APH - Earnings call transcript Q4 2024

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Operator

Hello, and welcome to the fourth quarter earnings conference call for Amphenol Corporation.

Following today's presentation, there will be a formal question-and-answer session. [Operator Instructions] At the request of the company, today's conference is being recorded. If anyone has any objections, you may disconnect at this time.

I would now like to turn the conference host -- over to your host, Mr. Lampo. Craig begin. may you Sir,

Craig Lampo

everyone you call. very Craig with everyone. is fourth to good Norwitt, welcome Year, you to much, Amphenol's CFO; and our wish like Lampo, would together XXXX CEO. afternoon, Happy and New our and conference This quarter We Thank a I'm Adam here

market will I some financial current commentary, Our fourth XXXX then year business provide full trends, overview results were the then of will questions. Adam give will, quarter and released an of this course, morning. we and and take

to As non-GAAP forward-looking the a to our reminder, call, during please for so measures we the certain may make release refer disclosures in information. press certain and relevant refer financial further statements,

with to and XXXX. compared currencies record and up billion record sales organically. quarter were closed minutes. in trends company currencies comment sales local Fourth dollars The dollars Adam XX% sales of and GAAP of $X.XX by X% adjusted local and XXXX and will of diluted $X.XX, a EPS respectively. further Sequentially, up in U.S. in were quarter the few in fourth in XX% of and on $X.XXX U.S. organically the quarter market fourth up

up Orders For XXXX. billion, of in full sales organically strong the currencies compared book-to-bill local X.XX:X. in XX% a for were U.S. the XX% year dollars sequentially, in to and to were up ratio full quarter up record XXXX, year -- the $XX.XXX and in prior XX% billion, resulting $X.XX XX% and compared year a up

resulting in up billion, X.XX:X. For XXXX, a to were the of full $XX.XXX orders compared year, book-to-bill ratio XX%

was quarter pending 'XX quarter, to the and million acquisition-related a fourth of of million points record of operating increased quarter XXX margin basis which CommScope. Andrew basis costs the compared and the in the respectively. was and primarily to the points GAAP of operating third from XXX to businesses $XX XX.X%, GAAP income included related 'XX, acquisition $XXX

acquisition-related in costs, operating in adjusted of the million, of income record resulting fourth operating a these margin quarter $XXX Excluding adjusted 'XX was XX.X%.

increased driven on from and basis, On primarily in The margin margin operating strong was sequentially. XX an adjusted operating year-over-year which by On on operating conversion XXX year adjusted by prior higher increase basis of increase a was leverage basis levels. volumes, strong quarter sales dilutive reflected in by sales points higher impact offset points basis, operating the partially sequential margin acquisitions. adjusted the the

was For $XXX GAAP income GAAP year which year the XXXX. costs. increased XX billion basis compared points $X.XXX Full operating operating XX.X%, was margin XXXX, full of and acquisition-related included million to

adjusted operating also acquisition-related billion, full margin Excluding a resulting $X.XXX XX.X%, adjusted in costs, year record. an operating was XXXX income of

XXX margin sales on operational Compared continued our impact partially by by increased teams. which higher points, year, for dilutive performance the of company's full which offset to XXXX, the basis adjusted record the by am performance strong strong operating fourth and reflects driven quarter the acquisitions. of in execution the I primarily was proud operating margin levels, very

Communications Systems of quarter billion, organically, quarter segment fourth segment by and operating were and was XX.X%. margin billion, and the U.S. Sales by the in compared fourth Sales in the Environment XXXX. organically, and XX% was segment Sensor X% margin $X.XXX and and segment segment were Solutions XX% $X.XXX Sales down XX% were increased Breaking in $X.XXX by in X% operating dollars dollars and U.S. results and Interconnect segment by margin increased segment billion, XX.X%. and in the increased to Harsh the dollars X% XX%. and operating Solutions U.S. in organically was

organically, XX% XXXX. compared -- segment by operating Solutions were and in Harsh sorry, $X.XXX and margin full Communications $X.XXX the by in XX.X%. the $X.XXX increased Sales X% and to the year and was billion and Sales XX.X%. results and operating billion segment XX% increased was segment year in organically, and increased dollars Environment and U.S. full down XX% X% dollars Breaking Sales in margin and in operating $X.XXX segment segment U.S. and by XX.X%. segment U.S. billion, Sensor X% segment margin dollars organically, in billion Systems was Solutions by were were the Interconnect

company's the The tax XX%, XX% and was for fourth rate respectively. effective adjusted GAAP quarter and quarter compared tax the of effective XX% in the which was XX.X% to XXXX, fourth rate

XX.X%, respectively. GAAP compared company's was which the was For the XX% tax in tax XX.X% effective full XXXX, effective adjusted and year XXXX, XX%, the rate to rate and

to effective favorable in income tax expect our higher assumes compared a rate. our and driven a primarily mix point first by currently our tax XX.X%. This of less XXXX rate XXXX, bringing guidance in is this quarter in X.X our XXXX, slightly tax XX.X% We increase expectation to rate

a the $X.XX to GAAP compared prior an increased to XX% diluted a EPS the was excellent the was record adjusted an to in compared record EPS of XXXX. fourth $X.XX result. and quarter, This up $X.XX XX% in fourth diluted basis period quarter on

from record XX% year, an and full in the $X.XX $X.XX, $X.XX a was EPS For adjusted XXXX, GAAP increase XX% of diluted XXXX. XXXX increase $X.XX in EPS record in from diluted a was a

