Amphenol (APH) 26 Apr 232023 Q1 Earnings call transcript

Hello, and welcome to the First Quarter Earnings Conference Call for Amphenol Corporation.

Following today's presentation, there will be a formal question-and-answer session. Until then all lines will remain in a listen-only mode. At the request of the company, today's conference is being recorded. If anyone has any objections, you may disconnect at this time.

to introduce like Mr. conference now would turn today's – host, I Lampo. Craig Sir, you may begin.

much. everyone. Adam Good Lampo, very XXXX welcome you Thank afternoon, first our and We like quarter here you CEO. to Amphenol's call. This I'm together our with Norwitt, conference would to CFO; Craig is

then and questions. were business give will an of the XXXX Our morning. will Adam first results quarter take provide then I current we trends, and and this released some will financial commentary, overview

As the and to certain during a non-GAAP forward-looking certain refer reminder, may we call, financial make measures statements.

to disclosures information. So the please for release our further refer relevant in press

The company and of billion diluted closed $X.XXX EPS the first $X.XX and sales of and respectively. adjusted with GAAP $X.XX, quarter

dollars local XXXX. lower lower in the $X.XXX X% Adam and communications organically to market minutes. ratio First the flat was markets, further billion, to down compared XXXX XX% of currencies a X. quarter experience sales by the by in which were first resulting in were quarter and a local on currencies in few to The trends quarter XX% of X.XX to decline and U.S. in driven in a sequentially, quarter of bookings which book-to-bill the Sequentially, in was Orders continue first book-to-bill related and demand. sales dollars, X% X% down organically. were up U.S. in in comment compared up will by X%

XX and XXXX quarter XX points first basis decreased the compared GAAP operating included On in XX.X% for margin basis, adjusted were decreased and sales GAAP strong decrease first margins basis basis, operating adjusted operating first quarter GAAP by points operating volumes. were XX by an income increase billion on driven year-over-year basis higher XXXX. the XXXX points On $X by in a in the costs. and million a adjusted margin on GAAP quarter the modestly first sequentially. XX operating XX.X%, the million, operating downside of adjusted the compared operating lower and and to adjusted points And was increased first quarter. reflected respectively, normal to and the The $XXX conversion decreased sequential $XXX quarter the acquisition-related operating basis, leverage levels. of margin and sales of respectively, on by margins margin of in sequentially, basis

first quarter XX% In quick preserve operating of decrease first segment. our of we In teams profitability segment, appreciate the several to Communications quarter, range the communications-related in the year. a strong XX% the and Environment appropriate these of face demand. despite versus particular, prior truly continues was team downturns down quarter, segment, and Breaking dollars communications organically in versus sales of we XX.X%. proud profitability around levels customer execute Our are margin the which in were operating billion of strongly Segment the which in the strong dollars continued in to XX.X%. in the have markets. actions moderating $XXX of conditions XX% took the who world, results in to XX% working an the Solutions including reactivity challenges $X.XXX quarter, margin the was Solutions in was the in U.S. by U.S. In and Harsh million of markets, sustained our year. sales was prior increase organically were Segment

of rate the in was effective increase quarter, dollars versus and and $XXX segment, diluted compared in the and XX%. $X.XX the period, X% compared $X.XX Sensor the adjusted quarter EPS the was GAAP prior $X.XX XXXX, EPS first first the tax to was The in adjusted diluted increased and $X.XX quarter to XX.X% increased year of or was quarter company's first the $XXX to in inorganically adjusted flow respectively. Operating U.S. margin GAAP effective to to income. net free first $XXX tax an which XX% rate cash our cash prior compared were XX.X%, of XXX% the was XXX% year. for quarter Segment flow in X% which XX.X%, capital XX.X% Systems adjusted And of the spending, XXXX. in million of In million Interconnect net of sales income. was million operating or net first

strong cash We to to continue are pleased flow a deliver yield.

were lower capital continued were the XX that the quarter supply impacts days days, sales standpoint, year. industry days, our the the in payable higher first and experienced and inventory XX, over together primarily days outstanding From working from past sales chain days by level a driven some The inventory disruptions XX respectively. with

team the down Our on back a normal to quarters. range bringing more the management inventory focused over is days coming

dividend, at During stock common company our was the quarterly quarter, X.X approximately of the average shares total $XX. quarter the in to returned repurchased $XXX with capital an of shareholders normal And first more XXXX million. than of when combined million price

at $X.X Total Total cash at $X.X which debt end net billion, debt liquidity March the and includes our existing credit of facilities. short-term investments plus and was under $X.X billion, hand was the billion. of availability on $X.X XX billion, quarter was

