Amphenol Corporation (APH) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

From the Annual Report on Form 10-K for the fiscal year ended December 31, 2025, accession 0001104659-26-013549.

Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors and interconnect systems, antennas, sensors and sensor-based products, and coaxial, high-speed, fiber optic and specialty cable. It is one of the largest suppliers in an interconnect, cable, antenna and sensor market the Company sizes at roughly $500 billion of worldwide sales in 2025, based on industry analyst reports. Products are sold to thousands of original equipment manufacturers, to electronic manufacturing services and original design manufacturers, and to service providers, through Amphenol's own global sales force, independent representatives and a global distributor network. Distributors accounted for approximately 19% of net sales in 2025 (18% in 2024), and no single customer reached 10% of net sales in 2025, 2024 or 2023. Approximately 65% of 2025 net sales were outside the United States, with China alone at approximately 16%. The Company designs, manufactures and assembles at facilities in approximately 40 countries and employed approximately 170,000 people at December 31, 2025, of whom approximately 15,000 were in the United States; around 90% of the workforce sits outside the U.S. Approximately 79% of long-lived assets were located outside the United States at year end, with approximately 37% in China, up from 73% and 29% respectively in 2024, an increase the Company attributes primarily to investment supporting its AI-related products.

Segments. Amphenol reports three segments, each run by a segment manager reporting to the Chief Executive Officer:

• Communications Solutions, connectors and interconnect systems including high-speed, radio

frequency, power and fiber optic products; coaxial, fiber optic, power and high-speed cable; antennas. Approximately 52% of 2025 net sales.

• Harsh Environment Solutions, ruggedized connectors and interconnect systems, specialty

cable, printed circuits and printed circuit assemblies. Approximately 26% of 2025 net sales.

• Interconnect and Sensor Systems, sensors, sensor-based systems, connectors and value-add

interconnect systems. Approximately 22% of 2025 net sales.

End markets (share of 2025 net sales). Information technology and data communications ("IT datacom") approximately 36%; industrial approximately 19%; automotive approximately 15%; communications networks approximately 10%; defense approximately 9%; mobile devices approximately 6%; commercial aerospace approximately 5%. The IT datacom position, high-speed, power and active and passive fiber optic interconnect for internet and AI-enabling systems, is the largest single exposure and the principal engine of recent growth.

Strategy. The Company describes six pillars: broad market diversification; developing high-technology, performance-enhancing solutions in radio frequency, power, harsh environment, high-speed, fiber optic, antenna and sensor technologies; expanding global presence; cost control; strategic acquisitions; and a collaborative, entrepreneurial management model. The last is structural rather than rhetorical: more than 140 general managers run unique, independent businesses in a flat organization with direct income statement and balance sheet responsibility.

Acquisition program. Management regards its industry as highly fragmented and acquisitions as a standing part of the strategy. The Company invested approximately $3.8 billion across five acquisitions in 2025 and approximately $2.2 billion across two acquisitions in 2024. On January 31, 2025 it completed the acquisition of the Outdoor Wireless Networks segment and Distributed Antenna Systems business (together, "Andrew") from Vistance Networks, Inc. (formerly CommScope Holding Company, Inc.), adding base station antennas, related interconnect and distributed antenna systems. On January 9, 2026 it completed the acquisition of Vistance's Connectivity and Cable Solutions business (referred to as "CommScope") for an aggregate purchase price of approximately $10.5 billion, the largest acquisition in Amphenol's history, adding fiber optic interconnect capability for IT datacom and communications networks and industrial interconnect products for building infrastructure connectivity.

Manufacturing, supply and R&D. Facilities are generally vertically integrated from design through manufacture; substantially all are certified to recognized management system standards (primarily ISO9001, also ISO13485, AS9100, IATF16949), and roughly half also to environmental, energy or health-and-safety standards. Raw material purchases span precious metals (gold, silver, palladium), aluminum, steel, copper, titanium and metal alloys, copper wire and optical fiber, and plastics, sourced locally from a variety of suppliers worldwide. Research, development and engineering was supported by approximately 6,400 employees at the end of 2025, organized by business unit around specific markets and technologies, with an emphasis on products that can reach broad application within one to three years.