net of This excellent million fourth was to Operating our growth capital income. spending, we of in flow cash result, cash or free that flow record elevated was seeing $XXX are datacom $XXX XX% income. net was was million IT And support capital in net the or and in quarter are we spending investments a our of quarter somewhat XXX% in the the markets. especially considering strong making defense due an of

related capital elevated somewhat we significant growth have to the the first as support particularly to to applications. spending AI in we in are IT datacom to seeing continue market, to levels invest continue the quarter of expect We

within flow $X.XXX income, and and $X.XXX outstanding sales were payable For their the in inventory spending, XX operating billion days income, of XXXX cash a days, days was all a free levels. net From capital or and net XX, our flow full working XX% year cash normal of XXXX, respectively, XXX% days, net strong result. of standpoint, billion record or XX capital a was

average at our capital for an fourth of the billion normal in to During X.X of year and of and company the returned shareholders total stock with $XX price the XXXX shares quarter, of dividend, quarterly quarter full the combined million was $X.XXX common approximately repurchased when $XXX million XXXX.

hand Total cash credit debt plus end included $X.X December was billion, $X.X and net availability short-term $X.X at and the liquidity billion, under investments on billion, XX our the was quarter facilities. billion, debt $X.X total which was on existing of and of

on approximately $XX is earned we from Until our reflected the previously first million, to businesses Andrew expect quarter interest of on expense hand the in be which cash acquisition closes, announced net CommScope quarterly interest of guidance. income

to close acquisition the expect continue XXXX. of to We quarter first the CommScope in

and was quarter EBITDA $X.XXX respectively, XXXX X.Xx. billion Excluding At full acquisition-related our year billion, was net the end of leverage costs, XXXX, and of costs, $X.XXX quarter ratio the fourth fourth

company's pleased We condition by very any measure. the that are financial strong remained

I over on will to commentary current provide trends. now the turn call will market Adam, who some

R. Norwitt

Connecticut. chilly of to you late not stay Happy Wallingford, hope And on this warm thank much, very frozen but to a you Year its hope wish Craig. too I New are Well, I from very here able winter all the day. And on beautiful everybody call

-- quarter trends across for achievements and of for to quarter, then highlight discuss full we'll I'm served some outlook fourth course, As and Craig our the markets, on going questions. the in I'll then our our our of have the and year. mentioned, comment time first then I'll

grew fourth both per quarter, With respect share, strong Sales across by and U.S. quarter. with XXXX the very diluted guidance dollars served all XX% and a earnings the basis, with to growth fourth by XX% to adjusted had finish organic virtually end of of strong new an our And high the our exceeding very local currencies, sales company of record billion. reaching on successful increased markets. in a a here $X.XXX sales the our in a

data also particular, driven year up in investments company by the prior a fourth center just in The and to very sequentially. record once again new number AI intelligence XX% another a strong large over representing billion in related, a artificial were demand Orders strong company X.XX:X. by of quarter, our orders also grew for $X customers. were the strong book-to-bill and from of or primarily These by XX% booked orders

direct have and would just I record of reached XXX of from the around from profitability by in is XX.X% an team the this world. a points of in increase pleased points result XX% year grew quarter, that basis the record to basis the of margins sequentially. delivered execution new EPS XX Amphenol outstanding say adjusted of prior operating prior a We're superior diluted Adjusted year $X.XX. quarter and the

reflections flow well earnings. of of record cash flow Finally, the $XXX operating of quarter, free both quality fourth clear the in generated as million the cash $XXX million company the company's as of

my I to I pride team. in the enough just that Amphenol have say express can't

and the environment. entrepreneurial quarter Our results very once discipline we well have agility of dynamic this the of again our organization a reaffirmed to amidst perform continued as value

full successful the Amphenol. dollars by in Now new XX% sales truly year billion. our U.S. overall record is local the expanded and for XXXX. sales and I of reaching organically, growing currency that turning want this a a to just say to XX% $XX.X position year We of market, in

to great X navigate cross organization is proud our As years, XX% industry. reflection just $XX opportunities the grown electronics our we XXXX, broad in billion by sales market uncertainties we our this last while organization's on sales the array the of across that arising have a of ability in is in capitalizing and

a of level achieve XXX XXXX strong from diluted operating EPS adjusted $X.XX. full Our of adjusted year margins points profitability increase enabled basis an a and XX.X%, us full prior to this year, record of record reached

generated the of of record working $X.XXX flow capital flow clear billion $X.XXX billion, cash confirmations execution superior management. and we finally, of And cash disciplined free company's and operating

again U.S. broad than largest bringing Interconnect together acquisition completed our added and enhancing technologies the that Carlisle very These into billion a have of more $X Europe. Amphenol's collectively value while acquisitions sales the created Technologies, position with in pleased talented across program and our of of and the to of Lutze individuals annualized outstanding family. XXXX. array company our Also acquisition acquisition great We ever,

market In we and the from in still communications acquisition close adding first previously for Amphenol. the to addition, the the technologies team here announced, quarter position Andrew outstanding XXXX businesses in as July, also expect in while members will This company's of incredible which global the acquisition, signed to strengthen we CommScope.

