Amphenol(APH) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION 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) 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 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 ($M) | Change (%) | | :----------------------------------- | :------------------- | :--------------------- | :---------- | :--------- | | Total Assets | 25,668.4 | 21,440.2 | 4,228.2 | 19.7% | | Total Liabilities | 14,068.7 | 11,584.1 | 2,484.6 | 21.4% | | Total Equity | 11,589.6 | 9,847.4 | 1,742.2 | 17.7% | | Cash and cash equivalents | 3,207.0 | 3,317.0 | (110.0) | -3.3% | | Accounts receivable | 4,270.9 | 3,287.9 | 983.0 | 29.9% | | Inventories | 3,137.1 | 2,545.7 | 591.4 | 23.2% | | Goodwill | 9,651.3 | 8,236.2 | 1,415.1 | 17.2% | | Other intangible assets, net | 1,989.4 | 1,225.1 | 764.3 | 62.4% | | Current portion of long-term debt | 936.6 | 401.7 | 534.9 | 133.2% | | Long-term debt, less current portion | 7,125.8 | 6,484.4 | 641.4 | 9.9% | Condensed Consolidated Statements of Income Details the company's revenues, expenses, and net income over specific reporting periods | Metric | 3 Months Ended June 30, 2025 ($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 ($M) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | :--------- | | Net sales | 10,461.3 | 6,866.0 | 3,595.3 | 52.4% | | Gross profit | 3,697.3 | 2,302.1 | 1,395.2 | 60.6% | | Operating income | 2,443.6 | 1,383.7 | 1,059.9 | 76.6% | | Net income attributable to Amphenol Corporation | 1,829.1 | 1,073.5 | 755.6 | 70.4% | | Diluted EPS | 1.44 | 0.85 | 0.59 | 69.4% | Condensed Consolidated Statements of Comprehensive Income Reports net income and other comprehensive income items, reflecting changes in equity from non-owner sources | Metric | 3 Months Ended June 30, 2025 ($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 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | | Net income | 1,845.0 | 1,080.8 | 764.2 | | Foreign currency translation adjustments | 247.1 | (117.9) | 365.0 | | Total comprehensive income | 2,093.7 | 964.5 | 1,129.2 | | Comprehensive income attributable to Amphenol Corporation | 2,075.5 | 958.6 | 1,116.9 | Condensed Consolidated Statements of Cash Flow Summarizes cash inflows and outflows from operating, investing, and financing activities | Metric | 6 Months Ended June 30, 2025 ($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 Provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1—Basis of Presentation and Principles of Consolidation 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] Note 2—New Accounting Pronouncements 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] - 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] Note 3—Inventories Provides details on the composition and valuation of the company's inventory balances | Inventory Component | June 30, 2025 ($M) | December 31, 2024 ($M) | Change ($M) | Change (%) | | :------------------ | :----------------- | :--------------------- | :---------- | :--------- | | Raw materials and supplies | 1,300.2 | 1,102.5 | 197.7 | 17.9% | | Work in process | 853.9 | 703.5 | 150.4 | 21.4% | | Finished goods | 983.0 | 739.7 | 243.3 | 32.9% | | Total Inventories | 3,137.1 | 2,545.7 | 591.4 | 23.2% | Note 4—Debt Outlines the company's debt structure, including senior notes, credit facilities, and recent financing activities | Debt Type | June 30, 2025 Carrying Amount ($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] - 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][31] - The $400.0 million 2.050% Senior Notes due March 2025 were repaid upon maturity using cash on hand and U.S. Commercial Paper borrowings[27] Note 5—Fair Value Measurements Describes the methodologies and hierarchy used for fair value measurements of financial instruments - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets for identical instruments), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs)[36] | Instrument | June 30, 2025 Total Fair Value ($M) | Level 1 ($M) | Level 2 ($M) | Level 3 ($M) | | :-------------------------- | :---------------------------------- | :----------- | :----------- | :----------- | | Short-term investments | 19.4 | — | 19.4 | — | | Long-term investments | 0.2 | — | 0.2 | — | | Forward contracts | 2.0 | — | 2.0 | — | | Redeemable noncontrolling interests | (10.1) | — | — | (10.1) | | Total | 11.5 | — | 21.6 | (10.1) | - Redeemable noncontrolling interests are classified as Level 3, with their redemption value generally calculated using a multiple of earnings based on unobservable inputs[39] Note 6—Income Taxes Details the provision for income taxes, effective tax rates, and the impact of tax legislation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Provision for income taxes ($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] - 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] - 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] - 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] Note 7—Stockholders' Equity and Noncontrolling Interests 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][53] - 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] - The quarterly dividend rate was increased from $0.11 to $0.165 per share, effective Q3 2024. Dividends declared for H1 2025 totaled $400.8 million[55][160] Note 8—Stock-Based Compensation Provides information on stock-based compensation expense, option activity, and unrecognized costs | Metric | 3 Months Ended June 30, 2025 ($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 $415.9 million, with a weighted average expected amortization period of 3.84 years[62] Note 9—Earnings Per Share Details the calculation of basic and diluted earnings per share, including weighted average shares outstanding | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Amphenol Corporation ($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 | $0.85 | - Anti-dilutive common shares, primarily related to outstanding stock options, were 8.3 million for Q2 2025 and 8.2 million for H1 2025[67] Note 10—Benefit Plans and Other Postretirement Benefits Outlines expenses related to pension plans and other postretirement benefits | Metric | 3 Months Ended June 30, 2025 ($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] Note 11—Acquisitions 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] - 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] - The Andrew Business acquisition resulted in the recognition of $893.1 million of goodwill and $800.0 million of definite-lived intangible assets (customer relationships, proprietary technology, acquired backlog)[73] | Acquisition-Related Expenses | 3 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2025 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total acquisition-related expenses | 28.9 | 133.8 | | After-tax impact | 24.1 | 106.3 | | Amortization of acquired backlog (in Acquisition-related expenses) | 12.0 | 56.0 | | Amortization of inventory step-up costs (in Cost of sales) | 16.9 | 77.8 | Note 12—Goodwill and Other Intangible Assets Details the carrying amounts and changes in goodwill and other intangible assets, including amortization | Metric | June 30, 2025 ($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] | 