Eaton Corporation plc (ETN) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Eaton Third Quarter 2026 Earnings Results Conference Call. [Operator Instructions] 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 of Investor Relations. Please go ahead, sir.

Good morning. Thank you all for joining us for Eaton's Third Quarter 2026 Earnings Call. With me today are Paulo Ruiz, Chief Executive Officer and Dave Foster, Executive Vice President and Chief Financial Officer. Our agenda today includes operating remarks by Paulo. Then I will turn it over to Dave, who will highlight the company's performance in the third quarter. As we have done in our past calls, we'll be taking questions at the end of the Paulo's closing commentary. The press release and the presentation we'll go through today, including reconciliations 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 remind you that our commentary today will include forward-looking statements with respect to sales, earnings and other matters. Our actual results will differ materially from our forecasted projections due to a wide range of risks and uncertainties that are described in our recent SEC filings. With that, I will turn it over to Paulo.

Thanks, Yan, and thanks, everyone, for joining us. Starting on Page 3, our very strong third quarter shows the power of demand meeting execution. We said the second half would show the benefit of our capacity investments. And in Q3, our teams delivered on that promise. We came in above the high end of our guidance on every key metric. Organic growth was 19%. The segment margins were all-time record at 25.3%. Our adjusted EPS was $3.68, an all-time record and $0.17 above the midpoint of our guidance. Revenue reached a record of $8.9 billion, up 28%. Our strategy is working, and Electrical Americas is a strong proof point. Organic growth accelerated to 22% and margins reached 29.8%, up 230 basis points from Q2. Our new capacity is now turning into output and into margin. Growth in Electrical Global was even stronger with 27% organic growth and strength across all end markets. And across the business, demand is both accelerating and broadening. Our Electrical and Aerospace combined book-to-bill remained strong at 1.2 with Americas strong at 1.3 and Aerospace at 1.2. While demand is broad-based across end markets, you can see here that the data center orders for the 12 months rolling are over 100% and revenues up 65% remained really strong. Overall, accelerating orders and growing backlogs are a clear proof point that our customers are choosing Eaton because we bring end-to-end critical power solutions. Our performance in the year give us confidence to raise our guidance for the third time this year. We are raising organic growth by 200 basis points to a midpoint of 14% and our adjusted EPS midpoint by $0.25 to $13.75. Dave and I will walk you through Q3 and the rest of the year outlook. But first, let's turn to Slide 4. We continue to drive Eaton forward with our bold strategy to lead, invest and execute for growth. The strategy is working, and we are transforming our company at fast pace. All 3 pillars are designed to accelerate our growth and create sustained value for our shareholders. Today, we will talk about how our strategy is fueling growth in the Americas and Global and we'll conclude with a short update on Boyd. Now starting with Electrical Americas. This Page 5 shows what we are seeing right now. Demand is strong and broad-based well beyond data centers and every leading indicator is pointing up. First, customer investment keeps building. Mega project announcements are up 85% so far this year. These are large multiyear infrastructure and electrification projects, and they will turn into demand for our products and solutions. Second, our negotiations pipeline is up about 55% year-to-date. That's our earliest signal of future orders, and it's broad across every end market we serve. Third, backlog is up 33% to another record and is still growing even as we grow top line at 22% rate. Demand continues to run ahead of what we can convert. Finally, orders up 39% on a 12-month basis with book-to-bill of 1.3. Orders can be lumping quarter-to-quarter, as you know, but the pipeline and the backlog keep building. Taken together, this is a business that continues to benefit from powerful secular trends, utility investment, grid modernization, industrial reshoring AI-driven data center expansion and broader ratification. We remain focused on