million share substantial repurchase a of of XXXX, quarterly represented our to capital $X.X buying our We returned total and this XX%, by billion. under shareholders increasing shareholders dividend and nearly back in cash to XX.X program shares return

we XXXX, enter of the opportunities ahead As about remain us. I excited

from superior long-term drive new to can organization position agile Our continue created the entrepreneurial performance. of has company, strength a which we from

great pleased very that trends Now company's exposure all create it global turning application. served markets. our the broad. to and diversification to the end and to progress market because the would industry, across being the disproportionately balanced market across participate diversified, we're This diversified of us while not comment value enables just highly our areas I exposed for or remains of to given continues volatility any Amphenol all that electronics

the to currency. coming fourth line organic particular, quarter quarter in Sequentially, prior first in vehicles, XX% all defense strongly grew and turning full an our from included of growth increasing and X%, with the virtually for by by sales our with sales communications. XX% Sales our basis, On sales the in avionics, our This and So and airframe XX% this market dollars increased across local sales which year, expectations quarter. the broad-based defense year in the U.S. increased XXXX. of ground by market. X%, was into represented space, applications, in

in in I our reflected are our segments their reflected and this XX% spending. X% by the year the For here dollars execution the full growth that by growth position leading organically, increasing our U.S. grew local strong together XXXX really XXXX, all and with across just and in market. currency was many superior would and countries across operational our of note broad defense defense and particularly who sales that there Europe,

company's we remain into to roughly first the range and where by to the these expect of products. leading high-technology interconnect industry's we we widest defense encouraged market, quarter, position at the in the remain sales Looking offer levels, continue

well are broad of the expanding well capacities of on Amidst defense as the to capitalize current both world in demand a long-term in potential. around as spending positioned dynamic around the current With investments and geopolitical environment, build we're the technologies. their new array on them development to our products the next-generation this world, countries

and as a for local grew air currency. U.S. by of sales in commercial represented strong The organic of Sequentially, driven with third market from sales quarter, XXXX an X% really all our basis, XX% strength commercial year X% our sales the fourth quarter. manufacturers. the in by and virtually by And XXX% dollars and full by on and sales broad-based grew our aircraft year is increased the prior this from expected

full of CIT sales increased that fact, in in platforms. XX% sales by the strong prior For and acquisition And design-in year, as from on as our growth our broad robust XXXX, increased U.S. reflect local the and our from from market. the range as organically, underlying really we of currency by a XX% year dollars did jetliner position in benefited well

sales market. Looking -- team just in mid- single-digit moderate to really into commercial high proud in the to of range our expect sequentially. the first quarter, we the air working high I'm

organically real through both demand ongoing growth paying our aviation, dividends. and program offering, the efforts With expand product acquisition our are to for and our

technology for many to realizing We our growth to this of the continue opportunities benefits great and to come. in look see for initiatives our forward important offering market, long-term we years

Now industrial XXXX. in turning our represented the market to XX% This the of quarter market. full the year XX% sales for and fourth

in prior were year. grew basis, instrumentation, that alternative as into on year from X%, sales by as mass And and a from organic the in transit our sequential rail grew pleased growth XX% local On prior basis, electric coming than heavy which grew in X% sales our quarter. quarter vehicles, by with energy, and U.S. better currency medical expectation by the was Our applications. dollars we battery sales well an

grew energy U.S. applications by from dollars from as in rail in we by more benefited impact X% Organically, offset local acquisitions. were than sales full our other markets. and XX% year alternative in and of year as XXXX, the currency sales For medical by the declined mass strength moderations transit, prior

Europe fourth sales market moderation, levels. single range Looking of did of in to will segments service by in low quarter company's we the I Demand year, digits market. we strength of did quarter that to overall moderate continue diversified the many but this of and despite across in industrial diversified products this the now capabilities our into these in we market. XXXX, expect say important particular, encouraged first the XXXX, global expand remain the decline from in the

organically antenna no us to the As begins doubt occur now high-technology that strategy complementary sensor revolutions offering, to and has our I'm through electronics demand industrial improve, our and confident continue acquisitions, on interconnect many long-term to will across to positioned market. both expand that capitalize the

bit X%, lower organic in the our The automotive market represented for and year. really XX% a Asia. America of our sales in than and the our European and our were quarter customers, in driven the Sequentially, which was and particularly more sales sales Sales by offset organic, North into in from XX% coming which increased was and currencies X% down that fourth by dollars demand local quarter of better the automotive by expectations full than growth quarter. U.S.

U.S. increased and performance and in our particularly driven XXXX, year and Europe. currencies offset sales organically, full this partially dollars by strong by local was was America the For in reduced which by by demand North and X% X% Asia, in

quarter Looking seasonal into the from levels. of XXXX, in expect quarter's moderation we first sales this a

Just market. want say that our proud in I'm working to really automotive the team of

of for this in customers to our technologies with look exciting are wide years to automotive to Europe, whole And design forward there particular, electrified strong into applications on. benefiting remains a from in position of on that in market, team includes the many come. we're working And market array from everything focused drivetrains multitude other we clearly who wins driving new the vehicles. a While implementing our some uncertainties in new are their

by much organically coming mobile quarter our sales U.S. market XX% for in The robust as a of was laptops and by of offset a moderation sales Sequentially, wearables the the and local our and better full the was X% year. which than expectations strong in currency tablets. the in In sales into partially growth grew represented into increased smartphones, our sales quarter. fourth our only our devices dollar, sales XX% in by X%, quarter,

that by full virtually U.S. the growth and device mobile all year, by I'm really this mobile and dollars organically, in increased in for applications. sales in XX% driven devices market the And pleased our was

into of a their that of incremental reactivity across first do agility seasonal have in As products interconnect for term. our well we designed capture look sort volatile us in here XXXX, a fourth devices the dynamic array in market mid-XX% sequential our confident range. of quarter the the very typical antennas, working we long the proud mechanisms of enabled as quarter. devices of positioned anticipate who's again decline with range broad the in to always and once next-generation very I'm mobile and And sales team leading I'm we're that mobile and

