Core Insights - Amphenol's international operations are crucial for assessing its financial resilience and growth prospects, especially given its expansive global footprint [1][2] Group 1: International Revenue Performance - Amphenol's total revenue for the quarter ended June 2025 was $5.65 billion, marking a 56.5% year-over-year increase [4] - Revenues from other foreign locations accounted for 50.10% of total revenue, translating to $2.83 billion, which exceeded Wall Street's expectations of $2.2 billion by 28.96% [5] - Revenue from China was $882.2 million, representing 15.61% of total revenue, which was a decline of 16.06% compared to the projected $1.05 billion [6] Group 2: Future Revenue Projections - For the current fiscal quarter, total revenue is projected to reach $5.46 billion, reflecting a 35.2% increase from the same quarter last year, with other foreign locations expected to contribute $2.33 billion [7] - For the full year, total revenue is anticipated to be $20.82 billion, a 36.8% increase from the previous year, with revenues from other foreign locations and China expected to be $9.13 billion and $3.99 billion, respectively [8] Group 3: Market Dynamics and Stock Performance - Amphenol's reliance on international markets presents both opportunities and challenges, making it essential to track international revenue trends for future projections [9] - The company's stock has appreciated by 7.5% over the past four weeks, outperforming the S&P 500's 4.9% increase, and has seen a 30.2% increase over the past three months compared to the S&P 500's 16% increase [12]

Investment Rating - The investment rating for the AIDC power equipment and grid industry is "Outperform the Market" (maintained) [1] Core Viewpoints - The global AI computing load is expected to grow significantly, with new AI computing loads projected at 9.7/15.9/20.2/22.3/23.4/24.6 GW from 2025 to 2030, leading to a corresponding increase in demand for AIDC power equipment [5][13] - The domestic data center industry is expected to see substantial capital expenditure growth, with major cloud providers anticipated to ramp up investments, particularly in AI infrastructure [18][24] - The industry is characterized by a long power transmission chain, with established global players like Eaton and Schneider Electric dominating, while domestic companies are gaining competitive advantages in various segments [5][13] AIDC Power Equipment Summary - The demand for AIDC power equipment is projected to reach 29/48/60/67/70/74 GW from 2025 to 2030, with an average annual growth rate of 20% [5][13] - The market space for dry-type transformers, medium and low voltage switchgear, UPS, HVDC, and solid-state transformers is expected to reach 85/341/41/380/239 billion yuan by 2030 [5][12] - Recent performance in the AIDC power equipment sector has shown significant gains, particularly in transformers and switchgear, with notable stock performances from companies like TBEA and XWDA [5][28] Grid Industry Summary - National power engineering investment reached 1,057 billion yuan in June 2025, a year-on-year increase of 22.5% [32] - The grid engineering investment for the same period was 871 billion yuan, reflecting a year-on-year growth of 4.1% [33] - The bidding results for the State Grid's transformer equipment showed a total bid amount of 211.89 billion yuan, a year-on-year increase of 38.1% [61] - The focus for the grid industry includes high voltage orders and the development of new business models such as virtual power plants and green electricity direct supply [5][55]

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, comprehensive income statements, and cash flow statements, along with detailed notes. It also includes management's discussion and analysis of financial condition and results of operations, disclosures about market risk, and controls and procedures [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section provides the unaudited condensed consolidated financial statements for Amphenol Corporation, covering the balance sheets, income statements, comprehensive income, and cash flows, along with extensive explanatory notes detailing accounting policies, debt, equity, acquisitions, and segment information [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, at specific reporting dates | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :------------------- | :--------------------- | :---------- | :--------- | | Total Assets | 25,668.4 | 21,440.2 | 4,228.2 | 19.7% | | Total Liabilities | 14,068.7 | 11,584.1 | 2,484.6 | 21.4% | | Total Equity | 11,589.6 | 9,847.4 | 1,742.2 | 17.7% | | Cash and cash equivalents | 3,207.0 | 3,317.0 | (110.0) | -3.3% | | Accounts receivable | 4,270.9 | 3,287.9 | 983.0 | 29.9% | | Inventories | 3,137.1 | 2,545.7 | 591.4 | 23.2% | | Goodwill | 9,651.3 | 8,236.2 | 1,415.1 | 17.2% | | Other intangible assets, net | 1,989.4 | 1,225.1 | 764.3 | 62.4% | | Current portion of long-term debt | 936.6 | 401.7 | 534.9 | 133.2% | | Long-term debt, less current portion | 7,125.8 | 6,484.4 | 641.4 | 9.9% | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the company's revenues, expenses, and net income over specific reporting periods | Metric | 3 Months Ended June 30, 2025 ($M) | 3 Months Ended June 30, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | | Net sales | 5,650.3 | 3,609.7 | 2,040.6 | 56.5% | | Gross profit | 2,053.3 | 1,213.1 | 840.2 | 69.3% | | Operating income | 1,418.8 | 698.8 | 720.0 | 103.0% | | Net income attributable to Amphenol Corporation | 1,091.3 | 524.8 | 566.5 | 108.0% | | Diluted EPS | 0.86 | 0.41 | 0.45 | 109.8% | | Metric | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | | Net sales | 10,461.3 | 6,866.0 | 3,595.3 | 52.4% | | Gross profit | 3,697.3 | 2,302.1 | 1,395.2 | 60.6% | | Operating income | 2,443.6 | 1,383.7 | 1,059.9 | 76.6% | | Net income attributable to Amphenol Corporation | 1,829.1 | 1,073.5 | 755.6 | 70.4% | | Diluted EPS | 1.44 | 0.85 | 0.59 | 69.4% | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Reports net income and other comprehensive income items, reflecting changes in equity from non-owner sources | Metric | 3 Months Ended June 30, 2025 ($M) | 3 Months Ended June 30, 2024 ($M) | Change ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | | Net income | 1,100.8 | 528.7 | 572.1 | | Foreign currency translation adjustments | 175.0 | (46.6) | 221.6 | | Total comprehensive income | 1,276.6 | 482.8 | 793.8 | | Comprehensive income attributable to Amphenol Corporation | 1,265.5 | 479.2 | 786.3 | | Metric | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | Change ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | | Net income | 1,845.0 | 1,080.8 | 764.2 | | Foreign currency translation adjustments | 247.1 | (117.9) | 365.0 | | Total comprehensive income | 2,093.7 | 964.5 | 1,129.2 | | Comprehensive income attributable to Amphenol Corporation | 2,075.5 | 958.6 | 1,116.9 | [Condensed Consolidated