TE Connectivity (TEL) Q2 2025 earnings summary

Executive summary

• Q2 FY25 sales reached $4.1 billion, up 5% organically and 4% reported year-over-year, led by double-digit growth in Industrial Solutions, while Transportation Solutions declined.

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

• Orders grew to $4.25 billion, up 6% year-over-year and sequentially, supporting a positive outlook for Q3.

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

• ~$1 billion returned to shareholders in the first half, including a 9% dividend increase.

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 $1.91 per share non-cash tax charge.

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

• Gross margin for Q2 FY25 was $1.46 billion (35.2% of sales), up from $1.36 billion (34.4%) a year ago.

• Book-to-bill ratio was 1.02 in Q2 FY25.

Outlook and guidance

• Q3 FY25 net 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 for tariff recovery, and a sequential tax rate headwind of ~$0.06 on EPS.

• Adjusted tax rate expected at 24%-25% for Q3 and the second half.

• Industrial Solutions growth expected to offset Transportation Solutions declines.