Good morning, and thank you for standing by. Welcome to the second quarter 2023 Hubbell Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. 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, Vice President of Investor Relations. Please go ahead. Thanks, Michelle. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing the results for the second quarter of 2023. The press release and slides are posted to the investor section of our website at hubbell.com. We're joined today by our Chairman, President, and CEO, Gerben Bakker, our 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. 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 consider it incorporated by reference into this call. Additionally, comments may also include non-GAAP financial measures. These measures are reconciled with 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, everyone, thank you for joining us to discuss Hubbell's second quarter 2023 results. Hubbell delivered another strong quarter of financial results. Our favorable position in attractive markets enabled us to achieve 6% organic growth, which combined with improved productivity and supply chain dynamics, to drive significant and margin expansion in the quarter. Solid execution through the first half of 2023 and good visibility to continued strength in our businesses, give us the confidence to raise our full-year outlook again this morning. In addition to the strong financial results, we continue to improve our service levels to customers. Hubbell's investments in capacity, innovation, and supply chain resiliency are enabling increased sequential output and improved lead times. Looking ahead, we expect grid modernization and electrification to continue to drive elevated demand for Hubbell's critical infrastructure solutions, both in front and behind the meter. We will continue to make the investments into our business to support this growth in the second half of 2023 and beyond. Before I turn it over to Bill Sperry to give you more insights on the performance in the quarter, I would like to introduce our two new segment Presidents. You will recall from our press release a few weeks ago that we announced Allan Connolly's retirement from Hubbell after 10 years of leading Aclara, and in recent years, our combined Utility Solutions segment. Allan's strategic vision and passion for innovation played a critical role in accelerating the segment's organic growth profile, and I'd like to thank him for his many contributions to Hubbell, as well as strong financial performance for our shareholders. I'm excited to share that we've appointed a very talented successor in Greg Gumbs to lead Hubbell Utility Solutions moving forward. Greg has a strong track record of leadership and performance in the utility, electrical, and automation industries over his career, and his skill set is well-suited to help us further our growth ambitions across utility components, communications, and controls. I've gotten to know Greg over the past year and believe he will integrate quickly and effectively within the organization. His focus will be on driving profitable growth by building on a strong core foundation while innovating and expanding in attractive adjacencies. I'm also excited to announce the appointment of Mark Mikes to lead Hubbell Electrical Solutions. Mark is a long-tenured Hubbell leader with a proven track record of performance and operational execution, most recently in leading Hubbell Power Systems. The strong results of that business over the last several years speaks for itself. Some of you will know Mark Mikes from our investor days over the past few years, he was a key partner to me when I led the utility business. He played a critical leadership role in our efforts to unify a broad portfolio of acquired utility businesses under an integrated business and Hubbell Power Systems, organized to compete collectively with a simplified operating structure. As we continue our multi-year journey to execute a similar playbook in HES, Mark Mikes is well suited to drive sustained improvement in the segment's long-term growth and margin profile. Both Greg Gumbs and Mark Mikes are well supported by experienced and talented leadership teams, I am confident they will continue to execute on our core strategy together and deliver consistently differentiated performance for our customers and shareholders. With that, let me turn it to Bill Sperry here to walk you through the financial performance in the quarter. Thanks very much, Gerben. Good morning, everybody. Thanks for joining us. Congratulations to Greg and Mark. On a personal note for me, very, very excited to partner with both of you as we drive to future success with Hubbell. They're both off to excellent starts in their new responsibilities. I'm going to start my comments on page five of the materials that you hopefully grabbed. It's really just a summary of the very strong financial performance in the second quarter. Most of the compares we'll show you in this deck are against the second quarter of prior year of 2022. We find it instructive also to look sequentially to the first quarter of 2023. I think that we see a lot of continuation of the positive trends that we experienced in Q1. Things played out quite similarly in the second quarter, to a 6% sequential top-line growth and a point half or so of margin added. A lot of the same themes that you'll remember from our first quarter call. You see sales at $1.37 billion, 9% growth, with 3% coming from acquisitions, 6% organic. The organic being driven primarily by price, which is a theme, again, you guys saw in the first quarter with us, going back to last year. OP margin