Statements of Cash Flow](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Summarizes cash inflows and outflows from operating, investing, and financing activities | Metric | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | | Net cash provided by operating activities | 2,181.7 | 1,263.6 | 918.1 | 72.7% | | Net cash used in investing activities | (2,964.2) | (2,195.7) | (768.5) | 35.0% | | Net cash provided by financing activities | 612.3 | 743.4 | (131.1) | -17.6% | | Net decrease in cash and cash equivalents | (110.0) | (222.5) | 112.5 | -50.6% | | Cash and cash equivalents balance, end of period | 3,207.0 | 1,252.5 | 1,954.5 | 156.0% | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1—Basis of Presentation and Principles of Consolidation](index=8&type=section&id=Note%201%E2%80%94Basis%20of%20Presentation%20and%20Principles%20of%20Consolidation) Explains the accounting principles and consolidation methods used in preparing the financial statements - The financial statements are unaudited and prepared in conformity with U.S. GAAP, consolidating Amphenol Corporation and its subsidiaries, with intercompany balances eliminated[17](index=17&type=chunk) [Note 2—New Accounting Pronouncements](index=8&type=section&id=Note%202%E2%80%94New%20Accounting%20Pronouncements) Discusses recently issued accounting standards and their potential impact on the company's financial reporting - FASB issued ASU 2023-09 (Income Taxes) effective for annual fiscal years beginning after December 15, 2024, aiming to improve disclosures on rate reconciliation and income taxes[18](index=18&type=chunk) - FASB issued ASU 2024-03 (Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures) effective for annual fiscal years beginning after December 15, 2026, requiring disaggregation of significant income statement expenses. The company is evaluating its potential impact[19](index=19&type=chunk) [Note 3—Inventories](index=10&type=section&id=Note%203%E2%80%94Inventories) Provides details on the composition and valuation of the company's inventory balances | Inventory Component | June 30, 2025 ($M) | December 31, 2024 ($M) | Change ($M) | Change (%) | | :------------------ | :----------------- | :--------------------- | :---------- | :--------- | | Raw materials and supplies | 1,300.2 | 1,102.5 | 197.7 | 17.9% | | Work in process | 853.9 | 703.5 | 150.4 | 21.4% | | Finished goods | 983.0 | 739.7 | 243.3 | 32.9% | | Total Inventories | 3,137.1 | 2,545.7 | 591.4 | 23.2% | [Note 4—Debt](index=10&type=section&id=Note%204%E2%80%94Debt) Outlines the company's debt structure, including senior notes, credit facilities, and recent financing activities | Debt Type | June 30, 2025 Carrying Amount ($M) | December 31, 2024 Carrying Amount ($M) | Change ($M) | Change (%) | | :----------------------------------- | :----------------------------------- | :------------------------------------- | :---------- | :--------- | | Total debt | 8,062.4 | 6,886.1 | 1,176.3 | 17.1% | | Current portion of long-term debt | 936.6 | 401.7 | 534.9 | 133.2% | | Long-term debt, less current portion | 7,125.8 | 6,484.4 | 641.4 | 9.9% | - The Revolving Credit Facility was increased to **$3,000.0 million** in March 2024 and was undrawn as of June 30, 2025, and December 31, 2024[22](index=22&type=chunk) - The company issued **$750.0 million** of 4.375% Senior Notes due June 2028 and **€600.0 million** (approx. **$685.9 million**) of 3.125% Euro Senior Notes due June 2032 in June 2025, using proceeds to repay U.S. Commercial Paper and for general corporate purposes[26](index=26&type=chunk)[31](index=31&type=chunk) - The **$400.0 million** 2.050% Senior Notes due March 2025 were repaid upon maturity using cash on hand and U.S. Commercial Paper borrowings[27](index=27&type=chunk) [Note 5—Fair Value Measurements](index=17&type=section&id=Note%205%E2%80%94Fair%20Value%20Measurements) Describes the methodologies and hierarchy used for fair value measurements of financial instruments - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets for identical instruments), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs)[36](index=36&type=chunk) | Instrument | June 30, 2025 Total Fair Value ($M) | Level 1 ($M) | Level 2 ($M) | Level 3 ($M) | | :-------------------------- | :---------------------------------- | :----------- | :----------- | :----------- | | Short-term investments | 19.4 | — | 19.4 | — | | Long-term investments | 0.2 | — | 0.2 | — | | Forward contracts | 2.0 | — | 2.0 | — | | Redeemable noncontrolling interests | (10.1) | — | — | (10.1) | | Total | 11.5 | — | 21.6 | (10.1) | - Redeemable noncontrolling interests are classified as Level 3, with their redemption value generally calculated using a multiple of earnings based on unobservable inputs[39](index=39&type=chunk) [Note 6—Income Taxes](index=20&type=section&id=Note%206%E2%80%94Income%20Taxes) Details the provision for income taxes, effective tax rates, and the impact of tax legislation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Provision for income taxes ($M) | (247.3) | (135.1) | (465.9) | (245.8) | | Effective tax rate | 18.3% | 20.4% | 20.2% | 18.5% | - Stock option exercise activity decreased the effective tax rate by approximately **630 basis points** for Q2 2025 and **460 basis points** for H1 2025 due to excess tax benefits[41](index=41&type=chunk) - The company paid the balance of its Transition Tax (related to the 2017 Tax Cuts and Jobs Act) in the second quarter of 2025[42](index=42&type=chunk) - The Inflation Reduction Act of 2022 (IRA) did not have a material impact on the company's financial statements during the three and six months ended June 30, 2025 and 2024, and is not expected to have a material future impact[44](index=44&type=chunk) - The company is evaluating the impact of the H.R. 1 tax and spending bill, enacted on July 4, 2025, on its consolidated financial statements[45](index=45&type=chunk) [Note 7—Stockholders' Equity and Noncontrolling Interests](index=21&type=section&id=Note%207%E2%80%94Stockholders%27%20Equity%20and%20Noncontrolling%20Interests) Presents changes in equity, including stock repurchases, dividends, and noncontrolling interests | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :------------------- | :--------------------- | :---------- | :--------- | | Total stockholders' equity attributable to Amphenol Corporation | 11,519.3 | 9,792.0 | 1,727.3 | 17.6% | | Noncontrolling interests | 70.3 | 55.4 | 14.9 | 26.9% | | Total Equity | 11,589.6 | 9,847.4 | 1,742.2 | 17.7% | - Stockholders approved an amendment to increase the authorized Class A Common Stock to **5,000,000,000 shares**, effective May 15, 2025[52](index=52&type=chunk)[53](index=53&type=chunk) - Under the 2024 Stock Repurchase Program, the company repurchased **4.7 million shares** for **$341.0 million** during the first six months of 2025, with **$1,155.8 million** remaining authorization as of July 22, 2025[54](index=54&type=chunk) - The