Competition and backlog. Principal named competitors are Aptiv, Belden, Corning, Foxconn Interconnect Technology, Glenair, HUBER+SUHNER, ICT Luxshare, Jonhon, Molex, Rosenberger, Sensata, TE Connectivity and Yazaki, alongside numerous smaller regional and product-specific competitors. Backlog of unfilled firm orders was approximately $8.9 billion at December 31, 2025 against approximately $6.1 billion a year earlier, the increase driven primarily by demand for AI-related products and by acquisitions. Nearly all backlog is expected to be filled within 12 months, and because much of the communications-related and distributor business carries short lead times, management cautions backlog may not indicate future demand. Seasonality is not significant, though historically the strongest quarters have been the last two of the fiscal year.

Certain predecessor businesses date to 1932; the Company was incorporated in Delaware in 1986 and its Class A Common Stock began trading on the New York Stock Exchange in 1991.

Risk factors

From the FY2025 Form 10-K, accession 0001104659-26-013549, Item 1A, condensed.

International exposure, geopolitics and trade policy. With approximately 65% of 2025 sales and roughly 90% of employees outside the U.S., and 79% of long-lived assets abroad (37% in China), Amphenol is directly exposed to economic and geopolitical conditions in many jurisdictions. The U.S. continued to impose new tariffs on imports throughout 2025 and other countries have imposed or threatened reciprocal measures; these changes have in certain cases already increased the Company's cost of doing business, and management states it cannot predict future actions or whether it could fully mitigate them through pricing. Related exposures the Company enumerates include regional recession, postponement of customer spending, monetary and fiscal policy shifts, armed conflict (the Ukraine–Russia conflict is named), employment cost increases in low-cost regions, industrial policies favoring domestic champions, intellectual property enforcement difficulty, longer payment cycles, exchange control and tax-policy changes restricting movement of cash between subsidiaries, and receivable credit risk. Facilities operating under preferential duty or tariff programs face increasing regulatory scrutiny, and non-compliance would raise manufacturing costs.

Raw materials and components. Prices for precious metals, base metals, copper wire, optical fiber and plastics have been volatile. The Company may be unable to pass increases through to customers, and in limited instances depends on a single source or a thinly-supplied commodity market where alternatives may not exist at the volumes required.

Cybersecurity. Amphenol relies on its own and third-party systems, including cloud hosting and managed security providers; it notes that the rise of AI and machine learning has produced more sophisticated and deceptive attacks, that IoT and operational-technology devices have widened the attack surface, and that an incident at a provider could materially disrupt operations even if internal systems are not breached. Previous attacks have not been material. Mitigation rests partly on a deliberately decentralized IT architecture in which each business unit runs a separate and distinct system.

Acquisition integration and goodwill. The Company has completed numerous acquisitions recently, five in 2025, two in 2024, some large and complex, and closed the CommScope acquisition, its largest ever, on January 9, 2026. It has at times experienced difficulties and unanticipated expenses integrating acquired businesses, and may in future incur goodwill and other intangible asset impairment charges.

Leverage, covenants, capital markets and interest rates. The Company's credit agreements and senior notes contain requirements that, if breached, could have a material adverse effect. It depends on access to global capital markets on favorable terms, which a ratings downgrade or market deterioration could impair. At December 31, 2025, 3% of outstanding borrowings carried floating rates, a proportion the Company states will be higher going forward as a result of the Delayed Draw Term Loan borrowings made after year end.

Tax. Amphenol is taxed in every jurisdiction in which it operates, including its two largest markets, the U.S. and China. Audits, examinations, changes in tax law or accounting standards, and challenges to its tax positions could all affect results. (A live instance of this risk in China is described under "Current quarter" below.)

Demand cyclicality and competition. Results depend on end market dynamics, and some end markets are subject to cyclical and at times rapid periods of reduced demand. Competition is on technology innovation, product quality and performance, price, customer service and delivery time, against competitors some of which have comparable or greater assets and financial resources.

