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Amphenol Q1 2026 Earnings Analysis · Beta Finch - Amphenol - APH - EN

• 0:08
  Speaker 1: Welcome to Beta Finch, your AI powered earnings breakdown. I'm
• 0:12
  Speaker 1: Alex and I'm here with my co host Jordan to
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  Speaker 1: dive into some fascinating quarterly results. Today we're unpacking Amphonol's
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  Speaker 1: absolutely monster first quarter twenty twenty six earnings call, and Folks,
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  Speaker 1: when I say monster, I mean it. Jordan, Before we
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  Speaker 1: jump in, I need to share our standard disclaimer with listeners.
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  Speaker 1: This podcast is AI generated content for educational and entertainment
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  Speaker 1: purposes only. Nothing we discuss should be considered investment advice.
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  Speaker 1: Always do your own research and consult a qualified financial
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  Speaker 1: advisor before making any investment decisions. Now, Jordan, let's talk
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  Speaker 1: about these numbers because they're pretty incredible.
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  Speaker 2: Alex, I've been covering tech earnings for years, and this
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  Speaker 2: AMFANOL quarter is genuinely jaw dropping. They just posted record
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  Speaker 2: sales of seven point six billion dollars. That's up fifty
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  Speaker 2: eight percent year over year and thirty three percent organically.
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  Speaker 2: But here's the kicker. Their IT datacom segment, which is
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  Speaker 2: heavily exposed to AI infrastructure, grew eighty one percent organically
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  Speaker 2: eighty one percent.
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  Speaker 1: That's insane growth. And their guidance for second quarter is
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  Speaker 1: equally aggressive. They're projecting eight dollars and ten cents to
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  Speaker 1: eight dollars and twenty cents billion in sales, which would
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  Speaker 1: be another forty three to forty five percent year over
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  Speaker 1: year growth. What's driving this AI boom for them?
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  Speaker 2: Specifically, so Amfenol makes connectors and interconnect products, basically the
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  Speaker 2: plumbing that connects all the components in data centers. CEO
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  Speaker 2: Adam Norwitz made a really interesting point on the call.
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  Speaker 2: He said that virtually all of their sequential growth in
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  Speaker 2: IT datacom came from AI related products. These aren't just
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  Speaker 2: any connectors, high speed, high power interconnects that AI systems
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  Speaker 2: absolutely depend.
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  Speaker 1: On, and they just made a huge acquisition to strengthen
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  Speaker 1: this position, right, the Comscope deal.
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  Speaker 2: Exactly. They closed the Comscope acquisition in January for what
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  Speaker 2: appears to be around two point one billion dollars based
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  Speaker 2: on the context. This gives them fiber optic capabilities to
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  Speaker 2: complement their copper products. Norwid was really excited about this
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  Speaker 2: on the call. He kept emphasizing that they now have
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  Speaker 2: the industry's broadest range of high speed, copper power and
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  Speaker 2: fiber optic interconnect products.
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  Speaker 1: That seems strategic because there's this big debate in the
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  Speaker 1: AI world about whether future systems will use copper or
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  Speaker 1: fiber optic connections, right.
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  Speaker 2: Exactly, and that's where Amfenol's positioning gets really smart. There
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  Speaker 2: was a great exchange during the Q and A about
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  Speaker 2: copackaged optics and other next gen technologies. Norwid basically said
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  Speaker 2: they don't care which technolology wins because they play in
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  Speaker 2: both spaces. Now, his quote was memorable. No matter what,
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  Speaker 2: there's going to be more interconnect.
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  Speaker 1: So they're betting on the overall trend rather than a
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  Speaker 1: specific technology. That makes sense. What about their margins, because
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  Speaker 1: with this kind of growth, you'd expect some operational challenges.
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  Speaker 2: That's the really impressive part. Despite integrating a major acquisition
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  Speaker 2: and growing at breakneck speed, they maintained adjusted operating margins
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  Speaker 2: of twenty seven point three percent. That's actually up three
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  Speaker 2: hundred and eighty basis points a year over year. CFO
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  Speaker 2: Craig Lampo attributed this to robust operating leverage. Basically, they're
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  Speaker 2: scaling efficiently.
