Sign in
AI

AMETEK INC/ (AME)·Q3 2025 Earnings Summary

Executive Summary

  • AMETEK delivered record Q3 results with sales of $1.89B (+11% y/y), adjusted EPS of $1.89 (+14% y/y), and adjusted operating margin of 27.0%; orders rose 13% to a record $1.97B, driving backlog to $3.54B .
  • The company raised FY25 adjusted EPS guidance to $7.32–$7.37 (from $7.06–$7.20) and guided Q4 sales up ~10% y/y and adjusted EPS of $1.90–$1.95; management cited strong execution and acquisition contributions (e.g., FARO) .
  • Segment performance was strong: EIG sales +10% to $1.25B with adjusted margin 30.4% (+50 bps ex-acq), and EMG sales +13% to $646M with margin up 250 bps y/y to 25.4% .
  • Cash generation remained robust (Q3 free cash flow $420M; 113% conversion), with net leverage ~0.9x EBITDA; capex is now expected at ~$150M for FY25 (down from prior ~$160M) .

What Went Well and What Went Wrong

What Went Well

  • Broad-based beat vs. Street: Q3 adjusted EPS $1.89 vs consensus $1.760*; revenue $1.893B vs $1.815B*; EBITDA $591M vs $569M* .
  • EMG outperformance: sales +13% y/y to $646M; margin expanded 250 bps to 25.4% on strong Paragon Medical and automation demand .
  • Raised guidance: FY25 adjusted EPS to $7.32–$7.37 and Q4 adjusted EPS to $1.90–$1.95, citing strong operating execution and acquisitions; “outstanding 90 basis points of margin expansion excluding the impact of recent acquisitions” .
    • Quote: “AMETEK delivered impressive results… double digit growth in sales, orders and earnings per share” — CEO David Zapico .

What Went Wrong

  • China softness and tariff-driven delays: management highlighted “tariff gamesmanship” and price renegotiations causing project timing delays in China; Asia ex-China saw growth .
  • Process/research and semiconductor end-markets remained sluggish; management noted research/academia headwinds impacting process businesses .
  • EIG core growth was muted (organic flat in Q3) with acquisitions and FX doing the heavy lifting; management focuses on margin quality and acquisition integration .

Financial Results

Headline Financials: Q1–Q3 2025 vs Q3 2024

MetricQ1 2025Q2 2025Q3 2025Q3 2024
Revenue ($USD Millions)$1,731.97 $1,778.06 $1,892.64 $1,708.56
GAAP Diluted EPS ($)$1.52 $1.55 $1.60 $1.47
Adjusted Diluted EPS ($)$1.75 $1.78 $1.89 $1.66
GAAP Operating Margin (%)26.3% 26.0% 25.8% 26.1%
Adjusted Operating Margin (%)26.3% Core 26.7% 27.0% 26.1%
EBITDA ($USD Millions)n/a$565 $592 n/a

Notes: Adjusted margins/EBITDA per company’s non-GAAP framework; reconciliations provided in filings .

Segment Performance (Q3 2025 vs Q3 2024)

SegmentQ3 2024 Sales ($MM)Q3 2025 Sales ($MM)Y/YQ3 2024 Op Inc ($MM)Q3 2025 Op Inc ($MM)Margin (Q3’25)
Electronic Instruments (EIG)$1,134.59 $1,246.33 +10% $338.96 $352.44 28.3% GAAP; 30.4% adj
Electromechanical (EMG)$573.98 $646.31 +13% $131.52 $163.88 25.4%

KPIs and Balance Sheet

KPI / Balance SheetQ3 2025
Orders ($B)$1.97; +13% y/y
Backlog ($B)$3.54; record
Free Cash Flow ($MM)$420; 113% conversion
Working Capital (% of Sales)18.9%
Cash ($MM)$439
Total Debt ($B)~$2.5; gross debt/EBITDA ~1.0x; net debt/EBITDA ~0.9x
Q3 Capex ($MM)$21; FY capex now ~$150M

Estimate vs. Actual (S&P Global Consensus)

MetricConsensusActualSurprise
Adjusted EPS ($)1.7596*1.89 +0.13 (≈+7%)
Revenue ($MM)1,814.78*1,892.64 +77.86 (+4.3%)
EBITDA ($MM)569.07*591.14 +22.07 (+3.9%)

Values marked with * are from S&P Global consensus (GetEstimates). Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$7.06–$7.20 $7.32–$7.37 Raised
Sales GrowthFY 2025Mid-single digits y/y Mid-single digits y/y maintained Maintained
Adjusted EPSQ4 2025n/a$1.90–$1.95 New
Sales GrowthQ4 2025n/a~+10% y/y New
Effective Tax RateFY 202519.0%–19.5% 18.0%–18.5% Lowered
CapexFY 2025~$160M ~$150M Lowered
FCF ConversionFY 2025~115% ~110%–115% Narrowed/Lower bound added
A&D Organic SalesFY 2025High single digits (raised from mid) High single digits reiterated Maintained (positive)
Power & Industrial Organic SalesFY 2025Up low single digits Up low to mid single digits Raised
Process Organic SalesFY 2025Flat to down low single digits Flat to down low single digits; improving visibility Maintained