reaching the 22% level, a very attractive level, nearly six-point improvement over last year, really a result of the price cost being favorable, as well as some productivity from the supply chain normalization and some of the efficiencies coming with that. Earnings per share above the $4 level, also very attractive, 45% growth rate. That increase in earnings resulting being driven by the sales growth and the margin expansion at the OP level. Free cash flow of $192 million, really driven by the strong net income growth. That number is absorbing continued investment in CapEx and working capital. I think that we're very pleased with this cash flow. It's allowed us to strengthen the balance sheet. You look at the balance sheet at the midway point here of 2023, you've got nearly a half billion of cash, about $1.4 billion of long-term debt. Our net debt to EBITDA, you know, being less than one, we think really positions our balance sheet to be supportive of being in an investment profile. We think that can come both in the form of CapEx, OpEx, as well as acquisition. On the acquisition front, very pleased to announce, in the second quarter, we were able to close our acquisition of Electro Industries. A very typical Hubbell-sized bolt-on of $60 million. It fits into the utility segment. Products are in the distribution automation area of sensing and controls, power quality, metering. Fits very well with other products of ours in that space. We welcome our new associates from Electro to the Hubbell family. I'm gonna switch now to page six, which lays out our performance in this bar chart format, and we'll drill a little bit into each item. The sales growth of 9%, we said 3% acquisition, 6% organic. The organic is really all price. Volumes were down slightly overall as Electrical volumes were down and partially offset by the growth in Utility volumes. We'll talk about each segment in subsequent pages a little bit more. The acquisitions from three points came from two major contributors, one from each segment, and I think good reflection of our intentional investment strategy. On the electrical side, contribution comes from PCX, which was a data center, acquisition we made. We just passed our first anniversary of owning PCX, off to a great start, growth and margin-wise. On the Power Systems side, Ripley Tools, very good extension on the component side for us for Power Systems. Again, good signals of how we intend to deploy our capital here. On the upper right, you see operating profit up 47% and above the 22% level. Price cost, really the biggest driver there. Interestingly, both levers contributing to the margin expansion. I think you've seen our price story play out over the last couple of years or so. Also this quarter, we had material costs flipping to a tailwind, so actual deflation in both the raws and our component costs there, helping drive strong margins. We believe our pricing success has been driven by our differentiated service levels. We get consistent feedback from our customers that we're outperforming competitors in that regard, that continues to inform us as we continue to invest. We wanna push that differentiated performance and make sure we're able to support those pricing levels, continue to make our margins durable and truly emerge from the pandemic as a more profitable company. Besides price cost, there also was productivity. I think we're finding that our factories performing better in 2023 than in 2022. Really, as supply chain is normalizing, we're getting a lot of those inefficiencies we experienced last year to be ironed out, and that's helping drive margins for us. We don't think they're all the way back, certainly a contributor. On the lower left, you have earnings per share. Again, the $4 level and a 45% increase, really all Operating Profit driven. Below the line was a slight drag as taxes were up just a little bit, but that was partially offset by a decline in interest expense, really net interest expense, as our cash, I mentioned, we are up to close to $500 million, and that cash is actually starting to earn interest income to help offset the expense. On the lower right, you see free cash flow. This page depicts the three months of the second quarter, up 14% to $192. I find a little more instructive to widen the lens and talk about the first six months, where we've got $272 million of free cash flow, which is more than a doubling of what it was last year. That's been absorbing a higher CapEx level. Our CapEx for the first six months of the year is up about 2/3 from what it was last year to almost $70 million in the first half, as well as an increase in working capital investment as we continue to need the inventory to support our customer service. I think given the fact that we're investing and increasing the cash flow, shows a good relationship there. Let's unpack the performance by segment, and on page seven, we'll start with Utilities. Utilities has really been the engine of the Hubbell enterprise financial performance of late. We think really a leading business model, unique positioning across components, communications, and controls, and very worthy of continued investment, as we'll discuss a little bit more later. On the sales side, you see 14% increase to $831 million. That's comprised of one point from acquisition, I mentioned Ripley Tools before, and 13% organic. That organic is comprised of roughly double-digit price and low single-digit volume increase. We believe we've got really nice end market demand construct here, and it's really complemented across the two segments we're talking about here, the two business units between the transmission and distribution