Eaton Corp (NYSE:ETN) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Eaton Corp reported record third-quarter results, with organic growth of 19% and revenue increasing 28% to $8.9 billion, exceeding the high end of their guidance.
The company raised its full-year organic growth guidance to 14% and adjusted EPS to $13.75, highlighting strong demand across the Electrical Americas and Electrical Global segments.
Notable strategic moves included the acquisition of Boyd Thermal and Fiberbond, contributing significantly to growth, particularly in the data center sector, which saw a 65% revenue increase.
Management emphasized the successful execution of their Lead, Invest, and Execute strategy, resulting in record margins and expanding capacity that is now turning into output.
Eaton’s Electrical Global segment saw 27% organic growth, driven by strategic expansion and restructuring, with a strong order backlog supporting future growth prospects.
Full Transcript
OPERATOR (Moderator)
Thank you for standing by and welcome to the Eaton third quarter 2026 earnings results conference call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you’ll need to press star 11 on your telephone. If your question has been answered and you’d like to remove yourself from the queue, simply press star 11. Again, we ask that you please limit yourself to one question each.
You may get back in the queue as time allows. As a reminder, today’s program is being recorded and now I’d like to introduce your host for today’s program, Yan Jin, Senior Vice President of Investor Relations. Please go ahead, sir.
Yan Jin (Senior Vice President of Investor Relations)
Hey, good morning. Thank you all for joining us for Eaton’s third quarter 2026 earnings call. With me today, Paulo Ruiz, Chief Executive Officer, and Dave Foster, Executive Vice President and Chief Financial Officer. Our agenda today includes opening 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 on our past calls, we’ll be taking questions at the end of 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 may 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.
Paulo Ruiz Sternadt (Chief Executive Officer)
Thanks, Jian, and thanks everyone for joining us. Starting on page three, 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 remains 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% remain 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 three 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 five shows what we are seeing right now. Demand is strong and broad-based well beyond data centers and every lead indicator is pointing up. First, customer investment keeps building. Mega project announcements are up 85% so far this year. These are large multi-year 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 a 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 lumpy 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 electrification.
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 deliberate 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 four 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 wherever 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 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 one of the fastest growing business in the data center market to our 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% five-year CAGR from 2026 to 2030.
With Boyd turning organic and the strength we continue to see across Global, we expect to update that target in 2027. Turning to page seven, 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 standalone 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 toward more integrated power and cooling architectures — an increasingly 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.
Dave
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 continued 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 12 cents above the high end of our guidance.
We generated a strong 32-cent 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%, 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 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% 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%. Boyd 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%. 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%. 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%, 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’ll turn it back to Paulo to discuss our updated guidance and close out the presentation.
Paulo Ruiz Sternadt (Chief Executive Officer)
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’re also reaffirming 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 in 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 still 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 takeaway 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 a third 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 2026–2030 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 processes 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 third 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.
Yan Jin (Senior Vice President of Investor Relations)
Hey, thanks, Paulo. Moving to the Q&A, we ask you to please limit your opportunity to just one 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 questions.
OPERATOR (Moderator)
Certainly. And our first question for today comes from the line of Nigel Ko from Wolfe. Your question, please.
Nigel Ko (Analyst at Wolfe Research)
Yeah, good morning everyone. Thanks for the question. So since it’s just one question, maybe just, Paulo, maybe talk about where we are in sort of the transition to next-generation revolt DC solutions. I think the sidecar kind of rack-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 solid-state transformer commercialization and production?
Paulo Ruiz Sternadt (Chief Executive Officer)
Thanks, Nigel. Good morning to you. Thanks for the question. It’s 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 with the tagline: we remain in a strong leading position for solid-state transformers both in the US and globally. Let me just give you an update on what happened the last quarter in the US, for example. In October our 15 kV 2 megawatt unit, the medium-voltage solid-state transformer, successfully passed all the UL tests. There’s a new UL 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 is the only system in the market which is, at the same time, liquid-cooled. It’s multi-port, meaning you have AC and DC ports that give maximum flexibility to customers. It is also outdoor-ready. So this provides customers with the most flexible and compact brains, if you will, for the next generation of either complete DC architectures or 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 EMEA and Asian markets, the Eaton indoor unit also passed all the tests, this time with TÜV, 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.
