Eaton Corp PLC

Thank you for standing by and welcome to Eaton's first quarter 2026 earnings results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. We ask that you please limit yourself to one question each. You may get back in the queue as time allows. As a reminder, today's program is being recorded. And now, I'd like to introduce your host for today's program, Yan Jin, Senior Vice President, Investor Relations. Please go ahead, sir.

Hey, good morning. Thank you all for joining us for Eaton's first quarter 2026 earning call. With me today are Paulo Ruiz, Chief Executive Officer, and Dave Foster, Executive Vice President and Chief Financial Officer. Our agenda today, including the opening remarks by Paolo, then we'll turn it over to Dave, who will highlight the company's performance in the first quarter. As we have done our past calls, we'll be taking questions at the end of Paolo's closing commentary. The press release and the presentation we'll go through today, including reconsiderations to non-GAAP measures, have been posted on our website. And a replay of this webcast will be accessible on our website after the call. Before we begin, I would like to note that our comments today will include forward-looking statements with respect to sales, earnings, and other matters. Our actual results may differ materially from our forecasted projections due to the wide range of risks and uncertainties that are described in our recent SEC findings. With that, I will turn it over to Paulo.

Thanks, Jian, and thanks, everyone, for joining us. Starting on page three, I'm happy to report we have delivered solid results to start the year. From a demand perspective, we continue to see tremendous strength. Rolling 12-month orders are up in all businesses, 42% in Electric Americas and 13% in both Electrical Global and Aerospace. We are winning business at unprecedented rates, resulting in our backlogs hitting a new record high in both electrical and aerospace, with book-to-bill increasing to 1.2 combined on a rolling 12-month basis and even stronger than that year-over-year. Our accelerating orders, driven by data center orders up 240%, prove continuous strong demand and our winning value proposition as an end-to-end solutions provider. Overall, the business is executing nicely to start the year, We posted record revenue of $7.5 billion, along with Q1 record segment profit of $1.7 billion and margins of 22.7%. We are pleased to beat our adjusted EPS guide and consensus. All the beat was operational. We also delivered strong total revenue growth of 17% and higher margins than anticipated. We are also executing well on our deals to boost growth. We closed UltraPCS in January and Boyd Thermal in March, both ahead of schedule. Our partnerships with NVIDIA resulted in a complete solution for their generation of chips Vera rubbing. Thanks to our teams for the strong work as we keep shaping our portfolio. As we look toward the rest of the year, with an unprecedented demand backdrop, We raised our organic growth outlook by 200 basis points to a midpoint of 10% and also raised our adjusted EPS midpoint expectations to now $13.28 for the year, which covers the EPS dilution from the Boyd acquisition. Another important update, on March 2nd, we announced Dave Foster as CFO. We are thrilled to have you back, Dave. And he has 29 years career with Eaton, which brings deep understanding of our business and markets, as well as a proven ability to drive performance. Dave and I will dive into Q1 and the 2026 outlook, but first let's move to slide four. We continue to drive Eaton forward with our bold strategy to lead, invest, and execute for growth. All three pillars are designed to accelerate our growth and create sustained value for shareholders. Today, we will discuss how we are executing for growth in Electrical Americas, investing for growth including the Boyd Thermal Acquisition, and leading for growth with a customer-centric approach. Slide five includes an update on how we are executing for growth in Electrical Americas. Demand remains incredibly robust. We are winning like never before. and the order and the backlog growth supports that. Meanwhile, we are accelerating our production ramp in Americas to meet demand. The investments we are making, over $1 billion in CapEx, are at record scale for us, but well within our capability to navigate. And most importantly, we are on track as planned and feel confident on our path forward, given our strong position in growing markets and proven track record of solid execution at Eaton. America's recovered well from a tough January and February with impacts from the winter storms in our facilities and across the supply chain. Our team recovered well in March. April was another strong month. From both sales and margin perspective, Q1 will be the trough and as mentioned in our last earnings call in February. We expect progress as we enter Q2 and momentum Q3 and Q4, which will set up the business to meet or exceed our margin target of 32% by 2030. Turning to page six in our investing for growth strategic pillar, where we are doubling down on high growth, high margin markets to capitalize on once in a lifetime opportunities. We've taken both portfolio actions in the last year, including the successful integration of FibreBond, which enhances our modular approach, Resilient Power, which fast-tracks our solid-state transformer technology, and various partnerships like the design partnership with NVIDIA and the on-site power partnership with Siemens Energy to help solve for global power constraints. Now, Eaton's broad portfolio has been further enhanced by the acquisition of Boyd Thermal. Our complete offering to data centers now has leading liquid cooling solutions, a true grid-to-chip approach that is unique to Eaton. We have solutions from power generation and the grid, gray space power infrastructure, and now a stronger presence in the white space along with cooling solutions. More specifically on Eaton's Boyd Thermal, this business is a core design partner to leading hyperscalers and silicon providers. As codeplates expand across compute, networking, and rack-level components, Voigt system-level position drives also increased CDU adoption. Embedded at the chip and system level, Voigt-Thermon expands ETHAN's presence in the wide space and gives ETHAN early visibility into evolving data center platform requirements. advancing next generation power and cooling management. The cooling business is on track to record $1.7 billion or better in revenue in the full year of 2026, of which about $1.4 billion will be included in ETH and financials for the year with margins generally in line with the prior expectations. The Boyd business had a very strong start of the year, up well over 100% in Q1 versus prior year. In fact, Boyd's backlog doubled over the last six months. Boyd's recent wins underscore strong momentum in liquid cooling, reflecting customer preference for its deep engineering integration, early design engagement, speed of execution, manufacturing readiness, and ability to scale globally. Therefore, we are confident in 2026 outlook. We are very excited to welcome this strong team to the Eaton portfolio and look forward to continued success together. Turning to page seven, we are leading for growth by striving to move fast, co-creating innovative solutions with our customers at the center of everything we do. Here, we highlight the Eaton Bean Rubbing DSX platform as part of our collaboration with NVIDIA to support the next generation of AI factories with end-to-end great-to-cheap infrastructure. AI factories represent a new class of infrastructure, and they are driving a massive global build-out, where data center power demand could nearly triple between 2025 and 2030. This unprecedented demand requires end-to-end solutions for faster builds and more efficient energy usage. That's why we developed the Ethan Bean Rubbing DSX platform. It delivers a complete modularized implementation of AI factory infrastructure spanning grid connection, power distribution, advanced cooling, and structural architectures engineered for a higher speed, efficiency, and resilience. Truly an ideal solution. By integrating Ethon's grid-to-chip architecture, we are enabling our customers to move beyond custom designs toward efficient, reliable, and modular solutions. It's a unique collaboration tailored to help our customers with their greatest challenges. And we couldn't be more excited for our customers to benefit from this technology. Now I will turn over to Dave to walk through the financials.