XX% The XX% the sales the for a by market this this IT local driven our strong and in IT our datacom business. our used with grew the XX% currency in represented sales Sales datacom of together market growth fourth quarter continued in acceleration in full continued and of applications very demand products dollar, in year. organically, and AI by our base U.S. was for in

the driven basis, quarter, This growth sales coming by On sequential our better quarter. in third into a essentially the was XX% growth by than expectations substantially AI-related applications. sequential from increased

strong XXXX, datacom well of in strong very our dollars our U.S. demand as we IT AI-related in for growth as datacom market as in year XX% organically grew from IT and full business. the For XX% applications a sales the by benefited non-AI

in expect in sequential first in to as centers data investments mid-single-digit increase further Looking AI-related a the ahead, quarter we accelerate. sales continue

market. company's IT the by position more datacom the are than in ever We encouraged global

IT create in continues AI. a Our our an Amphenol for business particularly systems given future This job unique team AI those to securing to outstanding opportunity enabling next-generation do on continues revolution leading really in power growth for products, high-speed critical high-speed are opportunity and Amphenol. or power creates our continued this a fiber these interconnect next-generation whether optic, long-term and and components networks, products

mobile Andrew that turning that and mobile one the as refer market Now of the of and the the markets. CommScope the will combine going acquisition effective broadband networks markets going communications to I and the broadband that will in first market. networks we with to note pending just forward, from we to forward businesses quarter XXXX network want the into

operators and year and our dollars in U.S. as sequential The full our X% sales single-digit and organic currency was broadband quarter our the of strong quarter Sales increased sales demand decline. from market represented broadband fourth which XX% XX% XX%, a the grew On for improved. fourth in a a basis, sales in high by by for of X% actually in local the XXXX. well-ahead very expectations

the X% in year sales organically, currency year organically from mobile in increased manufacturers. a broadband Sales network equipment networks and the in in local and the as for full XX% U.S. spending by XX% by the operator XXXX. fourth driven dollars, the sales benefited fourth XX% represented our and well of that full strong The X% by U.S. we operators in as of was by For prior wireless quarter market and down currency were local a and really in year XXXX, moderation dollars of increased as by spending. quarter mobile broadband market

was the sales full in by by Sequentially, much organically. market, in And our prior from year And of our half the strengthening expectations year mobile quarter. this coming by XX% driven a than and into was particular X%, the decreased grew XXXX, for the year. the sales second of in this networks better but X%

have And from quarter, ahead sales named we quarter to market looking networks the see expect mid-teens now first quarter. the yet So strong the communications a as the reminder, to these Andrew acquisitions expect that fourth that this excludes of therefore acquisition levels. excludes a not first in impact closed decline the newly of in we still close to guidance and impact the

customers market to support to I we across well with continuing beyond. provider we're look forward and and in very communications would that just and networks positioned our the customers service XXXX OEM say

we to potential efforts Our look benefits providers. next-generation working manufacturers around are our that Amphenol's of to comes both service our with realize world equipment unique increased from to position the expand the the in teams and forward position technologies, aggressively mobile and

to the welcoming further As innovation continues forward we look as remain on team technology Andrew to poised build position we Amphenol, our accelerate. mobility to to

And well conditions Now as outlook. turning rates. as assuming of our constant market to obviously, continuation exchange the current

sales we XX% for This $X.XXX growth range first XX% to For EPS quarter, $X would in first XXXX and in the of now sales $X.XX. diluted first to to diluted quarter represent billion of quarter EPS the of the range XX%. growth adjusted from billion XX% and -- the to of the expect adjusted of $X.XX guidance

remain in just many Amphenol's would environment confident continue management the and and I while grow our of position ability outstanding sustainable current the that to term. reiterate the adapt I market And strong in to here the driving long team profitability and to challenges to over opportunities

I finally, year outstanding like for thank in would full the the world And truly global XXXX. around to opportunity fourth their team take quarter in our and to the of efforts this entire here

operator, be to with And any take that, happy we'd questions.

Operator

first Instructions] Luke from Junk Baird. Our question with [Operator comes

Luke Junk

below opportunity course into the in operationally below are end the year? excited new for what AI the CIT but discussed you're radar pending or the either about 'XX, market as of opportunity [indiscernible] and Andrew radar much acquisitions, that Adam, is Amphenol about coming

R. Norwitt

much. thank the hours, very next all you opportunities if I talk that burn mean the of of bits would Luke, we little faced. I X started to about Well, I bobs and

to revolution see that. going one with the bit is little of company across tell I'm punt a so which the electronics. to much just thing, so And But we on you that, opportunity

January for of lot the people know crowded Christmas dread They kind of Vegas whole week aisleways they Consumer I spend on a the Show. a going as And of in a of dreading ago, of chore to and CES the was CES. going their just, couple weeks holiday out Electronics roam first Las at it. to I around

Earth to it's the most on exciting me, go. For thing

one array in thing this nearly on wandering saw hallways, one going And the in there steps at all in was XX,XXX what's in Vegas, looking you on I the these next-generation computing, next-generation IoT now with and been and on, going and and with product things like, consumer is revolution acceleration vehicles that this day, see the of Las which of of that robotics business, accelerated and is combination of extraordinary power world. display convergence our things that in real devices, the of have and we think I've that the compute and burnt like the the converging device really AI. full innovation

