Move on with Hubbell. Joe Capozzoli, CFO, and Greg Gumbs, who runs the Hubbell Utility Solutions business. A great one-two punch here from finance and a real growth business right now in utility. Maybe just, Joe, talk about the near term. You guys are mostly U.S., but I'm kind of just getting the Middle East vibe from every company and what you guys are seeing, if there's anything on the radar from that perspective. Then just kind of a standard update on anything you're seeing quarter to date in fundamentals.
Sure. You know, very heavy U.S. presence as you pointed out there. Limited exposure to the Middle East. A little bit of supply that comes out of there, aluminum. The shipping lanes impact us and ocean freight, things of that nature, tentacles. It's pretty limited, you know, for us overall. Generally-
Are these, t his mic. Maybe you wanna just get a little closer to the mic.
Test. Can you guys hear us? Okay, great.
So, um-
Is that better, Scott?
Okay.
Overall, a strong fourth quarter exited 2025. What we had seen, a really nice inflection in our incoming orders, primarily in our utility T&D business, which delivered a strong fourth quarter, was a good setup to begin this year. We've seen some really nice momentum from that incoming order rate, utility T&D, data center, light industrial. That momentum has carried on nicely into the first quarter. Overall, a nice solid start to the year, and very much in line with how we had provided our outlook about a month ago. I'd say not a whole lot is new since then, given a little bit of incremental inflation that we saw in the beginning of the year, metals. We talked about some of the geopolitical conflict and a little bit of inflation there.
Overall, nothing that we can't manage. We did go out with a first quarter announced price increase that'll click in the second quarter, and something that'll be very important for us just in managing price cost, productivity over the course of the year, so.
What's the magnitude of that price increase, and is that kind of your normal? Well, I guess normal is a relative term these days. How does that cadence compare to what you've done in the past?
Yeah, I would say it's consistent with the multiple waves of price increases that we rolled out last year as we were addressing inflation. We came into the year with about 2 points of wraparound price, and with some more of that inflation settling in in the first quarter, maybe there's another point or so that we add to that, to the year. Overall, feel pretty good about navigating this year.
Is that incremental price, do you target that to be, margin neutral, dollar neutral? Just remind us. I mean, the accounting's changed a little bit, so, how does that, you know, filter in ultimately to margins and the bottom line?
We're going after dollar neutral or better, and that typically, very mathematically, will have a little bit of a drag on the margin, but we're very focused on the dollars.
As far as the other parts of the portfolio outside of, you know, T&D, just general industrial economy, what are you seeing there? Normal seasonality, a little bit better, a little worse? What, how does the general economy outside of the growthy areas feel to you?
It's been solid for us, in particular across, broadly across industrial. Light industrial is a little better for us as we define it versus heavy industrial. Heavy industrial's been soft for a couple of years. A lot of that exposure is in, you know, steel mill, heavy industrial, transportation, pockets of oil and gas, mining and minerals, things of that nature. That's been a little soft, and we are anticipating that to continue to be soft. Our light industrial side is, has been pretty solid. It's been solid for a couple of years now, and some tailwinds from some mega projects and reshoring, things of that nature, they continue. We're pretty positive on the light industrial side.
As we move into the you know rest of the year, do you view the year as being kind of normal seasonality off of the first quarter, or are there any kind of seasonal fluctuations we should keep an eye on given maybe timing of projects in T&D or data center or things like that?
Yeah. Generally, I would say it's more normal seasonality off of the first quarter. There are some minor pockets where we're continuing to add capacity, where we've got areas of high visibility demand and growth, and we continue to bring new capacity online. As that capacity comes online, yeah, you naturally have a little more volume coming on the back half of the year in support of that capacity. Few projects in the back half of the year, but it's not anything that's really gonna tilt that normal seasonality in a meaningful way.
I understand the first quarter is maybe a little bit better than normal seasonality, given the order strength coming out of the fourth quarter. Are you planning the first to be in line?