quarterly dividend rate was increased from **$0.11 to $0.165 per share**, effective Q3 2024. Dividends declared for H1 2025 totaled **$400.8 million**[55](index=55&type=chunk)[160](index=160&type=chunk) [Note 8—Stock-Based Compensation](index=25&type=section&id=Note%208%E2%80%94Stock-Based%20Compensation) Provides information on stock-based compensation expense, option activity, and unrecognized costs | Metric | 3 Months Ended June 30, 2025 ($M) | 3 Months Ended June 30, 2024 ($M) | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Stock-based compensation expense | 31.3 | 26.6 | 57.9 | 50.4 | | Aggregate income tax benefits | 88.7 | 33.7 | 111.7 | 65.8 | | Excess tax benefits from option exercises | 85.3 | 30.9 | 105.5 | 60.6 | | Stock Option Activity | June 30, 2025 | January 1, 2025 | | :----------------------------------- | :------------ | :-------------- | | Options outstanding | 98,428,821 | 105,704,191 | | Weighted Average Exercise Price | $35.41 | $29.40 | | Weighted Average Remaining Contractual Term (years) | 5.74 | 5.53 | | Aggregate Intrinsic Value ($M) | $6,234.3 | $4,233.2 | - As of June 30, 2025, total compensation cost related to non-vested options not yet recognized was approximately **$415.9 million**, with a weighted average expected amortization period of **3.84 years**[62](index=62&type=chunk) [Note 9—Earnings Per Share](index=29&type=section&id=Note%209%E2%80%94Earnings%20Per%20Share) Details the calculation of basic and diluted earnings per share, including weighted average shares outstanding | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Amphenol Corporation ($M) | 1,091.3 | 524.8 | 1,829.1 | 1,073.5 | | Weighted average common shares outstanding — Basic (M) | 1,215.3 | 1,202.3 | 1,212.5 | 1,201.2 | | Weighted average common shares outstanding — Diluted (M) | 1,272.2 | 1,264.9 | 1,269.2 | 1,260.4 | | Basic EPS | $0.90 | $0.44 | $1.51 | $0.89 | | Diluted EPS | $0.86 | $0.41 | $1.44 | $0.85 | - Anti-dilutive common shares, primarily related to outstanding stock options, were **8.3 million** for Q2 2025 and **8.2 million** for H1 2025[67](index=67&type=chunk) [Note 10—Benefit Plans and Other Postretirement Benefits](index=30&type=section&id=Note%2010%E2%80%94Benefit%20Plans%20and%20Other%20Postretirement%20Benefits) Outlines expenses related to pension plans and other postretirement benefits | Metric | 3 Months Ended June 30, 2025 ($M) | 3 Months Ended June 30, 2024 ($M) | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net pension expense | 1.0 | 0.6 | 2.1 | 1.8 | - The company provided matching contributions of approximately **$18.9 million** to U.S. defined contribution plans during the first six months of 2025, up from **$13.1 million** in the prior year[70](index=70&type=chunk) [Note 11—Acquisitions](index=30&type=section&id=Note%2011%E2%80%94Acquisitions) Provides details on recent acquisitions, including purchase price, acquired assets, and related expenses - During the first six months of 2025, the company completed three acquisitions, including the Andrew Business from CommScope, for approximately **$2,483.2 million**, net of cash acquired[71](index=71&type=chunk) - The Andrew Business acquisition (completed January 31, 2025, for **$2,041.1 million**) provides communications network solutions, including base station antennas and related interconnect solutions, and is included in the Communications Solutions segment[72](index=72&type=chunk) - The Andrew Business acquisition resulted in the recognition of **$893.1 million** of goodwill and **$800.0 million** of definite-lived intangible assets (customer relationships, proprietary technology, acquired backlog)[73](index=73&type=chunk) | Acquisition-Related Expenses | 3 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2025 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total acquisition-related expenses | 28.9 | 133.8 | | After-tax impact | 24.1 | 106.3 | | Amortization of acquired backlog (in Acquisition-related expenses) | 12.0 | 56.0 | | Amortization of inventory step-up costs (in Cost of sales) | 16.9 | 77.8 | [Note 12—Goodwill and Other Intangible Assets](index=33&type=section&id=Note%2012%E2%80%94Goodwill%20and%20Other%20Intangible%20Assets) Details the carrying amounts and changes in goodwill and other intangible assets, including amortization | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :------------------- | :--------------------- | :---------- | :--------- | | Goodwill | 9,651.3 | 8,236.2 | 1,415.1 | 17.2% | | Other intangible assets, net | 1,989.4 | 1,225.1 | 764.3 | 62.4% | - The increase in goodwill during H1 2025 was primarily driven by the 2025 Acquisitions, particularly the Andrew Business acquisition[79](index=79&type=chunk) | Intangible Asset Type | June 30, 2025 Net Carrying Amount ($M) | December 31, 2024 Net Carrying Amount ($M) | Weighted Average Life (years) | | :-------------------------- | :--------------------------------------- | :----------------------------------------- | :---------------------------- | | Customer relationships | 972.4 | 776.6 | 12 | | Proprietary technology | 733.6 | 179.4 | 14 | | Backlog and other | 14.3 | — | 1 | | Trade names (indefinite-lived) | 269.1 | 269.1 | N/A | | Total | 1,989.4 | 1,225.1 | 12 (definite-lived) | - Amortization expense for H1 2025 was **$87.1 million**, including **$10.0 million** related to the amortization of acquired backlog from the Andrew Business acquisition[80](index=80&type=chunk) [Note 13—Reportable Business Segments](index=35&type=section&id=Note%2013%E2%80%94Reportable%20Business%20Segments) Presents financial information by business segment, including net sales and operating income - The company has three reportable business segments: Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems[83](index=83&type=chunk) | Segment | 3 Months Ended June 30, 2025 External Net Sales ($M) | 3 Months Ended June 30, 2024 External Net Sales ($M) | Change ($M) | Change (%) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | :---------- | :--------- | | Harsh Environment Solutions | 1,445.2 | 1,046.0 | 399.2 | 38.2% | | Communications Solutions | 2,909.8 | 1,444.6 | 1,465.2 | 101.4% | | Interconnect and Sensor Systems | 1,295.3 | 1,119.1 | 176.2 | 15.7% | | Total External Net Sales | 5,650.3 | 3,609.7 | 2,040.6 | 56.5% | | Segment | 6 Months Ended June 30, 2025 External Net Sales ($M) | 6 Months Ended June 30, 2024 External Net Sales ($M) | Change ($M) | Change (%) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | :---------- | :--------- | | Harsh Environment Solutions | 2,713.4 | 1,962.0 | 751.4 | 38.3% | | Communications Solutions | 5,323.5 | 2,710.3 | 2,613.2 | 96.4% | | Interconnect and Sensor Systems | 2,424.4 | 2,193.7 | 230.7 | 10.5% | | Total External Net Sales | 10,461.3 | 6,866.0 | 3,595.3 | 52.4% | | Segment Operating Income | 3 Months Ended June 30, 2025 ($M) | 3 Months Ended June 30, 2024 ($M) | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Harsh