Good day, and welcome to the nVent Third Quarter 2025 Earnings Call. Please note, this event is being recorded. I would now like to turn the conference over to Tony Riter, Vice President of Investor Relations. Please go ahead.

Thank you, and welcome to nVent's Third Quarter 2025 Earnings Call. On the call with me are Beth Wozniak, our Chair and Chief Executive Officer; and Gary Corona, our Chief Financial Officer. Today, we'll provide details on our third quarter performance and outlook for the fourth quarter and an update to our full year outlook. As a reminder, all results referenced throughout this presentation are on a continuing operation basis unless otherwise stated. Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in today's press release and nVent's filings with the Securities and Exchange Commission. Forward-looking statements are made as of today, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results. Today's webcast is accompanied by a presentation, which you can find in the Investors section of nVent's website. References to non-GAAP financials are reconciled in the appendix of the presentation. We have time for questions after our prepared remarks. With that, please turn to Slide 3, and I will now turn the call over to Beth.

Thank you, Tony, and good morning, everyone. It's great to be with you today to share our outstanding third quarter results. Our portfolio transformation to become a more focused, higher-growth electrical connection and protection company is delivering results and accelerating our growth. We had record sales and adjusted EPS in the third quarter. For the first time, quarterly sales were more than $1 billion. Adjusted EPS was $0.91. Both sales and EPS exceeded our guidance. We also had record orders and backlog in the quarter. Organic orders were up approximately 65%, primarily driven by large orders for the AI data center buildout. Excluding data centers, organic orders grew high single digits. With the record orders growth, our backlog grew strong double digits sequentially. We had very strong cash flow in the quarter, and our balance sheet is healthy. Our first priority for capital allocation remains the same: invest in growth. We are investing in new products, commercial capabilities, and expanding four of our facilities to add capacity for data center and power utility growth. Now on to Slide 4 for a summary of our third quarter performance. Sales were up 35% and 16% organically, led by the infrastructure vertical. New products contributed over five points to sales growth year-to-date, and we have launched 66 new products so far this year. Adjusted operating income grew 27% year-over-year with a return on sales of 20.2%, and adjusted EPS grew 44%. Looking at our key verticals, infrastructure led the way with organic sales up over 40%, with strength in both data centers and power utilities. Industrial and Commercial/Resi sales were each up low single digits. Turning to organic sales by geography, both Americas and Europe were strong. Americas grew high teens, while Europe was up approximately 10%, and Asia Pacific was down low single digits. Looking ahead, we continue to expect infrastructure to have strong sales growth across both data centers and power utilities. We expect Industrial sales to grow low single digits and Commercial/Resi to be flat for the year. For guidance, we are again raising our full year sales and adjusted EPS guidance to reflect our outstanding third quarter results and stronger performance in data centers. Our organic growth and recent acquisitions are expected to more than offset the EPS impact from the thermal management business we divested in the first quarter. Importantly, we cannot accomplish these results without the dedication of our nVent team. Transforming our portfolio and accelerating to become a higher growth company takes a lot of effort and teamwork. I am very proud and appreciative of all the hard work by our nVent team to support our customers and deliver this outstanding performance. I will now turn the call over to Gary for further details on our third quarter results and our updated outlook for 2025. Gary, please go ahead.