Yeah, I think the first quarter will be largely in line. We typically see a flattish revenue sequentially from 4Q to 1Q, and that's very much what we're anticipating here. That will present a nice year-over-year growth for the first quarter, and we would continue to grow off of that base.
What's the rough year-over-year in the first quarter again?
High singles.
Organic?
High singles?
Toward the higher end of the full year range. High singles. Okay. Sounds good. Let's talk about where all the action is. On the utility side. Talk about the different parts of the business and how those orders are kinda differentiated currently.
Yeah. As Joe alluded to, we rounded the bases in fourth quarter with relatively good inflection in orders. You know, last year we kinda went through t he whole destocking, we lived through a bit of that on the utility side of the business. For T&D, I would say we've continued in the first quarter with orders inflecting up to the right, very strong. Super bullish on the T&D side. I'd say grid automation's still a bit flattish, largely on the back of Aclara and meters. We're still living through a bit of a project roll-off cycle in the meters business, but that's coming to an end, say into the end of Q1 into Q2. We'll start seeing that turn to modest growth in the back half of the year.
All in all, I mean, across all the businesses, Joe and I were just talking about it this morning, you know, we're seeing order strength continue off of a good finish in fourth quarter.
Can we expect the book-to-bill broadly for utility systems to remain above one in 2026?
Yeah, when you break it down in parts of the business, I'd say Aclara is probably right at one. The core T&D franchise is above one right now, and, you know, we'll see how things play out. It's still early innings, but we feel really good about what we're hearing and what we're seeing in terms of our book-to-bill rates coming in.
Can you maybe talk about the differences between the transmission and substation stuff, and then the more distribution-related MRO side? I know that's the distribution-related MRO has kind of gone through some waves. It doesn't, it's not quite getting the love from a budget perspective, as they really spend a lot on the T&D especially. Maybe talk about if there is still bifurcation there.
Yeah, from our point, super strong on book-to-bill MRO, coming out of the gates this year. We don't see any sign of that slowing down at this point. Like I said, we've kind of gotten all of the inventory normalization out of our system, and so we really like what we're seeing right now in terms of order inflection on the book-to-bill side, for MRO. T&D, I would say on the transmission and substation side of the business, high double digits, high single to double digits. We're seeing really good inflection in the project cycle of the business. A lot of big transmission projects coming through the pipeline, and we're well positioned on all fronts in that category.
High double digits or high single digits, low double digits?
High single .
High single digits.
Okay, 'cause yeah, high double digits.
Yeah. Yeah
With these data center numbers, high, we get crazy with high double digits. That could be a big number.
Yeah.
That's interesting. You're definitely more bullish on the MRO side than maybe I was expecting. What's happening there? Are they now shifting some budget back there on the OpEx side? Or what's driving that?
We think it's really a result of what we had anticipated last year, which was at some point there was gonna be a snap back once.
Yep
The inventories got cleared in the channel.
Yep.
That's really playing out the way we anticipated it.
Wow.
Yeah.
Okay, like a bit of a not a restock, but like a bit of a resumption of that buying that's snapping in. You said that's a first quarter phenomenon?
That is a first quarter phenomenon.
Okay.
We're hoping it carries through.
Yeah, no..
The balance of the year.
That sounds, you know, super positive.
Off to a good start. We saw that inflection back in the fourth quarter. That's been nice momentum. I think our full year guide in the distribution and MRO was more like mid singles, and we'll see how that continues to pace as the year progresses. Overall, as Greg noted.
Way to keep the expectations low.
Off to a decent start.
That's snap right in. Keep the expectations low. He's smiling over there. On the Aclara side, you maybe sound a little bit more confident on the timing of those orders picking up. Is there something that's gonna happen in the budgets there, or anything specific to Aclara?
Yeah, I think just zooming, backing off a little bit and talking about Aclara, you know, we went through a little bit of a lull in that business for the last couple of years. I'd say we've taken a lot of time during that period to kind of reposition the business to go after that downmarket, co-ops and munis. On the meter side, we're really well positioned when that replacement cycle kicks in. Quite frankly, we repivoted the strategy and redirected a lot of our MRO spend or our R&D spend towards projects in that sweet spot of the business where we feel like we've got the right to win and play, and we're seeing that come through in our pipeline.
