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AMPHENOL CORP /DE/ (APH)·Q3 2025 Earnings Summary

Executive Summary

  • APH delivered record Q3 2025 net sales of $6.2B, up 53% YoY (41% organically) and significantly above prior guidance; GAAP EPS $0.97 and adjusted EPS $0.93, with record consolidated operating margin of 27.5% . Street EPS and revenue were both beaten by wide margins (EPS $0.93 vs $0.80*, revenue $6.19B vs $5.56B*) with EBITDA also ahead ($1.93B vs $1.64B*) (Values retrieved from S&P Global).
  • Orders were $6.11B (book-to-bill 0.99), sequential sales rose 10%, and margins expanded 190 bps sequentially, driven by AI-related IT datacom strength and improved profitability on acquisitions .
  • Q4 2025 guidance: sales $6.0–$6.1B and adjusted EPS $0.89–$0.91; FY 2025 guidance: sales $22.66–$22.76B and adjusted EPS $3.26–$3.28 . CFO highlighted a higher adjusted effective tax rate of ~25.5% embedded in Q4 and expected to continue into 2026 .
  • Dividend increased 52% to $0.25 per share (payable Jan 7, 2026), a likely positive stock catalyst alongside the beat and margin record; strategic momentum reinforced by acquisitions (Rochester Sensors closed; Trexon expected Q4 close; CCS expected close by Q1 2026) .

What Went Well and What Went Wrong

  • What Went Well

    • Record profitability: consolidated operating margin reached 27.5%, with adjusted margin up 560 bps YoY and 190 bps QoQ; management cited strong operating leverage and progress on acquired-business profitability . Quote: “record operating margins of 27.5%... strong profitability is a direct result of the outstanding execution of the Amphenol team” .
    • IT Datacom outperformance: sales grew 128% YoY; sequentially +13% vs expected decline; AI-related and base IT datacom both contributed . Quote: “The revolution in AI continues to create a unique opportunity for Amphenol… our products are critical components in these next-generation systems” .
    • Cash generation and capital returns: Q3 operating cash flow $1.47B, FCF $1.22B, buybacks of 1.4M shares ($153M), dividends $201M returned, with total capital returned ~$354M .

  • What Went Wrong

    • Tax rate headwind: adjusted effective tax rate increased, with a Q3 catch-up to 25.5% causing a ~$0.03 EPS impact; higher tax rate assumed in guidance and expected to persist .
    • Communications Networks seasonality: management expects a low-teens sequential decline in Q4 despite robust FY growth, reflecting normal seasonality post-Andrew acquisition .
    • Mobile Devices mixed: down 3% YoY (organically and in USD), sequentially strong (+18%) but management expects only modest increase in Q4; laptops/tablets moderated demand .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Net Sales ($USD Billions)$4.811 $5.650 $6.194
GAAP Diluted EPS ($)$0.58 $0.86 $0.97
Adjusted Diluted EPS ($)$0.63 $0.81 $0.93
GAAP Operating Margin (%)21.3% 25.1% 27.5%
Adjusted Operating Margin (%)23.5% 25.6% 27.5%
Segment Net Sales ($USD Billions)Q1 2025Q2 2025Q3 2025
Harsh Environment Solutions (HES)$1.268 $1.445 $1.516
Communications Solutions (CS)$2.414 $2.910 $3.309
Interconnect & Sensor Systems (ISS)$1.129 $1.295 $1.369
Consolidated Net Sales$4.811 $5.650 $6.194
Segment Operating Margin (%)Q1 2025Q2 2025Q3 2025
HES24.5% 25.2% 27.1%
CS27.4% 30.6% 32.7%
ISS18.1% 19.5% 20.0%
Consolidated (GAAP)21.3% 25.1% 27.5%
KPIsQ1 2025Q2 2025Q3 2025
Orders ($USD Billions)$5.292 $5.523 $6.111
Book-to-Bill1.10 0.98 0.99
Operating Cash Flow ($USD Billions)$0.765 $1.417 $1.471
Free Cash Flow ($USD Billions)$0.580 $1.121 $1.216
Capital Expenditures ($USD Billions)$0.189 $0.297 $0.257
Share Repurchases ($USD Millions)$180.9 $160.1 $152.9
Dividends Paid ($USD Millions)$199.5 $199.6 $201.2
Estimates vs ActualsQ1 2025Q2 2025Q3 2025
EPS Consensus ($)0.5208*0.6658*0.7984*
EPS Actual ($)0.63 0.81 0.93
Revenue Consensus ($USD Billions)4.284*5.040*5.556*
Revenue Actual ($USD Billions)4.811 5.650 6.194
EBITDA Consensus ($USD Billions)1.125*1.429*1.643*
EBITDA Actual ($USD Billions)1.366 [GetEstimates]*1.657 1.930 [GetEstimates]*

