TE Connectivity (TEL) Q1 2026 earnings summary

Executive summary

• Net sales reached $4.7 billion in Q1 FY2026, up 22% year-over-year (15% organic), surpassing guidance, with both Industrial and Transportation segments contributing; Richards Manufacturing acquisition added $107 million in sales.

• Adjusted EPS rose 33% year-over-year to $2.72, with GAAP EPS at $2.53; record orders of $5.1 billion, up 28% year-over-year and 9% sequentially.

• Free cash flow was $608 million, with nearly 100% returned to shareholders via buybacks and dividends.

• Net income for the quarter was $751 million, up from $528 million in the prior year.

• Order momentum and backlog support confidence in above-target growth for fiscal 2026.

Financial highlights

• Q1 sales: $4.7 billion, up from $3.8 billion year-over-year; adjusted operating margin expanded to 22.2%, up 180 basis points.

• Adjusted operating income exceeded $1 billion; GAAP operating income was $963 million (20.6% margin).

• Adjusted EBITDA margin improved to 26.5% from 24.3% year-over-year.

• Gross margin rose to 37.2% from 35.5% year-over-year.

• Free cash flow: $608 million; cash from operations: $865 million.

Outlook and guidance

• Q2 sales expected at ~$4.7 billion, up 13% year-over-year (6% organic); adjusted EPS guidance: ~$2.65, up 20% year-over-year.

• Full-year tax rate expected at ~23%; Q2 tax rate at 22%.

• CapEx for fiscal 2026 expected to be close to 6% of sales to support AI program growth.

• Guidance reflects positive FX impacts and continued benefit from recent acquisitions.

• Double-digit sales and adjusted earnings growth anticipated for Q2.