We're seeing our order pipeline start to fill back up, but I would say you're gonna see modest growth coming from Aclara in the back half of the year.
For the year, that can still grow moderately?
Oh, yeah.
Yeah.
We think it can.
Okay. Is there enough behind that to kind of exit rate at a mid-single-digit rate into next year, you think?
Yes.
Okay.
Yeah.
Can you just talk about the new product that we saw at DistribuTECH? I think that was related to Aclara. There's some-
Well, there's a couple of things. One is on-
Yeah, there's some innovation there.
Yeah
that I thought was pretty interesting.
Yeah. LineDefender, which is a lateral protection device, we're already booking well ahead of our capacity in that product line. When that product line hits the street, it's already booked out in terms of orders. On the software side, Aclara360, that's an edge software package that we're selling to collect meter data and run some analytics on the grid. That package is all software related. On the Aclara side of the business, we're seeing a lot of interest from the market there.
A little bit innovation on that side as well as a bit of a pickup. Should be pretty positive. The perpetual, you know, question on telecom. Are we seeing any pickup there? Are we just kind of like bumping along the bottom?
Actually, I'm pretty bullish on telecom as well. We still think there's quite a bit of broadband spend that's gonna happen. We're not banking on it in terms of our plan, but we see BEAD, you know, BEAD funding coming through in the back half of the year as well. Similar to Aclara, we repositioned the enclosures business when we went through that lull. When all the telecoms customers kind of hit the brakes and stalled buying and ended up overbuying and buying a lot of inventory. We've cleared that through the system. We've gotten really well positioned in that business, and we're seeing that order inflect as well. Their orders are up double digits year-over-year off of lower compares.
Yep. Yep.
We're being very selective about what we go after in the telecom space. We like the business. It's contributing, it's accretive to the rest of the portfolio. You know, our enclosures business, broadly speaking, in utility, telecom, and civil construction is doing very well right now.
Is there anything right now in this portfolio that we didn't cover that's not getting, you know, incrementally better or accelerating? Doesn't sound like there is much.
No, I'd say all the businesses are getting incrementally better, still modest to flattish growth coming out of the Aclara side of the business.
Right, and maybe telecom as well, although it's off a low base, maybe that's a little better. Are there any bottlenecks with these projects on the T&D, the larger project side that you're seeing out there?
No. You know, when we talk to customers and some of the EPCs that we're partnering with, the feedback has been speed and execution. It's all about quality. They're not really grappling hard on price. We feel very well positioned there. We're specified in many cases. If there's upside to be had, as long as those projects get funded and get deployed, we're gonna be in the ring.
And are you expanding- Sorry, go ahead.
Yeah, I was just gonna add, and it's probably where you were going on capacity.
Yep, yep.
Just in some of those areas where we've got, you know, higher growth pockets of the portfolio, and as we continue to add capacity, naturally, you know, growth comes with, you know, you've got to manage your way through it, and you're bringing a whole supply chain along. Just pockets of transmission and substation as we grow those businesses, just managing our way through growth. You know, it's not unnatural to deal with pockets of supply chain constraints or supplier delivery, you know, realignment schedules to keep up with our demand. There's pockets of that that's happening out there, but nothing that's really slowing us down in a meaningful way.
When-
Just normal growth.
When it comes to your capacity, is there any of, like, floor space being added, or is it mostly if you have to crank it up, you just, you know, add a line here and add a line there, hire a few people? What's the nature of your capacity additions?
A lot of our capacity additions are on existing roof line.
Yep.
Our existing footprint. That tends to be our approach to adding capacity. We're adding new mold machines. We're adding new presses. Sometimes you're adding people to man those machines. We do have pockets where there's higher growth, you know, within switching and fusing, within transmission and substation, where we are adding on roof line to existing facilities.
Yep.