components growing at 13%, and the comms and controls growing at mid-teens. That comms and controls piece is the Aclara, largely the Aclara business. I think most of you following it will remember they've been held back by a shortage of chips over the last year and a half or so. As we saw easing of that chip supply in the second quarter, and for us, we got our comms business out of the gates first, and they had a really strong second quarter. We see because of their supply now, they had a nice backlog of demand from their customers, and with the supply chain improving on the chip side, we see a very good second half for the comms. That happens to be a nice, a very attractive gross margin business, so a very mixed friendly development. The meter side is we see exiting the quarter with the same kind of supply trend. We think meters will have a good second half of visibility as well. I think good news to see the comms half kind of returning to not being held back by the supply constraints. On the Power System side, you know, you've seen that over the recent quarters, really having strong growth. I think you'll remember last quarter, we showed you a chart that had a three-year review of orders and shipments, and that chart essentially showed a relentless buildup of backlog over that timeframe that was starting to peak at the end of that period. And as we discussed then, the orders were reflecting, yes, strong demand, but they were also reacting to the shortage of supply and the need of our customers to be ordering farther ahead in order to keep themselves stocked. That obviously was not sustainable, and especially in light of improving supply chain and shortening of promised delivery dates. As we've seen those lead times start to normalize, I would say in two particular segments of the components area, we've really started to see customers adjust their order pattern to reflect the fact that they can work off of inventory and can moderate their order pattern until that inventory gets to the proper levels. That's both the distribution side of Power Systems, as well as the telecom end market. Both of those have very attractive backlogs, so we'll be navigating a period of using the backlog as those order patterns adjust. As Gerben Bakker had mentioned, in raising our guidance, we feel it that we've got the momentum to clearly carry us through the second half of the year. On the right side of the page, you see the operating profit story. You know, just a very impressive performance of 70% increase, north of 25% margins, really good price cost there, improved productivity. The factories are getting rid of some of those prior year inefficiencies. I mentioned the mix with Aclara has been quite favorable. We are investing on the OpEx side as well as the CapEx side. We anticipate increasing those investments in the second half. We'll talk a little bit about that on the next page. Page 8, we wanted to highlight for you the transition space. This is kinda defined more narrowly as transmission. We often lump in substation here, but this is kind of the more narrow transmission piece, smaller than the distribution side of the components world, but nonetheless, a really critical area to enable the grid modernization, hardening, electrification, and really getting renewable generation to the point where the user is. We think the trends here are very attractive. We see long-term growth rates in the high single-digit range. Right now, we're seeing, in contrast to what I described in telco and distribution, we're seeing orders and quotes up over 50% over prior year. We think there's some support here from stimulus packages, from government policy, where IRA is helping spur development through the provision of the tax credits versus the IIJA providing harder funding dollars to really spend on the project. We think really nice growth dynamics in the area. We also think that we are really well positioned. We feel we have the best depth and breadth of products, quality, and reliability. We also feel help in the problem-solving and design area plays to Hubbell's strengths, and ultimately, to help with the complexity of getting material to these projects, I think there's a tendency to want fewer suppliers. That plays very well to our positioning. We feel very well positioned in very attractive markets such that we'll get our fair share, and at the point where that's gonna require investment on our part to help support our customers. The graph is of the total Hubbell enterprise CapEx, but you see over couple years, a very strong increase in that capital. On the electrical side, it's going a little bit more to productivity, and on the utility side, I'd say it's tending more to the growth side. I'd say the distribution part of utility was earning the early CapEx raises, and now we're starting to shift our focus on to T&D. You'll see we've put a little plus sign to the right of the 160. As those dynamics play out over the second half of the year, I don't think we would shy away from investing even more if the dynamics require it. So we have attractive growth, we're well-positioned, and we're prepared to invest to earn, you know, more than our fair share. You know, as we map out these projects, they have excellent ROI when you just analyze the financials. I also think it's a really good way for us to continue to differentiate our customer service and solutions that we provide to our customers, which ultimately helps support the sustainability of our utility margins to last, you know, just beyond a big quarter. That kinda underlies one of our rationales for continuing to wanna support our customers in a differentiated way. Page