TE Connectivity (TEL) Q3 2025 Earnings Call July 23, 2025 08:30 AM ET Company ParticipantsSujal Shah - VP - IRTerrence Curtin - CEO & Executive DirectorHeath Mitts - CFO, EVP & DirectorScott Davis - Chairman, CEO & Founding Partner – Multi-Industry ResearchAmit Daryanani - Senior MD - Equity ResearchJoseph Spak - Managing DirectorJoseph Giordano - Managing DirectorAsiya Merchant - Technology Equity ResearchSteven Fox - Founder & CEOShreyas Patil - VP - Equity ResearchConference Call ParticipantsMark Delaney ...

Financial Data and Key Metrics Changes - The company reported third quarter sales of $4.5 billion, representing a 14% increase year-over-year and exceeding guidance [6][8] - Adjusted earnings per share (EPS) reached a record $2.27, a 19% increase compared to the previous year [6][8] - Adjusted operating margins improved to 20%, up 60 basis points from the prior year [7][8] - Free cash flow generation was $1 billion for the quarter, contributing to a year-to-date total of approximately $2.1 billion [5][19] Business Line Data and Key Metrics Changes - The Industrial segment experienced over 20% organic growth, driven by Digital Data Networks and Energy businesses [6][8] - The Transportation segment saw a 2% organic growth in the auto business, with a notable 11% growth in Asia, offset by a 5% decline in Western regions [10][11] - The Energy business grew 70%, including contributions from the Richards acquisition, with a 20% organic growth rate [12][13] Market Data and Key Metrics Changes - Orders in the Transportation segment increased by 5% year-over-year, with a 17% growth in Asia [9] - The Industrial segment orders grew by 12% year-over-year, reflecting strong momentum in AI applications and energy sectors [9][12] - The global auto market remains uneven, with strength in Asia helping to offset declines in Europe and North America [9][10] Company Strategy and Development Direction - The company is focused on capitalizing on strong demand for AI and energy applications, with significant investments made to broaden its business portfolio [4][5] - A strategic emphasis on localization has resulted in over 70% of production being localized, enhancing customer differentiation [5][6] - The company plans to hold an Investor Day to discuss growth opportunities and value creation [3] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong performance into the fourth quarter, expecting double-digit sales and adjusted EPS growth [6][8] - The company anticipates that the strong demand trends in AI and energy will persist, contributing to future growth [45][46] - Management noted that while there are challenges in Western markets, the overall outlook remains positive due to strong performance in Asia [9][10] Other Important Information - The company returned $1.5 billion to shareholders and deployed $2.6 billion for acquisitions in the Industrial segment [8][19] - The impact of tariffs was approximately 1.5% of sales, with minimal earnings impact, and the company continues to mitigate these through sourcing changes and pricing actions [18][19] Q&A Session Summary Question: Is the AI business fully ramped and scaled? - Management confirmed that AI revenue is expected to exceed $800 million this year, with continued growth anticipated into next year [22][24] Question: What is driving the diversification and growth in the industrial segment? - Management highlighted investments in connectivity and power trends as key drivers of growth, with margins in the industrial segment now exceeding 20% [30][32] Question: Is there any meaningful impact from customers pre-buying to mitigate tariff risk? - Management indicated that there is no significant evidence of pull-ins affecting orders, with growth seen across both segments [38][40] Question: What is the outlook for margins moving forward? - Management expects to maintain margins above 20% in the industrial segment, supported by operational improvements and volume leverage [105][108] Question: How is the company positioned for future acquisitions? - Management expressed confidence in the acquisition pipeline, focusing on bolt-on opportunities to strengthen the energy business [96][98]

TE Connectivity Third Quarter 2025 Earnings July 23, 2025 EVERY CONNECTION COUNTS Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or ...

