Amphenol(APH) - 2024 Q4 - Annual Results

Performance Overview and Business Outlook Amphenol achieved record sales and Adjusted Diluted EPS in Q4 and full year 2024, driven by organic growth and acquisitions, projecting robust Q1 2025 performance Fourth Quarter 2024 Performance Amphenol achieved record Q4 2024 sales and Adjusted Diluted EPS, driven by strong organic growth across multiple key markets and acquisitions Fourth Quarter 2024 Financial Highlights | Metric | Value | YoY Change | | :--- | :--- | :--- | | Sales | $4.3 billion | +30% | | Organic Sales Growth | - | +20% | | GAAP Diluted EPS | $0.59 | +44% | | Adjusted Diluted EPS | $0.55 | +34% | | GAAP Operating Margin | 22.1% | - | | Adjusted Operating Margin | 22.4% | - | | Operating Cash Flow | $847 million | - | | Free Cash Flow | $648 million | - | - The 30% sales increase was driven by strong organic growth in IT datacom, mobile networks, commercial air, mobile devices, broadband, and defense markets, along with contributions from the company's acquisition program[4] Full Year 2024 Performance Amphenol's full year 2024 sales and Adjusted Diluted EPS reached record highs, driven by robust organic growth and strategic acquisitions Full Year 2024 Financial Highlights | Metric | Value | YoY Change | | :--- | :--- | :--- | | Sales | $15.2 billion | +21% | | Organic Sales Growth | - | +13% | | GAAP Diluted EPS | $1.92 | +24% | | Adjusted Diluted EPS | $1.89 | +25% | | GAAP Operating Margin | 20.7% | - | | Adjusted Operating Margin | 21.7% | - | | Operating Cash Flow | $2.8 billion | - | | Free Cash Flow | $2.2 billion | - | - Full-year sales growth was driven by robust organic performance in IT datacom, commercial air, mobile devices, and defense markets, supplemented by contributions from acquisitions[4] Capital Allocation and Strategy Amphenol returned significant capital to shareholders in 2024 through buybacks and dividends, while actively pursuing strategic acquisitions - The company returned nearly $1.3 billion to shareholders in 2024 In Q4 alone, it purchased 2.4 million shares for $169 million and paid $199 million in dividends[4][8] - Completed two acquisitions in 2024: Carlisle Interconnect Technologies and Luetze[8] - The company expects to close the acquisition of CommScope's OWN and DAS businesses during the first quarter of 2025[5] First Quarter 2025 Outlook Amphenol provided a strong outlook for Q1 2025, projecting significant year-over-year growth based on current market conditions Q1 2025 Guidance | Metric | Guidance Range | YoY Growth | | :--- | :--- | :--- | | Sales | $4.00B - $4.10B | 23% to 26% | | Adjusted Diluted EPS | $0.49 - $0.51 | 23% to 28% | Consolidated Financial Statements Amphenol's full year 2024 financial statements show strong growth in net sales and income, with expanded assets and robust operating cash flow Condensed Consolidated Statements of Income Amphenol's full year 2024 income statement shows significant increases in net sales, operating income, and net income attributable to the company Full Year Income Statement Highlights (2024 vs. 2023) | Metric (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Net sales | $15,222.7 | $12,554.7 | | Gross profit | $5,139.7 | $4,084.1 | | Operating income | $3,156.9 | $2,559.6 | | Net income attributable to Amphenol | $2,424.0 | $1,928.0 | | Diluted EPS | $1.92 | $1.55 | - Dividends declared per common share for the full year 2024 increased to $0.55 from $0.425 in 2023[20] Condensed Consolidated Balance Sheets As of December 31, 2024, Amphenol's total assets and liabilities grew, driven by increased cash, goodwill, and long-term debt from acquisitions Key Balance Sheet Items (in millions) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $3,317.0 | $1,475.0 | | Total current assets | $9,686.0 | $6,835.3 | | Goodwill | $8,236.2 | $7,092.4 | | Total Assets | $21,440.2 | $16,526.4 | | Long-term debt | $6,484.4 | $3,983.5 | | Total Liabilities | $11,584.1 | $8,099.9 | | Total Equity | $9,847.4 | $8,395.8 | Condensed Consolidated Statements of Cash Flow Amphenol generated substantial operating cash flow in 2024, with significant cash used for acquisitions, capital expenditures, and shareholder returns Full Year Cash Flow Summary (in millions) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,814.7 | $2,528.7 | | Net cash used in investing activities | ($2,648.6) | ($1,393.7) | | Net cash provided by (used in) financing activities | $1,729.9 | ($1,012.4) | | Net increase in cash and cash equivalents | $1,842.0 | $101.9 | - Key uses of cash in 2024 included $2,156.4 million for acquisitions, $689.3 million for treasury stock purchases, and $665.4 million for capital expenditures[26] Segment Information All three of Amphenol's segments reported sales growth in 2024, with Communications Solutions being the largest and fastest-growing, also showing strong margin improvement Full Year 2024 Net Sales by Segment (in millions) | Segment | 2024 Sales | 2023 Sales | YoY Growth | | :--- | :--- | :--- | :--- | | Harsh Environment Solutions | $4,417.4 | $3,530.8 | 25.1% | | Communications Solutions | $6,323.8 | $4,912.8 | 28.7% | | Interconnect and Sensor Systems | $4,481.5 | $4,111.1 | 9.0% | | Consolidated Total | $15,222.7 | $12,554.7 | 21.2% | Full Year 2024 Operating Income & Margin by Segment | Segment | 2024 Op. Income (M) | 2024 Op. Margin | 2023 Op. Margin | | :--- | :--- | :--- | :--- | | Harsh Environment Solutions | $1,093.2 | 24.7% | 26.7% | | Communications Solutions | $1,569.6 | 24.8% | 21.6% | | Interconnect and Sensor Systems | $825.9 | 18.4% | 18.3% | Supplemental Financial Information (Non-GAAP Reconciliations) This section reconciles GAAP and non-GAAP financial measures, highlighting Amphenol's underlying operational performance, organic growth, adjusted margins, and free cash flow Reconciliation of Net Sales Growth Amphenol's full year 2024 consolidated net sales grew 21%, with 13% organic growth and 8% from acquisitions, led by Communications Solutions Full Year 2024 Net Sales Growth Reconciliation | Segment | Net Sales Growth (GAAP) | Acquisition Impact | Organic Net Sales Growth (Non-GAAP) | | :--- | :--- | :--- | :--- | | Harsh Environment Solutions | 25% | 21% | 4% | | Communications Solutions | 29% | 2% | 27% | | Interconnect and Sensor Systems | 9% | 5% | 4% | | Consolidated | 21% | 8% | 13% | Reconciliation of Operating Results (GAAP to Non-GAAP) Amphenol's full year 2024 GAAP Diluted EPS and operating margin were adjusted to non-GAAP figures, reflecting acquisition-related and tax adjustments Full Year 2024 GAAP to Non-GAAP EPS Reconciliation | Description | Per Share Amount | | :--- | :--- | | Reported Diluted EPS (GAAP) | $1.92 | | Amortization of acquisition related inventory step-up costs | $0.01 | | Acquisition-related expenses | $0.08 | | Excess tax benefits related to stock-based compensation | ($0.11) | | Discrete tax items | ($0.01) | | Adjusted Diluted EPS (non-GAAP) | $1.89 | Full Year 2024 GAAP to Non-GAAP Operating Margin Reconciliation | Description | Margin % | | :--- | :--- | | Reported Operating Margin (GAAP) | 20.7% | | Amortization of acquisition related inventory step-up costs | 0.1% | | Acquisition-related expenses | 0.8% | | Adjusted Operating Margin (non-GAAP) | 21.7% | Reconciliation of Free Cash Flow Amphenol generated $2.16 billion in Free Cash Flow in 2024, derived from operating cash flow minus net capital expenditures, consistent with the prior year Full Year Free Cash Flow Calculation (in millions) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Operating Cash Flow (GAAP) | $2,814.7 | $2,528.7 | | Capital expenditures (GAAP) | ($665.4) | ($372.8) | | Proceeds from disposals of property, plant and equipment (GAAP) | $7.8 | $4.0 | | Free Cash Flow (non-GAAP) | $2,157.1 | $2,159.9 | Other Information This section provides corporate details, investor call information, non-GAAP definitions, and forward-looking statements outlining potential risks and uncertainties About Amphenol Amphenol is a global leader in designing, manufacturing, and marketing interconnect products, serving diverse high-growth end markets across approximately 40 countries - Amphenol is one of the world's largest manufacturers of electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors, and specialty cables[11] - The company has a diversified presence in high-growth markets including Automotive, Broadband Communications, Commercial Aerospace, Defense, Industrial, IT and Data Communications, Mobile Devices, and Mobile Networks[11] Forward-Looking Statements and Risk Factors Forward-looking statements, including Q1 2025 guidance, are subject to various risks such as geopolitical conditions, supply chain issues, and cybersecurity threats - Forward-looking statements, including Q1 2025 guidance, are based on management's current assumptions and are subject to risks and uncertainties[13] - Key risks include political and economic risks, supply chain disruptions, cybersecurity threats, competition, and difficulties in integrating acquisitions[14][15][16]