execution and bringing new capacity online. Our strong pipeline orders and backlog give us the confidence in the durability of growth in Electrical Americas, and that's a great growth story for Eaton. Turning now to Slide 6. Electrical Global continues to outperform expectations. We now expect organic growth about 16% in 2026 well above our prior guidance and more than double the 7% we delivered in 2025. This acceleration is no accident. It reflects the liberate strategic moves we made over the past few years. We took the lessons we learned and applied the pillars of our lead, invest and execute for growth strategy to our global business, and we are growing with better margins. There are the 4 moves behind this performance. First, we restructured early. We realigned Europe well ahead of the demand acceleration, building a leaner organization that's closer to our customers, and centered on solving their biggest challenges. Those efforts are now paying off. Second, we scale globally, our brand, our trusted technology and our relationships with global customers travel with us. Our differentiated solutions let us compete in complex applications where reliability, safety and performance are critical. And we are following our global customers whatever they build. Third, we shifted our portfolio to high-growth areas. We are in the right markets at the right time, data centers but also utility and machine OEM. So we expanded in modular power with Nordic ePod and our agreement to acquire COL Group will add even more scalable technologies, capabilities and capacity in Europe. Finally, we are winning share through strong execution. Growth is broad-based with revenue and orders rising together, and we are outgrowing our markets in GIS, EMEA and APAC. We are seeing the strongest competitive growth in APAC, and that gives us real confidence in what's ahead. And there is more to come. Starting March 27, Boyd Thermal becomes part of organic growth, adding 1 of the fastest-growing business in the data center market to organic base. Taken together, these strengths give us confidence not only in 2026 but in our long-term ambitions. Our current target for Electrical Global growth is 5%, 5-year CAGR from 2026 to 2030 with Boyd Thermal organic and the strength we continue to see across global, we expect to update that target in 2027. Turning to Page 7. Boyd Thermal is an important accelerator for Electrical Global. Since our last update, Boyd has continued to significantly outperform our expectations, reinforcing the strategic rationale for the acquisition and validating the strength of Eaton's position in the data center infrastructure market. The business delivered nearly triple-digit year-over-year growth with demand remaining exceptionally strong across the portfolio. Growth has been supported by accelerating customer investments in AI and next-generation data center infrastructure. And orders continue to accelerate at similar rates as well highlighting strong customer adoption of liquid cooling, architectures and Boyd's differentiated capabilities in thermal management. Demand strength is also reflected in the backlog, which saw 3x growth year-over-year providing strong visibility into future growth and reinforcing confidence in the long-term outlook. Beyond the near-term financial performance, we are increasingly seeing the strategic benefits of combining Boyd with Eaton. Boyd's industry-leading thermal management capabilities, combined with Eaton's global scale, balance sheet strength channel reach and supply chain capabilities are creating opportunities to accelerate growth beyond Boyd's stand-alone potential. So this momentum is why we are raising Boyd's full year revenue outlook again. The third increase this year to $1.9 billion. Specifically, Eaton is helping expand Boyd's customer access through our global sales channels, accelerating commercialization of new solutions and enabling broader participation in large-scale data center projects. At the same time, our combined expertise in electrical power and thermal management position us to help customers to move towards more integrated power and cooling architectures, an increasing important requirement as AI workloads drive higher power densities. Overall, Boyd strengthens Eaton's ability to deliver differentiated grid to chip solutions while increasing our exposure to some of the fastest-growing segments of the data center market. Now I'll pass it on to Dave to walk through the financials.