Values retrieved from S&P Global. An asterisk denotes S&P Global consensus values and EBITDA actual where sourced via estimates tool.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales ($USD Billions)Q3 2025$5.4–$5.5 Actual: $6.194 Beat
Adjusted Diluted EPS ($)Q3 2025$0.77–$0.79 Actual: $0.93 Beat
Sales ($USD Billions)Q4 2025N/A$6.0–$6.1 New
Adjusted Diluted EPS ($)Q4 2025N/A$0.89–$0.91 New
Sales ($USD Billions)FY 2025N/A$22.66–$22.76 New
Adjusted Diluted EPS ($)FY 2025N/A$3.26–$3.28 New
GAAP Diluted EPS ($)FY 2025N/A$3.31–$3.33 New
Adjusted Effective Tax Rate (%)Q4 2025 & 2026 view~25.5% ~25.5% Raised vs prior quarters
Dividend per Share ($)Quarterly$0.165 (prior) $0.25 effective Jan 7, 2026 Raised 52%
CapEx (% of Sales)Q4 2025N/A~4% (“similar range… maybe slightly higher”) Indicated elevated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/Technology initiativesQ1/Q2: IT datacom grew 133%+ YoY; secured next-gen platforms; broadened active/passive optics; automation capabilities to shorten time-to-volume IT datacom +128% YoY; outperformed expectations; content leadership in high-speed, power, fiber; visibility across hyperscalers/OEMs/chip ecosystems Accelerating; broad-based
Supply chain, lead times, book-to-billQ2: book-to-bill 0.98; lead times coming down; bookings strong in ramp-up phase Q3: book-to-bill 0.99; orders $6.11B; shorter cycle in IT datacom noted; metric less meaningful at high growth Stable-to-shortening cycles
Tariffs/macroQ1: decentralized model mitigates tariffs; slight pricing impacts, still strong margins; Europe industrial “green shoots” Not a major Q3 focus; noted broader geopolitics and seasonality in some segments Reduced focus; managed
Product performance & marginsQ2: adjusted margin record 25.6%; target conversion approaching 30%; higher-tech mix driving profitability Record 27.5% margin; margin expansion YoY/QoQ; segment incrementals strong; complexity/value supports pricing Improving margins
Power interconnect opportunityQ2: Elevated CapEx to support AI buildouts Power is a “big story”; efficiency/safety focus across bus bars, board-level, assemblies; critical for AI rack power Expanding opportunity
Regional trendsQ2: Industrial organic growth in all regions; Europe improving; automotive growth across regions Defense +29% YoY; commercial aero +17% YoY; automotive +13% YoY; industrial +21% YoY Broad-based strength

Management Commentary

  • “We are pleased to have closed the third quarter of 2025 with record sales and Adjusted Diluted EPS, both significantly exceeding the high end of our guidance… Operating Margin reaching a record 27.5%” — R. Adam Norwitt, CEO .
  • “Operating cash flow in the third quarter was $1,471 million… free cash flow was $1,215 million… net leverage ratio was 0.7x at quarter end… total liquidity $10.9B” — Craig Lampo, CFO .
  • “The revolution in AI continues to create a unique opportunity for Amphenol… our products are critical components in these next-generation systems” — CEO .
  • “Higher adjusted effective tax rate… 25.5%, expected to continue into 2026” — CFO .
  • “Dividend increased by 52% to $0.25 per share” — Press release .

Q&A Highlights

  • Margins and incrementals: Analysts probed segment incrementals and drivers; management cited operating leverage, improved profitability of acquisitions (CIT, Andrew), and ability to “share some small part” of value from complex technologies with customers .
  • AI mix and inventory: Q3 outperformance balanced between AI-related and traditional IT datacom; no abnormal inventory signals; visibility strong across stack (hyperscalers/OEMs/chips) .
  • Book-to-bill utility: At very high growth rates, book-to-bill near 1 can still reflect strong orders; lead times have come down, making cycles shorter .
  • Power opportunity & CapEx: Significant power interconnect opportunity as racks consume 2–3x historical power; CapEx near ~4% of sales expected in Q4 to support growth .
  • Automation: In-house, decentralized automation capabilities shorten time-to-volume and support quality/performance across markets, not only IT datacom .

Estimates Context

  • Q3 beats: Adjusted EPS $0.93 vs $0.80*; revenue $6.19B vs $5.56B*; EBITDA $1.93B vs $1.64B*. Q2 and Q1 also beat on EPS and revenue (see table above) (Values retrieved from S&P Global).
  • Implications: Consensus models likely need higher IT datacom run-rate, sustained elevated margins (~27%) and higher tax rate (~25.5%) assumptions. Near-term seasonality in Communications Networks and modest automotive moderation in Q4 should be reflected .

Key Takeaways for Investors

  • Sustained margin step-up: With record 27.5% margins and management targeting conversion near ~30% over time, APH’s higher technology mix and execution underpin structurally stronger profitability .
  • AI secular exposure: Broad content in high-speed, power, and fiber optics across the AI stack drives continued revenue and earnings momentum; sequential variability possible, but medium-term trajectory remains positive .
  • Cash generation supports capital deployment: Strong FCF and liquidity fund acquisitions (Trexon, CCS), buybacks, and a 52% dividend hike, reinforcing total shareholder return .
  • Guidance credibility: Q4/FY guidance is anchored by current demand and assumes a higher adjusted tax rate; investors should adjust models accordingly .
  • Segment breadth reduces risk: Balanced growth across defense, aero, industrial, automotive, communications networks, and IT datacom mitigates single-market risk while enabling upside capture .
  • Watch near-term seasonality and tax: Communications Networks normal seasonality and the 25.5% tax rate are the main near-term EPS headwinds; still, margins remain near record levels .
  • Strategic M&A: Execution on acquisitions (CIT, Andrew, Rochester Sensors; pending Trexon/CCS) expands capabilities and content, supporting outperformance in targeted markets .
Notes:  
- Street consensus values marked with * and EBITDA actual in Q1/Q3 derived from estimates tool. Values retrieved from S&P Global.