Thank you, Beth. We had another excellent quarter, exceeding our guidance with record sales and adjusted EPS, along with very strong cash flow. Let's turn to Slide 5 to review our results. Sales of $1,054 million were up 35% relative to last year. Organically, sales grew 16% driven largely by volume and an increased contribution from price. Acquisitions added $139 million to sales or 18 points to growth ahead of our guidance. Foreign exchange was roughly a 1 point tailwind. Third quarter segment income was $213 million, up 27%. Return on sales came in at 20.2%. Inflation was more than $45 million, including nearly $30 million in tariff impact. Price plus productivity offset inflation, and we also continued to make investments for growth, particularly for data centers and our recent acquisitions. Q3 adjusted EPS was $0.91, up 44% and above the high end of our guidance range. We generated robust free cash flow of $253 million, up 77% year-over-year. Now please turn to Slide 6 for a discussion on third quarter segment performance. Starting with Systems Protection, sales of $716 million increased 50%. Acquisitions contributed 26 points to sales and have performed ahead of expectations. Organically, sales grew 23%, with all verticals growing. Infrastructure grew over 50% with continued strength in data centers. Commercial/Resi grew low double digits, Industrial was up low single digits. Geographically, Americas and Europe were both strong, driven by data centers. Americas grew over 25%, while Europe was up low teens. Asia Pacific was down low single digits. Third quarter segment income was $146 million, up 40%. The return on sales of 20.4% decreased 150 basis points year-over-year, impacted by inflation, acquisitions, and growth investments. Moving to Electrical Connections, sales of $338 million increased 11%. Organic sales were up 5%, and the EPG acquisition contributed 6 points to sales. From a vertical perspective, infrastructure led, growing high teens. Industrial grew high single digits, and Commercial/Resi was flat. Geographically, sales were led by the Americas, up mid-single digits, Europe was flat, and Asia Pacific was down low single digits. Segment income was $102 million, up 10% versus last year. Return on sales improved sequentially coming in at 30%. Compared to last year, return on sales was down 40 basis points, mainly due to inflation and acquisitions. That wraps up the segments for the quarter. Turning to the balance sheet and cash flow on Slide 7. We ended the quarter with $127 million of cash on hand and $570 million available on our revolver. We had very strong quarterly cash flow generating $253 million in free cash flow, up 77% year-over-year. We believe our healthy balance sheet and strong liquidity position support our disciplined capital allocation strategy. Turning to Slide 8, where we outline our capital allocation priorities. We continue to prioritize growth and execute a balanced and disciplined approach to capital allocation to deliver great returns. We are investing in the business via R&D and CapEx for growth and supply chain resiliency. We returned $351 million to shareholders year-to-date in the form of share repurchases and dividends. We exited the quarter just below our targeted leverage range. We believe we are well positioned and have additional capacity for future capital deployment with our first priority being to invest in growth. Moving to Slide 9. As Beth shared earlier, we are raising our full year sales and adjusted EPS guidance to reflect our strong Q3 results and our improved outlook. We now forecast reported sales growth of 27% to 28%. That includes expected higher organic growth and approximately 16 points from acquisitions, with foreign exchange approximately a 1 point tailwind. For organic sales growth, we now expect to grow between 10% and 11% versus our prior guidance of 8% to 10%, reflecting our Q3 beat, along with stronger growth in data centers and power utilities. We are raising our full year adjusted EPS range to $3.31 to $3.33, up 33% to 34% versus last year. This new guidance continues to reflect tariff impacts of approximately $90 million. We expect to offset the impact of inflation, including tariffs through pricing, supply chain productivity, and operational mitigating actions. For free cash flow, we expect conversion of 90% to 95%. One additional modeling assumption to note, we now expect corporate costs to be approximately $120 million versus $110 million previously. Looking at our fourth quarter outlook on Slide 10. We forecast reported sales growth of 31% to 33%, with acquisitions contributing approximately 15% to sales and foreign exchange, approximately a 1 point tailwind. Organic sales growth is expected to be up 15% to 17%. Price increases, coupled with productivity are expected to offset inflation, including the tariff impacts in Q4. We expect adjusted EPS to be between $0.87 and $0.89, which at the midpoint reflects a nearly 50% increase relative to last year. Wrapping up, we are pleased with our excellent third quarter performance. We delivered record sales and adjusted EPS, and we are well positioned for a strong fourth quarter. I will now turn the call back over to Beth.