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 DC distribution as an alternative to AC because of those savings. And I remind you that you asked about solid-state transformers, which are a key part of this new architecture, but it’s only one of the four key building blocks that you need to have to win in this new era.
And I would say Eaton Corp is leading all the three as well. And I will 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 power electronics and UPS in distribution—and advanced cooling with Boyd. So we are leading all four of them. And then the other thing I want you and investors to have in mind is that the current architectures—the AC architectures—are not dead, and we are fine either way. Eaton’s position is that we’ll sell powertrain in both architectures. We are architecture-agnostic and we win either way. We win either path. So we want you to frame this as an opportunity more than a bet, and a good option for us in the future.
So specifically on the pilots we are running, we have 10 pilots running in parallel and multiple 15 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 continue to be a leader in the future. We are ready for that future with the DC portfolio we are building.
OPERATOR (Moderator)
Thank you. And our next question comes from the line of Nicole Dublaise from Deutsche Bank. Your question please.
Nicole Dublaise (Analyst at Deutsche Bank)
Yeah, thanks. Good morning, guys, and thanks for the question. Maybe—
Paulo Ruiz Sternadt (Chief Executive Officer)
Hi, Nicole.
Nicole Dublaise (Analyst at Deutsche Bank)
Hi. 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?
Paulo Ruiz Sternadt (Chief Executive Officer)
Yeah, thanks for the question. Let me make a comment on data centers first because we keep tracking this market and it keeps surprising us on the upside. So data centers continue to represent an enormous opportunity for us. We track the projects that were announced, and now they amount to 366 gigawatts, in contrast to the last update we gave you in the earnings call, which was 307. So that keeps building, so that’s good for us. Just think about—contrast that with the installed capacity of 50 gigawatts.
It’s 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 here 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 and 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 had meaningful growth for Commercial Institutional, which remains a big segment for us—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 distributed 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 pretty clear to everyone that demand is strong and is broadening much beyond data centers.
Dave
Yeah, I would even add, Paulo, Commercial and Institutional were both up north of 25% in the quarter.
OPERATOR (Moderator)
Thank you. And our next question comes from the line of Andrew Ogan from Bank of America. Your question please.
Andrew Ogan (Analyst at Bank of America)
Yes, good morning.
Paulo Ruiz Sternadt (Chief Executive Officer)
Hey, Andrew.
Andrew Ogan (Analyst at Bank of America)
Hey, how are you? You know it’s been a popular topic this quarter—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? Thank you.
Paulo Ruiz Sternadt (Chief Executive Officer)
Great, great question. Thanks for the question here. I think the most important thing is 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 we’re getting this question—because we take labor away from their job sites and we push this activity to our factories, which is much better and better controlled, but also increases the speed of deployment for this incredible backlog our customers have that I just mentioned.
And last but not least, when the modules are put outside the data hall, you also free up space for the servers where our customers generate revenue. So it is 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 modules—inside those boxes. Think about everything we design and manufacture, because we do that not only for the modules, but we design and manufacture the transformers, the switchgear, the circuit breakers, and the UPSs that go inside those modules. 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 modular today 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 module, 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 those customers, it means one vendor, one warranty, one commissioning team, fewer interfaces, and fewer single points of failure.
So that’s the biggest differentiation between us and other players. And then just to give a proof point here, Fiberbond—we acquired them April last year. In their first year, $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 Americas. So it’s a great business growing at a fast pace with great margins. So we decided to double the capacity we had for Fiberbond in their existing site. They had one 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 in modular, 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, modular 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 Fiberbond in 2025. And in Asia, we have multiple partners that we can also work with on 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.
OPERATOR (Moderator)
Thank you. And our next question comes from the line of Scott Davis from Melius Research. Your question, please.
Scott Davis (Analyst at Melius Research)
Hey, good morning, Paulo and Dave and John.
Paulo Ruiz Sternadt (Chief Executive Officer)
Hey, Scott. Good morning. Good morning.
Scott Davis (Analyst at Melius Research)
Good morning, 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 Fiberbond deal and the partnership with Nordic EPOD, the deal that was announced today with Boyd—probably some stuff that I’m not even remembering—but it 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 there remaining product gaps, I guess is the better way to ask it? And, you know, if so, 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?