Environment Solutions | 363.7 | 259.6 | 674.9 | 504.1 | | Communications Solutions | 890.7 | 350.6 | 1,551.5 | 636.8 | | Interconnect and Sensor Systems | 252.3 | 203.3 | 456.8 | 398.7 | | Total Segment Operating Income | 1,506.7 | 813.5 | 2,683.2 | 1,539.6 | - Depreciation and amortization expense for H1 2025 totaled **$445.7 million**, with Communications Solutions experiencing the largest increase due to acquisitions[88](index=88&type=chunk) [Note 14—Revenue Recognition](index=38&type=section&id=Note%2014%E2%80%94Revenue%20Recognition) Explains the company's policies for recognizing revenue, including sales channels and geographical distribution - The vast majority of sales are recognized at a point-in-time when control transfers to the customer, typically upon shipment or delivery and acceptance of the product[89](index=89&type=chunk) | Sales Channel (6 Months Ended June 30) | 2025 Net Sales ($M) | 2024 Net Sales ($M) | Change ($M) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :---------- | :--------- | | End customers and contract manufacturers | 8,509.4 | 5,650.6 | 2,858.8 | 50.6% | | Distributors and resellers | 1,951.9 | 1,215.4 | 736.5 | 60.6% | | Total | 10,461.3 | 6,866.0 | 3,595.3 | 52.4% | | Geography (6 Months Ended June 30) | 2025 Net Sales ($M) | 2024 Net Sales ($M) | Change ($M) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :---------- | :--------- | | United States | 3,580.9 | 2,369.1 | 1,211.8 | 51.1% | | China | 1,676.1 | 1,428.6 | 247.5 | 17.3% | | Other foreign locations | 5,204.3 | 3,068.3 | 2,136.0 | 69.6% | | Total | 10,461.3 | 6,866.0 | 3,595.3 | 52.4% | [Note 15—Commitments and Contingencies](index=40&type=section&id=Note%2015%E2%80%94Commitments%20and%20Contingencies) Discusses potential liabilities from legal actions and environmental compliance - The company does not believe that the resolution of any existing legal or regulatory action is expected to have a material adverse effect on its financial condition, results of operations, or cash flows[94](index=94&type=chunk) - The company believes its operations are in substantial compliance with applicable environmental laws and regulations, and compliance costs are not expected to have a material adverse effect[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial performance, liquidity, and capital resources for the three and six months ended June 30, 2025, compared to 2024, highlighting significant sales and earnings growth driven by organic expansion and strategic acquisitions, particularly in AI-related applications [Cautionary Note Regarding Forward-Looking Statements](index=41&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Warns readers about inherent risks and uncertainties associated with forward-looking information presented in the report - The report contains forward-looking statements subject to risks and uncertainties, including political, economic, military risks, changes in general economic conditions, cybersecurity threats, and climate change impacts[98](index=98&type=chunk)[100](index=100&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of their date, and the company undertakes no obligation to update them except as required by law[100](index=100&type=chunk)[101](index=101&type=chunk) [Reportable Business Segments](index=44&type=section&id=Reportable%20Business%20Segments_MD%26A) Identifies the company's operating segments and their respective end markets - The company's three reportable business segments are Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems, each serving various end markets[104](index=104&type=chunk) [Pillar Two Framework](index=44&type=section&id=Pillar%20Two%20Framework) Discusses the company's evaluation of the OECD/G20 global minimum tax framework and its financial impact - The OECD/G20 Pillar Two global minimum tax framework, effective in stages for EU and other countries, is being evaluated by the company[103](index=103&type=chunk) - The implementation of Pillar Two did not have a material impact on the company's condensed consolidated financial statements during the three and six months ended June 30, 2025, and is not currently expected to have a material impact on operations, financial condition, or cash flows in the future[103](index=103&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Analyzes the company's net sales, operating income, and earnings per share performance | Metric | 3 Months Ended June 30, 2025 ($M) | 3 Months Ended June 30, 2024 ($M) | Change ($M) | Change (%) | Organic Growth (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | :----------------- | | Net sales | 5,650.3 | 3,609.7 | 2,040.6 | 56.5% | 41% | | Operating income | 1,418.8 | 698.8 | 720.0 | 103.0% | N/A | | Diluted EPS | 0.86 | 0.41 | 0.45 | 109.8% | N/A | | Metric | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | Change ($M) | Change (%) | Organic Growth (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | :----------------- | | Net sales | 10,461.3 | 6,866.0 | 3,595.3 | 52.4% | 37% | | Operating income | 2,443.6 | 1,383.7 | 1,059.9 | 76.6% | N/A | | Diluted EPS | 1.44 | 0.85 | 0.59 | 69.4% | N/A | - Net sales growth was driven by robust organic growth in the Communications Solutions segment (**78% organically in Q2 2025**, **76% in H1 2025**), particularly in AI-related applications within the IT datacom market[105](index=105&type=chunk)[106](index=106&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) | Segment Organic Net Sales Growth | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Harsh Environment Solutions | 18% | 13% | | Communications Solutions | 78% | 76% | | Interconnect and Sensor Systems | 14% | 10% | - Adjusted Operating Income for H1 2025 was **$2,577.4 million** (**24.6% of net sales**), up from **$1,453.7 million** (**21.2% of net sales**) in H1 2024, primarily due to strong operating performance on higher sales volumes[120](index=120&type=chunk)[127](index=127&type=chunk) - Interest expense increased for both periods due to higher average borrowing levels from new senior note issuances and commercial paper to fund acquisitions and for general corporate purposes[124](index=124&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) Examines the company's cash position, funding sources, and capital allocation strategies [Liquidity and Cash Requirements](index=51&type=section&id=Liquidity%20and%20Cash%20Requirements) Details the company's cash position, primary liquidity sources, and anticipated cash needs | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :----------------------------------- | :------------------- | :--------------------- | | Cash, cash equivalents and short-term investments | 3,226.4 | 3,335.4 | | % located outside of the United States | ~60% | ~50% | - Primary sources of liquidity include internally generated cash from operations, cash on hand, and availability under Commercial Paper Programs and the Revolving Credit Facility[130](index=130&type=chunk) - Key cash