Latest / Beta Finch - Amphenol - APH - EN / Amphenol Q2 2026 Earnings Analysis

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Amphenol Q2 2026 Earnings Analysis · Beta Finch - Amphenol - APH - EN

• 0:08
  Speaker 1: Welcome to Beta Finch, your AI powered earnings breakdown. Today,
• 0:12
  Speaker 1: we're digging into Amfenol's second quarter twenty twenty six results.
• 0:16
  Speaker 1: Ticker Aph and Jordan buckle up because this one's a doozy.
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  Speaker 1: Before we get into it, quick disclaimer. This podcast is
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  Speaker 1: AI generated content for educational and entertainment purposes only. Nothing
• 0:29
  Speaker 1: we discuss should be considered investment advice. Always to your
• 0:33
  Speaker 1: own research and consult a qualified financial advisor before making
• 0:37
  Speaker 1: any investment decisions.
• 0:39
  Speaker 2: Doozy is right. Record sales of eight point eight billion
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  Speaker 2: dollars up fifty five percent year over year, thirty percent,
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  Speaker 2: organically record orders of ten point seven billion dollars up
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  Speaker 2: ninety four percent, a book to bill of one point
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  Speaker 2: twenty three. I mean, Alex, when's the last time you
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  Speaker 2: saw literally every in market post a positive book to
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  Speaker 2: bill in the same quarter?
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  Speaker 1: Rare air and it wasn't just top line noise either.
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  Speaker 1: Adjusted operating margin hit twenty nine point eight percent of
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  Speaker 1: four hundred and twenty basis points from last year. Adjusted
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  Speaker 1: EPs came in at a record one dollar and thirty
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  Speaker 1: five cents, up sixty seven percent. This feat the high
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  Speaker 1: end of their own guidance.
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  Speaker 2: The margin story is really what stood out to me.
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  Speaker 2: Part of it's an eighty million dollars terra for covery
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  Speaker 2: benefit sure, but even stripping that out, they were still
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  Speaker 2: near twenty nine percent margins. That's operating leverage on serious volume,
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  Speaker 2: plus rail progress, cleaning up profitability. At Comscope, which they
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  Speaker 2: acquired last year.
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  Speaker 1: Let's talk Comscope because that's the headline strategic story here.
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  Speaker 1: Amfonol just upgraded their full year expectations for that business
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  Speaker 1: from four point one billion dollars in sales to four
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  Speaker 1: point six billion dollars. And this is the wild part.
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  Speaker 1: Accretion guidance basically doubled from fifteen cents to thirty cents a.
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  Speaker 2: Share, and CFO Craig Lampo was pretty clear on the
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  Speaker 2: call that this wasn't a pricing story. Its operational execution,
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  Speaker 2: factory efficiency SG, and a discipline leveraging the growth they're getting.
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  Speaker 2: Comscope did over one point two billion dollars in sales
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  Speaker 2: in the quarter alone and is now operating above twenty
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  Speaker 2: percent margins.
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  Speaker 1: CEO Adam Norwitz got almost sentimental about it, honestly. He
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  Speaker 1: talked about meeting the Comscope team early on, calling them
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  Speaker 1: a team of people whose capabilities maybe weren't being tapped
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  Speaker 1: into before the acquisition now plugged into Amphenol's culture. They're
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  Speaker 1: firing on all cylinders.
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  Speaker 2: The engine behind all of this, though, is AI and
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  Speaker 2: data centers. IT data com was forty three percent of
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  Speaker 2: total sales this quarter and grew sixty three percent organically,
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  Speaker 2: sixty three percent alex. That's not a market. That's a
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  Speaker 2: rocket ship.
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  Speaker 1: And there was a rate exchange in the Q and
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  Speaker 1: A about whether this is a copper versus fiber story
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  Speaker 1: for AI infrastructure. Norwi basically said that framing is wrong.
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  Speaker 1: Customers want more of everything, more copper, more fiber, more power, interconnect.
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  Speaker 1: Amphenol plays across all three, which is really the crux
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  Speaker 1: of their competitive positioning.