For industry to in half across this imagined unlock me, over never I leather at could and over when going again. XX,XXX that's those opportunities and burning and my our before, day that and I have CES, my just walking we saw over spent out steps shoe of

so we, around about I'm technology across and enabling to developments what going and I to with amazing really that the excited about come markets. compute unknown are all really that new going convergence, industries am convergence product our excited that of that are of a as that's the this create And accelerated company, out end

Operator

comes question with Samik next Our JPMorgan. Chatterjee from

Samik Chatterjee

that look level Adam, sort those can opportunity news of these time? talk some about in of can you're That over increase vis-a-vis complexity both that if your content AI terms the a maybe need increase complexity for sort manufacturing you market And that complexity data-AI helpful on on impact of to talk I simplification of term of you're how with the the drivers. customers mean will of share generation-to-generation about And there's and ask one in particularly. Amphenol the been does can I how seeing at the long that connectors basis? the there implications a for systems. you be if of the connectors you lot reports the trends about for just if of

R. Norwitt

and chips, for that Thanks whatever of calculations but and about each is, thing much, the little the got what fact It to probability the these think the investments advent you already development have is make I broken, acceleration to all Samik. in question. gist your model to the I the calculations that neural systems complex it of creates really And or with the this machine Amphenol. the is complexity of is ultimately this talked these Yes. unique a to want number times about that or network Look, a very a other learning, we've talk a and the with call AI, was a it. learning great processors,

products integral to part that in linking the then across And products chips by other. center. chips of devices -- connectivity our to talk are it have definition the various an that linking is to all of We the because and complex, them is data each

-- talk And the that then make the so with each to those highest it's solve to enable problems to amongst using our latency of that customers' other, do a chips we can lowest you question speed, calculations interconnects to And those out. themselves. power hearing about breadth they're built article of the think cannot as about challenges the AI an without networks because for energy also being pick supply I up these in nobody amount possible the same lowest around

investments industry Amphenol, board, products we're much than just going enabling you confident a intensive our opportunity. where enabling which and go to have interconnect the the of we're new also how And as make would with low high in as our accomplish but speed, of we'll to that we more across architectures, by the to definition beauty in the from broadly content architecting continue for gain these more certain agnostic They other customers for are significant than they both. architectures. able products they AI share us, to these long a power fair that supply about latency that but doing more are of And the is get products -- reduction

Operator

with Our next Daryanani question Evercore. comes from Amit

Amit Daryanani

seeing is durability helpful. can Adam, talk the AI part the and just theme bit be you of the on hoping little maybe the you're maybe would about can you about growth more talk AI front just a

I think convert $X what's that to how impressive. Maybe on of billion just revenue? of touch duration book, the orders this is does extremely you can

from out related folks to And on nice then you shot NVIDIA call had recently. AI, really really the earnings a

clearly, and in to X go the them. your content AI something different you're closely to is X everything traditional up smartphones, typically here? Gen we very when X. with as Gen from well? So see typically, else, as you switches Or your Gen there But, for true working hold that goes Would

R. Norwitt

to very look, folks from with up investments company's thanks the way position systems our position talked we're themselves And we the these folks are those and proud next-generation down we're who Well, fact chips chips between. the actually really really breadth players the position. around I've data much, designing making are stack very our And are that who in systems. and the everything and of working these pleased the down on all Amit. centers, the And about of and Yes. the with in

And of there ratchet. that position of one-way not as strength limits the the position the is a breadth across continue a is products as trend of our Performance position very entire our stack of And we that and the performance systems enable investment. program, of strengthens is think really and these to further push a backward the that durable in I of much performance. in as the

our course, in would position some Of to competitors actually I we I products, of are win position and power leading it certainly more and of mean with great cases. competitors us fair that. not. have licensed in going everything? But that of share than certain a partners gain puts are we Now our to high-speed those Amphenol's say in XXX%

as whether the performance, they're changes, already very generational more they're for complexity we partnership in whether products, to looking efficiency, looking the this embed of more will very are our the all exciting customers any trend deeply for all those I table have get. whether power in looking with in AI. I that we comments -- continue not is for prominent of to will shifts think making customers. any their positive we're increases will those of about limits very, real at helping role about my in with say comments But systems, push more our a generational we very and as them a where customers they enable revolution performance those into I the what areas are they're any pleased

Operator

Delaney question Sachs. Mark comes next Goldman Our with from

Mark Delaney

on record profitability. the Congratulations

bit I that is? you comment as there maybe that company could. or seeing. ramp could a spoke double-click racks. I'm please. and Another not constraints, products support if your to Can AI, And servers meet question is very gen current the status hoping more already AI, is is demand? I ability any and on yield bit that side, And has the demand Amphenol supply next Amphenol to robust shipping could, you on be gating you around if how on encountered a And supply what may if are issues whether going share to any the the or

R. Norwitt

also because customers Amphenol, They're it Yes. proverbial Well, or Appreciate doing machine doing the reasons. your product like. comments. and latency, the satisfy we needs that doing and organization that But they're choose high to of has of efficient this they kind they're created. -- Mark. the mean, whether much, I have a entrepreneurial our look, that capabilities have they when the a speed, they because a it thanks confidence our that very more in mousetrap execution abilities the have power our for have variety low has better the that's

customer for step entrepreneurial you have special? with is back what a each tailor demand. around if about really in moment and XXX to managers that -- the general makes meet such let's who and way company the authority individual full businesses a that world, our It accountability their organization think decentralized And they nearly

our ability about unique again and mobile devices down, the last expectations of quarter. We've into when that talked for fall our capture did coming you working our quarter, as maybe in to years saw, we outperforming opportunities the competitors incremental team

folks faint AI the no are Very outfitting tell just these very, wide you inside the Amphenol are customers that to not spending always only unique agility. companies the array no are is very of who question, these heart. AI doubt that challenging public significant schedules ramp-up which you of working would to challenging There centers significant to very in big have but our that work very these mean products, for happy it. know on about there's with Amphenol of at some of it. about of ramp-ups, no look I doubt CapEx And are I ramp-ups, the and

make always to in perfect happen, of value we are our question we all And real end about greatest needs there comes we're Are entrepreneurship Amphenolian support times? resources to at to the of there time customers. react No the offer from. that it. happen we that unique is, that Of the day, not. whatever customers agility is But at and the that course, in our redirect to

proud, far. how on programs so so they're really just would and that And tell of of team you, momentous proud working so I doing these a job our great I'm