EBITDA of of ratio million. quarter quarter our end the X.X was leverage XXXX, times. was first And $XXX First net the at

financial company's extremely pleased by condition strong the any measure. We that are very remains

commentary call the turn now current over to trends. will Adam, who will I on market provide some

and allow all Craig, welcome here phone extend far. spring thank to enjoying hope the of to a so And I you much, me all are all my today. very you on lovely you Well,

outlook progress quarter. of served discuss first markets, going make to our end. at the our and I'm second our across the then achievements then, course, for As and some comments the for some Craig And time on trends then we'll our I'll here in questions have some quarter. highlight mentioned, of

share. respect end per stronger earnings expected, than of our were guidance the adjusted first the quarter, and sales to With diluted exceeding in results high

year from billion. in X% reaching prior grew sales and $X.XXX by local dollars U.S. currency, X% Our in

sales IT and networks air, X%, in largely commercial mobile by declines On markets, devices growth with markets. our military, mobile an increased basis, and datacom, automotive broadband, in industrial offset by organic the

The company in of orders booked a X.XX:X. quarter, the under $X.X book-to-bill representing billion in just

Our margins, year's quarter increase XX.X%, levels. reached a operating operating basis in was adjusted that point from and XX last the margins

of we this in very As our achieved very as a Craig still just strength world, around markets, company's an level communications despite and of is execution robust excellent as mentioned, of in profitability volumes our challenges dynamic of cost ongoing declining the the times. just these reflection the well many

and all the clear year in respectively, cash of high million, Amphenol's quarter, demonstrations operating generated Adjusted we earnings. to and diluted flow the quality from grew of EPS strong $X.XX, prior $XXX X% million of $XXX

once reflects I'm dynamic our company's agility challenging the global team environment. and just of a uniquely around well discipline and again extremely our of in proud entrepreneurial Amphenolians The perform as very this of quarter we organization to results world. continue the

for to with industry, worldwide value Amphenol turning electronics Now it market our the any progress highly markets, is continues to being diversified, various very balanced across risk and areas I still that diversification to that exposed This comment not served all our broad. across or given of associated would participate end great create application. just while market enables the remain disproportionately us exposure because our pleased we to

And said, by and in from this growth a increase this as prior So represented the quarter. most driven Sequentially, sales really coming dollars across market by in And from our broad-based market modestly with XX% segments into U.S. within market. year our the And we XX% with that was first XX% strong quarter. quarter to expectations X%, defense military grew in was the which first the of organically. the increased quarter, into levels. by we sales our second in sales these line expect look sales

of very where to we high-technology industry's the by strength the products. continue broadest company's range the position in defense encouraged interconnect We offer of the remain market,

nations investments certainly around demand from next-generation geopolitical investments our made demand the and expanding increasing world increased potential. array forward we've technologies, the recent this look their years. sensor with environment expanded defense the to wide has of in together supporting our As long-term resulting that with capacity, are interconnect become the in dynamic, products, thereby We more

aerospace yet very pleased not are in this XX% to driven be aircraft after commercial prior our quarter, that from to continued we production. back the achievement. it a was benefited XX% very the aircraft from The levels sales pandemic, represented the and sales before market and sales back we several really production global pre-crisis years the our team may And while great our challenging has of levels, a essentially as that market, in in strong X% organically recovery year by increased

grateful so we first in our remain we by our XX% Sequentially, quarter. the expect quarter into the And from better-than-expected air to look much as market. fourth these sales who team at I'm the commercial second levels. just quarter, grew sales works a to

in high-technology interconnect recovery and travel XXXX paying of these ongoing in jetliners, initiatives our products, beyond. our into we diversifying thus for the market position look here And breadth real while efforts forward the are next-generation strengthen aircraft, dividends. realizing to benefits demand of our With to and

and our in XX% in local quarter. prior this U.S. X% XX% year the sales The industrial dollars, by sales currency market represented XX% our in in market of from And grew program. and medical our organically. contributions This transit, sales growth equipment, applications, particular, was alternative with rail in generation, together energy acquisition into traditional and factory driven, by automation heavy mass from

first than from sales expectations. levels saw fourth the the which basis, market as in our into a as second we we X% here On better And industrial the the expect at a quarter, sequential quarter, were remain look bit to up in sales we similar quarter. was

continues Our distinct diverse the outstanding industrial this opportunities market, for segments of across working new truly across and exciting global to find market. team the growth many

both to to complimentary and electronics confident market. organically around through that that on our us strategy the capitalize the sensor many I offering technology industrial long-term positioned interconnect revolutions high our antenna and expand are has acquisitions happening remain

the the this with growth automotive our represented again years to into array of We applications, our a of electronic quarter, by XX% in to strength come, first quarter many look X% and realizing forward U.S. into wide the market in our strategy sales the products organically benefits grew XX% sales systems cars. supported in sold dollars for sales in and once new vehicle electrified of with together of other

