According to Utility Dive, Schneider Electric’s Energy Management segment grew 10% year-over-year in the third quarter, with North America surging 17% as hyperscalers could spend nearly $200 billion on data center investments this year. CFO Hilary Maxson reported strong pipeline trends from both hyperscalers and new AI players across North America and China. The Paris-based company overall reached 10 billion euros ($11.5 billion) in organic revenue, representing 9% growth. Schneider’s software business grew 8% and now makes up 19% of total revenue, while the company’s AVEVA acquisition delivered 12% recurring revenue growth. Maxson also revealed that Schneider’s top suppliers have cut operational carbon emissions by 53% since 2020, beating their 2025 target ahead of schedule.
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The data center gold rush
Here’s the thing about Schneider’s performance – it’s basically riding the AI infrastructure wave that’s transforming the entire tech landscape. When hyperscalers are throwing around $200 billion in a single year, you want to be the company selling them the power management and cooling systems. And Schneider has positioned itself perfectly with strategic moves like buying Motivair for cooling expertise and partnering directly with NVIDIA on integrated data center designs.
That NVIDIA partnership is particularly smart. Instead of just selling individual components, they’re offering complete reference designs that can supposedly slash deployment times. In an industry where getting capacity online faster than competitors can be worth billions, that’s a compelling value proposition. It’s not just about selling hardware anymore – it’s about selling speed and integration.
Beyond the data center boom
Now, what’s interesting is that Schneider isn’t putting all its eggs in the data center basket. The company highlighted strong demand from “technical buildings” like retail and hotels, while residential markets in China and North America remain weak. But here’s the kicker – residential is apparently a small part of their buildings business anyway.
The real story might be Schneider’s broader repositioning as an “energy technology partner” across industries. They’re not just an electrical equipment company anymore – they’re becoming the go-to solution for companies trying to electrify, automate, and digitize their operations. And with their EcoStruxure platform and AVEVA software integration, they’re building a pretty comprehensive ecosystem.
The challenges ahead
It’s not all smooth sailing though. Maxson acknowledged that tariffs and inflation will continue to bite in 2025, and they won’t be able to fully offset those costs through price increases. Mexico’s also proving to be a weak spot due to “tariff uncertainties” – which basically means nobody knows what’s going to happen with trade policy there.
But honestly, when you’re growing at 10% in your core business and riding the AI infrastructure wave, these feel like manageable headwinds. The bigger question is whether this data center boom is sustainable or if we’re seeing another tech bubble in the making. Given that AI workloads are only getting more power-intensive, I’d bet on continued strong demand for energy management solutions.
The sustainability advantage
One underrated aspect of Schneider’s story is their sustainability progress. Cutting supplier emissions by 53% since 2020 isn’t just good PR – it’s becoming a competitive advantage. Companies buying data center infrastructure are increasingly concerned about their environmental footprint, and being able to demonstrate real progress on Scope 3 emissions matters.
Looking ahead to their Capital Markets Day on December 11th, it sounds like we’ll hear more about this “energy technology partner” vision. If they can successfully position themselves as the company that solves complex energy and automation challenges across multiple industries, they could define an entirely new market category. That’s ambitious, but given their current momentum, it might just work.
