Schneider Electric tops revenue forecast as it rides AI data centre wave
By Gianluca Lo Nostro
Schneider Electric's Financial Performance and AI Data Centre Growth
April 30 (Reuters) - Schneider Electric narrowly beat first-quarter revenue expectations on Thursday, once again boosted by the global artificial intelligence data centre buildout reinforcing the French group's role as one of the most sought-after suppliers.
First Quarter Revenue Results
Revenue in the three months through March grew 11.2% organically to 9.77 billion euros ($11.39 billion). That was a notch above the average consensus estimate of 9.76 billion euros, with 10.1% organic growth expected by analysts polled by the company.
Hyperscaler Investments and Market Demand
Large cloud providers, also known as hyperscalers, are expected to invest more than $600 billion into data centres and other AI-related infrastructure this year alone, analysts say.
Schneider's Product Portfolio and Market Position
Schneider makes power equipment, server racks and most importantly cooling systems that let energy-hungry data centres operate at peak performance. The booming demand for this technology, particularly from the United States, is driving Schneider's earnings, offering a stable and alternative revenue stream to the legacy electric equipment business.
The $182 billion company, the fifth-largest by market value in France, is reaping gains from its acquisition of U.S. liquid cooling specialist Motivair last year, which expanded its product portfolio for data centres.
Market Outlook for AI Data Centre Cooling
Consultancy firm Market Decipher has estimated that the global AI data centre liquid cooling market will grow to $18.1 billion by 2036, from only $3.7 billion in 2026.
Full-Year Targets and External Impacts
Schneider confirmed its full-year targets and said it expected the negative impact of foreign exchange fluctuations on revenue to be between 750 million euros and 850 million euros in 2026. In February, it had estimated the hit to be between 850 million euros and 950 million euros.
Geopolitical and Regional Factors
"Q2 will probably be disrupted from the crisis in the Middle East," finance chief Nathan Fast told reporters in a call, though he added that the region contributed to less than 5% of Technip's turnover last year.
($1 = 0.8578 euros)
(Reporting by Gianluca Lo Nostro; Editing by Milla Nissi-Prussak)