nine is the electrical segment, you can see 1% growth year-over-year to $535 million. That's also 6% sequential growth, a little bit better than typical seasonality there. The acquisition of PCX that I had talked about added five points. The organic was actually down four, that included a mid-single digit of price. From the market's perspective, the industrial end market's showing a strong demand. I think the reshoring trend is providing strength in U.S. manufacturing, oil and gas, steel and transportation, all being strong contributors to growth for us. The verticals that we focused on between data centers and renewables been very successful growing there. In the more commercial arena, you know, we're seeing similar, as I described, in the Power Systems, where the T&D and the telecom customers were starting to adjust their order patterns. We've seen that, in our Electrical segment, on the more on the commercial side. The customer anecdotes are suggesting that their days of inventory are getting in line with targets they have, and therefore we may be, we think, nearer to the end of that adjustment period. Our expectation is second half will be a little more balanced between book and bill. On the OP side, on the right, you see an improvement of 12% growth. It's obviously not the volume that's driving it. The price cost has been very positive, and the productivity has been good right there. I think it sort of points out, you know, where Mark is gonna be focused with us as he takes over this segment. He was incredibly successful on the power side, bringing together multiple brands and multiple acquisitions to compete collectively as a business, and I think he'll be able to help us do the same inside of the electrical segment. We'll continue to support Mark in acquiring higher growth, higher margin businesses. We're gonna be focused on innovation, where new product development should come in at higher margins. The vertical focus can help us pull a lot of balance of system product into high-growth areas and continue to focus on that productivity, and try to again, make those margins durable as we go forward. That's the financial performance in the two segments. I'll give it back to Gerben to share with you know, how that affects our outlook as we stand here at the halfway point. Great. Thank you, Bill. Moving to our outlook, Hubbell is raising our 2023 outlook to an adjusted earnings per share range of $14.75-$15.25, representing approximately 40% adjusted earnings growth for the year at the midpoint. We continue to project total sales growth in the range of 8%-10%, with 7%-9% organic growth. Our improved outlook is primarily driven by improved visibility to second half margin performance, as we expect to sustain favorable price cost and continue to drive productivity across our businesses. We're also accelerating our investment levels in the second half to increase capacity for future demand in areas with visible longer-term growth, drive higher productivity, accelerate innovation, and enhance supply chain resiliency. These investments position us to execute effectively across each of our strategic pillars, which are to serve our customer, grow the enterprise, operate with discipline, and develop our people. I'm confident that our strategy will continue delivering strong results for our stakeholders in the second half of 2023 and beyond. With that, let me turn it over to Q&A. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. As a reminder, please limit to one question and one follow-up. Please stand by while we compile the Q&A roster. The first question comes from Tommy Moll with Stephens. Your line is now open. Good morning. Thanks for taking my questions. Good morning, Tommy. Morning, Tommy. Gerben, I wanted to start with a discussion of the utility outlook. Last quarter, you highlighted the transmission and distribution space as a mid-single-digit grower, maybe even higher next year with the stimulus contribution. Today, you highlighted a piece of the transmission market as a high singles grower. Talked about needing to accelerate investment at Hubbell in preparation for next year. If you roll that all together, is there to think that utility shouldn't be up mid or maybe even high single digits this year? Maybe I'll make a couple of comments, Bill, I'm sure will help me with this as well. You're right to point out the comments of what Bill highlighted in transmission. It's an area that we've seen elevated investment of many years. It's probably one of the earliest areas where we really saw utilities starting to invest in with renewables and the integration of the interconnection of the grid. You know, we have visible signs of that continuing to grow. It's the reason why we're so optimistic about this business. I still believe if you add it all together, you know, to count on mid-single of this whole market is the right way to look at it. Certainly, we're optimistic, and that's why perhaps we made that comment, is to say mid-single digits. You know, there may be times or pockets where we cannot grow that. Bill, maybe you have something to... I don't think I would add a lot. I'd say, Tommy, you know, the mid-single digit long-term outlook, is reflective of how we feel. We're getting really good, ROIs on these projects. We're gonna continue to invest and grow with our customers. Shifting to electrical. qualitatively, it feels like the commentary is about the same as last quarter, but I'm just curious if anything's gotten better or worse there. Bill, you referenced the destocking as potentially, shifting to a rearview mirror item by the back half of this year. Any additional detail you could