TE Connectivity Fourth Quarter 2025 Earnings October 29, 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 conditio ...

Core Viewpoint - The company emphasizes its strong technical reserves in key processes such as fine lines, drilling, and high-precision lamination, ensuring high reliability of PCB products while actively exploring market potential in the AI application field [1] Group 1 - The company has deep technical reserves in critical processes, which include fine lines, drilling, and high-precision lamination [1] - The company is actively expanding into the AI application market to leverage potential growth opportunities [1] - The company is continuously enhancing its product technology level to strengthen its market competitiveness [1]

Core Insights - The Guangdong Enterprise 500 Strong list for 2025 has been released, showcasing significant changes in rankings and performance metrics of leading companies in the region [1][2]. Group 1: Rankings and Performance - The total revenue of the Guangdong Enterprise 500 Strong reached 19.36 trillion yuan, with a growth rate of 3.36% compared to the previous year [2]. - The top 10 companies in the 2025 Guangdong Enterprise 500 Strong are: Ping An Insurance, China Resources Group, Huawei, Southern Power Grid, BYD, Tencent, Foxconn, China Merchants Bank, Midea Group, and GAC Group [2]. - Huawei moved up one position to rank third, while Southern Power Grid dropped to fourth. BYD and Tencent swapped places, with BYD at fifth and Tencent at sixth. Vanke fell out of the top 10, now ranked eleventh, while Midea Group entered the top 10 at ninth [1][2]. Group 2: Regional Distribution - Shenzhen leads with 216 companies on the list, achieving a cumulative revenue exceeding 1 trillion yuan and a net profit of 863.7 billion yuan [4]. - Guangzhou follows with 120 companies, including major firms like Southern Power Grid and GAC Group, reflecting a balanced presence of service and manufacturing sectors [4]. - Other cities like Foshan, Dongguan, and Huizhou also show stable performances with notable companies in manufacturing [5]. Group 3: Profit Trends - The total net profit of the Guangdong Enterprise 500 Strong shows a trend of recovery and stabilization, reversing a two-year decline, with a growth rate of 2.06% for 2025 [6]. Group 4: Industry Insights - The service and manufacturing sectors remain the dual engines of Guangdong's economy, with strong performances in finance, insurance, supply chain, and real estate [9]. - The manufacturing sector is concentrated in electronics, automotive, home appliances, and new energy, with companies like Huawei, BYD, and Foxconn demonstrating Guangdong's strength in high-end and smart manufacturing [9]. - There is a notable increase in companies within the new energy and electronic information sectors, indicating ongoing investment in green transformation and technological innovation [9]. Group 5: R&D Investment - The scientific research and technical services industry leads in R&D investment, accounting for 18.99% of its revenue, followed by the manufacturing sector with a 4.08% R&D investment ratio [10].

Core Points - Guangxi Yuyao Electronic Technology Co., Ltd. has been established with a registered capital of 2 million RMB [1] - The legal representative of the company is Wu Caili [1] - The company’s business scope includes technology services, development, consulting, and promotion, as well as sales and repair of communication equipment and electronic products [1] Business Scope - General business activities include technology services, development, consulting, and transfer [1] - The company is involved in the sales and repair of communication equipment, daily necessities, audio equipment, and home appliances [1] - The company also provides 5G communication technology services and mobile terminal equipment sales [1] Licensing - The company is authorized to conduct internet information services, subject to approval from relevant authorities [1] - Specific business activities will be carried out based on the approval documents or licenses from relevant departments [1]

Core Insights - As of October 28, 2025, the total number of A-share listed companies reached 5,444, with a total market capitalization exceeding 118 trillion yuan, maintaining its position as the second-largest capital market globally for five consecutive years [1] - The structure of A-shares has undergone profound changes over the past five years, with the market capitalization of the technology sector approaching 50%, and the electronics industry surpassing the banking sector to become the largest industry [1] - The number of strategic emerging industry companies has exceeded half for the first time, and the profit share of real economy enterprises has surpassed that of the financial sector, indicating a closer symbiotic relationship between the capital market and the real economy [1] Innovation and Growth - Innovation-driven growth has become the core driving force, with total R&D investment by listed companies during the 14th Five-Year Plan period reaching 6.5 trillion yuan, a 189% increase compared to the 13th Five-Year Plan [1] - New sectors such as robotics, artificial intelligence, and innovative pharmaceuticals have seen significant net profit growth, leading to a revaluation of asset values in China [1] Market Governance and Future Outlook - Market governance has improved, with cash dividend distributions reaching a historical high and risks associated with stock pledges significantly reduced. The implementation of independent director reforms has led to continuous optimization of corporate governance [1] - Looking ahead to the 15th Five-Year Plan, the capital market is set to deepen reforms, enhance inclusiveness, and cultivate more new productive forces, transitioning from quantitative expansion to qualitative improvement and reshaping the future landscape of Chinese industries [1]