X% automotive Asia just strong that America our opportunities the realized into sales which declined in strong in prior and the was by from slightly coming by year, team down we execution our than were expectations to sales from a quarter, demand. the reflected quarter, Sequentially, growth While customer our Europe better reacting bit fourth in in market. and North with

design increase For the by They wins market. with automotive sales continue by expect these new to second And a of modest our wide global position vehicles. I truly new a are remain grow in into say who that technologies to just from the focused array we have implementing customers impressed in I sequential working quarter, levels. on team remaining driving our their

next has and In efforts wide potential incorporated neutral creates our are that products all driving particular, electrified are range at for to with us solutions long-term our whom enabled expand the carbon business. range expanding our generation a of customers, comprehensive of position of into interconnect pursuing further vehicles now that

mobile no expected The slightly look and more mobile XX% the mid-teen There's most declining Sequentially, tablets, as second sales declined these from our do by as XX% question sales declined market we was decline that quarter, quarter. the by And into and of sales represented we smartphones growth quarter further by expect quarter, than first in a volatile. wearables. market the sales a laptops, the remains levels. devices one our X% our year of better sales than offset prior fourth devices in from from into

has the that and and demand of XXXX in outstanding arise changing always capture our agile as opportunities levels Nevertheless, to stands and adjusted with incremental sales their any beyond. in real-time team for poised may resources

array broad continues leading well which interconnect range of devices, mobile a for precision antennas, mechanisms next-generation products Our the long-term. of positions enable us and to

into of in as dollars the stronger market decline networks consumption. sales XX% from quarter, by look which operators low further a organically first operators the reduced mobile our were represented we more Sequentially, bit equipment spending. second double-digit was moderate year several by quarter. after expect had the and in now our expected coming U.S. further down of sequential into X% their do quarter their sales and than in demand as quarter. fourth quarter, a Sales in we the prior sales the The quarters we manufacturers XX% XX% And declined from as

a And realize benefits pause currently investment to to as team while constructed Our our efforts in benefiting of as cycle is that seemingly customers providers. with position there and next-generation our the the the renewed increased advanced the unique to comes continues world. work from expand aggressively equipment both the around in XG manufacturers systems, position networks to being well when equipment, look from once of construction our potential these we service drive again mobile forward

light The U.S. dollars market of XX% information market. a fourth from sales service touch into communications and the the and On in across our of the as which by still data quarter, declined sales equipment the XX% in levels inventory both sequential sales XX% was providers their quarter. and did significant manufacturers represented moderated and technology of down in better expectation of XX% decline coming basis, quarter, than demand organically a

outstanding inventory, datacom remain company's levels. in sales roughly Regardless IT look quarter, this we And to position demand first due we quarter in to towards of the second market. correction by global expect encouraged these we as the current remain the at largely

in just realize fiber optic continue service this the years or power provider overall and high products their in growth applications, are traffic, that to an come. be of our performance. and for in including With team's levels with drive our to the data developing particular continued Our job many confident benefits alternative that to AI, exciting OEM and outstanding higher we'll leading speed, able of customers equipment to interconnect enabling new together done we're leading position important market web intelligence to networks

as strong expanded a And and This communications operators we products. for well was X% Sales a sales of significant coverage, organically demand particularly market here prior grew XX% as driven on growth experienced a quarter. by cable broadband preparing from network increase build-outs year in finally, our customers the represented XX% from North wide of in broadband by very our new for our range the supported increased in as government America. spending

coming our basis, by expectations than XX%, a sales the declined into On sequential slightly quarter. worse

sequential first into look we of procurement as moderation we from temper operators anticipate quarter, sales As second the these mid-single levels their a broadband digit levels. quarter

to the of Nevertheless, strong we their network provider speed in broadband applications proliferation continuing market the to working company’s customers world, around we increase homes and and encouraged remain the whom by position of to support expanded the are our data and forward to service and high to coverage bandwidth support look businesses. all

and current economic our remains environment sure highly uncertain. to turning The for dynamic Now outlook.