Paulo Ruiz Sternadt (Chief Executive Officer)
Well, thanks. 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 with great, great performance for all the acquisitions we made. And we always talk about organic. If you look at our total growth for the company, incredible 28%. That’s another mark we would like to highlight in Q3. Very strong number and better margins, accretive margins for the company. Great moves so far. For now, I would say the big deals are behind us. We don’t see any large acquisitions in the short term. That I think is the core of your question. 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 gaps, which was the second part of your question. We don’t see any gaps in North America. Just look at our data center portfolio goes all the way from the grid to the chip. So we don’t see any product gap here where we’d like to scale more if we find the right deal with 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. This bolt-on adds technologies, capabilities and capacity in Europe to accelerate the organic plans we had on the deck anyways.
So you should expect more bolt-ons on the Electrical side. We’ll keep this flexibility if something comes along. But don’t expect any bite sized deal in the next 12 months. I think that’s the key takeaway.
Scott Davis (Analyst at Melius Research)
Perfect. Best of luck guys. I’ll pass it on.
OPERATOR (Moderator)
Thank you. Thank you. And our next question comes from the line of Jeffrey Sprague from Vertical Research Partners. Your question please.
Jeffrey Sprague (Analyst at Vertical Research Partners)
Thank you everyone. I hope everyone is well. Paulo, maybe pick up on Boyd. Actually, it looks like your revenue forecast for Q4 is roughly flat sequentially. And you know, you made the point about it’s going to flip into organic and be a growth driver into next year. So just looking, just looking at that revenue trajectory, is this particular business capacity constrained at this point? Do you have new capacity coming on and maybe give us a early thought on how 2027 may play out for that business.
Thank you.
Paulo Ruiz Sternadt (Chief Executive Officer)
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, their ramp 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 of 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.
OPERATOR (Moderator)
Thank you. And our next question comes from the line of Andrew Piscaglia from BNP Paribas. Your question, please.
Andrew Piscaglia (Analyst at BNP Paribas)
Hey, good morning, everyone.
Paulo Ruiz Sternadt (Chief Executive Officer)
Morning. Morning.
Andrew Piscaglia (Analyst at BNP Paribas)
I wanted to touch on what caught my eye this quarter. You know, Electrical Global accelerated 27%. So that’s up. Last quarter was up about 18%. So I’m wondering what’s behind that step change and then should we assume this segment’s now kind of entered in an elevated growth phase?
Paulo Ruiz Sternadt (Chief Executive Officer)
Yeah, 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 deliberate. 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 Spray 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 27th. 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, 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 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 beating 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 I made the cut by business. If you cut by end market and you look at the performance by end market, also very strong performance. Our data center business grew almost 100% in global, so 97%, 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 sustained growth phase.
And the order book sustains that. 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 double the backlog in a year over year basis. And even if you exclude the Boyd backlog, I always get that question, it’s still 76% up. So everywhere you look, end market business by business, with or without Boyd, you see you come to the same conclusion.
So those drivers in our opinion are structural, they’re 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 three 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 this strong growth moving forward and we keep expanding margins for Electrical Global.
Dave
Yes, I want to add to that. If you look at the Geist business and you talk about execute for growth, they expanded margins almost 400% from H1 to H2 through price, cost out and productivity. So really executing the global playbook that Paulo just talked about. 400 bps. Yes, I’m sorry. Yeah, thank you.
OPERATOR (Moderator)
Thank you. And our next question comes from the line of Steve Tusa from Wells Fargo. Your question please.
Steve Tusa (Analyst at Wells Fargo)
Hi guys, good morning.
Paulo Ruiz Sternadt (Chief Executive Officer)
Hey, good morning.
Steve Tusa (Analyst at Wells Fargo)
Just on the margin, I think your 4Q incremental in EA is like, I know it’s a bit of a range, but something in the 40 to 45% range. Can you just talk about how you kind of feel about that next year there’s probably an easy comp in the first half, a little bit tougher in the second half and then somewhat related to that. On pricing strategy, are you guys pricing similar products within the data center channel the same way as you would be pricing them?