Other named risks. Foreign currency movements; dependence on attracting and retaining skilled employees including management teams; government contracting risk; export and import controls, sanctions and trade embargoes; anti-corruption compliance across U.S. and foreign jurisdictions; difficulty enforcing intellectual property rights and claims of infringement by others; customer claims, litigation and regulatory proceedings; environmental laws and regulations; extreme weather and natural catastrophic events including those intensified by climate change; and incremental costs and regulation arising from climate-change and sustainability efforts.

Management's discussion, fiscal year 2025

From the FY2025 Form 10-K, accession 0001104659-26-013549, Item 7.

Net sales. $23,094.7 in 2025 against $15,222.7 in 2024, an increase of 52% in U.S. dollars, 51% in constant currencies and 38% organically. Growth was led by robust organic expansion in the IT datacom market, strong organic growth in defense, industrial, communications networks and commercial aerospace, moderate growth in automotive and mobile devices, plus the acquisition program. By market, IT datacom sales rose approximately $4,593.7 on continued acceleration in AI-related applications together with networking equipment, servers, cloud storage and peripherals; communications networks rose approximately $1,374.3, driven primarily by the Andrew acquisition with organic growth from mobile network operators and wireless equipment makers; industrial rose approximately $770.0; defense approximately $499.2; commercial aerospace approximately $322.2 (largely the CIT acquisition); automotive approximately $248.3; mobile devices approximately $64.3. A weaker U.S. dollar added approximately $84.6 of sales.

By segment: Communications Solutions $12,056.0, up 91% in both U.S. dollars and constant currencies and 71% organically; Harsh Environment Solutions $5,881.7, up 33% (32% constant currency, 17% organic); Interconnect and Sensor Systems $5,157.0, up 15% (14% constant currency, 13% organic). By geography, U.S. sales were $7,987.7 and foreign sales $15,107.0, each up 52% in U.S. dollars.

Margins and operating income. Operating expenses (cost of sales plus SG&A) were $17,122.7, or 74.1% of net sales, against $11,938.4 and 78.4% in 2024. Operating income was $5,868.6, or 25.4% of net sales, against $3,156.9 and 20.7%. Management attributes the improvement to operating leverage on the sales growth and disciplined cost control, partly offset by acquisitions that currently run higher operating expense ratios than the Company average. Operating income included $181.2 of acquisition-related expenses in 2025 ($145.6 in 2024); excluding them, Adjusted Operating Income was $6,049.8 and Adjusted Operating Margin 26.2%, against $3,302.5 and 21.7% in 2024. Segment operating income: Communications Solutions $3,746.6 (31.1% margin, from 24.8%); Harsh Environment Solutions $1,541.4 (26.2%, from 24.7%); Interconnect and Sensor Systems $1,005.1 (19.5%, from 18.4%).

Below the line. Interest expense was $367.8 against $217.0, on higher average borrowings from the 2025 senior note issuances. Other income, net was $99.9 against $72.0, mainly interest income on the larger cash balance built ahead of the CommScope closing. The effective tax rate was 23.1% (18.9% in 2024), reflecting $246.6 of excess tax benefits from stock option exercises and a discrete $100.0 charge for notices received by certain Chinese subsidiaries challenging tax positions taken over up to an eight-year period; the Adjusted Effective Tax Rate was 25.5% against 24.0%.

Earnings. Net income attributable to Amphenol was $4,270.3 and diluted EPS $3.34, against $2,424.0 and $1.92 in 2024. Adjusted net income was $4,272.5 and Adjusted Diluted EPS $3.34, against $2,382.1 and $1.89.

Cash flow and liquidity. Operating cash flow was $5,374.7 (2024: $2,814.7; 2023: $2,528.7). Investing used $5,082.1, principally $3,818.6 for acquisitions, capital expenditures net of disposals of $981.8 and $281.7 of net short-term investment purchases; management called the elevated capital spending a response to IT datacom growth and expected it to continue into 2026. Financing provided $7,423.2, driven by $8,921.7 of net borrowing proceeds and $553.0 from option exercises, against $665.2 of buybacks, $802.2 of dividends, a $400.0 note redemption, $89.1 of financing costs and $88.0 to settle treasury locks. Cash, cash equivalents and short-term investments stood at $11,434.2 at December 31, 2025 versus $3,335.4 a year earlier. Capital expenditures have historically run 3% to 4% of net sales.