Thanks, Paulo. I'll start by providing a brief summary of our strong Q3 results on Page 8. Total revenue grew by 28%, with a strong contribution of 8 points from acquisitions. Our acquisitions continue to deliver at or above our expectations for growth and margins. Organic growth for the quarter was 19%, driven by strength in Electrical Americas and Electrical Global. Excluding mobility, our organic growth would have been 21%. Adjusted EPS of $3.68 was an all-time record, up 20% over prior year and $0.12 above the high end of our guidance. We generated a strong $0.32 segment profit beat versus our guidance with incremental margins of 26%, stepping up from 19% last quarter. Now let's move to the segment details. On Slide 9, we highlight our Electrical Americas segment. Organic sales growth accelerated to 22% driven by strength in data centers up 54% and along with strong growth in machine OEM and commercial and institutional. Our sequential margin improvement continues. Margins reached 29.8%, up 230 basis points from Q2 and more than 400 basis points since Q1. A clear sign our Execute for Growth strategy is working. From a year-over-year perspective, the majority of the margin decline was driven by temporary commodity cost headwinds. The pricing actions we took in Q2 and early Q3 are working as price/cost was positive on a dollar basis in Q3. Demand keeps building. We had record orders of over $5 billion. Our negotiations pipeline was up 55% year-to-date and rolling 12-month orders were up 39% with book-to-bill held at 1.3. Electrical Americas is exiting 2026 with real momentum, and we are well positioned for a strong 2027. Now I will summarize the strong results for our Electrical Global segment on Slide 10. Total growth of 58% and included organic growth of 27% from strength in data center, utility and machine OEM, along with 31% attributed to the Boyd acquisition. Organic revenue growth was broad in all regions with particular acceleration in APAC up nearly 50%. Boy continues to outperform. Sales grew 24% from Q2, with triple-digit growth year-over-year. Backlog nearly tripled year-over-year giving us strong visibility into the liquid cooling demand ahead. Operating margin of 21.1% was up 200 basis points over prior year, driven largely by higher sales. Each region posted strong year-over-year margin improvement. Demand in Global is accelerating fast. We had record orders in the quarter as rolling 12-month orders were up 51% and with momentum across our end markets and exceptional strength in data centers. Electrical Global is built for this moment and with orders and backlog at these levels, we see a long runway of above-market growth ahead. Before moving on to our industrial businesses, I'd like to briefly recap the combined electrical segment's performance. For Q3, we posted organic growth of 24% and total growth of 34%. The a great third quarter. Segment margins were 26.4%, 190 basis points higher than Q2. On a rolling 12-month basis, orders accelerated up 43%, and our book-to-bill ratio for our electrical sector was 1.2. Our total electrical backlog reached another record of more than $20 billion, up 46% from last year. Page 11 highlights our Aerospace segment's performance for the quarter. Organic sales growth of 6% resulted in Q3 record sales and segment profit with particular strength in commercial OEM. Ultra PCS added 5 points of growth this quarter with margins well above the segment average, it continues to be accretive to Aerospace. Total aerospace margins were 24.9% and up more than 200 basis points from Q2. Year-over-year, margins were down 100 basis points, driven by mix. Demand in aerospace has never been stronger with record orders driving backlog expansion and book-to-bill remaining a strong 1.2. We are well positioned to convert that backlog into growth in earnings. Moving to our mobility segment on Page 12. Mobility had a strong quarter. Sales grew 10% with 9% organic growth and 1 point from currency, a clear return to growth. Meanwhile, margins increased 370 basis points to 17.2%, the highest level since 2018, driving incremental margins of more than 50%. Now I will turn it back to Paulo to discuss our updated guidance and close out the presentation.