requirements include operating and working capital needs, capital expenditures, product development, stock repurchases, dividends, debt service, taxes on repatriated foreign earnings, and future acquisitions[131](index=131&type=chunk) - The company paid the balance of its Transition Tax during Q2 2025 and is evaluating the impact of the H.R. 1 tax bill[132](index=132&type=chunk)[133](index=133&type=chunk) [Cash Flow Summary](index=53&type=section&id=Cash%20Flow%20Summary) Summarizes cash flows from operating, investing, and financing activities, including free cash flow | Cash Flow Activity | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | | Net cash provided by operating activities | 2,181.7 | 1,263.6 | 918.1 | 72.7% | | Net cash used in investing activities | (2,964.2) | (2,195.7) | (768.5) | 35.0% | | Net cash provided by financing activities | 612.3 | 743.4 | (131.1) | -17.6% | | Net decrease in cash and cash equivalents | (110.0) | (222.5) | 112.5 | -50.6% | - Operating Cash Flow increased primarily due to higher net income, partially offset by increased working capital usage[135](index=135&type=chunk) - Investing activities were driven by **$2,483.2 million** for acquisitions and **$480.0 million** in net capital expenditures, with elevated spending supporting AI applications in IT datacom[141](index=141&type=chunk) - Financing activities included **$1,430.0 million** from new debt issuances (2028 Senior Notes, 2032 Euro Notes) and **$333.8 million** from stock option exercises, offset by **$400.0 million** debt redemption, **$399.1 million** in dividends, and **$341.0 million** in share repurchases[143](index=143&type=chunk) | Free Cash Flow | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | Change ($M) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | | Operating Cash Flow (GAAP) | 2,181.7 | 1,263.6 | 918.1 | 72.7% | | Capital expenditures (GAAP) | (485.7) | (235.6) | (250.1) | 106.2% | | Proceeds from disposals of property, plant and equipment (GAAP) | 5.7 | 5.4 | 0.3 | 5.6% | | Free Cash Flow (non-GAAP) | 1,701.7 | 1,033.4 | 668.3 | 64.7% | [Debt Instruments](index=58&type=section&id=Debt%20Instruments) Provides an overview of the company's credit facilities, commercial paper programs, and outstanding senior notes - The Revolving Credit Facility (increased to **$3,000.0 million** in March 2024) and Commercial Paper Programs (U.S. and Euro) had no outstanding borrowings as of June 30, 2025, and December 31, 2024[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) - The U.S. Commercial Paper Program was utilized in H1 2025 to partially fund the Andrew Business acquisition, but all outstanding notes were repaid before the end of Q2 2025 using proceeds from the 2028 Senior Notes and 2032 Euro Notes[146](index=146&type=chunk)[150](index=150&type=chunk)[155](index=155&type=chunk) | Senior Notes Outstanding (as of June 30, 2025) | Principal Amount ($M) | Interest Rate | Maturity | | :----------------------------------- | :-------------------- | :------------ | :------------- | | 4.750% Senior Notes | 350.0 | 4.750% | March 2026 | | 5.050% Senior Notes | 700.0 | 5.050% | April 2027 | | 4.375% Senior Notes | 750.0 | 4.375% | June 2028 | | 5.050% Senior Notes | 450.0 | 5.050% | April 2029 | | 4.350% Senior Notes | 500.0 | 4.350% | June 2029 | | 2.800% Senior Notes | 900.0 | 2.800% | February 2030 | | 750.0 | 2.200% | September 2031 | | 5.250% Senior Notes | 600.0 | 5.250% | April 2034 | | 5.000% Senior Notes | 750.0 | 5.000% | January 2035 | | 5.375% Senior Notes | 500.0 | 5.375% | November 2054 | | 0.750% Euro Senior Notes | €500.0 | 0.750% | May 2026 | | 2.00% Euro Senior Notes | €500.0 | 2.00% | October 2028 | | 3.125% Euro Senior Notes | €600.0 | 3.125% | June 2032 | [Stock Repurchase Programs](index=61&type=section&id=Stock%20Repurchase%20Programs_MD%26A) Details the company's share repurchase authorizations and activity - The Board authorized a **$2,000.0 million** stock repurchase program in April 2024, effective until April 2027[158](index=158&type=chunk) | Period | Total Shares Purchased (M) | Average Price Paid per Share ($) | | :-------------------------- | :------------------------- | :------------------------------- | | April 1 to April 30, 2025 | 0.8957 | 65.53 | | May 1 to May 31, 2025 | 0.6199 | 83.68 | | June 1 to June 30, 2025 | 0.5301 | 93.44 | | Total (Q2 2025) | 2.0457 | 78.26 | - As of July 22, 2025, **$1,155.8 million** remained authorized for repurchase under the 2024 Stock Repurchase Program[158](index=158&type=chunk) [Dividends](index=61&type=section&id=Dividends_MD%26A) Reports on dividend declarations and payments to shareholders - The Board approved an increase to the quarterly dividend rate from **$0.11 to $0.165 per share**, effective with dividends declared in Q3 2024[159](index=159&type=chunk) | Metric | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Dividends declared | 400.8 | 264.5 | | Dividends paid | 399.1 | 263.8 | [Acquisitions](index=61&type=section&id=Acquisitions_MD%26A) Discusses recent acquisition activities, funding, and related expenses - Three acquisitions were completed in H1 2025, including the Andrew Business from CommScope, for approximately **$2,483.2 million**, net of cash acquired[161](index=161&type=chunk) - The 2025 acquisitions were funded using cash on hand, proceeds from October Senior Notes, and borrowings under the U.S. Commercial Paper Program[161](index=161&type=chunk) | Acquisition-Related Expenses | 3 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2025 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total acquisition-related expenses | 28.9 | 133.8 | | After-tax impact | 24.1 | 106.3 | [Environmental Matters](index=63&type=section&id=Environmental%20Matters) Assesses the company's compliance with environmental regulations and potential financial impacts - The company believes its operations are in substantial compliance with environmental laws and regulations, and compliance costs are not expected to have a material adverse effect on its financial condition, results of operations, or cash flows[164](index=164&type=chunk) [Non-GAAP Financial Measures](index=63&type=section&id=Non-GAAP%20Financial%20Measures) Explains the use and reconciliation of non-GAAP financial metrics for performance evaluation - Management uses non-GAAP financial measures (e.g., Adjusted Diluted EPS, Adjusted Operating Income, Free Cash Flow, Organic Net Sales Growth) for internal monitoring, evaluation, forecasting, and communication of financial performance[165](index=165&type=chunk) - Non-GAAP measures exclude items not directly related to operating performance, such as acquisition-related expenses, refinancing costs, and certain discrete tax items, to provide a clearer view of underlying trends[165](index=165&type=chunk) - Free Cash Flow is defined as Net cash provided by operating activities less capital expenditures, net of proceeds from disposals of property, plant and