分组1 - TE Connectivity (TEL) reported quarterly earnings of $2.27 per share, exceeding the Zacks Consensus Estimate of $2.08 per share, and showing an increase from $1.91 per share a year ago, resulting in an earnings surprise of +9.13% [1] - The company achieved revenues of $4.53 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.20%, and up from $3.98 billion year-over-year [2] - TE Connectivity has outperformed the S&P 500, with shares increasing by about 26.2% since the beginning of the year compared to the S&P 500's gain of 7.3% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $2.13 on revenues of $4.38 billion, and for the current fiscal year, it is $8.27 on revenues of $16.67 billion [7] - The Zacks Industry Rank for Electronics - Miscellaneous Components is in the top 28% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[TE Connectivity Third Quarter Fiscal 2025 Results](index=1&type=section&id=TE%20Connectivity%20Third%20Quarter%20Fiscal%202025%20Results) [Third Quarter FY25 Performance Highlights](index=1&type=section&id=Third%20Quarter%20FY25%20Performance%20Highlights) TE Connectivity achieved record Q3 FY25 results, exceeding guidance with double-digit sales and EPS growth, led by Industrial segment Q3 FY2025 Key Financial Metrics | Metric | Value | Year-over-Year Change | | :--- | :--- | :--- | | Net Sales | $4.5 billion | +14% Reported, +9% Organic | | GAAP Diluted EPS | $2.14 | +15% | | Adjusted EPS | $2.27 | +19% | | Orders | $4.5 billion | Up YoY and Sequentially | | Operating Margin | 18.9% | - | | Adjusted Operating Margin | 19.9% | - | | Operating Cash Flow | ~$1.2 billion | - | | Free Cash Flow | $962 million | - | - The strong performance was primarily driven by **30% sales growth in the Industrial segment**, particularly from high-speed connectivity solutions for AI applications and the energy business[3](index=3&type=chunk)[5](index=5&type=chunk) - The Transportation segment saw increased sales despite declines in overall vehicle production, attributed to strength in Asia and innovations in electrification and next-generation vehicle data connectivity[5](index=5&type=chunk)[6](index=6&type=chunk) - Significant capital deployment year-to-date includes the completion of the Richards acquisition for **$2.3 billion** and returning **$1.5 billion** to shareholders[4](index=4&type=chunk) [Fourth Quarter FY25 Outlook](index=3&type=section&id=Fourth%20Quarter%20FY25%20Outlook) The company anticipates continued momentum into Q4 FY25, projecting double-digit sales and adjusted EPS growth Q4 FY2025 Guidance | Metric | Expected Value | Year-over-Year Change | | :--- | :--- | :--- | | Net Sales | ~$4.55 billion | +12% Reported, +6% Organic | | GAAP EPS | ~$2.18 | +140% | | Adjusted EPS | ~$2.27 | +16% | [Consolidated Financial Statements](index=10&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=10&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 FY25 net sales increased to **$4.53 billion**, operating income to **$857 million**, and diluted EPS grew to **$2.14** Q3 FY2025 vs Q3 FY2024 Income Statement (in millions, except EPS) | Metric | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Net Sales | $4,534 | $3,979 | | Gross Margin | $1,600 | $1,386 | | Operating Income | $857 | $755 | | Income from Continuing Operations | $638 | $573 | | Diluted EPS from Continuing Operations | $2.14 | $1.86 | [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$24.87 billion** as of June 27, 2025, driven by acquisitions, with total liabilities rising to **$12.34 billion** Balance Sheet Comparison (in millions) | Account | June 27, 2025 | September 27, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$24,866** | **$22,854** | | Cash and cash equivalents | $672 | $1,319 | | Goodwill | $7,251 | $5,801 | | **Total Liabilities** | **$12,342** | **$10,368** | | Long-term debt | $4,846 | $3,332 | | **Total Shareholders' Equity** | **$12,381** | **$12,355** | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Nine-month operating cash flow was **$2.72 billion**, with **$3.30 billion** used in investing activities for acquisitions, and **$63 million** in financing activities Nine Months Ended June 27, 2025 Cash Flow Summary (in millions) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash provided by operating activities | $2,718 | | Net cash used in investing activities | $(3,298) | | Net cash used in financing activities | $(63) | | **Net decrease in cash** | **$(647)** | - Investing activities were dominated by **$2.63 billion** used for the acquisition of businesses, net of cash acquired, over the nine-month period[23](index=23&type=chunk) - Financing activities included **$910 million** in share repurchases and **$594 million** in dividend payments, partially offset by **$2.23 billion** in proceeds from debt issuance[23](index=23&type=chunk) [Segment and Sales Analysis](index=14&type=section&id=Segment%20and%20Sales%20Analysis) [Segment Data](index=14&type=section&id=Segment%20Data) In Q3 FY25, Industrial Solutions sales grew **30%** to **$2.12 billion** with a **20.4%** adjusted operating margin, while Transportation Solutions sales increased modestly Q3 FY2025 Segment Performance (in millions) | Segment | Net Sales | YoY Change | Adj. Operating Income | Adj. Operating Margin | | :--- | :--- | :--- | :--- | :--- | | Transportation Solutions | $2,418 | +2.8% | $469 | 19.4% | | Industrial Solutions | $2,116 | +30.0% | $432 | 20.4% | [Reconciliation of Net Sales Growth](index=15&type=section&id=Reconciliation%20of%20Net%20Sales%20Growth) Q3 FY25 total net sales growth was **13.9%**, with **9.1%** organic growth, **1.7%** from currency, and **3.2%** from acquisitions, primarily driven by Industrial Solutions Q3 FY2025 Net Sales Growth Breakdown vs Q3 FY2024 | Component | Growth % | Value (in millions) | | :--- | :--- | :--- | | Organic Net Sales Growth | 9.1% | $361 | | Translation (FX) | 1.7% | $68 | | Acquisitions | 3.2% | $126 | | **Total Net Sales Growth** | **13.9%** | **$555** | - Within the Industrial Solutions segment, the Digital Data Networks business grew **81.9%** organically, and the Energy business grew **20.2%** organically[28](index=28&type=chunk) - The Transportation Solutions segment experienced modest organic growth of **1.1%**, with Automotive growing **1.5%** organically while Sensors declined **3.8%** organically[28](index=28&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Explanation of Non-GAAP Measures](index=5&type=section&id=Explanation%20of%20Non-GAAP%20Measures) TE Connectivity uses non-GAAP measures to provide supplemental information, enhancing understanding of operating performance and business trends by excluding certain items - The company presents non-GAAP measures to help investors understand performance in the same way management does for internal planning and forecasting[10](index=10&type=chunk) - Key non-GAAP measures include Organic Net Sales Growth (excludes currency, acquisitions/divestitures), Adjusted Operating Income (excludes special charges), Adjusted EPS, and Free Cash Flow (FCF)[11](index=11&type=chunk)[12](index=12&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Q3 FY25 GAAP operating income of **$857 million** was reconciled to an adjusted **$901 million**, and GAAP diluted EPS of **$2.14** to an adjusted **$2.27** Q3 FY2025 GAAP to Non-GAAP Reconciliation (in millions, except EPS) | Metric | U.S. GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Income | $857 | +$44 | $901 | | Operating Margin | 18.9% | - | 19.9% | | Diluted EPS | $2.14 | +$0.13 | $2.27 | - Adjustments primarily consist of acquisition-related charges, restructuring costs, and other net charges[30](index=30&type=chunk) - Forward-looking guidance for Q4 FY25 reconciles a GAAP EPS of **$2.18** to an Adjusted EPS of **$2.27**, with adjustments for restructuring and acquisition-related charges[44](index=44&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) [Conference Call and Webcast](index=3&type=section&id=Conference%20Call%20and%20Webcast) The company held an investor conference call on July 23 to discuss quarterly results, with replay access available via its investor relations website - An investor conference call was held at 8:30 a.m. ET on July 23[8](index=8&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) The earnings release contains forward-looking statements subject to various risks and uncertainties, including business interruptions, economic conditions, and currency fluctuations - The report includes forward-looking statements based on current management expectations, which are subject to risks and uncertainties[17](index=17&type=chunk) - Key risk factors mentioned include business interruptions, demand conditions, competition, currency and commodity price fluctuations, and geopolitical instability[17](index=17&type=chunk)[18](index=18&type=chunk)