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 $10.0 million related to the amortization of acquired backlog from the Andrew Business acquisition[80] Note 13—Reportable Business Segments Presents financial information by business segment, including net sales and operating income - The company has three reportable business segments: Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems[83] | Segment | 3 Months Ended June 30, 2025 External Net Sales ($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 $445.7 million, with Communications Solutions experiencing the largest increase due to acquisitions[88] Note 14—Revenue Recognition Explains the company's policies for recognizing revenue, including sales channels and geographical distribution - The vast majority of sales are recognized at a point-in-time when control transfers to the customer, typically upon shipment or delivery and acceptance of the product[89] | Sales Channel (6 Months Ended June 30) | 2025 Net Sales ($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 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] - 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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][100] - 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][101] Reportable Business Segments 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] Pillar Two Framework 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] - 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] Results of Operations 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][106][108][109] | 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 $1,453.7 million (21.2% of net sales) in H1 2024, primarily due to strong operating performance on higher sales volumes[120][127] - Interest expense increased for both periods due to higher average borrowing levels from new senior note issuances and commercial paper to fund acquisitions and for general corporate purposes[124] Liquidity and Capital Resources Examines the company's cash position, funding sources, and capital allocation strategies Liquidity and Cash Requirements Details the company's cash position, primary liquidity sources, and anticipated cash needs | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :----------------------------------- | :------------------- | :--------------------- | | Cash, cash equivalents and short-term investments | 3,226.4 | 3,335.4 | | % located outside of the United States | ~60% | ~50% | - Primary sources of liquidity include internally generated cash from operations, cash on hand, and availability under Commercial Paper Programs and the Revolving Credit Facility[130] - Key cash requirements include operating and working capital needs, capital expenditures, product development, stock repurchases, dividends, debt service, taxes on repatriated foreign earnings, and future acquisitions[131] - The company paid the balance of its Transition Tax during Q2 2025 and is evaluating the impact of the H.R. 1 tax bill[132][133] Cash Flow Summary Summarizes cash flows from operating, investing, and financing activities, including free cash flow | Cash Flow Activity | 6 Months Ended June 30, 2025 ($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] - 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] - 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 $341.0 million in share repurchases[143] | Free Cash Flow | 6 Months Ended June 30, 2025 ($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 Provides an overview of the company's credit facilities, commercial paper programs, and outstanding senior notes - The Revolving Credit Facility (increased to $3,000.0 million in March 2024) and Commercial Paper Programs (U.S. and Euro) had no outstanding borrowings as of June 30, 2025, and December 31, 2024[145][146][147] - The U.S. Commercial Paper Program was utilized in H1 2025 to partially fund the Andrew Business acquisition, but all outstanding notes were repaid before the end of Q2 2025 using proceeds from the 2028 Senior Notes and 2032 Euro Notes[146][150][155] | Senior Notes Outstanding (as of June 30, 2025) | Principal Amount ($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 Details the company's share repurchase authorizations and activity - The Board authorized a $2,000.0 million stock repurchase program in April 2024, effective until April 2027[158] | Period | Total Shares Purchased (M) | Average Price Paid per Share ($) | | :-------------------------- | :------------------------- | :------------------------------- | | 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] Dividends Reports on dividend declarations and payments to shareholders - The Board approved an increase to the quarterly dividend rate from $0.11 to $0.165 per share, effective with dividends declared in Q3 2024[159] | Metric | 6 Months Ended June 30, 2025 ($M) | 6 Months Ended June 30, 2024 ($M) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Dividends declared | 400.8 | 264.5 | | Dividends paid | 399.1 | 263.8 | Acquisitions Discusses recent acquisition activities, funding, and related expenses - Three acquisitions were completed in H1 2025, including the Andrew Business from CommScope, for approximately $2,483.2 million, net of cash acquired[161] - The 2025 acquisitions were funded using cash on hand, proceeds from October Senior Notes, and borrowings under the U.S. Commercial Paper Program[161] | Acquisition-Related Expenses | 3 Months Ended June 30, 2025 ($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 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] Non-GAAP Financial Measures 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] - 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] - 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] - 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] Critical Accounting Policies and Estimates 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] - Interest rate risk is managed through a mix of fixed and variable rate debt, with various fixed rate senior notes outstanding[170] - 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] - 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] Item 4. Controls and Procedures 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] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[172] PART II — OTHER INFORMATION 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 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][94] Item 1A. Risk Factors 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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 $160.1 million during Q2 2025[176] | Period | Total Shares Purchased (M) | Average Price Paid per Share ($) | | :-------------------------- | :------------------------- | :------------------------------- | | 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] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported[178] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[179] Item 5. Other Information 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] Item 6. Exhibits 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][183][184][185][186] 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]