If it’s the same product like you know, in a more standard application, like in a CNI application or something like that, maybe just talk about how you manage that price across the channels as well. Thanks.
Paulo Ruiz Sternadt (Chief Executive Officer)
Great question. So on the ESA margin, I will lead with the bottom line message here that we are in line with the full year margin guidance range and our three quarters under our belt give us the confidence to make that point. And as you know, we are still operating in a very high inflationary environment. So we are managing that very well. I would say if you look at the performance quarter by quarter and first half versus second half and on your point on incremental discussions for ESA, we will continue to improve our incrementals from Q3 to Q4.
So we had high 20s in Q3, that’s going to get high 30s to close to 40% incrementals moving to Q4. So that’s going the right direction again. And that for us, I would say again I’m proud of the team because taking that the way they did and the margin development from. If you look at the margin development from the first half to the second half, the progression will be over 400 basis points, which is a great result in this environment specifically.
And then specifically on the question about pricing, I would say this. We have pricing power and we have also good contracts in place where we have correction for commodities, etc. And we see that we are leading with pricing announcements as well when required on price list. And we negotiate pretty well with our project by project as well. So we have in this environment the pricing power
Dave
and also the good relationship with the customers to have those debates. Yeah, the only thing I would add to that is, you know, in October we finalized negotiations with two of our large customers. We have a handful to finalize in Q4. I kind of talked about this in the last earning call that we’d have discrete price negotiations with larger customers. And then we just announced today that we would have general price increases in ESA, EMEA and Geist effective January 2nd.
So it’s going to be a combination of those going forward and that’s how we’re going to price in the market and we are on the right trajectory. And just to make a short commentary on October, we just got the top line. It looks really strong. So it’s a good start of the quarter as well.
OPERATOR (Moderator)
Thank you. And our next question comes from Amit Bharotra from UBS. Your question please.
Amit Bharotra (Analyst at UBS)
Great, thanks. Good morning everybody. I guess I just wanted to follow up on that question. It was nice to see the margins improve in the quarter and continue from the fourth quarter, but not a big sort of three phase transformer plan that’s coming online I think for the first half of next year. So is there any color initially that you can provide on EA27? I assume it’s going to be better than the full year 26, but just trying to think about the headwind from this big three phase transformer plant.
Paulo Ruiz Sternadt (Chief Executive Officer)
Okay, it was breaking up a lot. But I think you’re inquiring about margin development to 27 and also the fact that we have a new transformer plant coming online, correct?
Amit Bharotra (Analyst at UBS)
Yeah. Just the size of that three phase transformer facility I think is orders of magnitude larger than sort of the 18 that’s been put up over the last year and a half. And so I’m just trying to understand what transitory impact that could have on incremental 27.
Paulo Ruiz Sternadt (Chief Executive Officer)
Yes. So first of all, we are really excited about the margin development for Electrical Americas. As I said before, I would just caution you not to take Q4 and multiply by four because there’s some seasonality with the business, especially in the distribution business, et cetera. So there’s some seasonality there, but the direction of travel is very clear. We have a strong start. We have record backlogs. So we feel really good about it. On a specific question about the transformer facility, yes, it’s larger than the other ones we did, but we also learned our lessons. We hired early, we hired our workers early. We are training them in our Wisconsin plants already. So when we start to ramp, we go with, you know, it’s going to be a learning curve in the new facility, but they’re already trained in a facility that runs those products today. So we are taking lessons here. I would also tell you that we are dealing with six expansions now versus 18.
So it’s a much easier setup and we have a much stronger team dealing with this expansion. So we learned our lessons. It’s less disruptive than it was for the full year last year and the first half of this year. And I think we have a good team around it. So we feel confident as we meet with them every week to check progress.
OPERATOR (Moderator)
Thank you. And our next question comes from the line of Andy Kaplowitz from Citi. Your question, please.
Andy Kaplowitz (Analyst at Citi)
Good morning, everyone. Can you give us more color into the health of the Aero markets and in particular your Aero supply chain at this point? It would seem since you didn’t change your Aero organic revenue guidance for the year, that you think you have your arms around any supply chain issues, that revenue growth could even improve a bit in Q4, but maybe you could give us a little more color on the markets, what you’re seeing and doing to mitigate supply chain risk.