equipment, serving as a key liquidity measure[169](index=169&type=chunk) - Organic Net Sales Growth excludes the impact of foreign currency exchange rates and acquisitions to reflect growth from operating volume, pricing changes, and sales mix[169](index=169&type=chunk) [Critical Accounting Policies and Estimates](index=65&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Confirms no material changes to key accounting policies and estimates since the last annual report - No material changes have occurred in the company's critical accounting policies and estimates since the 2024 Annual Report on Form 10-K[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates and interest rate fluctuations. While it manages interest rate risk through a mix of fixed and variable rate debt, and had no outstanding variable rate borrowings as of June 30, 2025, changes in interest rates could impact future interest expense if variable rate debt is utilized - The company is exposed to market risks from foreign currency exchange rates and changes in interest rates[168](index=168&type=chunk) - Interest rate risk is managed through a mix of fixed and variable rate debt, with various fixed rate senior notes outstanding[170](index=170&type=chunk) - As of June 30, 2025, there were no outstanding borrowings under the Revolving Credit Facility or Commercial Paper Programs, which bear floating interest rates[170](index=170&type=chunk) - While changes in interest rates are not expected to materially affect income or cash flows for the remainder of 2025, future borrowings under floating rate instruments could impact interest expense[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025. There have been no material changes in internal control over financial reporting during the most recent fiscal quarter - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[171](index=171&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[172](index=172&type=chunk) [PART II — OTHER INFORMATION](index=68&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, unregistered sales of equity securities, defaults on senior securities, other information including trading arrangements, and a list of exhibits [Item 1. Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 15 of the Notes to Condensed Consolidated Financial Statements, indicating no material adverse effect is expected from current actions - Information on legal proceedings is incorporated by reference from Note 15, which states that no material adverse effect is expected from existing legal or regulatory actions[174](index=174&type=chunk)[94](index=94&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for December 31, 2024[175](index=175&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 2.0 million shares for $160.1 million in Q2 2025 under its 2024 Stock Repurchase Program, with $1,155.8 million remaining authorization as of July 22, 2025 - Under the 2024 Stock Repurchase Program, the company repurchased **2.0 million shares** for **$160.1 million** during Q2 2025[176](index=176&type=chunk) | Period | Total Shares Purchased (M) | Average Price Paid per Share ($) | | :-------------------------- | :------------------------- | :------------------------------- | | April 1 to April 30, 2025 | 0.8957 | 65.53 | | May 1 to May 31, 2025 | 0.6199 | 83.68 | | June 1 to June 30, 2025 | 0.5301 | 93.44 | | Total (Q2 2025) | 2.0457 | 78.26 | - As of July 22, 2025, **$1,155.8 million** remained authorized for repurchase under the 2024 Stock Repurchase Program[176](index=176&type=chunk) [Item 3. Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[178](index=178&type=chunk) [Item 4. Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[179](index=179&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025[180](index=180&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, debt instruments, stock plans, and certifications, with many incorporated by reference from previous filings - The section lists various exhibits, including Restated Certificate of Incorporation, Indentures for Senior Notes, Stock Purchase and Option Plans, Pension Plans, and Certifications[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) [Signature](index=74&type=section&id=Signature) The report is signed by Craig A. Lampo, Senior Vice President and Chief Financial Officer of Amphenol Corporation, on July 25, 2025 - The report was signed by Craig A. Lampo, Senior Vice President and Chief Financial Officer, on July 25, 2025[189](index=189&type=chunk)

Core Viewpoint - Amphenol (APH) reported record revenue and profit in Q2 2025, driven by growth in IT data communications, communication networks, commercial aerospace, defense, industrial markets, mobile devices, and automotive sectors [1][6][12]. Financial Performance - Q2 2025 revenue reached $5.65 billion, exceeding guidance of $5 billion, with a year-over-year increase of 57% and a quarter-over-quarter increase of 17% [1][6]. - Adjusted operating profit margin was 25.6%, up 4.3 percentage points year-over-year and 2.1 percentage points quarter-over-quarter, reflecting strong operational leverage from increased sales [1][6][12]. - Adjusted EPS was $0.81, surpassing guidance and up 84% from $0.44 in Q2 2024 [1][6][12]. - Record order volume of $5.523 billion, up 36% year-over-year and 4% quarter-over-quarter, with an order-to-shipment ratio of 0.98:1 [1][6][12]. Segment Performance - All three business segments reported significant year-over-year growth: Environmental Solutions ($1.445 billion, +38%), Communication Solutions ($2.91 billion, +101%), and Interconnect and Sensor Systems ($1.295 billion, +16%) [2][7]. - IT data communications and communication networks saw remarkable growth, with revenues increasing by 133% and 143% year-over-year, respectively, driven by AI applications and acquisitions [2][11][12]. Market Outlook - For Q3 2025, the company expects revenue between $5.4 billion and $5.5 billion, representing a year-over-year increase of 34% to 36% [3][14]. - The defense market is anticipated to see slight growth, while commercial aerospace and industrial markets may experience minor declines due to seasonal factors [4][16][17]. Cash Flow and Capital Expenditure - Q2 2025 operating cash flow and free cash flow reached new records of $1.417 billion and $1.122 billion, respectively, with capital expenditures expected to increase to support growth in IT data communications [12][12]. Acquisition Strategy - The company completed the acquisition of Narda-MITEQ for approximately $300 million, enhancing its position in the defense market [13][31]. - Amphenol continues to explore acquisition opportunities across various market segments, focusing on companies with strong talent and product offerings [31][32]. Future Growth Potential - The company anticipates that future incremental sales will convert to operating profit at a rate close to 30%, reflecting ongoing improvements in product technology and cost management [15][20].