in communications do demand In addition, second markets. reduce the the we expect continue to quarter related across

assuming conditions do constant meaningfully not market and exchange rates. also Assuming worsen,

the to expect $X.XX. $X.XXX For quarter, the second per diluted in adjusted $X.XX of sales range we earnings in of range billion $X.XXX billion to the and share

sustainable grow in of many our driving strong and and ability long-term. team management while prior represent the This the compared would over adapt outstanding challenges environment to and of continue Nevertheless, decline confident profitability in X% quarter and decline X% of of year-over-year opportunities diluted adjusted EPS the remain XX% a to the to to sales to year. to market current second I again X% the to position our

offer team their be the true our I take entire here world for efforts I around to the if to gratitude Finally, this in didn’t opportunity global my quarter. first remiss would outstanding

any be And to happy operator with we’d questions. that, very take

Thank you. to will caller. period question begin. The question-and-answer one Please limit now per

Our comes Daryanani Amit first with question from Evercore.

go may You ahead.

Thanks more afternoon, you’re seeing. the could you Yes. bit segment I on communication everyone. Good a expand Adam, hope softness that lot. a

for it side the softness few on well. like a the it’s sounds incrementally as maybe there datacom I we’ve talked network about think IT quarters, now mobile

of point, forward? Would driven love you correction think then your this inventory you is more issue, or Thank the what do as perspective you. your from go softness if of think to get is duration this driven you and vantage demand

I mobile in couple in decent team quite in wrestling sure, market all been of devices. strong very our mean, the communications also had with vacillations IT particular thanks you And but in communications the networks has much, working we prior And if years, Well, growth the just in growth demand. over some we datacom, and fabulous in fabulous, just back Amit. for market, look had growth the in mobile

quarter we And is into a I in overbuying there was the end came last market, – seen think IT datacom and of particular a coming this we’ve what year significant as significant of that because course certainly there the degree we into coming were to over their the constantly quite boom and of rescue customers contrary. had our Not We agility to of of our components. Amphenol. disappointed customers, the with come the the they’ve demand expect from that in

not in issue that market, aperture saw everything light procurement buy the inventory But say of we the of with regardless, dynamics is to their of as is service have chain which certainly, I’d of Relative they supply building seem inventory the that virtually crisis. they it our opened hindsight. included And spending. up much networks to this mobile an provider as products across

various reported And it think we’ve And their early we’ve in seen of networks it’s building benefited and ups across systems. next downs seen I out the mobile and no we position service of what with generation and plans. I our the doubt well that as kind stages from build networks providers about build-out the efforts capital to their in in particular XG put long-term those think the we that of operators

And Europe, operate the contrary, in quite of out we of like they’ve networks build-outs and And build-out then North these I then most the otherwise, and built built-out once sometimes certainly fully where they you they again economics are would the tell come America, you digest framework and and XG figure see initial it rough places out they a what the places not that is next to but phase. them.

then economic certain of return point do would It happens, equipped that. one realize certain well And typically be mobile for in capacity build certain that coverage, this deal up to very amount that their a is volatile. to get start of to they a investments amount further and more investments, the other happens, allows to as when networks. communications a market them we’ll at I mean, those to devices, with start is

We dramatic like was think pull declines than the in well saw dynamic of in memory that home in from lot last more work the the here. I parking kind reported demand really the offset full, particular demand quarter I and everybody also or forward a that’s And went for smartphones, but fairly to robust strength with are laptops tablets. of offset by is work devices any of overall office, still a into is those distant is kind devices come if from cubicles full our as And of the office the Craig as home. indication, quite and computing offices because and

people of so equip think them a replacement prior that the maybe cycle working bit bit And and more a I various into from to change those rush bunched home the devices, with has two for mad little years. of

the of the then last broadband, really of products. which quarter. the is We into that had kind market. supporting really And continued sell talk about fourth markets. array broadband was customers We’ve broad outstanding broadband just communications our of last range dramatically and we with the year that expanded first I’ll performance our in into that a is And here of products

times for couple going digestion organic very doubt U.S. resulted bit double-digit as think XX% that a over see built position little us think create is dollars variety growth customers is here the position our year of broadband years company. by made robust no of quarter. something in acquisitions the in we of in I great as in we But to it, those you’ll recall, and second the the I into that that mean, with well we’ve the And And we customers. in first the last long-term grew, XX% about quarter. we’ve recent look still we that of in organically with taking last value significant now

from question with Bank And our comes Wamsi next of America. Mohan

may You go ahead.