Thank you, Gary. Please turn to Slide 11. Our portfolio transformation to become a more focused, higher-growth electrical connection and protection company is showing in our results. We have increased our exposure to the high-growth infrastructure vertical. In addition, we have been investing in our data center business, which is growing and accelerating with the AI build-out. We believe the infrastructure vertical has the highest growth opportunity with the trends of electrification, sustainability, and digitalization. Turning to Slide 12. I want to share our latest highlights on liquid cooling for data centers. We are a leader in liquid cooling with over a decade of experience and more than 1 gigawatt of cooling deployed. Our strength lies in our ability to design modular, service-friendly, high-performance systems that simplify deployment and provide resiliency across large-scale environments. We differentiate with deep application expertise, complete system designs, lab capability, rigorous testing, and a proven ability to manufacture at scale. In September, we announced a new manufacturing facility in Minnesota, our second liquid cooling expansion in the last two years. This new facility is expected to begin production early next year and effectively double our overall footprint to support our record orders and backlog. Recently, we were named to NVIDIA's partner network as a solution adviser with our cooling solution and design architecture. This brings both credibility and awareness with global customers designing next-generation AI facilities. At the upcoming Supercomputing Conference, we will debut over 10 new products, including our newest generation of high-performance, high-reliability, modular liquid cooling solutions, purpose-built to meet the growing power and thermal demands of next-generation AI data centers. And we now have a new tagline for our liquid cooling solutions: We do cool stuff. Wrapping up on Slide 13, we had record performance in the third quarter, including strong double-digit growth in orders, sales, adjusted EPS, and free cash flow. Our backlog has never been larger. Our portfolio transformation and our focus on data centers is delivering accelerated growth, which we expect to continue in Q4 and beyond. I'm very proud of our nVent team that is working tirelessly on growth, delivering for our customers and our shareholders. We believe we are well-positioned with the electrification, sustainability, and digitalization trends. Our future is bright. With that, I will now turn the call over to the operator to start Q&A.

Our first question comes from Joe Ritchie with Goldman Sachs.

Yes. So look, let's start with the incredible quarter acceleration this quarter. Beth, I'm wondering if you could maybe just parse it out a little further for me. So it seems if my math is right, your data center orders were up, I don't know, almost 3x this quarter. I'm just wondering, are you starting to like see a little further out in your pipeline for data centers? Is the lead time still pretty comparable? I always think of your backlog as being kind of 9 to 12 months? And is the type of data center order changing? So are you doing more modular type data centers? Just any color on that would be helpful.

Okay. Thanks for the question. Well, yes, you are correct, our data center orders are accelerating. And as we look at that, some of those orders are through 2026, but we do have some view into '27. And of course, we have visibility into '27 and beyond with some of our key customers. One of our key focus areas this year was to continue to expand our customer base and expand our portfolio. So I would say we're seeing some new customers there as well. But as you know, a lot of these orders are particularly for liquid cooling and are large orders, and so they can be lumpy. And I think we're just seeing the overall data center growth accelerating.

Okay. Great. And then maybe just as part of that question, just the type of data centers that you're actually booking orders for? I know that you have some more modular offerings as well that typically carries higher content. Just trying to get an understanding for the orders that were booked this quarter, whether you're seeing any shift in the type of orders that you're booking for the data center business?

Thanks for the question. As I mentioned, we are expanding the customer base, and we are seeing a broader range of orders. So it's not just liquid cooling. There's other things in there in cable management and our power distribution units. But I would say our expectations for seeing smaller customer orders through distribution, for example, goes hand in hand with this portfolio of new products that we are going to showcase at Supercompute and launching through the end of this year and into next year. And I think that will take some time, but we really do expect that modular platform and suite of products to really drive a further diversification of our customer base. And of course, I want to make the point that the level of orders that we're seeing gave us confidence for our capacity expansion to be able to meet that overall demand.

Yes. Great. Great to see. I'll see you at Supercompute.

Our next question comes from Deane Dray with RBC Capital.

