TE Connectivity (TEL) Q2 2025 earnings summary

Executive summary

• Q2 FY25 sales reached $4.1 billion, up 5% organically and 4–4.4% reported year-over-year, led by double-digit growth in the Industrial segment and exceeding guidance.

• Adjusted EPS hit a record $2.10, up 13% year-over-year and above guidance; GAAP EPS was $0.04 due to a one-time non-cash tax charge.

• Orders totaled $4.25 billion, up 6% year-over-year and sequentially, reflecting strong momentum in Industrial and stable Transportation.

• Free cash flow for the first half was $1.1 billion, with ~$1 billion returned to shareholders and a 9% dividend increase announced.

• Richards Manufacturing acquisition closed in April, deploying $2.3 billion and expanding presence in the North American utility market.

Financial highlights

• Q2 FY25 net sales: $4.143 billion (up from $3.967 billion in Q2 FY24); adjusted operating income: $805 million (19.4% margin); GAAP operating income: $748 million (18.1% margin).

• Adjusted EPS: $2.10 (vs. $1.86 prior year); GAAP EPS: $0.04, impacted by a one-time non-cash tax charge of $1.91.

• Free cash flow: $424 million in Q2 FY25; $1.1 billion for 1H FY25; cash from operations: $1.5 billion for 1H FY25.

• Adjusted effective tax rate: 22–22.3% in Q2 FY25, expected to rise to 24–25% in the second half due to global minimum tax.

• Book-to-bill ratio: 1.02 in Q2 FY25; orders at $4.25 billion, up 6% year-over-year and sequentially.

Outlook and guidance

• Q3 FY25 sales expected at ~$4.3 billion, up 5% organically and 8% reported year-over-year.

• Q3 adjusted EPS guidance is ~$2.06 (up 8% year-over-year); GAAP EPS expected at ~$2.02.

• Guidance includes Richards acquisition, ~2 points of pricing from tariff recovery, and a sequential tax rate headwind of ~$0.06 on EPS.

• Sales growth in Industrial Solutions expected to offset declines in Transportation Solutions.