Thanks, Dave. Moving to Page 13, we summarize our updated 2026 organic growth and margin guidance. Following another strong quarter, we now expect total company organic growth to be between 13% and 15%, up 200 basis points at the midpoint from the prior 11% to 13% range. This increase is driven by strength in Electrical Americas, up 400 basis points to a midpoint of 19% and Electrical Global, up 400 basis points to a midpoint of 16%. We are maintaining our total segment guidance range of 24.1% to 24.5%. On the next page, we have the balance of our guidance for '26 and Q4. For 2026, we are raising our adjusted EPS guide. Now we expect full year EPS to be between $13.70 and $13.80, $13.75 at the midpoint, up 14% from 2025. We also reaffirmed our cash flow expectations for the year. Additionally, we have provided guidance for Q4 on this page. As a reminder, we also provide supplemental guidance, which includes raising Boyd's full year revenue to $1.9 billion, of which $1.6 billion will be Eaton's books for the year. Continued strength across end markets combined with our record backlog provides strong visibility into our outlook for the year. This is the third time we've raised organic growth and adjusted EPS guidance this year. With the industry best positioned portfolio, and demand steel building, we are not just finishing 2026 strong. We are carrying real momentum into 2027 and beyond. So now shifting our perspective ahead to 2027 on Page 15, we provide our view of our end market growth assumptions for the next year. I won't go line by line, but the key take way here is simple. None of our end markets are expected to decline in 2027. Approximately 90% of our portfolio is in markets we expect to grow and the rest being residential and light vehicles should hold flat. Data centers and distributed IT along with commercial aerospace remain our strongest markets, both expected to grow strong double digits. Together, that's roughly 1/3 of our sales. All in, that adds up to about 11% growth across our end markets in total with some outgrowth on top of that, 2027 growth would be well ahead of our 2026 to 2030 organic growth target of 6% to 9% CAGR. Let me be clear, that's double-digit market growth again in 2027. We have the right portfolio in the right markets at the right time, and we expect 2027 to be another year of differentiated growth and strong returns for our shareholders. Now let me wrap on Page 16. This quarter showed what Eaton can do when robust demand meets strong execution, and we are just getting started. First, demand is accelerating and broadening Electrical orders are up 43% and backlog is up 46%. Let's not forget, this isn't just data centers. We are seeing strength across commercial and institutional, utilities, industrial facilities, machine OEM and residential. We are winning at a pace we've never seen before. Second, execution is compounding. Electrical Americas margins reached 29.8%, up 230 basis points sequentially in a single quarter. and 18 of our 25 expansion projects are complete, with the steepest part of the ramp behind us. The results are clear, new capacity is turning into output and output into earnings. Third, our lead invest and execute strategy is working and is gathering pace. We are transforming our portfolio and evolving our culture. We are positioning the company to capture strong demand to accelerate growth and to beat our own short and long-term commitments, so we can deliver meaningful value creation for our shareholders. And finally, when you put it all together, strong demand, improving execution, higher shipments and growing earnings it gives us real confidence in both our near-term outlook and our long-term commitments. You can see that in the organic growth and EPS guidance we are raising today for the turn time this year, and we are remaining focused staying close to customers, innovating with speed, leading and investing in growth and executing with discipline. So the best years are still ahead of us. With that, let's open up for your questions.

Thanks, Paulo. Moving to the Q&A, we ask you to please limit your opportunity just 1 question per person. We appreciate your cooperation. So we can accommodate as many participants as possible today. With that, I will turn it over to the operator for guidance.

And our first question for today comes from the line of Nigel Coe from Wolf.

So it is just 1 question. Maybe just Paul, maybe talk about where we are in sort of the transition to next-generation interval DC solutions. I think the sidecar kind of back based solutions for the first half of next year. Just wondering -- are you starting to see orders for kind of facility level DC power at this point? And where are we on the sole transformer commercialization and production?

Thanks, Nigel. Thanks for the question, is also top of mind for investors. We get that question all the time. So thanks for that. So we remain, I would say, this, I'll leave the tagline. We remain a strong leading position for our solid-state transformers both in U.S. and globally. Let me just give you an update on what happened in the last quarter. In the U.S., for example, in October, our 15 kV 2-megawatt unit, the [indiscernible] transformer successfully passed all the UL tests. There's a norm. And to our knowledge, we are the first multi-megawatt unit that successfully cleared all those tests, which is a great thing. And I would say this more importantly than being the first -- the system is truly unique. That's the most important part. It's unique in the market. It's the only system in the market, which is, at the same time, liquid coal it's multiport, meaning you have a CNDC port that gives maximum flexibility to customers. It is also outdoor ready. So this provides with customers the most flexible and compact brings, as you will, for the next generation of either complete the architectures or to your question, to hybrid architectures with AC and DC playing together. And then also in parallel, our teams. Our global teams also advanced our technology here. So in the EIC markets, which are the European and the Asian markets, they eat an indoor unit also pass all the tests, this time with the TOV, the tube, the German Institute, which is a global third-party testing certification organization. So we're really excited that we are pushing this leadership even further in this case. For me, the good thing for us to keep in mind is that this direction of travel in terms of migrating from AC to DC is real because of the large power savings that the customers see in this new technology. But the timing of that transition is not under our control. So the industry is definitely moving to the distribution as an alternative to AC because of those savings. And I remind you that you asked about solid state transformer, which is a key part of this new architecture, but it's only one of the 4 key building blocks that you need to have to win in this new era. And I would say Eaton is leading all other 3 as well. And now name them again, so you guys can remember. So the other one is DC breaker technology. The third one is power quality. So think about electronics and UPS in distribution and advanced cooling with void. So we are leading all 4 of them. And then the other thing I want you and investors to have in mind is that the current architecture, the AC architectures are not that, and we are fine either way. Eaton's positions that will sell powertrain in both architectures -- we are architecture-agnostic and we win either path. So we want you to frame this as an opportunity more than a bad and a good option for us in the future. So specifically on the pilots we are running, we have 10 pilots running parallel and multiple 150 kV projects that we're going to ship this year, and we expect this to turn into volume moving to next year. And here, the conclusion for us is very simple. We are a leader today in the current data center architectures and will continue to be a leader in the future. We are ready for that future with the DC portfolio we are building.