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  Speaker 1: And this isn't just an AI story, is it. Looking
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  Speaker 1: at their other segments, they seem pretty diversified.
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  Speaker 2: Right, and this is important for investors to understand while
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  Speaker 2: it datacom is now forty one percent of their business,
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  Speaker 2: they're still seeing solid growth elsewhere. Defense was up twenty
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  Speaker 2: five percent organically, industrial up sixteen percent organically. Even automotive
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  Speaker 2: grew modestly. Their book to bill ratio was one point
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  Speaker 2: two four to one, and every single in market had
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  Speaker 2: a positive book to bill.
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  Speaker 1: That book to bill number is telling. It means orders
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  Speaker 1: are coming in twenty four percent faster than they can
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  Speaker 1: ship products. There was an interesting question about capacity constraints
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  Speaker 1: and long term supply agreements. What did management say about that?
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  Speaker 2: Norwit was a bit coy, but he hinted that they're
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  Speaker 2: working more closely with customers on capacity planning than in
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  Speaker 2: the past. He mentioned that some customers are opening up
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  Speaker 2: their order apertures and participating in Amphenol's capacity investments. That
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  Speaker 2: suggests these hyperscale customers are so desperate for supply security
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  Speaker 2: that they're willing to help fund expansion.
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  Speaker 1: That's a pretty enviable position to be in any concerns,
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  Speaker 1: investors should be aware.
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  Speaker 2: Of a few things. First, there was a one h
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  Speaker 2: undred thirty million dollar taxi crewle related to some issues
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  Speaker 2: in China, plus another one hundred and sixty million dollar adjustment.
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  Speaker 2: Management says this is contained, but it shows the complexity
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  Speaker 2: of their global operations. Also, with forty one percent of
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  Speaker 2: revenue now in IT data com, they're getting pretty concentrated
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  Speaker 2: despite the diversification story.
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  Speaker 1: And AI spending can be cyclical, right, We've seen other
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  Speaker 1: infrastructure booms and busts.
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  Speaker 2: Absolutely, but nor What seemed confident about the sustainability During
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  Speaker 2: the Q and A. He talked about working with customers
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  Speaker 2: years and years from now on next generation systems. He
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  Speaker 2: also emphasized that Amphenol has proven execution capabilities. They've doubled
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  Speaker 2: their revenue in just two years, which builds customer trust.
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  Speaker 1: What about the stock, It's been on quite a run.
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  Speaker 2: The stock is up significantly over the past year, and
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  Speaker 2: at these growth rates, probably priced for perfection. But if
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  Speaker 2: AI infrastructure spending continues at this pace, and if they
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  Speaker 2: can maintain these margins while integrating comscope successfully, there could
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  Speaker 2: be more upside. The key risk is any slowdown in
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  Speaker 2: AI capex.
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  Speaker 1: Before we wrap up any final thoughts on what investors
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  Speaker 1: should watch for going forward.
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  Speaker 2: I'd watch three things. First, can they maintain these growth
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  Speaker 2: rates as the numbers get bigger. Second, how well does
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  Speaker 2: the comscope integration go. That's a big acquisition to digest.
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  Speaker 2: And Third, are they diversifying into new AI applications beyond
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  Speaker 2: just data centers. Nor Wit mentioned working across the entire
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  Speaker 2: AI ecosystem, which could mean opportunities in edge computing, autonomous vehicles,
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  Speaker 2: you name it.
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  Speaker 1: Those are great points to monitor, Jordan. Before we sign off,
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  Speaker 1: can you share our closing disclaimer.
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  Speaker 2: Absolutely everything discussed today is AI generated analysis for educational purposes.
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  Speaker 2: Past performance doesn't guarantee future results. Please do your own
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  Speaker 2: due diligence before making any investment decisions.
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  Speaker 1: Thanks for joining us on Beta Finch today. Amfenol's first
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  Speaker 1: quarter results show just how transformative the AI revolution is
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  Speaker 1: becoming for infrastructure companies. Whether this growth trajectory continues will
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  Speaker 1: be fascinating to watch. We'll be back next time with
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  Speaker 1: more AI powered earnings analysis. Until then, keep learning and
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  Speaker 1: stay curious. That's all for today's earnings analysis. If you
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  Speaker 1: finch to learn more. Thanks for listening,