I'd say that tends to be, you know, you're adding 60,000 feet here, 100,000 feet there versus, you know, 500,000 square feet greenfield locations. That's, t here's none of that really-
Right.
in our environment.
There are a few people out there that are adding $1.5 million. It's pretty crazy.
Yeah.
Obviously, you guys are a different type of business.
Aside from just buildings and equipment, you know, what I see is a little bit of a congestion in terms of hiring and onboarding in some of the high-growth areas.
Yep.
That's one area we've been navigating through. It's really access to labor is probably the biggest thing keeping us up at night when we, in the high growth areas of the business.
Yep, that makes sense.
Yeah.
Can we- so CapEx broadly kinda flat as a percentage of sales going forward?
Yeah, flattish as a percentage of sales. I think we'll probably be up about 10%-20% versus last year. In and around the 3% of sales range is where we'd like to pace that.
Got it. Just on the operating margin at utility, obviously it's been pretty strong. How do you expect that to trend this year? Any real moving parts around that, I think the long-term guide is for the company, like 50 basis points a year?
Yes. So operating margin, you're right to point out that our outlook contemplates 50 basis points of expansion at the midpoint. That's gonna lean a little heavier towards utility, a little higher than 50 basis points electrical, a little lower. That does also contemplate some investments that we're strategically placing in both segments. A little more R&D investment that you'll see coming through in electrical and a little more growth oriented support over in utility.
Is there a mix dynamic that, you know, we should consider in the utility growth? Like, what's kinda the hierarchy of the richest mix stuff?
I'd say the core T&D franchise is that volume picks up, that mix is constructive to the outlook.
Right.
With modest growth on Aclara, that helps as well because that's a lower margin business. Overall, I think with the T&D inflection that we're seeing, that's very constructive to our margin expansion outlook.
Is there anything that kind of flips in the second half, whether it's price cost normalizing? I mean, you guys are a different accounting now, so it's not as volatile. Or should it be, you know, pretty steady progression over the course of the year?
I would say steady progression. The one thing that would pick up in the back half, typically the way we planned it out, is our productivity initiatives. Those typically kick in in the second half of the year.
Yep.
You know, you're working on those projects in Q1, Q2, you start to see the benefits in the back half. That'll also be constructive to the margin expansion that was.
Okay.
We also think the accounting change of last year is much more constructive to how we run the business. It's much more constructive to how our channel absorbs price increases and the timing in which all of cost inflation and price recovery comes together. We don't feel like there's gonna be much of an impact in terms of timing of price costs over the course of the year.
Right. Okay. Anything we didn't talk about on utility that we should have, we should hit on?
No, I can't think of anything other than, you know, with regard to Aclara.
Yeah.
One of the reasons we're bullish about the outlook there, you know, we just announced a very large meter deal in the Philippines. I don't know if you saw that.
I'm not sure we picked that one up.
Yeah, that's worth, you know, 10 million endpoints over the course of the next 10 years.
Oh, wow.
That's a big deal for-
What's a-
In terms of front log for that business.
What's a value for something like that?
I don't know that we've put numbers out, given the size of the endpoint count. Just suffice it to say it's meaningful and it's gonna help us with regard to our backlog for that business.
Okay.
Nice steady piece of international business over the next decade.
Yeah.
Yeah.
How international is that business? Like, what's the percentage outside the US? I thought it was highly US.
Relatively low.
Yeah.
We've got a strategic partnership with Meralco, so we've done business with them for a long time in the Philippines.
Got it. That's kind of a Hubbell specific hotspot-
That's right.
that you guys are leveraging.
It is.
Yeah.
It's been in the base.
Yeah.
It's been in the run rate.
Got it. Okay. That's great. It sounds like Aclara, from a portfolio perspective, I think we had Gerben out last fall, and we kind of, you know, played a little ping pong on strategic value of Aclara in your portfolio. Sounds like it is definitively a keeper for now, as, you know, it's additive as it improves.
Yeah, in its current setup, we like what's coming down the pipeline.
Okay.
We think it's gonna be additive, not subtractive to the portfolio.