And our next question comes from the line of Nicole DeBlase from Deutsche Bank.

Clearly, data center markets remain robust. We all see that. But how are the balance of your electrical end markets performing in terms of growth?

Yes. Thanks for the question. Let me make a comment on data centers first because we keep checking this market and keeps surprising us on the upside. So data centers continue to represent an enormous opportunity for us -- we track the process that were announced, and now they amount to 366 gigawatt in contrast to the last update we gave you in the earnings call was [ $307 million. ] So that keeps building. So that's good for us. Just think about contrast that with the installed capacity of 50 gigawatts is an enormous buildout in my opinion, this will last for many years to come. But if you look beyond that, we are doing really well in that market in data centers. We grew 65% sales and it's the ninth consecutive quarter, we printed growth beyond 35%, which is amazing. And orders were up 101%. So we remain very excited about this business. I will just recall in our long-term plan, we baked 17% growth in our long-term plan. And year-to-date, we grew 60%. So it's an incredible opportunity for us. But the beauty to the core of your question, Nicole, the beauty of our strategy in our portfolio is that we are anchored on secular trends that are even broader than data centers. So we have meaningful growth opportunities beyond data centers. So just to give you some examples here, if you look at organic revenue -- we have mid-teens for commercial institution. Institutional, which remains a big segment for us. So mid-teens growth there. mid-30s growth, incredible growth for machine OEM in the quarter, double digits for industrial facilities, mid- to high single-digit growth for other markets like utilities, resi and distributor IT. So that's the look back. If you try to have a look forward on markets that are not data center, we better look at our orders here. So our Q3 orders were also very strong on a 12-month basis utility orders were up around 20%, RESI, 25% and machine OEM 55%. So just to conclude here, I think it's very clear to everyone that demand is strong and is broadening much beyond data centers.

Yes. I would even add, Paulo, commercial and institutional were both up north of 25% in the quarter.

And our next question comes from the line of Andrew Obin from Bank of America.

It's been a popular topic this quarter is modular capabilities. Can we just talk about what it is you guys have? And what's your competitive differentiation in terms of modular on data centers?