Core Insights - A new individual business named Nanchang Fanwo Electronic Products Business has been established, with a registered capital of 30,000 RMB [1] - The legal representative of the business is Mei Yingping [1] Business Scope - The business operates in various sectors including electronic product sales, wholesale and retail of computer software and hardware, and maintenance of computer and office equipment [1] - Additional activities include sales of security equipment, typing and copying services, sales of office supplies, communication equipment, and household appliances [1] - The business is authorized to operate independently within the scope of its business license, excluding projects that require government approval [1]

Core Viewpoint - The thermoelectric cooler module industry is experiencing significant growth driven by advancements in semiconductor materials and increasing applications across various sectors such as consumer electronics, communication, automotive, and medical devices. The market is expected to see a compound annual growth rate (CAGR) of approximately 10% over the next five years, with a projected global shipment of over 205 million units in 2024 [4][6]. Industry Overview - The history of thermoelectric cooler modules dates back to the discovery of the Peltier effect in the 19th century, but commercialization only began in the mid-20th century with the development of semiconductor materials. Initially, these modules were used in military and aerospace applications, but they have since expanded into consumer electronics, medical devices, and industrial sectors [3]. - Thermoelectric cooler modules operate based on the Peltier effect, where an electric current passes through a thermocouple made of p-type and n-type semiconductor materials, resulting in one end absorbing heat (cold side) and the other releasing heat (hot side). This solid-state technology is compact, noiseless, highly reliable, and allows for precise temperature control [3]. Market Size and Growth - According to QYResearch, the global thermoelectric cooler module market is projected to reach $1.55 billion by 2031, with a CAGR of 8.6% in the coming years [4]. - The market is expected to see a shipment of over 205 million units in 2024, with a continued growth trajectory driven by the proliferation of technologies such as 5G, artificial intelligence, and the Internet of Things [4]. Key Players - Major players in the thermoelectric cooler module market include Ferrotec, KELK Ltd. (Komatsu), Coherent Corp, Tark Thermal Solutions, KYOCERA, and several others. The top five manufacturers are expected to hold over 50% of the market share in 2024, with Ferrotec leading at over 20% [6]. Product Segmentation - Single-stage thermoelectric cooler modules currently dominate the market, accounting for approximately 68.3% of the total market share [8]. Application Areas - The demand for thermoelectric cooler modules is rising across various sectors, including consumer electronics, communication, medical, automotive, industrial, and defense aerospace. The consumer electronics sector remains the largest market, expected to account for about 25% of the global market in 2024. The communication and automotive sectors are anticipated to experience higher growth rates during the forecast period [10]. Regional Insights - North America, Europe, and the Asia-Pacific region are the primary markets for thermoelectric cooler modules. North America benefits from strong demand in the electronics and medical technology sectors, while Europe focuses on environmental sustainability. The Asia-Pacific region, particularly China, Japan, and South Korea, is the fastest-growing market due to rapid advancements in electronics manufacturing and the electric vehicle industry [11].