why Yes, communications, so consumer I weakness as diversified are is within thank exposure and contained you you radio, within you. mobile. to even this Adam, mean, curious communications. think

carrier IT You datacom, and networks. exposure and have enterprise cloud and exposure mobile

you cycle kind things macro like given a love the about expect moderation chance get to perspective if we China your I’m and there, just – to a as right other is this now slowdown. you to Is that very of you not if you. perspective up and broad be well if on sure like the that, you inventory industrial Thank in seeing you’re I in if to that noted think some should have you’re opened trends it it’s could, sounds Is it’s go the the even of on the do. Given typically this great why in and would but China. course or ground some on more it it? through even get auto some get would as had what And over areas year. of we that way early And not,

don’t Yes. in much, that the unique quite that are each I I markets and Look, Thanks very communications discussed, the Wamsi. just think dynamics which of them.

economic We’re we’ve guidance slowdown, all networks, in And broad is dynamic a a for guidance next quite talking and for kind think in broad don’t broadband. devices, contrary. indicator of reflects say that in given contrary, the our quarter a economic I that Quite of and a that IT I wouldn’t that markets. in situation. for leading again an different different mobile or yet about one indicative again datacom

booked pleasure I’m changed flights visa Craig when was and of policies was. early came just China, you our as a as it China mean, day China reenacted April, visas and glad literally I at first Relative the that the question. and to last and day asked were It that in soon I we out the what news were very its month

weeks had job some phenomenal last opportunity bubble in over I you challenging challenging went factory a into you, of these tell just meet particularly Shanghai. can’t Craig particular, years satisfaction workers all the to than who from one tell didn’t years. honest, six XX in in more visiting they our for certain places, such and in and to them Shanghai who including our to I case. be be weight our In in somehow year, to for which a did away in very to I was of thank them three over three team what phenomenal, over behalf Not of mention that just the tremendous that just And see period me. was to them hug I, be on of like time during for food company did ate that to the China. operations with tremendous, we and all China a week gain we able

the tell ground, being trends I But in not deep there on into the does going like seem you this recessions. China, continue a place apace. is that investments Infrastructure

highway they You speed new high and And time what this for every nobody rails go have our trains I what period next done most see impressed was them. visiting during virtually own to by operations when you on. was was

And run relying that Amphenol. what do we you they countries are the over technology, from applied Western engineers not this of, teams a their that subsidiary to we don’t did infrastructure we inside a outside amazing China government entrepreneurial like who anywhere as have subject that that credit work driving new of restrictions native rather products are growth can and be think and company the world relying just to on may developing organized standalone around but or it’s a to how be whole market, general of in by rather have organizations developing for capabilities on time, function, factories we but managers China

who It exceptional doing during China India to to place and for of what One while outside like to or really behalf Thailand to a on Mexico variety China, and of the something setting that customers have up like had or company Vietnam to just or special. operations going travel, that. of still that that. reminder operations set not Chinese see to our another this to of satellite a of even being Plus makes incentive their or up time wanted able many And was Also, reasons, factories really

get of around the tell in soon. Are able geopolitics the Are macro go now as finally ground, sitting there forward look do on U.S. back that to Washington? India, at and to to long-term China, population lack there Are Amphenol, go are issues, from highest going when back with like thereof? really to levels there, I I meet you you trends and kind are. Western can between growth the Sure things the that Sure. or go to encouraged people I again they China? there you being to But everywhere you, and Beijing Europe, I Mexico

question next Chatterjee Samik Our is JPMorgan. from with

may You go ahead.

Hi maybe thanks to question. to year, more have you. there? for guidance Is if of I going second for giving year the the some to a Adam, bit bit you’re half, the my for the how wanted full second aggregate even that any get into or now see year-over-year. Thank can your be the in XQ, a about the first But have with taking the orders that company you half visibility grow for down you’re stabilized. opportunities sort of half growth or thoughts the thinking thoughts opportunity of just you the for the for

very much, Samik. volatile does giving very environment. Look, a Thank we’re it because Yes. guidance year remain full I not you mean,

underlying And growth that of you love this secure base can the to Craig the company. mean I first that get the quarter you that the that today. would strength sort mentioned so I of that from much very I to that just tell it’s the of our second able skis were half refrain the in we company, despite The remains specifically. to I’m my to in condition or strength just doing the saw margins as going going is with market. at out mean ahead But growth, here testament customers, I tell we strong. as volatility of look And another real not of financial the our communications to and give give company

product extent So with more customers in we’re going that half, support from to us, want for sure, to the second the them that.