GAAP vs non-GAAP bridge for EPS guidance provided in exhibits .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
AI/Tech product innovationSpectro Analytical SPECTROGREEN MS launch; vitality index ~26% (Q2) Vertech IRIS AI Inspection Camera; NSI Vector Digital Receiver; vitality index 26% (Q3) Improving innovation cadence
Data center power exposureGrid modernization and electrification tailwinds (Q2) IntelliPower rugged UPS for microgrids; RTDS simulations for hyperscalers; early wins/backlog >$25M Strengthening
Tariffs & ChinaMitigation plans; offsetting $100M headwind (Q2) China delays from tariff price renegotiations; Asia ex-China growing; pricing offsets inflation/tariffs Mixed: execution strong, China timing a headwind
Process marketsSluggish with research/academia headwinds (Q2) Sequential improvement ex-China; pipelines improving; monitoring trade dynamics Stabilizing with improving visibility
EMG/Paragon MedicalDestock over; Paragon margins ≥30% EBITDA; strong orders (Q2) EMG margins 25.4% (+250 bps); Paragon leading EMG orders; targeting 35%+ EBITDA longer term Positive inflection
M&A – FARO TechnologiesAcquisition announced; synergy and margin roadmap (mid-teens cost synergies) (Q2) Integration “going very well”, met sales/profit commitments; strategic fit with Creaform; cross-sell and SaaS potential On track

Management Commentary

  • “AMETEK delivered impressive results… double digit growth in sales, orders and earnings per share, along with an outstanding 90 basis points of margin expansion excluding the impact of recent acquisitions” — David A. Zapico, CEO .
  • “EMG's third quarter results were outstanding… record operating income and sizeable margin expansion” .
  • “Organic sales were up 4%, acquisitions added 6 points… orders up 13% to a record $1.97B… EBITDA margins 31.3%” (prepared remarks) .
  • On China/tariffs: “Tariffs need to be renegotiated… causing a delay… we’re competitively very strong… it’s just going to be delayed” .
  • On data center power: “Rugged UPS systems… perfectly suited for… data center microgrids… backlog north of $25 million and a pipeline of another $30 million” .

Q&A Highlights

  • Paragon Medical: Strong double-digit orders; restructuring progressing; margins now in line with AMETEK with a pathway to 35%+ EBITDA longer-term .
  • Regional dynamics: Europe strength (up low double digits); Asia ex-China mid-to-high single-digit growth; China down mid-single digits due to tariffs .
  • Q4 setup: ~10% sales growth y/y; M&A mid-to-high single-digit contribution; negligible FX impact on bottom line .
  • Pricing vs costs: Pricing offset inflation and tariffs with positive spread, reflecting product differentiation .
  • Power/industrial: Growth led by grid modernization, nuclear, and data center microgrids; RTDS simulation systems seeing hyperscaler demand .

Estimates Context

  • AMETEK beat consensus across EPS, revenue, and EBITDA for Q3: Adjusted EPS $1.89 vs $1.760*, revenue $1.893B vs $1.815B*, EBITDA $591M vs $569M* .
  • Looking ahead, Street models Q4 2025 EPS of ~$1.94* and revenue ~$1.944B* versus company guidance for adjusted EPS of $1.90–$1.95 and ~10% sales growth y/y, suggesting guidance brackets consensus* .
    Values marked with * are from S&P Global consensus (GetEstimates). Values retrieved from S&P Global.

Key Takeaways for Investors

  • High-quality beat and raise: Broad-based upside with guidance raised meaningfully; momentum supported by record orders/backlog and strong free cash flow .
  • EMG is the incremental profit engine near term (Paragon + automation), while EIG maintains premium margins with acquisition integration tailwinds .
  • Secular AI/datacenter power buildout is a credible new vector (UPS/microgrids, RTDS), albeit off a low base; watch backlog conversion and pipeline in 2026 .
  • China remains a timing risk due to tariff repricing, but management indicates demand durability and competitive positioning; Asia ex-China healthy .
  • Cash deployment optionality is significant (net leverage ~0.9x, >$2B liquidity) supporting continued M&A and incremental organic investments .
  • Short-term: Positive trading bias on execution and raised guide; watch Q4 delivery vs ~10% sales growth and any China resolution signals .
  • Medium-term: Thesis underpinned by margin discipline, acquisition synergy realization (FARO), and secular growth niches (A&D, power/electrification, medtech automation) .

Additional Relevant Press Releases (Q4 dividend)

  • The Board declared a Q4 dividend of $0.31 per share, payable Dec 19, 2025 to holders of record Dec 5, 2025 .