Operator

comes from Our Difficulty] Buscaglia. [Technical question next Andrew

question our next comes Merchant And Citigroup. with Asiya from

Asiya Merchant

can, market. I Great. If the industrial just about end

I demand are -- think Adam improving. in trends mentioned that

of improving, could improvement, where seeing you the would great? market you're double-click linearity be if just that So on the that end

R. Norwitt

Yes. we're in question, there And if -- Thank that using to the where are seems growth Asiya. first, understand organic some not certainly connectivity very connectors. X%, in improvements quarter. was in bad by issue X so with But pleased the it the you industrial. Amphenol in much, growing we some I the And comment have not think, quarters, seeing I just very your would for first, here, I industrial actually to be market

the that better in organic and mentioned growth we like we showed prepared mass that I growth. saw sales really of that areas that see market good good we're or for markets growth continue strength would even I not particular that have an my segments the the alternative area we in were that medical had of as think in about the moderation showed fact strength remarks, quarter, another pleased energy, And particular rail transit, When Europe. organic the our in to been

encouraging semiconductor very robust there actually and of saw that equipment industrial in little and everything that a our bit very manufacturing. semiconductor does test then where was example, cycle manufacturing, a from go And include instrumentation, growth in for really we things that into, that

cycle to maybe starting of deliver growth. we're the that now side and right think I on other

encouraged. overall we're So

would because with in Asia a XXXX. early the remains, with better I too it's -- of a kind especially my sure, of confidence of we we little still sense did uncertain. outlook sense of in say It's in we've strength mind, to come than But better for bit call the and America, into XXXX, a that coming a seen into very Europe -- full North recovery,

Operator

UBS. Our next question with from Joe comes Spak

Joseph Spak

Adam, that strain reduce or And I'd the good really when getting AI is year's I a so. expanded CES feet past pair Communication margins, little quite the recommend year similar to over a of your pretty The on sneakers picking bit. trajectory think for they meaningfully Solutions up. started to next

So consider, can mix help it us higher? And forward? sustainable? go as to just it's should you that Or you've profitability rein of or about that more AI bit? CapEx to some understand to mix things sort are margins build the margins should in and investment up, other a going we some Is think starts how higher to know mentioned here there continues whether little maybe I capacity

R. Norwitt

really extremely the really is Yes. Thanks at XX.X% for certainly a proud something we're, company obviously, of hitting margin and the profitability levels lot just Joe. Listen, company the operating proud, we're of overall the of. again, that

that by a Communication specifically, AI datacom As in -- grew all certainly, division the portion very profitability, their certainly last good the and driven relates over year, division. just that is it the and I not market IT Solutions mean, of it grew they But of significantly that division to is.

it's be have just conversion typically really discipline It's really drives the to fixed the AI have and business' over ability really the related business. relatively growth leverage the And just that when costs in level, And not that related would to that to specifically. at strong you strong.

strong a XXs is the and And did, going ultimately division margin when rate. to and much mean grow abnormal you're you drive a higher. drive I probably conversion you in for for growth, that percent not they it's conversion in operating clearly at the that as as if that look low which growth dollars rate,

driven So continue execution drive their I to keep fixed drive and margin to able of Amphenol ultimately the what on really that's the by grow. the as eye drive really operations do. in team, an is say ability within think would agility costs growth. continue typical which the makes really more control to grow, we We what the just special they And strong We company we the conversion costs. always that's I when the to to

over relates wouldn't So costs. really the specifically to anything really our really has more business. AI-related profitability. the happy with real this strong, but and do the growth discipline -- say And to with just I It good

Operator

with from Buscaglia comes BNP. Andrew question next Our

Andrew Buscaglia

that. Sorry about

we taken any on, on repeating dropped want think office. take to tariffs? touch as from provide are your try how to percent I to you not hopefully And what some I details were pertains year of you're can Mexico, for you to questions the got that President gauge just asked, ahead? Trump wanted guys now Canada planning it but around and I products coming can has there. China, the so risk I get thinking,

R. Norwitt

the places I watching Thank goes all that question. -- very you world around of very and around carefully the that's all global in that we Obviously, much, we're company. as all the appreciate happening a Yes. operate

let U.S. We saw of wide the mostly was to fabulous what XXXX, tariffs but not impact I solution. a directed new is those we mean, that back is did the measures. not from with I China, of was only our think say me a mitigating just topic. job in, dealt in variety There I back at a this. tariffs, Look, specific those And this China. tariffs of were not tariffs a team think time through one-size-fits-all it

of always in to to our tend that them, where customers. we but be our try close all our the backdrop is we Underlying not that tend products the XXX%, that to regions to customers buy make

or shipping those close try to things them customers customers in and into U.S. they're them. we and our making sometimes are Europe, into regions be wherever And to making the

it successful to why a mentioned The tariffs, unique if so to to get down I were here's there the we what for that phase are fact to coming, tariffs don't last of in do. out But of at earlier. headquarters, essence comes here say, "Hey, everybody that the really put mandate we have organization you you that mitigating entrepreneurial

step step X, step Here's X, X."