Okay.
Yeah.
Yeah, makes sense. Sounds super positive on the utility side. Where do you think we are in the spending cycle? What inning do you think we're in? I mean, I guess for MRO, we're kind of early. Then for the T&D, the more project side, where are we on that in the spending cycle in your mind?
I think we're early on both of them.
Okay. Got it.
Yeah.
All right. Easy enough. Onto electrical. The rest of the portfolio, the renewables business is, you know, for many have been pretty weak. How is that looking, for you guys?
Yeah it's not. We're not dissimilar to others. The majority of our utility or renewables exposure is in utility scale solar.
Yep.
Over the last couple of years, you know, it's been growing. It's been a little flattish last year. Obviously, policy has not been, you know, particularly friendly.
Mm-hmm.
Under this administration versus the prior, we are seeing some of that cool off. We do talk regularly with our customers and the projects that are in the pipeline right now, and there's still a healthy amount of work that's in the pipeline running out. Overall, in the longer term, I think we see utility scale solar being an important component to source of generation to satisfy load growth and demand. We think it's going to be there longer term, but to what degree is kinda still TBD. Overall, well positioned to support and service, but I think we're not, you know, an outlier from some of the others you're talking about in that space.
Anything you do in and around battery storage? Where would that be in the portfolio?
Yeah, not much in there.
Not a ton. Okay. Got it. The other businesses, I mean, you mentioned light industrial a little bit better than heavy industrial, but you also have some construction exposure, some non-resi exposure. How are you seeing anything there outside of data center, which we'll get to in a second?
Yeah. Not seeing a whole lot of uptick in non-res. You know, non-res has been flattish to low singles for us, and that's kinda contemplated in our 2026 outlook. Conversations with the channel and with customers have been getting more and more bullish. But we're just not seeing yet in a meaningful way in our incoming order rate. So we'll continue to remain, you know, cautious but optimistic, ready to service that demand if and when it comes. For us, within non-res, if you think about commercial, you know, hotel, it's there's some transportation, there's some warehousing that runs through there, and on the institutional side is more like it's university and education, it's healthcare, and there's some government, so.
Yep.
Been a little flattish for us, but again, we're well positioned once that picks up.
A decent amount of the innovation we talked about, what is it? Utility, and putting data center aside, anything in electrical that stands out, innovation-wise that you think is exciting and could be an incremental growth driver over and above the end markets?
There's a lot of singles, you know-
Yeah.
that are queued up. The portfolio, I think on both sides, has a really attractive portfolio over the next couple of years coming out. A lot of it is dedicated to some of these high growth areas. Data center, I know we'll talk about that, you know, shortly. We've brought out a lot of new products in the renewable space and in some of our high growth verticals. Overall, really pleased. New products are contributing roughly a point of incremental revenue for our portfolio.
Okay.
And we think that could grow in the future, but overall, we're pleased with the NPI program.
On the data center side, I think it's like a $250 million business in 2025. Can you just split it down between, you know, the longer cycle modular kind of PCX business, and then the other, you know, components that you sell in there? They're obviously all growing fast, but, like, what are the differences between the trajectory in those two?
They're split about half and half.
The long cycle modular power skid distribution business is largely that longer cycle business. We're booked out through 2026 with orders and capacity, and we're taking orders for 2027. That business has been growing nicely for us, and we've got more visibility to that growth as it's, you know, locked and loaded in the backlog, and we're delivering against it. The other half is on the shorter cycle book-to-bill side, and that's primarily within our B urndy business, our wiring device business, where they're providing grounding systems, they're providing higher amperage pin and sleeve products and other connectors that you'll find in the data center. Again, that's been growing nicely for us as well. Short cycle, our quick turn in, you know, in the book-and-ship side, so limited visibility to what the back half of the year or even into Q2 is gonna look like.
Overall, we continue to add capacity to service that demand.
And do you need to, I guess, if you're booked out through 2026, will you need to add more capacity to kinda grow in 2027? I mean, I'm sure we're talking about some pretty strong double-digit rates, the high double-digit rates, 30%-40% in these businesses. Is that?