provide there would be helpful. Maybe any insight you have into the sell-through? I think- would shine some light. Yeah, I think that, you're right, that it felt quite similar to the first quarter, seasonal sequential growth. Even without volume, we're sort of happy that they're expanding margins. Some of that productivity work and the price cost work is paying off. I think, you know, as we spend, for Gerben Bakker, we spend time with CEOs and leaders of our top 10 customers throughout the year. You know, I think when we were talking to them last year, they all used the word, "We have too much inventory," and when we meet with them now, they sound like they're much closer to their target inventory levels. For the data that we do have, point of sale, add, it feels like what we're providing is getting sold. It just... You know, as we've gone through that adjustment, it does just feel like we're, quote, closer to that being in balance. Those are specifically comments to the electrical segment. I think on the distribution and telecom side, on utility, we're sort of maybe earlier to the middle of that side. Maybe they've been the two segments, Tommy, were maybe spread out a little bit on customer response. Thank you both. I appreciate it, and I'll turn it back. Please stand by for the next question. The next question comes from Josh Pokrzywinski with Morgan Stanley. Your line is open. Hi, good morning, guys. Hey, Josh. Hey, just wanna dig in a little bit on, commercial construction. Sounds like, you know, I guess the tone in the, in the slides is, you know, moderating or moderate. Data seems like it's softening up perhaps a bit more. I'm just wondering how much of what you guys are seeing right now is more of a timing function, or I guess, prospectively, you're talking to your distributors, does this seem still more, I guess, steady as she goes here for, you know, for maybe the next, you know, few months, few quarters? Yeah, I'm not sure exactly if you were making a statement or a question. I would say for us, you know, the commercial side, you know, we reduced our exposure to commercial pretty dramatically as we sold our C&I lighting business. We have a balance that we would describe, Josh, as being, you know, more exposed to some of these specific verticals like renewables and data centers. The balance of commercial, you know, is where we were kind of going through this adjustment, where Our lead times are now, you know, they were out at, I'd say, Gerben, towards the 50-week range, and they're now down to two-three weeks range. That's had, you know, an impact, we think, Josh, ultimately on how our customers have been ordering for us for the past couple of quarters. That's been affecting, as you see, the unit volumes, you know, that we're shipping. It does just feel like that adjustment period on Electrical, and we're getting a little bit closer to the balance point. Got it. Just to maybe follow up on the M&A environment, you guys, you know, noted a, you know, kind of a typical Hubbell deal here. Are you seeing, I guess, the acquisition environment or multiples start to increase with kind of this broader appreciation for electrification? I guess, maybe as a subpoint to that, if they aren't really increasing, would you consider levering up a little bit more to just consolidate some of these assets, you know, with maybe a bit more value disconnect? I think it's two parts to that question. You know, the first is M&A market. It is interesting, Josh. There are more assets coming to market than we typically see, and there's more assets kind of above this little average $60 million tuck-in that is quite typical for us. I maybe feel that is in response to owners figuring this is a good time to get a good valuation, and I think we see competition in those processes. It's interesting, you know, the acquisition finance market is a little bit different, right? You have higher interest rates, and that's kind of affecting how some financial buyers, you know, approach the market. We are seeing a little bit more assets kind of in the pipeline, which is interesting. I think your second question is around the balance sheet, and I think we do view that as a major strategic asset right now. We feel we can certainly invest aggressively. You know, PCX is an interesting one, I think, because you were specifically asking, you know, about multiples. If we were buying PCX, you know, in the 12x, 13x range, we've had it for a year. It's both grown really impressively, and the margins have done better because of what we do with it, and we find that we own it, you know, in the single digits. I think part of your question was, a higher multiple, we think can be justified, given the growth and margin potential of some of the businesses that are being put in. I'm hoping not too many investment bankers are listening right now, but I do think there is probably some upward drift in multiple as a result of what you're asking. Maybe to add to it, maybe the resource capabilities to be able to go at a faster pace. I'll make some comments on and, you know, as I look across the two segments, I would say the GMs of the businesses are more involved than ever in this process, partially helped by the operational discipline that we put in place over the last couple of years. We've added resources to both of the segments of individuals focused on M&A, and, you know, that's obviously complemented by the enterprise resources. I'd say, you know, not only is the pipeline fuller, but our resource capabilities to pull some of this off is better. I would expect that to be a good contributor for us going forward. Got it. Appreciate it. Best of