I want to focus on the new modular liquid cooling launch. Congratulations on that. Can you discuss the implications for the industry regarding data cooling? Is there a trend towards standardization? What are the effects of having less customization, and how does that impact your product mix?

Yes. Thank you for the question, Deane. I think one of the things that we've stated is it's a modular platform. And as we start to see expansion of liquid cooling from hyperscalers to colos to enterprise to more different types of customers that we wanted to have complete flexibility in our offering. And so the modular approach allows us to meet higher flow rates, higher power rates and/or smaller applications. And so if anything, we're seeing more standardization on the interoperability, which is really key for all these data center customers. But the modularization gives us the flexibility and allows us to scale through our manufacturing processes, our capabilities to be able to deliver with speed. So if anything, what this whole launch of new products is allowing us to expand liquid cooling beyond hyperscalers into more diverse customers and applications.

Great. That's exactly what I was looking for. So I appreciate that. And then second question, and thank you for sizing the capacity expansion. You said it was 2x. Can you help unpack the margin impact on Systems Protection? You said part of it, the decline which we had modeled for was the impact of investments. Is that all M&A, but is there any capacity expansion there on that new facility?

Deane, this is Gary. I'll take the margin question. And as you noted, Systems Protection in the quarter was actually a bit better than we expected on the margin line. Some of that is driven by growth. But certainly, also, we did experience a bit of a headwind from the M&A in Systems Protection but a bit less than we expected, and the investments are certainly in there to support the really nice growth, both of the business this year as well as we move into next year and expand capacity. So good quarter for Systems Protection on the top line and on the bottom line.

And is the capacity expansion in that as well? Or is that part of the CapEx spend?

Yes, it's both CapEx and OpEx investment to support the expansion.

Including investments in our engineering capability as we continue to launch and expand our new product offerings.

Our next question comes from Jeffrey Sprague with Vertical Research.

Just back to all these orders dialed right on this. First, I'm just wondering, are you including in the organic orders at Avail EPG because you now own it, and therefore, you consider those organic? And I'm also just wondering sort of the base we're coming off of. Obviously, things are very, very strong, right? But I don't want to run with 300% order growth, if that's somehow misleading, so to speak. So can you just kind of give us a sense of the base and this question about the acquisitions, if any?

Yes. When we talk about the 65% order growth, that is all organic. And so that does not include inorganic. So for example, the Avail EPG acquisition. So this is all the organic orders. And as we mentioned, the core business is up high single digits on orders and ex Avail EPG, but data centers overall is driving significant order growth for overall nVent.

Yes. And then can we just think about we're going to exit the year with data center being roughly 20% of revenues. What percent of orders might it be as we think about 2025?

Jeff, regarding Beth's earlier point, if we look at it from the perspective of total orders, approximately 65% are organic when excluding data solutions, which means about 20% of the business. Orders increased in the high single digits, indicating that data centers are experiencing very healthy growth this quarter. We received several substantial orders.

Great. No, understood. And then can you just give a little bit of more color on what you're seeing on the utility side of the equation, primarily, I would guess some closure related and the like, but any other detail there would be quite interesting.

Yes. I think on the utility side, we've continued to see nice orders in our Electrical & Fastening Solutions business. Recall, they have some utility exposure. And that what we're also seeing is continued orders and continued growth for the large enclosures that we acquired through the last two acquisitions. So overall, we talked about our growth being driven by both data centers and power utilities, and that we've been expanding our capacity to support our power utilities as well.

Our next question comes from Julian Mitchell with Barclays.

Maybe just wanted to start off with the operating margin outlook. So I think in the fourth quarter, it seems that maybe the operating margin that's dialed in is maybe up slightly sequentially and down a bit year-on-year, maybe in that 20%, 21% range. Just wanted to understand if that's the right sort of placeholder? And should we expect the company to return to operating margin expansion sort of fairly soon next year? Just when you're thinking about the margins in the backlog and the margins in the current orders being booked today?