Debt structure. The Company maintains a $3,000.0 revolving credit facility maturing March 2029, a U.S. commercial paper program of up to $3,000.0 and a Euro commercial paper program of up to $2,000.0, with combined commercial paper and revolver borrowings capped by Board authorization at $3,000.0. All were undrawn at December 31, 2025 and 2024. Two Delayed Draw Term Loans entered into August 22, 2025, one three-year, one 364-day, each reduced on November 13, 2025 to a $1,534.1 commitment, were undrawn at year end and fully drawn in January 2026 for CommScope. During 2025 the Company repaid $400.0 of 2.050% notes at maturity, issued $750.0 of 4.375% notes due 2028 and €600.0 (approximately $685.9) of 3.125% notes due 2032, and in November 2025 issued seven series totaling $7,500.0 (the "November Senior Notes"), ranging from floating-rate notes due 2027 to 5.300% notes due 2055. Management stated it expects interest expense net of interest income to rise to approximately $800.0 in 2026 as a result of the higher debt.

Capital return. Under the 2024 Stock Repurchase Program ($2,000.0 authorized through April 28, 2027), the Company repurchased 7.4 million shares for $665.2 during 2025. The quarterly dividend rate was raised from $0.165 to $0.25 per share effective with dividends declared in the fourth quarter of 2025, following an increase from $0.11 to $0.165 effective in the third quarter of 2024.

Current quarter, second quarter and first six months of 2026

From the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, accession 0001104659-26-089194, with the second-quarter results release furnished on Form 8-K, accession 0001104659-26-087904, as noted.

Sales. Net sales were $8,758.1 in the second quarter of 2026 against $5,650.3 a year earlier, up 55% in U.S. dollars, 54% in constant currencies and 30% organically. For the six months, net sales were $16,378.2 against $10,461.3, up 57%, 55% and 32% on the same three bases. Growth came from organic expansion in all three segments plus the acquisition program; by end market it was led by outsized organic growth in IT datacom with strong organic growth in industrial, defense, commercial aerospace and mobile devices. A weaker U.S. dollar added approximately $46.5 of sales in the quarter and $136.4 in the half.

By segment in the second quarter: Communications Solutions (approximately 62% of net sales) up 85% in U.S. dollars and 42% organically, on AI-related IT datacom strength plus industrial, mobile devices and automotive; Harsh Environment Solutions (approximately 21%) up 28% and 22% organically, on defense, industrial, commercial aerospace and IT datacom; Interconnect and Sensor Systems (approximately 17%) up 17% and 13% organically, on AI-related IT datacom.

Margins. Operating expenses were $6,150.0, or 70.2% of net sales, against $4,219.5 and 74.7% a year earlier. Operating income was $2,584.6, or 29.5% of net sales, against $1,418.8 and 25.1%. Management attributes the margin expansion primarily to operating leverage on the growth and disciplined cost control and, to a lesser extent, to an $80.0 net benefit ($0.04 per share) from the recovery of International Emergency Economic Powers Act ("IEEPA") tariffs, partly offset by acquisitions running above the Company-average operating expense ratio. For the six months, operating income was $4,416.4 (27.0% of net sales) against $2,443.6 (23.4%). Acquisition-related expenses were $23.5 in the quarter and $272.4 in the half, the latter comprising $140.4 of acquired-backlog amortization and transaction costs and $132.0 of CommScope inventory step-up amortization.

Segment operating income and margin in the second quarter: Communications Solutions $1,808.3 and 33.6% (from $890.7 and 30.6%); Harsh Environment Solutions $559.3 and 30.1% (from $363.7 and 25.2%); Interconnect and Sensor Systems $318.9 and 21.0% (from $252.3 and 19.5%).

Interest and tax. Interest expense was $213.7 in the quarter and $421.6 in the half, against $80.9 and $157.4, on higher average borrowings from the 2025 and 2026 note issuances and the Delayed Draw Term Loans used to fund CommScope. The effective tax rate was 25.3% for the quarter and 32.4% for the half, against 18.3% and 20.2% a year earlier. The Adjusted Effective Tax Rate was 27.0% for both 2026 periods, raised from the 24.5% of the prior-year periods.