ultimately, But what sense I think full to the QX dynamic give April, for the is XXth going premature today, given and, me how just on it’s QX of to of a is bring. sitting it year here and

our You high comes front realistic also we’re in team we’re manage that’s going way. can environment us, the our aspirations, of but bet through whatever and to has to

next And Steven with Advisors. Fox Fox from is question our

You ahead. may go

afternoon. Adam, at steps long since that good early period, you’re XXXX. period, Thank the COVID maybe about out time. think of year you’re record was sort experiencing down COVID you are time prior you. Hi the quarters? I period looking decline down, a just what in to I to was of earnings the coming just track where the mute for relative your first of I back for take to what If earnings this cycles and earnings your And curious cycle going earnings take

so goes. thanks look, see Well, mean, Steve. Yes. how we’ll year I much, the

kind and company XXXX even just I have XXXX, certainly, really the and the no time resonates when it that been one been not I’m the time, year what think dynamics to of But company. adjustments And for or see that of orders closely on play Rather, certainly and full be. whether we quarter, resources, call we wait bring Samik, to then we reflected just us was following just up. is have, come," did since we way that "Well, going or third We and many see to in I "let’s probably what longer, behind talk through then who’s up gets or, we what earnings a it. cost." Amphenolians don’t are about the quarter in that will have manage associated of the We you and the profitability of don’t our Because few let’s the the few want. catch-up going I XXXX. now, rapidly. face you’re the too wait have get As people too customers another have or And make what times the to -- we if of to curve I say idea, I say, and kind it punt good said

very was points company, XXXX distinguished XXX in as that well, our And significant peak of COVID downturns in in know our it XXXX, just very, basis XXXX very environment whether of you margins or declined demand. what early sort from trough, to during in was

as to Now quarter, a in we not time, dynamic the certainly the are saw But XXXX. second in same kind world. at such cataclysm all guiding it’s our with we of guidance

than customers Even every is managers, still And it like XXXX, in size They’re XXXX so and XX, to significantly categorically They’re XXXX, represented of in it. that was whatsoever. immediately maybe real XX same time than bigger it them. listening reacting like if are company which way with is, was culture entrepreneurship, out it’s coming back, changed of hasn’t across XXX was in deal and the sort it the day. today, was and of adjust to our GMs modus resources These it our with the XXXX, same operandi in accordingly. in bigger general playbook is the to

company, this XX for if demand, -- you been cost, And then market the you orders, be my in have go And approach that. can has share. years as once less you you less long It that’s it secure take but then of I out and take as entire out and will Amphenol.

So who to don’t be year, in it softer reduction it’s EPS. our manage year. it. is what have aspire through than We to But we’ll if going certainly last a this demand was knows

think And Craig. I one I is just just this thing Steve, would that. to add Hey,

and couple or at quarter that digits. that times. if the look quarter said you markets if think we four you the results that double first look But are you take I account and first by reducing this in results, we’ve have into three sequentially a

those a that But in from devices think are like the I But from for places the the reductions. reductions we typically where like as would market kind react mobile I margin future. And through a said, that. really may that reductions react mobile You demand the you just see quarter. of for volatility different basis. perspective data, to Adam kind shows will the of the think results line be broadband, and normally growth we’re bottom the having of is not for that continued first certainly don’t as be. IT, to in any is And ability company networks, quarter-to-quarter driving really to that of that just these that used mean, to of type resiliency that have kind kind and markets I

question Our next with Junk from is Baird. Luke

You ahead. may go

I demand respects, there’s as side, the looks communication this look fact hoping are catch longer-term the goes margins right for that question. could solutions guess, And now, I the your on is related busy of the the actually interesting a could is already business? opportunities been Adam, some you’re specifically In side, to positioning IT what you for the the Yes. very relative horizon. Thank some margin datacom comment able multi-year at you worse. market like XX% the if for AI group then consolidation taking the positive through the period. just on to emerging you areas on decremental period, focus that breath after today have a referenced as that

to If you. both you those could speak things? Thank

is working Nobody we folks very dealing is is. catch bit punt this. quick to market downside reflection – of have it this. their for I’m I kind robust happy I use is likes it’s Luke, conversion be really you are pretty earlier. emphasize if of sort downturn it. our mean, a Luke, phrase, glad of we well, is. with XX% you told by that margin It that that it is to a Like organization any little much. breath. you a would But your discussing of reality. in It reactivity I already what do margins what it’s that to an measure, thank lying this just I don’t And was making phenomenal.

