sure in terms of the portfolio, as it exists today. And just as we're mindful of sort of scenario considerations, anything on the tariff front?

Yes. I think you're right to point out that exposure has been reduced, particularly in the lighting businesses that were highly exposed to that. In the last couple of years, as part of our resiliency and strengthening during the supply chain crunch, we've also reduced our exposure to certainly one of those regions that we're highly exposed to tariffs in the past. Today, to Hubbell, it's a lower exposure than it was. I'd say the second thing is we've learned a lot from the earlier days when we perhaps were self-critical of not reacting fast enough. I think we've proven over the last couple of years, whether it's tariffication or other inflation, that we've managed it much better. I'd say I'm confident that when tariffs do arise, it would have a smaller impact on our business.

Thank you. I wanted to follow up on the utility organic growth commentary. It seems like at least based on my back of the envelope math, it seems like utility is up low single-digits organic in Q4, and really, all of that is driven by the storm, whether it's the deferment out of Q3, or just the storm orders you guys got. I guess my question is, how fast do you think this business can get back to that mid-single-digit kind of plus target? It sounds like you guys think next year at or above. Is that more of like a back half that we get there? Or do you think you could start the year at that level? It just seems like a big step up from what's implied on Q4?

Thanks, everybody, for joining us. We'll be around all day for calls. Appreciate it.

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