Core Insights - Foxconn, the world's largest electronics manufacturer, is set to deploy humanoid robots at its Houston plant, which specializes in producing AI servers for Nvidia [1] Company Summary - Foxconn is recognized as a key player in the electronics manufacturing sector and is particularly noted for its role in producing AI servers for Nvidia [1] Industry Summary - The deployment of humanoid robots in the production of AI servers indicates a trend towards automation in the electronics manufacturing industry, particularly in the context of AI technology [1]

Core Viewpoint - M-tron Industries, Inc. has formed a sales and manufacturing partnership with Indiana Microelectronics to market tunable microwave filters for defense and commercial applications [1][2][3] Company Overview - M-tron Industries, Inc. specializes in high-performance RF components and solutions, focusing on frequency and spectrum control products [3] - The company has design and manufacturing facilities in Orlando, Florida, and Yankton, South Dakota, along with a sales office in Hong Kong and a manufacturing facility in Noida, India [3] Partnership Details - The partnership will integrate Indiana Micro's tunable microwave filter technologies into Mtron's product portfolio, enhancing offerings for military and aerospace clients [2][4] - Mtron will leverage its advanced manufacturing capabilities to scale Indiana Micro's designs for volume production and improve global availability through established sales channels [2] Indiana Microelectronics Overview - Indiana Microelectronics develops real-time tunable microwave filters aimed at spectrum cleanup and interference mitigation, with R&D collaborations with various U.S. universities [4]

Financial Data and Key Metrics Changes - The company reported third-quarter sales of $143 million, an increase of 8% from $132 million in the same quarter of 2024 [4] - Adjusted diluted EPS for the third quarter was $0.60, down from $0.61 in the same period last year, primarily due to unfavorable impacts from recent U.S. tax legislation [5][17] - Adjusted gross margin improved to 38.9%, up 66 basis points year-over-year [16][17] - Operating cash flow for the third quarter was $29 million, compared to $35 million in the same quarter of 2024 [18] Business Line Data and Key Metrics Changes - Diversified end market sales increased by 22% year-over-year, accounting for 59% of overall company revenue, up from 52% in the previous year [4][5] - Medical end market sales rose by 22% compared to the same period in 2024, with bookings up 8% [5][7] - Aerospace and defense sales increased by 23% year-over-year [7] - Transportation sales decreased by 7% from the same period last year, attributed to softness in commercial vehicle products [9][10] Market Data and Key Metrics Changes - The book-to-bill ratio for the third quarter was slightly above 1, compared to marginally below 1 in the same quarter of 2024 [4] - Industrial and distribution sales showed a 9% sequential increase and a 21% year-over-year increase, indicating a steady recovery [9][46] - The North American light vehicle market is expected to be in the 15 million unit range, with European production forecasted at 16 million units and China at 30 million units [12] Company Strategy and Development Direction - The company aims to transition from a component supplier to a supplier of sensors, transducers, and subsystems, as validated by recent naval defense contract awards [8] - The focus remains on strong cash generation, appropriate capital allocation, and supporting organic growth and strategic acquisitions [18][19] - The company is monitoring the tariff and geopolitical environment while adapting to cost and price adjustments [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects for medical, aerospace, and defense markets, despite mixed signals from the transportation sector [24][46] - The company anticipates continued strength in therapeutic products, with expectations for increased volumes in 2026 [7][11] - The adverse tax impact from recent U.S. tax legislation is expected to persist into 2026, with a projected tax rate in the low 20% range [35][36] Other Important Information - SideQuest revenues increased to $8.8 million in the third quarter, with bookings up 29% year-over-year [8][16] - The company repurchased 400,000 shares for approximately $17 million during the quarter, returning a total of $44 million to shareholders through dividends and buybacks year-to-date [18] Q&A Session Summary Question: Guidance on revenue and EPS - Management raised the midpoint on revenue guidance but lowered the midpoint on EPS guidance due to tax impacts and mixed market signals [22][23] Question: Transportation customers' production rates for 2026 - The transportation market is mixed, with some OEMs optimistic and others cautious, but solid bookings were noted [24] Question: Gross margin contribution by end markets - Margins are good across diversified end markets, with transportation trailing behind [25][26] Question: Tax impact in 2026 - The adverse tax impact from U.S. tax legislation is expected to continue, with a similar tax rate projected for 2026 [35][36] Question: Inventory levels in transportation - Days of supply for light vehicles are around 50 days, which is considered normal, with no immediate concerns [38] Question: SideQuest revenue contribution - Revenue from SideQuest is expected to show seasonality, with a step-up in revenues anticipated [39] Question: Operating expenses increase - The increase in operating expenses is primarily due to a $4.2 million reserve increase and higher equity-based compensation [40]