you as a financial strength that. that XX% the as making robust At of the the sure did, is the is what’s company and again, convergent that while is stays of same indicator mentioned great margin time it we’re interesting though,

on next array We technologies. are working extraordinary generation of an

some inventory that things trying extra of Just achieve. they’re have customers an generation because enormous to amount doesn’t don’t they mean next have

interconnect those, revolutions demands of data quantum and And kind of to that AI think I to, relates are one as all leaps for in alluded these and the you power, of I of the mean, of kind operating footprint for power and that enormous processor drive creates data the of for efficiency expenses to high carbon that’s these demands and alone equipment processors next the interconnect into important which the for are sustaining going networking, these let as I fiber it generation optics speed massive the mentioned, our transmission high on for centers. the so customers speed

to haven’t slowed all And customers. as relates next our we generation down so with developing designing it products together and at

into foot with cases argue have situations like of on AI, certain in those actually on driving well. that’s I in It’s others necessarily. as could you much. competitive and a as emphasize about is something things in trait efforts carrying But shoulders. that accelerate one lot the both And had to water carrying the brake, shoulders learning gas, customers on one the we talk And not an so gotten with Amphenol company kind we’ve alike. water that machine on the both on

of that, IT trait got Sometimes to and to up And the resident generation that agility costs cut includes is systems. think support having working next very to that for the organization. And a as I you’re go within do mindset time you at do is across being out and our very that all datacom. those inside unique ramping the same engineering able

question UBS. And Snyder is Chris with our next from

ahead. go may You

you. been ask most datacom, been a so wanted I to Thank that’s guess by on obviously segment the I far impacted that’s IT inventory digestion.

like flat QX. And subsegment it guys about XX% impacted indicate you. if over right, there’s past of be segment that last three, but heard seasonality the I you sequentially to down QX in in it was is inventory, the moving the the have that four digestion subsegment now? quarters bulk does maybe is of that know going involved, some headwinds And sequentially. think said I be it the I sounds actually Thank

the talked better lot that don’t indication bit the datacom, to of XX flat going Look, it's better sales and certainly IT on sense that to second little about bring. leg Thanks, sequential see an reached we've question, it Chris. relates to hope a kind half an I’ve to I but had of we I is of indication you a we QX from your the a hope specific I if certainly more mean, days be that is But kind be what the Thanks. now, seen basis. know than that a fact a I a to able equilibrium. to half. down give second of as of another

we'll the a that. XX second give second to you half the in Again, me flat brings. try more what see hope, we'll quarter certainty about the gives So it's fact now some from little that but days

Stein is with William question next Securities. from Our Truist

go may You ahead.

linger end moment, in on comms, you you just Thank a are the more relatively my for to like I'd weakness slightly get just weaker for Great. taking question. in to And markets these clarity. seeing all of datacom any that weakness? Or it pronounced seeing Thanks. is And customers? geography? more more in within where specifically, across particular is IT shapes hyperscalers more you're that sizes the and general broad-based

them the Will. side device the at markets. products a of still of get OEM IT a a least Asia, remember – the lot Thanks wouldn't on that and significant they of across I out very these good products I – much, datacom. communications of lot the especially distinction mean portion communications that geographical point any get do made in the

is that here. we company. inventory enough – for that's as sure So any people you in and for sort manufacturers worse of customers a equipment the the manufacturers, versus that our But market. in did Asia, say lot are Europe as and quarter don't in performance again, position overall wouldn't can imagine I that fairly areas we both a overall that's And Asia, also robust having have across to that the Relative changes cases. think situation real there's hyperscale I ultimately end customer there's And many hyperscale in because geographic in I North distinction the that. of overall did otherwise, a driven equipment broad that think by not America the

with comes Delaney question from next Goldman Mark Sachs. Our

You ahead. go may

free a Yes. chain Good supply it was for to flow might hoping afternoon. more generation. Thanks little I for touch and your on cash question. taking mean what own bit the

free lead demand Given supply flow here? enough can perhaps chain inventory stabilizing you take softer, better do to think down you that cash and

the quarter, where here typically mean as – first I of on cash quarter, XXX% But even mean, flow, was that we majority actually the would that. for a we QX is little the many given inventory lag higher good I typically quarter we year a to the Mark. supply in higher. average. that, of recognize a well. Yes, had a Yes. effect certainly into of is of better chain We than we the effect XXXX. days wanted perspective. throughout which had from supply essentially the quarter our first our for get actually XXXX. hangover that And bit a in see think than for perspective came I from first the I first certainly reasons do a yield probably as And day's or strong is there's issues there had team Normally, very chain kind I mean Thanks

And naturally kind a day's I And cash may as a be achievable that a think I higher of of perspective the quarters, we we and impact some team a a that down. to bit some bring do from have year, be there be full where will a should will than continues actually free coming cash I here cash that kind XXX% quarter certainly, flow. and on we're should or which to certainly XXX%, help inventory But XX% believe from two that for and perspective. or improvement from little flow flow just on think the over that the see target our inventory,

And our last with question today comes Credit from Hardwick Guy Suisse.