Paulo Ruiz Sternadt (Chief Executive Officer)
Morning. Morning, Andy. Yeah. Thank you. So I believe it’s clear that demand for aerospace is strong. You just look at our orders, we’re up 20% and specifically defense OEMs up 36%. So there’s a lot of growth and we keep growing our backlog as well now to a record of 5.6 billion, which is 33% higher year over year. So the demand signals are clear and very strong. In terms of execution, we face some specific supplier issues. In some commodities, there are punctual problems. We are working on them and we are solving them with different strategies. Helping those suppliers to ramp is one of them. Creating second source in partnership with our customers is a second type of measure we are taking. The third one, in some cases, we are insourcing where we see some suppliers struggling.
We have the machining capability and capacity; we are insourcing that. So we are taking that holistic approach in partnering with our customers to approve that. Because, you know, in aerospace, you can’t shift a supplier without authorization from your customers. So we are working in collaboration with them. So that’s what I would say here. The demand is pretty clear, it’s strong, we are winning. We have those platforms for today and tomorrow and we are dealing with those punctual problems in supply chain. They cut across the whole industry. And we are both collaborative with customers, but also with the supplier base. And we continue to develop in that direction. So we still think our Q4 is going to be a bit better in terms of top line and growth.
We’re just cautious that this situation of the supply chain is fully behind us. Then we can start liquidating more of the backlog. We keep winning and it’s just a matter of conversion of that backlog.
Andy Kaplowitz (Analyst at Citi)
Appreciate the color.
Paulo Ruiz Sternadt (Chief Executive Officer)
Thank you.
OPERATOR (Moderator)
Thank you. And our next question comes from the line of David Raso from Evercore ISI, your question please.
David Raso (Analyst at Evercore ISI)
Hi, thank you for the time. Just trying to get a little more granular on the numbers for 27 versus 26. Can you characterize for us how price-costs will play out this year and just what’s the base case, how you’re thinking about how you’re setting pricing now for 27 and also the level of inefficiencies you alluded already to. Obviously a little bit easier to ramp up some six factories than 18. Maybe just some sense of, I don’t know Dave, how you might quantify it some way the inefficiencies in 26 and I would assume less in 27 and also just any sense of capacity available to you in 27 versus 26 given the ramp you’ve done on the 18 factories.
Thank you.
Paulo Ruiz Sternadt (Chief Executive Officer)
So I’ll go first and then Dave can add color. So we are still planning. Dave, we’re not ready to share the 2027 guidance yet, but I can give you a good framework for your model as you start thinking about our business in 2027. So you saw from the end market perspective, for example, that we see our end markets growing at at least 11% next year. You know that we usually plan to outperform the market. So think about a growth path which is higher than 11% here.
We also expect to improve incremental margins from 2026. You know we are looking at 26, around 23%, so we are certainly going to do something higher here. But again it’s premature for us to guide. We’re going to do that in February when the complete planning process is done. If you think about adjusted EPS for a moment, when we gave you the targets for the five-year plan last year we said we will go every year beyond 12% organic EPS growth. This year with the guidance we just shared with you for 26 we are aiming at 14% growth of EPS.
And if you look at the second half of this year, it’s a 20% growth. So we are on the right path here as a company. And that embeds much of the questioning you are asking about inefficiencies, capacity turning into earnings, etc. Most of it is already here. Right. So again the two portfolio items I want everyone to remind in 2027 that shouldn’t be confused with underlying performance and they are material for 2027 are the following. First of all, Boyd, we are planning—I just got that question around Boyd—we are planning on $2.7 billion for that business which is 50% growth again next year. That growth again becomes organic after mid March. So think about three-quarters of this this year being organic for us.
That would turbocharge the growth for Electrical Global. The organic growth rate on the other direction, though, Mobility will contribute around $800 million in revenue only reflecting a close with the Dana transaction around Q1. So those are things I want you and investors to keep in mind as you start modeling and comparing our 2026 with 2027 framework.