Great. Great question. Thanks for the question here. I think the most important thing is that to highlight first that our business is doing really well in terms of execution. And there's a great pull from customers. That's why you're asking this question. because we take labor away from their job sites and we pushed this activity to our factories, which is much better and better controlled. But also increase the speed of deployment for this incredible backlog or customers have that I just mentioned. And last but not least, when the models are put outside the data hall, you also free up space for for the servers where our customers generate revenue. So it's a great value proposition for our customers to start with. What differentiates Eaton from most other players is that we actually are experts in everything that goes inside those models, inside those boxes, right? Think about everything we design and manufacture because we do that not only for the models, but we design and manufacture the transformers, the switchgear, the circuit breakers and the UPSs that go inside those models. Then we can and we always do integrate them both in enclosed solutions but also skidded solutions. And many of the companies that talk about model today they are integrators or assemblers. They don't make the breakers or the transformers that go inside, and that's a big difference. So when you have all those elements that go inside the model, like Eaton, this vertical integration gives us the cost position, the lead time control and also supply certainty. If you think about hyperscale and colocation customers, that's what they're looking for. And for the customers, those customers, it means 1 vendor, 1 warranty, on commissioning team, few interfaces and fewer single points of failure. So that's the biggest differentiation between us and other players. And then just to give you a proof point here, Fiber bonds, we acquired them April last year in the first year at $375 million in revenue in the first year of us owning the business, they jumped already to $600 million and margins are accretive to Electrical America. So it's a great business, growing at fast pace with great margins. So we decided to double the capacity we had for fiber bone in their existing sites. They had 1 site and now we're going to double that again with the facility we announced in Arkansas, which comes online in 2029. So if you think about the business we already had before Boyd and the business we have with Boyd, [indiscernible] business only in the Americas, that business is going to reach $1 billion in revenue already in 2026. And just to conclude, let's not forget mother isn't new for us. We invested in Nordic ePod in EMEA in 2024. So we have a partner there. We have a joint venture. And we acquired -- we acquired fiber [indiscernible] in '25 and in Asia, we have multiple partners that we can also work with the modular solutions. And now as you think about the white space, we're going to start exploring as a company. We can take that expertise all the way down to the white space as well. So it's a great moment for us. Thanks for the question.

And our next question comes from the line of Scott Davis from Melius Research.

Paulo, I wanted to follow up a little bit on that and talk about M&A a bit because you've been busy. You just mentioned the fiber bond deal and the partnership with Nordic ePod, the COL that was announced today did Boyd probably some stuff that not even remembering. But seems like you're going down a strategy of trying to fill in some product gaps, perhaps more aggressively than if you look in the history of Eaton I assume that is a strategy, so I'm asking that as part of the question. And are the remaining product gaps, I guess, is the better way to ask it? And if so, do you -- are you guys kind of done with the M&A stuff? Or are you going to be equivalently aggressive over the next 12 months or so.

Well, thanks, Scott. We remain very consistent with what we shared with you in New York during our Investor Day, we would put our M&A dollars to work in electrical and aerospace, and that's exactly what we did. So our pipeline stays active mostly on the Electrical side this time. But let me set expectations to be very clear. I think that's the core of your question. We've already put $14 billion to work in our acquisitions. And as you heard from Dave, we are happy that every acquisition we made is delivering better numbers. than what we initially forecasted. We underwrote for the deals. We have great, great performance for all the acquisitions we made. And we always talk about the organic growth. But if you look at our total growth for the company, incredible 28%. So that's another mark we would like to highlight in Q3, very strong number and better margins, accretive margins for the company. So great moves so far. So for now, I would say the big deals are behind us. We don't see any large acquisitions in the short term. I think is the core of your question. And honestly, we are in this integration phase. We have a lot of organic inorganic growth to deal with right now. and executing on this growth is our top priority. We are executing on it. We'll continue to execute on it. On GAAP, which was the second part of your question, we don't see any gaps in North America. Just look at our data center portfolio. It goes all the way from the grid to the chip. So we don't see any product gap here. Where I would like to scale more if we find the right deal, the right bolt-on will be in Europe and perhaps in Asia as well. And the agreement we just made with COL to acquire this company based in Italy is a good example, he adds this bolt-on adds technologies, capabilities and capacity in Europe to accelerate the organic plans we had in -- on the deck anyways. So -- you should expect more bolt-ons on the logical side. We'll keep this flexibility if something comes along, but don't expect any Boyd sized deal in the next 12 months. I think that's the key takeaway.

And our next question comes from the line of Jeffrey Sprague from Vertical Research Partners.

