Amphenol (APH) investor relations material

Business performance and growth trends

• Achieved strong organic growth, with nearly all end markets growing in double digits and IT datacom up 133% year-over-year in Q2.

• Maintained robust demand across electronics, driven by proliferation of interconnect content and entrepreneurial culture.

• Record operating margins reported, reaching 25.6% in the latest quarter, attributed to high-value products and strong execution.

• Incremental margins now approach 30% on a combined basis, with expectations to sustain strong conversion rates.

• Acquisitions like CCS and Trexon expected to be accretive to EPS, though initially dilutive to margins, with profitability improvements anticipated over time.

AI, datacom, and connectivity outlook

• AI revolution drives exponential growth in interconnect requirements, benefiting from both copper and fiber solutions.

• CCS acquisition significantly expands fiber optic capabilities, enabling a comprehensive suite of interconnect solutions for data centers.

• Company’s agility and organizational culture allow effective management of market volatility and demand lumpiness.

• Attach rate for connectors in AI data centers is substantially higher than in traditional cloud data centers, though not quantified.

• Investment decisions are closely aligned with customer forecasts, with some customers sharing in investment risk for high-tech applications.

End market performance and diversification

• Mobile devices market showed unexpected sequential and year-over-year growth, driven by rapid execution and hardware innovation.

• Industrial segment rebounded with 12% organic growth in Q2, supported by strength in Europe and subsegments like medical and factory automation.

• Recent acquisitions have strengthened positions in medical interconnect and value-add industrial products.

• Defense and aerospace remain strong, with high-value, complex interconnect offerings and strategic acquisitions like Trexon enhancing market position.

• Expansion into nontraditional space and new tech-focused defense contractors broadens customer base and product reach.