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  Speaker 2: That power piece is underrated too. He had this great
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  Speaker 2: line paraphrasing here that AI is really just the conversion
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  Speaker 2: of electrons into tokens, and anywhere along that chain where
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  Speaker 2: Amfanol can make that conversion more efficient, they're creating value, power, interconnect,
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  Speaker 2: high speed, copper optics. They're positioned at basically every step.
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  Speaker 1: Not every market was firing, though. Let's give listeners the
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  Speaker 1: balanced picture communications networks, that's telecom infrastructure actually declined organically
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  Speaker 1: by six percent, and they're guiding to a mid teens
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  Speaker 1: sequential decline next quarter due to softness from network operators
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  Speaker 1: and wireless equipment makers.
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  Speaker 2: Right and Automotive was more modest, two six percent organic
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  Speaker 2: growth expected to be roughly flat next quarter with typical
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  Speaker 2: summer seasonality. But everywhere else industrial up eighteen percent organically,
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  Speaker 2: defense up twenty four percent, commercial air up twenty one percent,
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  Speaker 2: Mobile devices up fourteen percent. Broad based strength.
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  Speaker 1: Mobile devices had a fun aside too. Norwich talked about hinges, Yes,
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  Speaker 1: hinges as a real growth driver in foldable devices plus wearables.
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  Speaker 1: He even brought up his new dog's wearable tracker as
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  Speaker 1: an example of the category expanding into unexpected places.
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  Speaker 2: Classic Norwit color commentary. But let's get a guidance, because
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  Speaker 2: that's what investors will be modeling off of. For third quarter,
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  Speaker 2: Amfenol is guiding to nine dollars and thirty cents to
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  Speaker 2: nine dollars and forty cents billion in sales. That's fifty
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  Speaker 2: to fifty two percent year over year growth an adjusted
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  Speaker 2: EPs of one dollar and forty cents to one dollar
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  Speaker 2: and forty two cents, or fifty one to fifty three
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  Speaker 2: percent growth.
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  Speaker 1: And importantly, they flagged that guidance does not include any
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  Speaker 1: further tariff recovery benefits going forward, so this is a
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  Speaker 1: clean read on the underlying business momentum.
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  Speaker 2: One more thing worth flagging for investors capital allocation. They
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  Speaker 2: bought back one point five million shares, paid dividends, return
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  Speaker 2: about five hundred and fifteen million dollars to shareholders. Combined
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  Speaker 2: net leverage sits at a comfortable one point three times EBITDA,
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  Speaker 2: and liquidity is eight point four billion dollars. So even
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  Speaker 2: while integrating a major acquisition and ramping kpex running near
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  Speaker 2: the high end of their three to four percent of
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  Speaker 2: sales range, the balance sheet stayed healthy.
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  Speaker 1: So what's the takeaway for listeners? AMFANOL is writing the
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  Speaker 1: AI infrastructure build out about as directly as any interconnect
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  Speaker 1: supplier can. They're proving out the Comscope deal ahead of schedule,
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  Speaker 1: and they're doing it while expanding margins rather than sacrificing
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  Speaker 1: them for growth.
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  Speaker 2: The risk side of the ledger communications network softness, some
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  Speaker 2: automotive uncertainty, and obviously the broader question of whether AI
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  Speaker 2: kpex spending sustains at this pace nor what was asked
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  Speaker 2: directly about bottlenecks and fiber supply constraints and pushback pretty firmly,
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  Speaker 2: saying their decentralized one hundred and fifty general manager structure
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  Speaker 2: lets them route around supply issues in real time.
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  Speaker 1: Before we wrap up, here's our required closing note from Jordan.
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  Speaker 2: Everything discussed is AI generated analysis for educational purposes. Past
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  Speaker 2: performance doesn't guarantee future results. Please to your own due diligence.
• 6:45
  Speaker 1: With guidance pointing to another quarter of fifty percent plus growth,
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  Speaker 1: all eyes will be on whether AI datacom demand keeps
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  Speaker 1: accelerating and weather Comscope's momentum holds into the back half
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  Speaker 1: of the year.
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  Speaker 2: We'll be back in ninety days when Anthonol reports third quarter.
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  Speaker 2: Thanks for listening to Beta Finch. Catch you next time.
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  Speaker 1: Take care everyone,