We could handle the growth in 2027. We get beyond 2027, and we're working through how and where-
Okay
to add that capacity out in 2028 and beyond for that.
Okay. Is that the right kinda rate of growth for this $250 million in revenues, like 30%-40% ish?
Depends. We'll see what comes. I mean, they've been growing, you know, 30-ish-
Yeah
Plus or minus over the last couple of years, and we'll see what plays out.
I just wanted to pivot back to utility on data center. How much of the demand that you're seeing today do you think is, you know, directly, whether it's a substation that has to be refurbed and upgraded 'cause there's a data center right there, maybe you're doing even a little bit of on-site stuff you never would've really done. How much of the business that you're seeing today in HUS do you think is, you know, directly related to hooking up data centers?
I'd say it's low. I'd say that's an area we're focused on right now. I'd say it's probably less than 10%.
Yeah.
Yeah
Yeah
Yeah
Yeah, just to repeat it's 60/40 for substations, new versus MRO.
Right.
A decent amount of the new would be data center related.
Support data center.
Yeah, that would be for the substation business.
Yeah.
Yeah. Okay. Everybody got that? Well, we can connect afterwards then. As far as the margins are concerned in electrical, you said a little bit below. I mean, they had a great run on margins. Are we now at kind of a more normalized rate of conversion in that business, or is there still a lot of like low-hanging fruit, you know, blocking and tackling related margin opportunity?
I think the low-hanging fruit has been picked, but I also believe that we are in the middle innings of that margin expansion story, and we've got room to continue to run. I think the best way to think about it is within the context of our long-term financial framework. Think about our mid-single-digit organic growth. Think about 25%-30% incrementals running through electrical. As we continue to drive more project work, restructuring, there could be a little bit more that comes on top.
The inflation, just to kind of put a finer point, I think you said mid-single digit inflation exiting 2025. You're saying it may be a little bit higher than that, so you're gonna get a little more price? Or are we still in kind of the corridor of what you had said for guidance? There's no real change in that.
Largely within the corridor of guidance.
Last year, full year-
Yeah
was mid-singles.
Yep.
For which we covered with price and productivity.
Yep.
Our guidance was built off of, again, mid-singles, and we'll cover that with price and productivity. A little more inflation to start the year here in the first 90 or so days, and we think we'll get a little more price and a little more cost inflation, but it doesn't change that, the math there.
Okay. As far as the balance sheet is concerned, you guys, you know, do some episodic M&A. Any change in strategy there? How is the pipeline, and where are you guys looking to add from an M&A perspective?
Yeah. Pipeline remains very healthy and active. We continue to look at those high-growth areas of our business. Think transmission, substation, light industrial, data center, grid interconnect are kind of our core areas of where we're targeting M&A. The pipeline is comprised of a mixture of small bolt-ons as well as some larger opportunities there. Timing of those is always uncertain, you know, as they progress. We feel really good about the pipeline. M&A does remain a top priority for us as it relates to capital deployment. Our balance sheet, as you know, is very well positioned to do a combination of small and larger deals.
So, we're excited about those opportunities. Valuation has obviously, you know, clicked up over the last couple of years. We've also seen the quality of the companies in our portfolio or in the pipeline are also a little higher. Higher in terms of growth, higher in terms of margin. There is some justification of the premium multiples that we're seeing. Overall, we'll continue to be disciplined in our approach, but M&A remains a top priority.
I was a bit surprised with these substation assets that you guys bought and then INIVEN, I think bought one as well, that the multiples were actually, like, reasonable there. I would've thought that, you know, right now with the growth ahead of everyone, that those would've been a lot higher. How do I kinda reconcile that? The those lower multiples? What I mean, they were like low double digit, which is kind of unheard of.
I think the growth, a lot of that growth is buyers have to go get it. Buyers have to go build and service capacity-
Yeah
to go get it. It's not like they're coming online with tons of capacity that can swallow that growth over the next, you know, 5-10 years. You gotta go add-
Got it.