Dave
Yeah, I think Paolo, you covered really where we are in the process right now. The segments are reviewing it with their leaders this week. You know I’ve seen some preliminary looks and I’m feeling good about 2027. Paolo and I will review it here the third week of November. And, you know, but that’s where we stand right now. Too early to share any real concrete numbers.
David Raso (Analyst at Evercore ISI)
Thank you.
OPERATOR (Moderator)
Thank you. And our next question comes to the line of Chad Dillard from Bernstein, your question please.
Chad Dillard (Analyst at Bernstein)
Hey, good morning guys. So my question’s on how you’re winning in Europe on the data center buildout. Can you just talk about just like what you’re doing from a shares perspective and then maybe if you can share how you’re thinking about win rates in Electrical Global maybe versus what you’ve been seeing in Electrical Americas.
Paulo Ruiz Sternadt (Chief Executive Officer)
So I’m not sure it was really faded. But the question is on EMEA data center, is that…
Chad Dillard (Analyst at Bernstein)
Yeah, exactly. Just on just your win rate and how you’re gaining share in that market.
Paulo Ruiz Sternadt (Chief Executive Officer)
Yeah. So you could see that with those growth rates we are clearly gaining share in Europe and in Asia, et cetera. The actions behind these numbers are that we were traditionally, for data centers in Europe specifically to your question, we were and we remain leaders in UPS business in Europe. And what we are doing today, step by step, we are building the same fortress, the same leadership in our portfolio as we have in the Americas. So building the power distribution portfolio that we’re going to speed up now with the acquisition of Col when that comes to fruition. So we are building that power distribution portfolio. We also over time increased our transformer capacity in Turkey in our plant. So think about it. We looked at our strong leadership position in Electrical Americas and we are taking every action we need to take in Europe to build the same strong portfolio over there.
This is something that our customers are requesting us to do because we work with them in the US and as they go overseas and then build over there, they would like to count on our support as well. So we are building that over time. There are still things for us to go do. So we are far away from being done in that area. And despite all those fantastic growth numbers, no one is taking a victory lap in that team. They remain focused. They know what they need to do.
So all hands on deck. We’re going to keep building that portfolio.
OPERATOR (Moderator)
Thank you. This does conclude the question and answer session of today’s program. I’d like to hand the program back to Paolo Ruiz for any further remarks.
Paulo Ruiz Sternadt (Chief Executive Officer)
Thank you. So, I mean, this is a very, very good call. Very good questions. Let me add some closing remarks. First, I’d like to thank you, all the analysts and investors around the call, for interest in Eaton, your analysis, your deep questions today. I also wanted to thank the Eaton team. I’m pushing you hard, guys. I know you’re listening to this call, but you keep delivering quarter after quarter. I’m proud of the progress and we are committed to keep improving, which is the most important thing.
No one is taking victory laps here. We remain focused and I love the culture we are building here and I will leave with this. To investors, it’s clear that our strategy is working. Our lead, invest, and execute growth strategy is working, is gathering pace and you can see the results already, right? Record sales, growth, earnings above the high end of our guidance. So we are really happy with the progression we have here. The demand keeps accelerating and is broadening beyond data centers. We talked about that. So I think it’s important we highlight this. It’s cutting across different end markets, which is good to see.
And data centers, despite all the discussions in the market today, they have a long runway. They have a very long runway beyond 28 and 29 and many projects. And with this large backlog, it’s going to come in terms of multiple years of work for us. So this is a great platform. And the new Eaton, as we put this all together, this new Eaton is taking shape. Our portfolio moves have structurally transformed the company. And then if you add the future of these technologies in terms of 800 volt, et cetera, we are ready for that transformation. So we feel really good about it. We are also very proud. I think I want to highlight that the Electrical Global is the new growth engine for the company. We restructured early. We’re scaling globally.
So we turned this business into a next growth platform. And we all feel really proud of it. And as you look at it, we are really focused on execution as well. Electrical Americas, see the capacity coming online, turning into output and into margins and earnings. So that’s great to see as well. And I’m also, you know, I think this was all a lot of work from the team. We are also satisfied with the third beat and raise this year. This is what we want to do constantly now.
It gives us confidence in 27, in our 2030 commitment. So I will conclude to say thank you once again and we believe the best years are ahead of us. Have a great day.
OPERATOR (Moderator)
Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.
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