Julian, it's Gary. Thanks for the question. And you're pretty close there. Margin performance for the quarter came in essentially in line with our expectations. Coming into the quarter for the second half, excluding EPG, we expected margins to be slightly down in the third quarter and up in the fourth quarter. And that's what we've assumed in our updated guidance. Q3 is impacted by recent acquisitions, being margin dilutive, the investments for growth that we talked about. And it's worth mentioning, we had higher incentive compensation in the quarter as our 2025 performance continues to exceed expectations. As you mentioned, Q4 margins will be up sequentially and an improvement to Q3 as our actions continue to build, and we'll be up excluding EPG in the fourth quarter. We're not going to give guidance here on '26 on this call. But all in, we do expect margins to improve and to see better incrementals next year.

That's very helpful. And then just circling back, I'm sure not for the last time to the whole orders and so forth discussion. Maybe one other way I would ask about it perhaps is that, I know you don't disclose the backlog quarterly, but you typically in the 10-Q disclosed the RPO. And I think that was about $800 million at the end of June, up from about $150 million in March. I know we'll get the Q fairly in the next few days, but any help you could give us on how that RPO ended September, just as some kind of crude backlog movement proxy?

Julian, as we mentioned in the script, our backlog was up double digits sequentially. And we're feeling very good about where we're at, and we will disclose the backlog as we get to the end of the year.

Got it. And the RPO is sort of moving sort of commensurate with that?

Directionally makes sense.

Our next question comes from Nigel Coe with Wolfe Research.

Gary, I'm going to really annoy you here. We're calculating something in the range of about a 1.3x book-to-bill. Would that be in the right zone? Again, not looking for points here, but in that kind of ballpark. And then just thinking about the gross margins. Obviously, you're sort of absorbing a lot of headwinds here with tariffs, inflation, acquisition dilution. How do we think about the contribution margin from liquid cooling sort of ramp up? Is the gross margin comparable to fleet average here? Or is there any kind of variance that we should be aware of?

Yes, I’ll start by saying that we won’t disclose the book-to-bill ratio, but we have seen a healthy book-to-bill in both segments this quarter. From a gross margin perspective, as I noted in my earlier comments, price increases and productivity improvements are helping to counterbalance inflation. However, they aren’t fully covering the investments we are making and the additional compensation expenses I mentioned. We are optimistic about our margins in liquid cooling, which are performing well and align with the average margins in Systems Protection. It’s also important to note that we acquired a couple of businesses that typically have lower gross margins. We have solid plans in place as we work through our strategy, which aligns with our expectations, and we anticipate continued improvement.

Okay. I appreciate the detailed information. Regarding the fourth quarter modeling, your revenue range shows strong growth, but it suggests a significant decrease, possibly around 5% in the fourth quarter compared to the third quarter. As data center revenue increases, I anticipate a much more stable quarterly revenue profile. In fact, in many instances, the fourth quarter can outperform the third quarter for data centers. I'm just wondering why sales would be much lower than third quarter levels.

Well, one thing I just want to point out, yes, certainly, there's strength in data centers. But typically, as a business, we always see Q4 as a lower revenue quarter. And recall, in Q4, it depends what our distribution channel wants to do with their inventory position. So we tend to see some seasonality in the core business in Q4.

Our organic guidance of 15% to 17% aligns well with the growth we are experiencing, which has significantly accelerated compared to the first half of the year. We previously guided for 15 percentage points from acquisitions in the fourth quarter, which is a decrease from the unexpectedly strong performance in Q3. It's important to note that we also had some fluctuations in inorganic growth during Q3.

Our next question comes from Brian Drab with William Blair.

Could you remind us about the margin impact as you develop this modular solution and roll out new products, many of which will fall into the more standardized category? How does that affect margins and when can we expect to see that impact?