luck, guys. Please stand by for the next question. The next question comes from Nigel Coe with Wolfe Research. Your line is open. Oh, thanks. Good morning, thanks for all the details. A couple of questions from me. One is on the electrical segments, and you obviously talked about the inventory. Sounds like there's a bit more visibility on that. Are you seeing any differentiation between some of the smaller distributors out there and some of the, you know, the larger national players? Are you seeing the bulk of the inventory coming out of the smaller players? Then, you know, within that, you know, are you seeing any big difference between sort of core components and lighting? I'm sorry if I missed that in your prepared remarks. Yep. Maybe I'll start with the inventory on the distributors. It actually, it's maybe a little bit anecdotal, but also a little bit from inside, I would say, is the smaller distributors probably have felt less pressure to reduce inventory than the larger distributors, particularly the public companies. We saw that actually when the pandemic started, that those may have actually been heavier on the inventory. They've kept those longer in place, really, to serve customers. I think the largers are probably been a little more disciplined in, you know, adjusting their inventories to the market when the pandemic started. Now, again, adjusting after they've been bloated because of the supply chain constraints. I would argue it may actually be the opposite, Nigel. Oh, okay. That's interesting. Then on lighting, any sort of differentiation there? On lighting, Nigel? Yeah. I mean, lighting, I'm just wondering if that was disproportionately negative in that month for? Yes, sorry. The resi piece that we still have did have significantly negative volumes. They were impacted on the top line that way. Interestingly, the productivity, like we described, some of the supply chain normalizing, one of the biggest drivers for that resi business has been the transportation cost. It's an imported product from Asia, and those container costs have really gone from a pandemic gapped out container cost up in the mid-teens of thousands of dollars back down to $2,000-$3,000. That's really, despite the volume drop, allowed that resi business to earn a margin again. They kinda have two big crosscurrents there between volume and cost structure. Oh, interesting. Just my follow-up is on the transmission capacity investments. You know, we don't normally think of Hubbell as a transmission player. Maybe just remind us, you know, where you play in transmission. I remember you used to have that high voltage test business, but maybe just remind us on where you play and how big that business could be? The product line, is, the traditional like... if you're driving on a highway and you look up at one of those steel towers, and you see the insulators up there and the hardware up there, that's the part, you know, where Hubbell plays. Right now, if you exclude the substation, which we usually kind of lump in, you know, we're talking in the ballpark of $200 million of exposure for Hubbell. In the kind of 10%-ish range of the segment, a larger percentage of the kind of components piece. You know, we see that it could be an area of, acquisition investment, certainly capacity investment. Again, I think we see organic growth there, Nigel, certainly in the high single digits for the foreseeable future, for that, and continues to be a supply-constrained, you know, environment versus demand, just because of all the, I think, the drivers for hooking up to renewables and potential, interconnects between FERC regions, et cetera. Okay. Thanks, Bill. Thanks again. Yep, thank you. Please stand by for the next question. The next question comes from Joe O'Dea with Wells Fargo. Your line is open. Hi, good morning. I wanted to start on utility and just, I mean, you've talked about service levels being a differentiator for you. As we do see supply chain improving, you're just curious whether or not you're seeing some of those differentiation opportunities diminish a little bit, and maybe any sort of anecdotes as even when we get to sort of a normalized supply chain environment, where that service will remain a competitive opportunity for you? Yeah, I mean, it certainly during the pandemic, it's based on what customer have told us, we have outperformed. I would even go back to say service and quality have been absolutely core. When I ran that business, I mean, that I would hammer that, you know, day in, day out, week in, week out, 'cause, you know, I always saw that as a differentiator, right? On price, you can make a decision overnight to compete on a different level. Quality and service, that's a lot harder. You know, that proves during, you know, hurricane event, ice storms and pandemic. We again, you know, outperform. You're right to point out, as the supply chains recover, you know, you see, you know, others in the market, improving and, you know, getting closer again to, our levels. I would also say, you know, During this period, we probably gained some share. Once you have that hard to give up, you'd have to actually underperform again. I'd say, you know, we're able to hold on. You know, to continue to outperform on that level requires then us to just raise the bar. Part of the investments that we're making, part of what Bill talked about, investing in capacity and transmission, that allows us, when the demand is up, to continue the service. Being ahead of that, and we feel we are ahead of that, continues to allow us to raise the bar on servicing, and it's a differentiator. Then I wanted to ask on the deflation comment, where you're