Total Revenue

14% increase " "

The overall revenue increased by 14%, driven largely by the strong performance of the Industrial Solutions segment and modest gains in Transportation Solutions, reflecting a recovery and continuation of improvement trends noted in previous periods. " "

Industrial Solutions Segment

87% increase " " " "

The Industrial Solutions segment grew dramatically by 87%, likely due to significant expansion in areas such as digital data networks and energy, which overcame past weaknesses and benefited from strategic pricing and market developments seen in earlier periods. " " " "

Transportation Solutions Segment

3.8% increase " " " "

This segment experienced a modest 3.8% growth, suggesting that gains in operational efficiency and stable demand partially offset earlier challenges, reflecting a more balanced performance compared to previous fluctuations. " " " "

Asia-Pacific Region

25% increase " "

A robust 25% increase in revenue indicates strong market demand in the region, driven by factors such as increased vehicle production and accelerated growth in industrial applications—continuing positive trends from prior periods. " "

EMEA Region

5.4% increase " "

The modest 5.4% rise in the EMEA region reflects cautious recovery despite earlier challenges such as currency fluctuations and subdued demand, showing signs of stabilization relative to previous periods. " "

Americas Region

12.6% increase " "

Growth of 12.6% in the Americas region appears to be bolstered by strategic acquisitions and organic improvements that helped overcome previous translation headwinds, aiding overall revenue recovery in this market. " "

Sales

Q4 2025

$4.3B with 5% organic growth "

$4.55B with 12% reported growth and 6% organic growth "

raised

Adjusted EPS

Q4 2025

$2.06 "

$2.27 "

raised

Tariff Impact

Q4 2025

Approximately 3% of sales "

Approximately 1.5% of sales with minimal earnings impact "

lowered

Adjusted Tax Rate

Q4 2025

24%–25% "

24% "

lowered

Adjusted Operating Margins

Q4 2025

no prior guidance

Above 20% for the Transportation segment "

no prior guidance

Foreign Exchange Contribution

Q4 2025

no prior guidance

$111,000,000 in sales and $0.03 to adjusted EPS "

no prior guidance

AI Revenue Growth and Scalability

In Q1, the focus was on doubling AI revenue from $300 million to an anticipated $600 million with broad customer engagement. " " In Q2, guidance increased to expect over $700 million in AI revenue, backed by strong order ramps from hyperscalers. " "

In Q3, expectations rose to over $800 million in AI revenue with a run rate above $1 billion and a nearly 30% increase in capex for AI investments. " " "

There is a clear upward momentum with increasingly higher revenue targets and enhanced scalability.

Robust Order Growth and Secular Trends

Q1 reported orders of around $4 billion with indications of broad secular trends across segments. " " Q2 noted orders of $4.25 billion, driven by growth in Industrial markets and the impact of secular drivers such as electrification. " "

Q3 orders reached $4.5 billion, with 8% year-over-year and 5% sequential growth; secular trends continue to drive strong performance across segments. " " "

Orders and secular trend drivers are steadily improving, reflecting a consistent upward trajectory.

Operational Efficiency, Margin Expansion, and Strategic Capital Allocation

In Q1, margins reached a record 19.4% supported by restructuring and operational lever improvements, with notable capital deployment. " " " " In Q2, similar operational efficiency and margin expansion were reported along with significant free cash flow generation and strategic acquisitions. " "

Q3 delivered record adjusted operating margins of 20%, record free cash flow, and strategic capital moves including targeted acquisitions. " " " "

Margin expansion and efficiency gains have continued to improve with robust capital allocation practices becoming more pronounced.

Tariff Impacts and Mitigation Strategies

Q1 focused on leveraging a playbook from the 2017 tariff cycle to manage approximately $300 million in costs, using adjustments in logistics and pricing. " In Q2, the estimated tariff impact was 3% of sales, mitigated through sourcing changes and pricing actions. " "

In Q3, the actual tariff cost was only about 1.5% of sales due to effective supply chain adjustments and pricing actions, resulting in minimal earnings impact. "

The impact of tariffs has diminished as mitigation strategies have become more effective, reducing cost pressures.

Regional Market Dynamics and Western/European Market Weakness

Q1 noted significant weakness in Europe with a 10% decline and overall Western challenges, while Asia showed robust growth. " " Q2 emphasized European underperformance, which pressured content growth despite strong Asian performance. " "

Q3 continued to show weakness in Western regions—with 5% declines—but noted 11% growth in Asia and overall strong industrial order momentum. " " " " "

Persistent weakness in Western markets is being offset by solid growth in Asia, with a gradual improvement in overall order dynamics.

Transportation and Automotive Production Concerns

Q1 reported a 3% organic decline in auto business, attributed to Western region softness despite Asian strength. " " " Q2 described overall production declines in Western regions (up to 11%) with Asia leading in growth, reflecting uneven global performance. " "

Q3 showed a modest 2% organic growth overall, with strong 11% growth in Asia offsetting declines in Western markets and seasonal production changes noted. " " "

Concerns remain in Western/automotive production, although strong Asian performance and seasonal improvements are slightly mitigating overall declines.

Heavy Investment in AI Capacity and Digital Data Networks

Q1 highlighted heavy investments with AI revenue expected to exceed $600 million and Digital Data Networks growing 50% organically. " " " " Q2 increased the expectation to over $700 million in AI revenue and noted nearly 80% organic growth in DDN driven by hyperscale platforms. " "

Q3 raised expectations further to over $800 million in AI revenue, with significant capex increases (nearly 30% year-over-year) and DDN organic growth exceeding 80%. " " " "

Investments are escalating and growth in both AI revenue and DDN is accelerating, indicating strong commitment to advancing these capacities.

Supply Chain and Order Dynamics Uncertainty

In Q1, there was discussion of supply chain recovery with order stabilization in key segments like aerospace and industrial, despite regional disparities. " " " " In Q2, uncertainty was noted due to tariff-related factors, though overall orders remained stable. " "

Q3 reflected further easing of supply chain challenges with improvements noted in Aerospace, Defense & Marine and broad-based order growth, despite normal seasonal trends affecting automotive orders. " " " "

Overall supply chain stability is improving and order uncertainties are diminishing, leading to more robust execution.

Localization Strategies for Tariff Mitigation (diminishing emphasis)

Q1 stressed an 80% in-region manufacturing strategy using lessons from the 2017 tariff crisis. " Q2 reiterated that over 70% of production is localized to mitigate tariff impacts effectively. " " "

Q3 maintained the localization approach with over 70% production localized, contributing to the much lower tariff impact experienced this period. " " "

While the localization strategy remains consistent, there is a diminishing emphasis as tariff impacts have lessened, validating the strategy’s effectiveness.