You gotta add space.
Got it. That's kind of the synergy is you guys coming in and driving the growth to make it an even lower multiple, which is-
You got it.
You know, pretty impressive. Is there a view that, you know, the HUS is really kind of getting all the love from a growth perspective right now, so you wanna keep things balanced, and maybe there are some opportunities in, you know, where other people are zagging, you guys can zig and go to, you know, more, a little more on the electrical side? Or you're really kind of reinforcing the growth areas.
I think we are reinforcing the growth areas, but I also believe they are on both sides. Yeah, the last several years you've seen a lot of acquisitions over on the utility side. You've seen some dispositions and portfolio management on the-
Yep
... electrical side. As we go forward, I think you could see M&A on both fronts.
Is there an aim to keep it balanced, or it's really, you know, whatever pitch you're gonna hit, whatever pitch, you know, is coming your way?
Whatever's in the pipeline that looks really attractive and will be a good fit for our business.
Okay. Any questions out there? Scott? Scott?
Yeah.
No. I was talking to you. How are you guys leveraging AI at the company? Is there any initiatives there, product development, back office? We're asking all the companies about how they're applying it.
Yeah. Very early innings on the AI side. First was evaluating this technology and what can it do for us, like, realistically. And that was a lot of work that we put into that last year. Second was establishing a secure environment for which we can put the right guardrails up to deploy this from a data security standpoint, and that's been completed. Right now we've adopted a couple of enterprise AI solutions that are embedded within our existing technology stack. Think, you know, Microsoft Copilot, some of the other key areas of technology that we invest in our ERP and other areas are bringing embedded AI into the solution.
We've been introducing those to our organization and training our organization, training our knowledge workers, to adopt these tools, to deploy them to their day-to-day work, and that's underway. We've been piloting some larger use cases, to see if we can really, you know, put some of these capabilities to work. Starting with just a handful of use cases last year in the back half, proving them out, and we're starting to expand the use cases across our business. We'd call it more of a marathon here than a 40-yard dash. The marathon is underway, and we've started to invest in that in our business .
An-anything really stand out as, you know, something that you've noticed that people are, you know, either using more of or where there's been, like, an interesting productivity angle? Any kind of early success, successes or wins?
Yeah. One of our early use cases was turning quotes around much quicker.
Mm
using AI. Where it used to take us weeks to turn quotes around and a lot of research and a lot of back and forth, we can do that work in a matter of hours. Turning quotes around very quickly is super helpful to our customers and helping us take business off the street. Again, things like that. Greg, would you add anything in your business?
Yeah. I think on the electrical side they ran a competitive benchmarking competitive analysis tool where cross-referencing using AI to a competitor's part number to our part number. They launched that.
Mm
on the electrical side of the business. We're looking at a use case right now on chemical analysis of, for our MOV blocks to continue to improve and evolve the technology on the MOV block. I'd say broadly, the organization's if you look at our adoption rates of Copilot, which is kind of the entry level of AI-
Yep. Yep
You're seeing adoption rates across the company climb, and you're seeing really good utilization out of that.
Think an IR avatar could be good.
Yeah.
Hard to recreate that guy.
Yeah.
Definitely cannot.
It's not doable.
He's the best.
We've tried.
Anything else out there?
Yeah.
Just on what we were talking about earlier on price cost cadence, so just we have said, expect strong start from a margin perspective based on an easier comp, and we did highlight second quarter of last year was a harder margin comp because of the accounting change, and so.
Right.
That's factored in the outlook as well, and it gets.
Okay.
More normal in the second half.
Just remind us of what you had said on cadence for the year, from whether it was a percentage EPS or percentage of anything you guys had said on the call, just cadence.
Yeah. I think a normal seasonal year, right? If you look at, you know, where consensus settled in so far for the early part of the year, I think that's consistent with how we were building the outlook.
Okay.
So.
Great. Guys, thanks a lot.
Thanks.
Thanks for all the clarity in the numbers.
Yeah.
Appreciate it.
Appreciate it.