Yes, Brian, as we develop this more modular suite of products, we expect it to scale through distribution over time, which typically results in stronger margins from our distribution business. However, this will take some time, especially given the significant growth from our hyperscaler customers. Therefore, we won't see any immediate impact on margins there. The margins will remain good and consistent. It will be some time before we see growth to the scale we anticipate, but our strategy going forward is that liquid cooling will be applicable in a variety of scenarios, not just within data centers.

Okay. It seems that every couple of months or six weeks, there’s a panic among investors about companies like nVent and others involved in data centers due to announcements of new technologies that could revolutionize data center cooling. For example, the microfluidics announcement from Microsoft and earlier ones from Amazon have sparked conversations about two-phase direct-to-chip cooling potentially transforming the industry. Can you share your observations on what you see across the various customer segments you serve? Also, what direction do you anticipate the market to take over the next two to three years concerning technology?

Well, sure. I mean, recall, we always start by saying that less than 10% of data centers are liquid cooled. And as you think about the new GPU chips and the need for liquid cooling, it is only going to expand. And on top of that, liquid cooling also provides up to 50% energy efficiency. So when you think about it from that perspective, there's going to be a continued increase in liquid cooling. And there's many different types of architectures. However, right, our view is you need to have a cooling distribution unit and typically some manifolds, no matter what configuration you have, whether it's immersion, whether it's cold plate, there still needs to be that controlling CDU type of capability. And in fact, at Supercompute, while we're showing a whole launch of new products, we're also showing how we partner with immersion players and how we partner with those who are looking at 2-phase. We think some of those cooling technologies will have applications but not as broad. And so our strategy has been to have a wide range of products and portfolio, and we're flexible that we can integrate with any of these different types of cooling technologies and fluids that are being used.

Our next question comes from Nicole DeBlase with Deutsche Bank.

Can we just start with EPG Avail? I think in the slides, you mentioned that the business was performing ahead of your expectations. Is there any way to give some stats on what you're seeing with respect to apples-to-apples growth in that business or if it's margins ahead of expectations? Just some more color there would be helpful.

Yes. When we think about our acquisitions of Trachte and Avail, we aimed to create a stronger core utility platform. We have exceeded our expectations in terms of growth synergies, particularly in the gray space. The demand for power due to the increase in data centers continues to rise steadily. We are also seeing more applications in data centers, partly due to the customers we acquired and the overall need for more modular solutions and data center pods. This is what we mean by exceeding our expectations; we are discovering more applications and securing new types of business. I'll now let Gary discuss the margins.

Yes. Just to build, we're seeing double digits apples-to-apples growth. It will contribute 15 points to the fourth quarter, and it's nicely accretive for us in the first year. And based on the really strong and ahead of expectations, revenue and profit in Q2 and Q3, Nicole, it will be approximately a $0.10 impact to EPS, higher than the $0.05 that we originally quoted when we had just acquired the business. Of course, that's net of the lost interest benefit that we initially guided on. So really nice performance from EPG, both on the top line and on the bottom line.

That's great. And then just on the non-data center order growth in the high single-digit range, Beth, can you just parse that out a little bit between Comm/Resi and Industrial? Like did you see growth across all of your markets in the quarter?

Yes, we did. So we certainly saw strength of orders in Industrial, in Commercial/Resi, and certainly saw some strength there for our Electrical Connections business as well. So we are very pleased with just the breadth of the order growth.

Our next question comes from Jeff Hammond with KeyBanc Capital Markets.

I think the demand is impressive and it's great that you are increasing capacity. However, we've heard from some of our other companies about the challenges they face, and you appear to be optimistic that the margin improvement will begin as you move past the acquisition noise. I'm curious about what you consider the main challenges or pitfalls as you ramp up capacity and receive this business.