China tax matter. The Company received unfavorable determinations from Chinese tax authorities on certain prior-period positions and received tax payment notices totaling $230.0. It accrued $130.0 in the first quarter of 2026, on top of $100.0 accrued in the fourth quarter of 2025, and paid the $230.0 in full during the second quarter of 2026. Separately, a reassessment of tax rate assumptions applied to prior years' results not subject to the inquiries led to $160.0 of additional tax obligations recorded in the first quarter of 2026. Income tax related accruals were $39.0 in the second quarter and $169.0 in the half, the second-quarter amount relating primarily to reserves for potential settlement of various foreign tax matters.

Earnings. Net income attributable to Amphenol was $1,769.2 and diluted EPS $1.37 in the second quarter, against $1,091.3 and $0.86. Adjusted net income was $1,745.7 and Adjusted Diluted EPS $1.35, against $1,030.1 and $0.81. For the six months, net income was $2,702.2 and diluted EPS $2.10 (from $1,829.1 and $1.44); adjusted figures were $3,118.4 and $2.42 (from $1,829.9 and $1.44). The gap between reported and adjusted in the half reflects the China tax charges and CommScope purchase accounting.

CommScope. The acquisition closed January 9, 2026 for approximately $10.5 billion in cash, subject to customary post-closing adjustments, funded from the November Senior Notes, the Delayed Draw Term Loans and cash on hand. The preliminary purchase price allocation puts net assets acquired at $10,735.8, including $6,958.0 of goodwill (all assigned to Communications Solutions, none expected to be tax-deductible) and $3,289.0 of intangibles, $1,449.0 proprietary technology, $1,248.0 customer relationships, $545.0 trade names and $47.0 backlog, with a weighted average useful life of approximately 16 years. From the acquisition date to June 30, 2026, CommScope contributed net sales of $2,100.9 and net income of $190.2 (the latter excluding acquisition interest expense and transaction costs, and after $179.0 of backlog and inventory step-up amortization). Unaudited pro forma net sales as if the deal had closed January 1, 2025 would have been $16,465.8 for the 2026 half against $12,060.8 for the 2025 half.

Other 2026 acquisitions. The Company completed three acquisitions in the first six months of 2026 for approximately $10,684.0 net of cash acquired. Per the second-quarter results release (accession 0001104659-26-087904), the two beyond CommScope closed in the quarter: El.Com, based in Leno, Italy, with annual sales of approximately $150 million, a manufacturer of complex interconnect solutions and high-voltage cable assemblies for industrial, defense and commercial aerospace, placed in Interconnect and Sensor Systems; and Wilder Technologies, based in Vancouver, Washington, with annual sales of approximately $15 million, a supplier of high-performance test and measurement solutions for high-speed digital, RF and signal integrity applications in IT datacom, placed in Communications Solutions. Purchase prices for the two were not disclosed.

Cash flow and balance sheet. Operating cash flow was $2,678.7 for the six months against $2,181.7. Investing used $11,703.6, principally $10,684.0 for the 2026 acquisitions, $642.0 of capital expenditures net of disposals and $375.6 of net short-term investment purchases. Financing provided $2,585.2, from $4,927.2 of net borrowing proceeds and $200.6 of option exercises, against $1,535.7 of debt repayments, $614.0 of dividends, $386.0 of buybacks and $11.7 of financing costs. Cash, cash equivalents and short-term investments fell to $5,419.1 at June 30, 2026 from $11,434.2 at December 31, 2025, the majority now held outside the United States. Goodwill rose $6,979.3 to $17,554.7 and other intangibles rose $3,047.5 to $5,288.9, both driven by CommScope. Accounts receivable rose $2,073.0 to $6,790.1 (days sales outstanding 69, from 66); inventories rose $1,126.7 to $4,551.6 (inventory days 76, from 77); accounts payable rose $1,347.2 to $4,009.1 (payable days 69, from 60). The release reported second-quarter operating cash flow of $1.6 billion and free cash flow of $1.2 billion.