seeing it in both raws and components? Specifically on the components side, is that a function of efforts that you are making and going to market and any supplier consolidation that's translating to some of it? Or is it, you know, something that you're seeing broadly in the market on component deflation? Then related to that, I mean, historically, when you do see some of it, you know, what would generally be the lag time before you would start to see that filter into the conversation around price? My comments were around the sum of raws and components were a tailwind. I don't know, Dan, if there's a specific comment that components are behaving any differently. I wouldn't say it's the result of us doing something different. I think that's just kind of market pricing and reaction. It's interesting how you're describing the relationship between material cost, and Dan had a page, I think two quarters ago, that did a nice job of showing our cost structure being about 50% driven by raws and material costs, and the other half being labor and overhead and burden and other items. Usually, I would say our paradigm is to have price, you know, offset the material cost and our productivity initiatives to offset inflation in the non-material areas. What you're asking, usually, you know, if we were to see inflation in materials, so I'm going back three years ago and earlier, you know, it would take a quarter or 2 for us to get the price kind of into the market to offset that. That was kind of a lagged hedge, if you will. I would say the last two years, the pricing has been driven by lack of capacity, you know, rather than necessarily by cost. Connecting back to Joe, to the first question, you know, service is kind of a relative question, right? You're trying to outcompete somebody else, and it just feels to us like we're leaning in on the investment. I think we're finding this to be... Utility space, to be really core part of Hubbell's identity sort of leading into that maybe where maybe others might be a smaller division of a larger diversified company. That's helpful. Thank you. Please stand by for the next question. The next question comes from Steve Tusa with JP Morgan. Your line is open. Hey, guys. Good morning. Morning, Steve. Morning. Congrats on another good quarter of execution. Thank you. Thanks. Can you just give us a little more up, I joined a little bit late, so, if you already gave it, then I can just go back to the transcript. Have you guys given the just price cost absolute numbers now, what you expect for the year and what that would be kind of in the fourth quarter? You know, this utility margin is obviously very strong. Any updates on kind of how you feel about exiting the year and into next year with this, you know, type of margin level that's now, like, comfortably into the, into the mid-20s? Yeah. Let's start with price, Steve. We talked about it, being, you know, more than all of the organic for the quarter. You're talking about eight points, roughly, of price in the quarter. You know, we're getting to the point where, you know, we're not pulling a lot of price, you know, in the last quarter, so we're sort of riding out and lapping the previous price increases. One of the things that you'll see in our second half, you know, as you squeeze the second half expectation that's embedded in the guide, is the fact that price starts to moderate a little bit in the second half. The, the cost is a little bit harder for us to predict, but it just looks like that dynamic, you know, will kind of on a year-over-year compare basis, just start to narrow, just a little bit. It gets to your utility question is related to that. I think we, you know, we're going to be doing some more investing, just incrementally in transmission in the second half. We're going to be investing in areas, like, supply chain resiliency, and, innovation continues to be an area of focus. As we get, I think, to our third quarter call with you all in October, we'll maybe start to have a better view of what some of our expectations into 2024, you know, will be. I think by the fact that you saw us raise our guide, right? If you go to our mindset in April when we raised our guide by $2, we were describing having some second half conservatism because we just weren't sure what to expect. I think by our raise of $1.75 midpoint here to midpoint, you're hearing us say we actually see momentum that gives us better visibility in the second half, and some of that caution has been taken away. I think maybe now you're extending that six months and saying, as you end the year with the momentum that you've got, you know, ultimately, how will that appear in 2024? You know, we'd really like to make those margins as durable as we can, Steve, and we're going to do a lot of work to try to do that. We'll be talking more about that, obviously, over the next call or so. Yeah. any. Go ahead. Go ahead, Steve. Any mix impact from the, you know, you're now kind of more bullish on transmission. I guess that I view that as kind of like a bit more of a mid-to-late cycle dynamic, as you come off the bottom in these T&D cycles. Distribution's a little bit, you know, smaller ticket projects, maybe, perhaps. Is there any, you know, kind of mix impact from the handoff to transmission that we have to keep in mind? No, I think I agree with you that the D is smaller projects, the T are bigger projects, but our margin profile is actually reasonably consistent across the two, despite that difference. You know, we did see a mixed benefit in the second quarter from Aclara comms kind of outperforming, and so that's sort of interesting to watch that trend. Just their gross