By Adriano Marchese
Hammond Power Solutions is riding a wave of demand coming from U.S. as big tech builds out the infrastructure needed to support artificial-intelligence data centers.
The Guelph, Ontario, transformer manufacturer ended 2025 with a backlog at the highest level in the company's history, driven by what Chief Executive Adrian Thomas describes as several large, multiyear custom projects tied to the data-center ecosystem. The company is now expanding its capacity to meet the new demand.
Big tech is racing to build data centers and the infrastructure that will power the next generation of AI, a technology that requires massive amounts of energy and resources to operate.
Hammond produces electrical transformers and power-distribution equipment, the hardware that helps move and distribute electricity. In data centers, the transformers convert incoming grid power into the stable electricity for the servers and cooling systems to run.
In the final quarter of the year, the company's backlog rose 74% over the preceding quarter, with 2025 levels more than doubling the previous year--the highest level in the company's history. Thomas said in a call to investors Friday that the strong backlog gives the company revenue visibility into 2026.
Shares rose 13% midday Friday, reaching 196.71 Canadian dollars (US$143.17).
Sales in the fourth quarter rose by 14%, thanks largely to growth in the U.S. where data-center activity continued to lead overall economic activity. Hammond's Canadian operations also benefited from infrastructure and data-center projects, contributing to the company's fourth-quarter sales of C$254.1 million, which was higher than analyst projected.
Hammond is also investing heavily to increase its capacity to address the budding new demand. In 2025, the company brought more than C$100 million of new capacity online at its Monterrey, Mexico, facility, which the company said is already contributing to its backlog conversion. It also approved another C$100 million for custom transformer capacity through 2026 and early 2027.
In February, Hammond acquired AEG Power Solutions, a manufacturer of mission-critical industrial-power electronics, with the aim of expanding its product offering in transformer and power magnetics as well as its footprint in new markets and industries.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
March 20, 2026 11:34 ET (15:34 GMT)
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