Financing activity in the period. The Company drew the full $1,534.1 under each Delayed Draw Term Loan on January 9, 2026, then repaid $600.0 of the 364-day facility on May 11, 2026; at June 30, 2026 the 364-day and three-year facilities stood at $934.1 and $1,534.1. It repaid $350.0 of 4.750% senior notes at maturity on March 30, 2026 and €500.0 of 0.750% Euro notes at maturity on April 30, 2026. Its European subsidiary Amphenol Technologies Holding GmbH, with the Company as guarantor, issued €500.0 (approximately $586.7) of 3.625% notes due 2031 on March 30, 2026, and applied those net proceeds, together with cash on hand, to the April 30 repayment of the 0.750% Euro notes and to general corporate purposes. On May 12, 2026 the Company issued €600.0 (approximately $702.0) of 3.375% notes due 2029 and €500.0 ($585.0) of 3.875% notes due 2034, using those net proceeds to repay U.S. commercial paper borrowings and the 364-Day Delayed Draw Term Loan and for general corporate purposes. Commercial paper was drawn from time to time during the half and fully repaid before quarter end; the revolver was undrawn throughout.

Capital return. The Company repurchased 1.5 million shares for $208.0 in the quarter and 2.8 million for $386.0 in the half. It paid dividends of $307 million in the quarter, bringing total capital returned in the quarter to $515 million, per the results release.

Orders and outlook. Orders were $10.7 billion in the quarter, a book-to-bill of 1.23:1. For the third quarter of 2026, assuming continuation of current market conditions and constant exchange rates, the Company guided to sales of $9.3 billion to $9.4 billion (a 50% to 52% increase over the prior-year quarter) and Adjusted Diluted EPS of $1.40 to $1.42 (a 51% to 53% increase), excluding any additional tariff recoveries. Management also raised its CommScope expectation, now looking for full-year 2026 sales of $4.6 billion from that business and $0.30 of accretion to Adjusted Diluted EPS, against prior expectations of $4.1 billion and $0.15. (The $1.40 to $1.42 EPS guidance and the $0.30 of CommScope accretion are both pre-split; see below.)

Subsequent events

Post-period developments disclosed in the Form 10-Q for the quarter ended June 30, 2026, accession 0001104659-26-089194, and in Current Reports on Form 8-K filed August 6, 2026 (accession 0001104659-26-091969) and September 4, 2026 (accession 0001104659-26-105485).

• Term loan repayments. On July 2, 2026 and July 27, 2026 the Company used cash on hand to

repay $300.0 and $234.1, respectively, of the outstanding balance under the 364-Day Delayed Draw Term Loan. As of the date the second-quarter financial statements were issued, the carrying amount of that facility was $400.0.

• Share repurchases. From July 1 to July 28, 2026 the Company repurchased 0.5 million

additional shares for $74.0. As of July 29, 2026 it had remaining authorization to purchase up to $411.1 under the 2024 Stock Repurchase Program, which runs to April 28, 2027.

• Two-for-one stock split. At its meeting on August 5, 2026 the Board approved a two-for-one

stock split of the Class A Common Stock in the form of a stock dividend, announced August 6, 2026: each holder of record at the close of business on August 17, 2026 received one additional share for every share held, distributed September 2, 2026. The Company confirmed on September 4, 2026 that the split has been effected. Third-quarter 2026 Adjusted Diluted EPS guidance on a post-split basis is $0.70 to $0.71, against the pre-split $1.40 to $1.42 issued with the second-quarter results.

• Third-quarter 2026 dividend. The Board approved a third-quarter 2026 dividend of $0.25 per

share, payable October 14, 2026 to holders of record as of September 22, 2026. In light of the stock split, that dividend will be paid at $0.125 per share.

No acquisitions, divestitures or litigation outcomes were disclosed as occurring after June 30, 2026 in these filings; the acquisition activity of the period (CommScope, El.Com and Wilder Technologies) closed within the first six months of 2026 and is described above.

For completeness on the prior fiscal year: the only subsequent event disclosed in the FY2025 Form 10-K (accession 0001104659-26-013549) was the January 9, 2026 completion of the CommScope acquisition for approximately $10.5 billion in cash, which has since been reflected in the 2026 results above.