it's that ultimately through different bump the along of There's world whatever general whole including government up them policies, is that all their around our we we of tariffs, into company. to and to along. what including managers comes anything a our trade that tell host impacts come Rather, business, can can policies manage including do

And they coming. they guess rather their as the going, agile that is policy based us that are are run sure as what kind positions possible. means company there that these kind extremely entrepreneurship, not a that's where principle we operations of reactivity. make but the agility, that unpredictable is that that of well the of situations of the And when on flexibility, And are

to And that to going what to a ready be policy we managers products, we'll about. who by come need change and tell does ability know if mitigating never successful full back in guess there a We're in wherever that. can you any came the products their need were that right policy, I but front react policy run very know impact having logistics who to their to do have their their if they XXXX they so know customers, general and manufacture to competitors, do

in North the because the North that manufacturing capabilities And in XXXX, Africa, in position, company, to in continued since America, in in it. I'm company you Mexico, even around very of expand I confident you better presence time the name new new Eastern factories we'll same anything, U.S., in around, of tell in that an would Southeast presence this Asia, South we've world, if our our And we're the position this the Europe, in time. capabilities new Asia, be

flexibility accordingly and going that have world organization we time we and react faster our customers. first when they policies entrepreneurial out, have. to going than We're we're there them, real what more that come going event than of see because other what's those do, and with to do to our we nearly expand countries, with that going that us us across in to together and in come to we And do unique around the any we're on get that that can continue policies structure want then are impact mean the XXX today I so preserve customers. facilities out that XX

Operator

question next Truist Securities. comes Our Stein with from William

William Stein

Europe about great I from areas. about AI. congratulations automation industrial my not the instead, is are add away may the more specifically. it's it's in I'm seeing I talked focused, still wonder ask and of overhang automation, it's terms weak, your Great. be of inventory to And more Adam, related recovering. any guessing sort degree industrial that you skew there? I'll market. results. yet want to stronger to you improvement about I'm sense industrial related? therefore, another that, that But recollection my of And one the the end some demand trying It's to or

R. Norwitt

by are doubt Europe-centric no in overall and that they that double-clicking But much, there's automation, capabilities, Europe. impacted automation moderation automation the Will. more in the down Yes. into look, creating mean, I companies tends more where you're we demand. to a are with be more correct not who Europe-centric, demand these still very are Thanks automation It's very work that ends they our up. customers the necessarily industrial

we data of smidgen mean ahead industrial skis into year-over-year that would don't automation any a tell down on automation. sales is a look, I or point. I my other factory though, that, get our a sign, you quarter-to-quarter say, that basis. it to on so in a but saw organically on I basis, -- want of growth a that's and were recovery

And so we'll see.

timing performance and air strong in still has the I to strong the of to and and somewhat think the that remain anything the exception I Europe very a in businesses linkage yet commercial related be Look, seen determined. we've recovery that industrial, to concerned is with about But way, automotive really defense Europe. industrial the Europe industry, overall very, in recovery that our by

Operator

question with Boroditsky Jefferies. comes Saree next from Our

Saree Boroditsky

in the of would acquisitions of margin us improvement, impact performed improvement update but maybe of building on some quarter. organic commentary, how the the highlight just margin So some the on obviously, And there? did saw quarter? then you margins nice in have maybe dilutive and the you margin acquisitions integration Could

R. Norwitt

in a quarter the the a the quarter. going appreciate the on into had margins mid-XXs we we year-over-year conversion conversion I fourth of face XX% Yes, conversion our of had Yes. and question. basis sequential on good Thanks, the Saree. really in obviously of kind

out, as impact acquisitions, But point really acquisition the I of and as that dilutive and mention, despite did those you had conversions. we

because but So an even basis, fourth acquisition basis a margins so wouldn't I acquisitions, obviously, much impact sequentially, year-over-year such say there's and CIT. acquisition the these a biggest with year-over-year on were stronger. really quarter the on sequentially conversion was in the

company we the on to year. the with specific but CIT, average are going still progress They're margins. very give not We're under during their information certainly happy margin

to So with of the on dilutive on we're certainly an they're and company to the have margin also regards made. in but from our progress happy level progress still EPS the they perspective accretive line, conversion, the

of about has CIT outstanding we day, but those progress margins. get bit have that more how management couldn't with been a we'll The and to bit we're But acquisition. are And at a little things ultimately that of go. average This really team I time. -- the margins positively to end say do takes little think of that the the really company happy optimistic the and the really just enough

Operator

Markets. Our question Guy comes Capital with from Freedom Hardwick next

Guy Hardwick

warfare? as ask little electronic did about areas military you you defense a you beyond there's Adam, broadening the in wanted What's Can systems business, improvement bit just unmanned growth in you some of budgets? question it talk driving particular I if defense? could drivers a behind up to Industrial. or maybe the break Are where with the just about