Core Insights - TE Connectivity plc reported strong third quarter results for fiscal 2025, exceeding guidance due to robust operational performance and record sales and cash flow [3][5][9] - The company achieved double-digit sales growth, particularly in the Industrial segment, which saw a 30% increase in sales [3][4] - Adjusted operating margins reached 20%, leading to record adjusted EPS and cash generation for the quarter [3][9] Financial Performance - Net sales for the third quarter were a record $4.5 billion, up 14% year over year and 9% organically [9] - GAAP diluted EPS from continuing operations was $2.14, a 15% increase year over year, while adjusted EPS was $2.27, reflecting a 19% year-over-year increase [9] - Operating income was $857 million with an operating margin of 18.9%, and an adjusted operating margin of 19.9% [9][17] Segment Performance - The Industrial Solutions segment reported net sales of $2.1 billion, a 30% increase compared to the previous year, driven by high-speed connectivity solutions for AI applications and growth in the energy sector [4][17] - The Transportation Solutions segment increased sales to $2.4 billion despite declines in vehicle production, supported by strength in Asia and innovations in electrification and vehicle data connectivity [4][17] Cash Flow and Capital Deployment - Cash flow from operating activities for the quarter was approximately $1.2 billion, with free cash flow of $962 million [9][16] - The company completed the acquisition of Richards for $2.3 billion in the Industrial segment and returned $1.5 billion to shareholders [9][16] Fourth Quarter Outlook - For the fourth quarter of fiscal 2025, TE Connectivity expects net sales of approximately $4.55 billion, representing a 12% increase on a reported basis and 6% organically [5] - GAAP EPS from continuing operations is projected to be approximately $2.18, an increase of over 140% year over year, with adjusted EPS expected to be around $2.27, up 16% year over year [5]

