Data center demand for electrical equipment soared over the past quarter while utility sales have slowed somewhat, company leaders said Tuesday during Hubbell's third-quarter earnings call.

Hubbell's Electrical Solutions segment saw organic sales rise 22% year over- year, Chief Financial Officer Joe Capozzoli said. Sales to data centers rose more than 80% — exceeding the company's expectations for the year — while demand from light industrial and other nonresidential markets remained strong. The 2025 acquisition of NSI Industries drove another 29% increase on top of organic sales growth, according to slides released during the call.

In the Utility Solutions segment of the company, organic sales rose just 5%, with an 8% increase in grid infrastructure sales offset by a 4% decline in sales by the company's grid automation division. Most of the decline, according to CEO Gerben Bakker, could be attributed to slowing sales of substation control houses and a temporary shortage of metering equipment. Bakker said the shortage, which occurred when one of the company's contract manufacturers was unable to source a key component from a supplier, should be resolved by the end of the year.

“We continue to believe utility T&D markets are in the early stages of an attractive multiyear investment cycle, driven by aging infrastructure and bolstered by load growth and data center interconnections,” Bakker said.

Bakker said Hubbell continues to invest about $25 million per quarter in additional manufacturing capacity, and that the company plans to double that to $50 million per quarter next year. Most of the expansions, he said, involve adding machines and assembly lines to existing factories—though in some cases the company has begun adding square footage to existing factories as well.

“You can only keep adding so many machines before you run out of roofline,” he said.

Capozzoli noted that the majority of the new capacity will serve transmission, substation and data center markets.

Despite the ongoing expansion and rising inflation, Capozzoli said the company continues to improve its operating margins in line with a long-term effort to cut costs. Hubbell has also secured higher prices for its products in recent quarters, which in tandem with growing demand and expanding productivity has allowed the company's margins to stay ahead of inflationary pressures.

However, Capozzoli said Hubbell plans to implement 2027 price increases early, beginning this November, to address cost inflation and maintain the company's margins.