Maybe a pick up on Boyd actually. It looks like your revenue forecast for Q4 is roughly flat sequentially. And you made the point about it's going to flip into organic can be a growth driver into next year. So just looking at that revenue trajectory, is this particular business, capacity constraints at this point. Do you have new capacity coming on? And maybe give us an early thought on how 2027 may play out in that business.

Yes. So it was breaking up. So I think you are inquiring about Boyd's growth, right, in Q4 next year. So the first thing I want to say is this team is always surprising us on the upside every quarter is the same. And the reason is that they are winning with a number of different platforms. And since they engage early in the design phase, the rent process is pretty smooth. It's not easy. No business grows at the pace they are growing without problems, but they are always ahead of the other competitors. So we remain excited -- so on Q4, I wouldn't be surprised if, again, they beat their own numbers, to be honest, and as we think about 2027, I think that's the core of your question. We see at least a $2.7 billion business for next year, which is roughly 50% growth over our previous 1.8% guide. So strong growth once again. They have the design wins they have, the orders and the backlogs to sustain that. And we're really excited to keep winning on new platforms or things that are going to come live '28 and beyond. So strong performance, winning new business and ramping at speed. So we are confident here.

And our next question comes from the line of Andrew Buscaglia from BNP Paribas.

I wanted to touch on what caught my eye this quarter. Electrical Global accelerated 27%. So that's last quarter, it was up about 18%. So I'm wondering what's beyond that step change? And then should we assume the segments now kind of entered in an elevated growth base?

Yes. No, thanks for the question. I'm glad you raised that point because this segment really, really surprised all of us on the upside this quarter. But all the actions behind that growth were delivered. It was not an accident. So if you look at the growth rates of this business, we started Q1 at 9% and then Q2, 18% growth and now Q3, 27%. So incredible progression here. And just to remind you, the last question I got from Jeff Sprague was on Boyd. Boyd is not included in those numbers. So Boyd, actually adds 31 points of growth to a total of 58% growth and will become organic in March '27. So I think if you look at the legacy Electrical Global business we have is accelerating specifically across the complete portfolio and Boyd adds significant organic growth on top of it. So a really exciting platform. I'm going to go to the sustainability of that growth in a minute. If you cut this growth and you look at the growth regionally, business by business, I will lead with the affirmation that every business inside Electrical Global did the work. APAC led with a fantastic almost 50% organic growth guys in EMEA both grew around 20%, which is clearly ahead of the market. If you think about this Asian performance, we are bidding local players on growth. And in Europe and Asia, we are winning with the same hyperscale customers and multi-tenant customers we serve in North America, which is great news. They want us to be successful with them everywhere they built. We talked about that in the past. Now the reality is here to prove us right in that case. And then if you -- I made the cut by business, if you cut by end market and you look at the performance by end market, -- also a very strong performance. Our data center business grew almost 100% in global, so 97% and machine OEM 29% and utilities 21%. So really broad-based here as well. So with that in mind that every business is doing well and every end market is doing well, we believe -- we truly believe this electrical global business has entered what we call a sustained growth phase and the order book sustains that with our orders are up 51% on a 12-month basis. So that gives us the confidence. And if you look at the backlog as a result of that, even with the strong organic growth, they more than doubled the backlog in a year-over-year basis. And even if we exclude the Board backlog, I always get that question. It's still 76% up. So everywhere you look, end market, business by business, [indiscernible] with [indiscernible] see it come to the same conclusion. So those drivers, in our opinion, are structural. They are not cyclical. And again, didn't happen by accident. We restructured Europe well ahead of this demand. We were early. We are adding capacity in Asia we are focusing on winning share and not looking at PMIs. That's the way this team is wired. They really want to win, and we want to grow faster than the market. So let's not forget, once again, Boyd will add to that when it becomes part of the organic and just to conclude, we are rigorously applying our strategy, the 3 pillars of our strategy here in the global business. And we are all proud of this team because we believe we turned this segment into another high-growth platform for Eaton. So we continue to deliver the strong growth moving forward, and we keep expanding margins for Electrical Global.