Summary of Amphenol Corp. (APH) Conference Call Company Overview - **Company**: Amphenol Corp. (APH) - **Market Cap**: $128.1 billion - **Enterprise Value**: $131.2 billion - **Current Price**: $100.71 - **Target Price**: $124.00 - **Upside Potential**: 23.1% [1][3] Key Financial Highlights - **2Q25 Revenue**: $5.65 billion, up 57% year-over-year (yoy) and 41% yoy organically [2][18] - **Non-GAAP EPS**: $0.81, 12% above consensus estimates [2][19] - **Adjusted Operating Margin**: 25.6%, up approximately 210 basis points quarter-over-quarter (qoq) and 430 bps yoy [2][19] - **Orders in 2Q25**: $5.52 billion, up 36% yoy [1][24] - **Free Cash Flow**: $1.12 billion, approximately 20% of revenue [20] Growth Drivers - **AI/Data Center Applications**: Significant growth with total organic growth of 41% yoy in 2Q and IT datacom segment up 133% yoy organically [1][2] - **Diverse End Markets**: Growth across automotive, industrial, military, and commercial aerospace sectors [22][26] - **Acquisition of Narda-MITEQ**: Acquired for ~$300 million, enhancing capabilities in the defense market [20] Guidance and Outlook - **3Q25 Revenue Guidance**: Expected between $5.40 billion and $5.50 billion, up 35% yoy at the midpoint [25] - **Operating EPS Guidance**: $0.77 to $0.79, above consensus estimates [25] - **Market-Specific Expectations**: - **Automotive**: Slight decline expected due to seasonality - **Industrial**: Moderate growth anticipated - **IT and Data Communications**: Growth expected to moderate in the mid to high single-digit range due to timing dynamics [27][28] Market Position and Risks - **Investor Concerns**: Focus on sustainability of demand, particularly in AI/datacenter segments [1][16] - **Valuation**: Trading at 30X CY26 EPS estimate, lower end of historical premium range compared to S&P 500 [17][30] - **Key Risks**: Revenue growth sustainability, margin pressures, tariffs, and geopolitical factors affecting operations in China [33] Conclusion - **Investment Rating**: Maintained Buy rating based on strong product portfolio, diverse market exposure, and operational execution [29] - **Future Growth**: Continued focus on M&A to augment organic growth and address investor concerns regarding market share and demand sustainability [29]

Core Insights - J.F. Lehman & Company has sold Narda AcquisitionCo., Inc. (Narda-MITEQ) to Amphenol Corporation, with transaction terms undisclosed [1] - Narda-MITEQ specializes in advanced RF and microwave components for defense and commercial markets, enhancing RF energy management in various applications [2] - The acquisition by J.F. Lehman & Company in 2021 led to operational improvements and strategic growth initiatives, including the acquisition of Intelligent RF Solutions, LLC [3] Company Developments - Under J.F. Lehman & Company's management, Narda-MITEQ experienced significant operational and commercial improvements, enhancing its competitive position [4] - The partnership with J.F. Lehman & Company resulted in a transformation of organizational processes, benefiting customers and employees [4] - The strategic plan executed by management focused on expanding the product portfolio and strengthening customer value propositions [4] Advisory and Legal Support - KippsDeSanto acted as the exclusive financial advisor for Narda-MITEQ and J.F. Lehman & Company during the transaction [4] - A&O Shearman and BakerHostetler provided legal counsel for the deal [4]

Core Insights - Amphenol reported record sales and earnings for Q2 2025, with revenue of $5.65 billion and adjusted EPS of $0.81, surpassing analyst estimates and reflecting significant year-over-year growth [1][2][11] Financial Performance - Revenue increased by 57% year-over-year, with organic sales growth of 41% and acquisitions contributing an additional 15 percentage points [5][6] - Adjusted EPS grew by 84% compared to the prior year, with operating margin improving to 25.1%, a 5.7 percentage point increase [2][8] - Free cash flow reached $1.12 billion, nearly double the previous year, indicating strong cash conversion capabilities [2][8] Business Overview - Amphenol specializes in connectors, cables, and sensor systems for various industries, including automotive, aerospace, and IT datacom [3] - The company operates in nearly 40 countries, maintaining close relationships with original equipment manufacturers (OEMs) [3] Strategic Focus - Recent strategies emphasize innovation in high-performance solutions, supply chain flexibility, and operational efficiency [4] - Acquisitions, such as the Andrew Business and Narda-MITEQ, have expanded Amphenol's customer base and technology leadership [4] Segment Performance - The Communications Solutions segment saw sales double year-over-year, driven by strong demand in data centers [6] - Harsh Environment Solutions reported a 38% increase in sales, while the Interconnect & Sensor Systems segment grew by 16% [6] Market Trends - IT datacom revenue growth was significantly driven by AI applications, with two-thirds of the growth attributed to this sector [7] - Management noted strong demand across the broader IT market, not limited to AI-related areas [7] Future Outlook - For Q3 2025, management projects sales between $5.4 billion and $5.5 billion, indicating a 34-36% increase year-over-year [11] - Adjusted EPS is expected to be between $0.77 and $0.79, reflecting ongoing margin strength [11][12]

Core Insights - Amphenol's second-quarter 2025 adjusted earnings reached 81 cents per share, exceeding the Zacks Consensus Estimate by 22.73%, and reflecting an 88.4% year-over-year increase [1][8] - Net sales for the same period increased by 56.5% year over year to $5.7 billion, surpassing the consensus mark by 13.05%, with organic growth contributing 41% [1][8] Financial Performance - The strong top-line performance was driven by robust organic growth across all end markets, particularly in the IT datacom sector, along with strategic contributions from ongoing acquisitions [2] - Harsh Environment Solutions accounted for 25.6% of net sales, generating $1.45 billion, a 38.2% year-over-year increase [3] - Communications Solutions, making up 51.5% of net sales, saw sales of $2.91 billion, up 101.4% year over year [3] - Interconnect and Sensor Systems Solutions represented 22.9% of net sales, with sales of $1.3 billion, reflecting a 15.7% year-over-year increase [3] - Gross margin expanded by 270 basis points year over year to 36.3% [3] - Selling, general and administrative expenses decreased by 130 basis points year over year to 11% of revenues [4] - Adjusted operating margin improved by 430 basis points year over year to 25.6% [4] Balance Sheet & Cash Flow - As of June 30, 2025, Amphenol had cash and cash equivalents of $3.23 billion, down from $3.34 billion at the end of 2024 [5] - Total debt increased to $8.06 billion from $6.89 billion as of December 31, 2024 [5] - The company generated $1.4 billion in cash from operations in the second quarter, a significant increase from $764.9 million in the previous quarter [6] - Non-GAAP free cash flow reached $1.1 billion in the second quarter, up from $580.4 million in the first quarter [6] Future Guidance - For the third quarter of 2025, Amphenol expects earnings between 77 cents and 79 cents per share, indicating a year-over-year growth of 54% to 58% [7][9] - Revenue is anticipated to be between $5.4 billion and $5.5 billion, suggesting growth in the range of 34% to 36% year over year [9]