You ahead. may go

afternoon. good Hi,

Guy. Hi,

little now had medical little it's is I us end largest give Could but within market I more XX% away whether energy? is trends color or probably you a of industrial on on sales. your a the bit the expand factory you industrial, within that, segment, which far largest can segment, automation know bit think by you

factory, largest deeper at some much, environments At they Yes. of amongst was mean harsh and really environments to I within away into between. far our everything customers an and most where correlation XX% hour an to it deeper our push offshore onto Industrial, this a segment, an market. semiconductor Well, trying going same mean except in various theater, electronics time, kilometers all a and segments Guy. of sales. mill, the a I very of train not is new industrial the that quarter as thanks fact is into our is are our XXX there's wind represent operating the industrial harshest least into the diversified

manufacturing battery. like includes energy, energy traditional All rail times and these you but the things It's I transit, types includes also but and In I necessarily say tell can that marine significant sales which largest. vehicles are in automation that semiconductor alternative the and generation, things mean, generation segments, both segment, like terms into that not a another. one – of and instrumentation, wouldn't energy have and of equipment vehicles, mass, factory we strong is entertainment? medical, of the areas extraction correlate like heavy heavy electric markets and electric with

in business went. segment-based mean approach with application years we we to that a a just to this It where markets relatively long excited very be had if very products. have XX% this didn't in case, really our who over industrial our that. a to that we're And and leadership period. sales, want one have really new would technology-specific it that just much of we've I of the developing time one progress drove back by all the a close still If to went in ago, and made little XX over just was have fabulous bit an And our products, touch a others, application-specific, time this go small I bigger going that So market you'd industrial business the be really than through we're distribution.

pushed this same positioned the and as acquisitions the we deeper many a market into and time, of acquisitions great continue across ultimately At electronics over that environments. we gets years, harsher harsher going revolutions of number and just for make industrial great have as to on deeper made multitude us

so about and ongoing asset I for company many come. so and fabulous or years, of which believe for the years And has of piece industrial to excited really just been remain just strength will market, not that, a one our it's another just we're the for many

Michael additional question We with one TD Cowen. Anastasiou do have from

may You go ahead.

Thanks question. Good taking afternoon for guys. my

the deployment on a side, couple the CRM you strategy? markets do you into and capital the inorganically the Can you or what the how Thank the at of describe see announced deals just you. opportunity beginning broader for Looking front, RFS year? adjacencies, the at had end And overall year. most

industrial solutions we mobile particular, next-generation the that's second don't RFS into into end what say much, last really quarter, we with bring we year, really about Thank we in market as company we continues networks. signed our not by expands we that. them closed yet excited optic go about family. and heavy We the and we harsh the the expect Amphenol networks the earlier Michael. team And announced, position CMR, to mobile in team and interconnect the making high-technology very that to work change the company, fiber – we're, RFS antennas go products again, And that we equipment. with but a environment, get into to as very we that market, we that as acquisition, Well, value-add closely you the our it. quarter, in closer and closed of said have close fabulous RFS, in announced

to – we a of that future, choose XX since program. XX that make towards acquisitions been want to the capital return look years where we make markets. and and them we're market robust In approach XX portfolio buy all getting the than we leads a want sell and the where that's the great CEO married to companies that's terms I markets of our our an say, do where trader we career, nearly, is where our and having buy acquisition, I've complementary our well, than with deploy in make end And we we outstanding more that great my that don't the success acquisitions. on technologies We and simple for of sell and we pipeline companies reason And management. which of this see stretches M&A and with market and We're positions not forever. acquisitions and pick in don't think when kind market for these and more across long-term very really outstanding in experience, and enabling acquisitions, people, our over, or,

robust very pipeline acquisition remains Our today.

when for if support capital incapable the really to deals. great and cash and long-term, company the we of But certain the going we we growth wholly close remain of. I that and know predicting will of that will to great a use the so is I close generate continue program much

of look company the And forward of really something it as that's to the new bring very so of culture we one that And program, very these much every look in much it entrepreneurs, as complements the entrepreneurial actually time well. strengthens continuing because M&A forward and we to our Amphenol. well culture I

just close. any on RFS, included to And yet, since not to avoid our guidance and we Michael, until guidance in be it clarify, wouldn't it not have just confusion, closed we is included in

good. very Well,

operator. questions, further no have we think I

like forward you case, the just look to that's best to to opportunity all talking you a wonderful continuation and if would wishes spring this and I take now. from Thank wish much, all. so we so of of days you you to your And XX to all

Thanks, everybody.

conference, today's have you great for and thank And attending a day.