margins are high as part of relative to our portfolio. If we can get some good momentum behind that could be an interesting mix contributor. Great. All right, thanks. Thank you, Steve. Yep. Please stand by for the next question. The next question comes from Chris Snyder with UBS. Your line is open. Thank you. I wanted to follow up to some of the commentary in the prepared remarks about customers on the utility side changing their order patterns. Should we take that to mean that orders for utility were down in the June quarter, and did the backlog come down alongside that? Did that have any impact on Q2 revenue, or is this, you know, won't hit revenue for a bit longer just given backlog still elevated? Thank you. Yeah, Chris, the orders were down in utility. As you noted, the backlog is there, and that gives us enough backlog, not just to support the second quarter, but we view there's enough backlog to support the second half, which is really the underpinning of our guidance raise, is the confidence that comes from that. I think it's just that adjustment period to us confusing our customers with really long lead times as the supply chain was impaired. Now that it's recovering in many places, they just really don't need to be ordering as far out, and we're just going through that adjustment period right now. I think the really, the important part, because this for a period, as they adjust it makes it hard a year-over-year. If you think back of last year, during the first half, our orders increased over 50%, you know, and within a quarter, 70%. Even then we said, "You know, that's just not a sustainable level. That's not a reflection of real demand at the time, that's lead times, going out." Those are the comps to which we now compare. Even when orders are down, it's, you know, still at a, you know, very elevated level. Our backlog in utility came down very modestly last quarter, and it's still well above historical levels. The other thing I would say, it's very much time to us taking our lead times down. It's in the areas where we're taking our lead times down that we see this adjustment. It's all as we anticipated, and I would say pretty predictable. Yes. No, no, I really, really appreciate that. Thank you for all the color. When we kind of look at the guide and, you know, the company is guiding, you know, utility margins lower in the back half than the first half, but still obviously at really, really strong levels. When we think about that first half to second half decline, you know, is that just a function of price being held and costs going higher on the raws and the components? Is it mixed maybe from the Aclara installations coming back? Is there some, you know, expectation that maybe price will have to be given back in some capacity just because, you know, that's like supply chains are recovering, and there's not the same urgency to procure that there was a year ago? Thank you. Yeah, Chris, we're not anticipating giving price, as we go, you know, year-over-year, we are anticipating that price cost to be a little narrower. You know, we did have some mixed richness in the second quarter, and we are anticipating increasing our investments on the OpEx side inside of the segment. That all is contributing, as you say, a high level of margin, just kind of off of a nice comp there. Thank you. Please stand by for the next question. The next question is from Christopher Glynn with Oppenheimer. Your line is open. Thanks. Good morning, guys. Morning, Chris. Curious about utility's kind of capacity to run fixes and upgrade and modernize on the distribution side. Is there anything in terms of plateauing in their ability to consume the products you sell? I know it's kind of a mixed sort of question against the dynamic of the lead time adjustments, but hopefully I asked clearly enough. I mean, I think that, I think what you're maybe getting at is, are installers some form of constraint? I think inside of utility, there is some degree of that. You can't just add, but there are outsourced companies that are good at adding, you know, basically adding installer capacity. I think the need from the infrastructure is there, Chris, and, you know, from, you know, being able to put, you know, mid-single-digit units hang more, I do think that ultimately, that's what our expectation is. Okay, great. On the Aclara, you referenced the gross margin mix favorability, and I think total margin favorability. You know, at one point, we consistently thought of that as dilutive mix within the utility segment, and then we haven't had a clean read through the pandemic and more extended semiconductor dynamics there. Just curious what changed there, that we're talking about Aclara as mix favorable now? Yeah, because, you know, your first comments were, you know, as they were volume-constrained with chip supply disruption, you know, they were sitting there absorbing all the overhead, right? It was kind of a lower margin profile. I'm now really speaking to the incrementals of the comms inside of Aclara, which, you know, I'm sort of cheating and using gross margin as a proxy for that being quite attractive on the incremental side. I think all we're doing is talking about at a constrained volume, absorbing overhead, you know, not as profitable. Now, as we add in a high-gross area, you know, the incrementals are attractive that way, if that makes sense. Great. Yep, thanks for the clarification. At this time, I show no further questions. I would now like to turn the call back to Dan for closing remarks. Great. Thanks, everybody, for joining us. I'll be around all day for questions. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.