Financial Data and Key Metrics Changes - The company reported record sales of $5,650,000,000 for the second quarter of 2025, representing a 57% increase in U.S. dollars and a 56% increase in local currencies compared to the same period in 2024 [4][5] - GAAP diluted EPS reached a record $0.86, up 110% year-over-year, while adjusted diluted EPS increased 84% to $0.81 [10] - Operating cash flow was a record $1,417,000,000, or 130% of net income, and free cash flow was $1,122,000,000, or 103% of net income [10][11] - The company achieved a GAAP operating margin of 25.1% and an adjusted operating margin of 25.6%, reflecting strong operating leverage [6][15] Business Segment Data and Key Metrics Changes - Communication Solutions segment sales were $2,910,000,000, up 101% in U.S. dollars and 78% organically, with an operating margin of 30.6% [8] - Harsh Environment Solutions segment sales increased by 38% to $1,445,000,000, with an operating margin of 25.2% [9] - Interconnect Sensors and Systems segment sales grew 16% to $1,295,000,000, with an operating margin of 19.5% [9] - The IT datacom market represented 36% of sales, growing 133% in U.S. dollars, driven by demand for AI applications [30][31] Market Data and Key Metrics Changes - The defense market accounted for 9% of sales, growing 25% in U.S. dollars and 18% organically [19] - The commercial aerospace market represented 5% of sales, with a 50% increase in U.S. dollars [20] - The industrial market, representing 19% of sales, grew 25% in U.S. dollars and 12% organically [22] - The automotive market represented 14% of sales, with a 10% increase in U.S. dollars [25] Company Strategy and Development Direction - The company is focused on expanding its high technology interconnect, antenna, and sensor offerings through both organic growth and acquisitions [24] - The acquisition of Narda Mitek, a provider of RF and microwave components, is expected to enhance the company's position in the defense market [17][92] - The company maintains a diversified market exposure, reducing volatility risks associated with any single market [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to market opportunities and challenges, expecting continued strong profitability [34] - The company anticipates sales for the third quarter to be in the range of $5,400,000,000 to $5,500,000, representing a year-over-year growth of 34% to 36% [34] - Management highlighted the ongoing demand for AI-related products and the company's strong position in the IT datacom market [54] Other Important Information - The company completed a successful $750,000,000 U.S. bond offering and a €600,000,000 bond offering [11] - Total liquidity at the end of the quarter was $6,200,000,000, including cash and short-term investments of $3,200,000,000 [11] Q&A Session Summary Question: Operating margin performance and future targets - Management acknowledged the exceptional operating margin of 25.6% and indicated a target conversion margin of closer to 30% moving forward [39][40] Question: Sales mix and technology roadmap - Management noted that the sales mix is becoming richer due to high technology products across various markets, contributing to improved margins [44] Question: Durability of growth in AI infrastructure - Management confirmed that AI is a significant contributor to growth, with approximately two-thirds of growth in IT datacom attributed to AI [54] Question: Acquisition strategy and cash utilization - The company paid approximately $300,000,000 for Narda and remains optimistic about future acquisitions, indicating a strong pipeline [93][94] Question: Performance surprises in the quarter - Management highlighted strong performance across nearly all end markets, attributing success to the organization's execution capabilities [98]

Financial Data and Key Metrics Changes - The company reported record sales of $5,650,000,000 for the second quarter of 2025, representing a 57% increase in U.S. dollars and a 41% organic growth compared to the same quarter in 2024 [3][4] - GAAP diluted EPS reached a record $0.86, up 110% year-over-year, while adjusted diluted EPS increased 84% to $0.81 [8][12] - Operating cash flow was a record $1,417,000,000, or 130% of net income, and free cash flow was $1,122,000,000, or 103% of net income [8][14] Business Segment Data and Key Metrics Changes - Communication Solutions segment sales were $2,910,000,000, up 101% in U.S. dollars and 78% organically, with an operating margin of 30.6% [6][7] - Harsh Environment Solutions segment sales increased by 38% in U.S. dollars to $1,445,000,000, with an operating margin of 25.2% [7] - IT Datacom market represented 36% of sales, growing by 133% in U.S. dollars, driven by demand for AI-related products [28][29] Market Data and Key Metrics Changes - The defense market accounted for 9% of sales, growing 25% in U.S. dollars and 18% organically [16][17] - The commercial aerospace market represented 5% of sales, with a 50% increase in U.S. dollars [18][19] - The automotive market represented 14% of sales, growing 10% in U.S. dollars and 8% organically [22][23] Company Strategy and Development Direction - The company is focused on expanding its presence in RF interconnect and active RF components through acquisitions, including the recent acquisition of Narda Mitek [14][15] - The diversification of end markets allows the company to mitigate risks associated with market volatility [15][16] - The company aims to maintain a conversion margin target of closer to 30% moving forward, reflecting the increased level of technology in its products [36][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of growth in the AI infrastructure market, indicating that approximately two-thirds of growth in IT Datacom was driven by AI [52] - The company anticipates modest sales increases in the third quarter, with guidance for sales in the range of $5,400,000,000 to $5,500,000, reflecting a year-over-year growth of 34% to 36% [31] - Management highlighted strong execution across all end markets, contributing to better-than-expected performance [100] Other Important Information - The company completed a successful $750,000,000 U.S. bond offering and a €600,000,000 bond offering [10] - Total debt as of June 30 was $8,100,000,000, with net debt at $4,800,000,000 [9] Q&A Session Summary Question: Operating margin performance and future targets - Management acknowledged the exceptional operating margin of 25.6% and indicated that future targets may be closer to 30% due to higher technology products and cost control [36][39] Question: Sales mix and technology roadmap - Management confirmed that the sales mix is becoming richer due to high technology products across various markets, not just IT Datacom [41][44] Question: Durability of growth in AI infrastructure - Management indicated that while growth rates may not always be as high as 133%, there are significant future growth opportunities in AI [51][52] Question: Customer concentration in AI business - Management stated that the AI business remains broad and not overly concentrated among a few customers, with continued growth expected [55] Question: Acquisition plans and cash generation - Management confirmed the acquisition of Narda for approximately $300,000,000 and expressed confidence in pursuing more acquisitions in the future [94][95]