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Key Takeaways TEL expects fiscal Q3 adjusted EPS of $2.06 and sales of $4.30B. Growth in Asia's hybrid and EV markets is boosting TEL's automotive business. AI, Energy, and Aerospace demand support TEL's Industrial segment.TE Connectivity (TEL) is scheduled to report its third-quarter fiscal 2025 earnings results on July 23.TEL expects fiscal third-quarter adjusted earnings to be around $2.06 per share, suggesting 8% year-over-year growth. This forecast includes a 4-cent impact from the Richards acquisiti ...

Core Insights - Telenor Group reported strong second-quarter results for 2025, leading to an increased EBITDA outlook for both the Nordics and the Group overall [1][3] - The company is enhancing its position in the Nordic fibre market with significant investments, including a NOK 1.4 billion investment in Finland and a NOK 6 billion acquisition of GlobalConnect's consumer business in Norway [1][8] Financial Performance - Telenor achieved a year-over-year organic growth of 2.9% in service revenues and 8.3% in EBITDA during the second quarter [2] - The Nordic segment was the primary driver, with an impressive 12.5% organic growth in adjusted EBITDA [2] - For the first half of 2025, adjusted EBITDA reached NOK 18.0 billion, with free cash flow before M&A at NOK 4.6 billion [3] Regional Highlights - In the Nordics, Telenor experienced a 3.7% organic growth in service revenues [4] - Telenor Norway outperformed expectations with a 3.7% growth in service revenues and a 16.1% increase in adjusted EBITDA [5] - Telenor Pakistan reported a robust 15.0% growth in service revenues, while Grameenphone maintained good performance despite market challenges in Bangladesh [6] Strategic Investments - Telenor plans to upgrade DNA's broadband infrastructure to an all-fibre network in Finland by 2028, with an investment of approximately NOK 1.4 billion [7] - The acquisition of GlobalConnect's consumer business, valued at NOK 6 billion, includes fibre infrastructure and around 140,000 fibre customers [8] - These investments are expected to create synergies and enhance customer experiences across the telecom market [9] Future Outlook - The Nordic business anticipates mid-single-digit organic growth in EBITDA, with capex expected to account for around 14% of revenues [15] - Free cash flow before M&A is projected to be around NOK 13 billion [15]

Core Viewpoint - Telenor Group has agreed to sell its 50% stake in Allente to Viaplay for SEK 1.1 billion, marking a strategic shift as Allente aligns better with Viaplay's strategy than Telenor's [1][2][3] Group 1: Transaction Details - The sale involves a total consideration of SEK 1.1 billion for Telenor's stake in Allente, which has an enterprise value of SEK 3.1 billion [1][3] - Allente, formed in May 2020 from the merger of Canal Digital and Viasat, serves residential and business customers across the Nordics [1] - The transaction is expected to close within six to nine months, pending regulatory approvals in Norway, Sweden, and Denmark [4] Group 2: Performance and Future Outlook - Since its inception, Allente has distributed SEK 4.4 billion in dividends to its owners, demonstrating strong financial performance [3] - Both Telenor and Viaplay express confidence in the future of Allente under Viaplay's full ownership, aiming to enhance its offerings and customer experiences [2][4]