Well, growth is hard, and that's why I said, our employees are working really hard because as you scale, we've got to ensure that we're expanding our facilities, that we're bringing them online, that we're developing our supply chain. I do think that's a strength for us because as I started, we've been overworking it in liquid cooling for over a decade. So we're partnering well with suppliers to help them scale. We're having to ramp up in terms of people and finding innovative ways to train and bring people into our facilities. So there's a lot that we're doing. But I will say this: the fact that our expansions have been close to where our core capabilities are and our lab expansion, it's given us a lot of flexibility. So it's a lot of work, but I think we've got a very disciplined approach to how we're driving this increase in growth.

Okay. That's great. And then just a quick one, a follow-up on EPG Avail. I think with Trachte, you found some really good business optimization and flow in the plan. I'm wondering if you're seeing similar opportunity with Avail and if you're considering any capacity expansions, I think you're doing some on Trachte already with Avail?

It's a similar situation. Part of our integration strategy involves identifying areas for optimization, which includes improving efficiency in the plants to increase capacity. We are also evaluating our supply chain capabilities to strengthen our supply base. Additionally, we are expanding capacity in many facilities by adding both personnel and extensions to support the anticipated demand.

Our next question comes from Vlad Bystricky with Citi.

I wanted to follow up on the comments regarding the increased M&A contribution in the third quarter and the slight adjustment to the outlook for 2025. Can you discuss whether this is driven by improved demand patterns you are observing, or is it more indicative of enhanced productivity and your capacity to ship products out compared to your initial expectations?

Thanks, Vlad. Yes, as I had mentioned, our acquisition of Avail EPG is performing well. And to answer your question directly, it's both. We are driving more top line growth than initially expected. And the margins are looking a bit better than we initially forecasted as well as we drive scale and efficiency through the plant network. So very pleased with the acquisition and look for continued growth there.

Great. I appreciate that color, Gary. And then just circling back to data centers and the liquid cooling growth that you're seeing. I know, Beth, you mentioned and highlighted some large orders that came through in the quarter. Can you just talk about what you see in the large order pipeline going forward and whether you see in your pipeline, incremental large orders like you saw in 3Q that could repeat over the coming quarters, understanding that they can be lumpy.

Large orders are usually associated with significant programs from hyperscalers. They can be inconsistent, so the timing of these orders can vary. However, this is indicative of the overall acceleration in the data center business. The orders and the accumulation of backlog are reasons for our investment in expanded capacity, which will come online in 2026.

Our next question comes from Scott Graham with Seaport Research Partners.

Congratulations on the quarter. I was hoping you guys would tell us maybe on the 5% contribution from new products. If we took out infrastructure, what would that number look like?

Well, it would be lower. Just like a lot of our growth is being driven by infrastructure. We intentionally are focusing on new products across both data centers and power utilities, and that infrastructure vertical. So strategically, as we position the nVent portfolio to be more aligned with those macro trends, those investments in new products in R&D are also targeting infrastructure. So that's intentional.

Okay. So it's possible that the 5% is all infrastructure, would you say?

It's not all infrastructure. Oh, no. It's not all infrastructure. But it certainly has a significant portion from infrastructure.

One easy one. Will fourth quarter tariff impacts both in dollars and sort of with the price cost calculation we do here, even including your productivity, will tariffs be about the same in the fourth quarter as they were in the third? And what does that overall net number kind of look like that net productivity number?

Yes. So as I mentioned, the tariff dollars will continue to build. But I had mentioned as well earlier is that we expect price to be sequentially stronger in Q4 as well. And that's what's driving from a margin perspective, excluding EPG, we expect to be up in the fourth quarter.

If I could just sneak in this last one, the net leverage, I know you said it's like a little bit below your target. What does that look like pro forma right now? Is that like a 1.8 type of number or that territory?

Yes, you're right in the zone there.

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

Thank you for joining us today. I'm extremely proud of our performance in the third quarter. We will continue to focus on delivering for our customers, employees, and shareholders by executing on our growth strategy. We believe nVent is a top-tier high-performance electrical company well positioned for the electrification, sustainability, and digitalization trends. Thanks again for joining us. This concludes the call.

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