R. Norwitt

from different a industrial. mean, I look, little bit

a full I business, are space I others to for in strong tell are you space organically. had little that performance different than it's would X% Our mean, defense strong. example, both yes, is defense. last really higher quarter growing like which by the broad-based pockets growing year, which for growing related and very very there anything a

more Actually, answer and Will's offset it's strong. in a the as which we we're to vehicles, question. markets, particular, Europe, in But we're other strong, communications growing seeing challenged, that both quarter the mentioned it good markets to the But in in not growing year. seeing industrial, was distinguished very like airframe strength in really there's few remain where as really

broadly premium greater increased overall next-generation a countries, next-generation in spending. that's investments a the defense, broadly. because different in think a strong towards I we're question, in the a of Amphenol's think in And variety that's the performance one, by that it I spending seeing So it's is especially that ultimately degree Europe. is of electronics we equation And that of electronics just number really redirection where what then position results participate military did we in than such to year. we general those at last saw And the

Operator

next Our Bank Wamsi from with of question comes America. Mohan

Wamsi Mohan

pieces in moving could to I here this that supply a Adam, are topic. there back lot go chain, of if AI

orders, came down your record but had CapEx marginally. You

Your complex yields ODM low are systems. yields very these are in good, AI but

ODM just ramps? half given of you Amphenol? with in and you moderate could revenues investors CapEx Or with if growth do second visibility Can you calibrate should versus what second half, help your kind half think for matching into that are AI where have perhaps capacity especially first

R. Norwitt

sure, is mean, reasons, you in I that can investments, as just here certain to a certain things, to quarter. build-outs not a would much, when first lumpiness mean, pay position going very wide I'm we've AI for Thanks variety any Wamsi. Yes. of and our that our in very when the given guidance look, We're making you try you order things the quarter, for I a the about. talked for robust. like. markets CapEx predict And these tell we've past yes, there given I significant to be of

talked with great first already is we've higher book-to-bill strong. broad or to in next the commenting guidance AI wins which think customers the related that about unseasonably about, of datacom, think I gives the But that design in given IT us year, I going without orders significant we've array confidence a very that that long-term lower the quarter particular, to be have we we have and on quarter is

datacom, I our to in we decline low a a and digits, typical is in the which differential typically, up fourth scale. guiding here first for market quarter, IT know, quite mean, down, would mid-single don't mid-single-digit from seasonality are which IT of that is I datacom that be quarter of kind

with see of so to positive we outlook. successively. I And you how sense quarter through go try give into as come a very XXXX the each good a And year, think that we'll we we

Operator

from Fox Our comes Fox next question with Steven Advisors.

Steven Fox

basis on you devices could curious for mobile report markets helped was and us if there market, Just that's over on the outgrew into sort something the in auto just it at for flattish or full guys I like were hurt year if whether or of or organic what pretty you seems numbers on that par give course an growth market of the the sort your card those areas out 'XX? unusually looking a positive growth was looking markets. negative those now

R. Norwitt

Thanks for so Steve, comment. the much,

I example, I a for and been expansion the us. of think to number a And wants that's cars you're for decade, both I the has electronics one say in I not those years. automotive thereby correct. I we've us content opportunity the than of think markets. automotive, benchmark that, outperformed for driver always into think whatever years, use. that of of comes we've to I underlying And mean a outperformed would rarity mean in for recent more

electronics, fair ability mobile X devices, it relative comes then in And try whether to like. it's more and things. win to content, really than drivetrains, to our to safety, our that communications share next-generation And next-generation down the of

sell antenna wide the through of everything and offering with position interconnect mechanical and we to our breadth like. our antennas to from mechanism market, the of variety a is complex hinges and One that unique that into customers products interconnect products

that time to time a of share our and that team years the just our ability our far demonstrated thereby execute. And over, as again our they've customers think demonstrated us to than and organization. has ability most say more my need to fair then when team fabulous whole a business. I'd CEO, overall I of execute And so the take And little XX is gosh,

but us of mobile to to year so for that years I think a a of outperform don't is different every what something have agility in devices. volatility, There's serves continue rather a unique cadence. them allowed prior. many There's in has They And lot look, than continuation that well XXXX different. there's

Operator

Our Scott with last Research. question from Seaport comes Graham

Scott Graham

EV quarter. your market production forecast and have well hopefully, Congratulations on question next also that With in ICE market, production strong X opportunity certainly years, current and the a auto a does simple. on over above auto? the reduce it's I

R. Norwitt

were you're EV things upon or our job and electronic talked electrical, We mechanical creates that to fabulous all that converting you And that about when of of an for around the that amounts growing fact done and a EVs content. the I a company. great vehicles and And ICE world. into capitalizing hydraulic get think have we've opportunity opportunity

sensors, the new interconnect a to driver great of of is extent go the EVs that efficiency more no automotive ICE fuel electronics actually that efficient be to be along there's a to And meanwhile, with And drivetrain. products to to doubt there's also from new fuel ICE, vehicles, vast that will our the and with built that as well, majority vehicles tilt ICE that. business agnostic is or

car. of electronics agnostic is it's the to And the not in expansion what

of flamboyant like life you can much to kind for it's think used amazing. we've look different I for a today, amazing. of in that new for array you a who cars, so so and mom be. at these And my mean, electronics and car just I get even not car, I get their recently, a there's and new when new mean someone I shopping is it's you been my electronics know just mom, would And

These car embedded mom drive. life-changing the to type are being my that want electronics in are of would that XX-year-old a life-saving, even

very I us And robust. in so the very, think automotive remains of ahead opportunity

Operator

like to for turn Mr. the back no would closing Norwitt further I to have remarks. We call questions.

R. Norwitt

support for Thank want very on the I again the phone much company, all Take and you. you And operator. forward of much, thanks extend so and you talking care. look days thank XX we Well, to to your now. to of attention from to my everybody

Operator

Thank you have for attending day. nice today's a conference, and

Amphenol (APH) 22 Jan 252024 Q4 Earnings call transcript