Amphenol (APH) 24 Jan 242023 Q4 Earnings call transcript

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

Following today's presentation, there will be a formal question-and-answer session. At the request of the company, today's conference is being recorded. If anyone has any objections, you may disconnect at this time. I would now introduce your conference host, Mr. begin. may you Lampo, Craig

a Thank Call. you Lampo, Adam This Craig Quarter wish afternoon, our you and to our much. CFO, and Good Fourth everyone to Amphenol's like with 'XX We everyone. New I'm Year, CEO. welcome Conference is of would very Happy here Norwitt, together

trends. will I some financial current commentary, Our Fourth 'XX we year business provide full Then overview results were the then questions. will Adam give take Quarter and released an of this morning. will and and

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

X% EPS compared So in information. The the $X.XX. local up were sales in X% disclosures U.S. X% to dollars, sales company a further few market please in Fourth Fourth sales in minutes. relevant Fourth up further in Quarter U.S. and the Adam diluted for with local down Quarter release in and were of refer currencies closed million the of XXXX. Quarter Sequentially, on trends our X% X% to organically. and X% dollars, by will $X,XXX press adjusted comment organically of currencies record

to a year resulting U.S. Fourth down to sequentially, X. down $XX.XXX sales of 'XX, basis points the Quarter the quarter currencies flat XX in XXXX. Orders of ratio and in up in full were compared X% billion, X.XX the dollars, For XX% local of in compared XXXX flat million and book-to-bill organically to $X.XX were

sales and excluded was Quarter million the in new Quarter the record compared was the 'XX increase million XX company. full an Fourth adjusted during XX driven 'XX, On $XX margin XX.X% basis margin $XXX margin in points pricing the to the by compared basis, which of These in as strong well benefits year-over-year corporate to Quarter sequentially. operating X% of Fourth which by operating of for Quarter adjusted million, higher were points book-to-bill respectively, slightly actions. Third leverage a of benefit Quarter of by basis the costs. operating operating acquisition-related X.XXXX. operating income impact 'XX. Adjusted of as compared XXXX, partially primarily Adjusted margin the the XX year, resulting million, was the $XXX average. to levels currently and was income recent The points both are of most on increased quarterly a and the below operating offset 'XX orders operating of Fourth dilutive down XX.X%, Fourth increased basis increased For which by in GAAP and $XX,XXX and acquisitions, were operating

operating costs XXXX, acquisition-related full the million. GAAP and operating $XX which income included adjusted income was year For $X.XXX million excluding $X.XX billion, of costs, these of was

adjusted GAAP 'XX, margin well as which sales margin record achieved strong of year and slight adjusted was Compared was operating given XX.X% full driven XX dilutive actions, we in basis, the offset to the XXXX. and by performance previous of annual partially XXXX, consistent in impressive decline This primarily an points acquisitions. XXXX. experienced a by to XX.X%, For was operating the performance XXXX. margins margin compared a basis operating of operational the as margin was flat, was GAAP operating benefit On with margin decreased strong XXXX pricing impact our

XXXX. tax U.S. GAAP was $X.XXX increased company's XX.X%. Sales by compared XX.X% XX.X%. U.S. dollars U.S. GAAP tax Sensor tax was rate XXXX, were margin $X.XXX which down declined were we world. I segment segment organically. Quarter, operating be rate and segment full to $X.XX a Solutions to adjusted compared the was in margin adjusted was in the by to healthy margin margin were Sales declined are 'XX. 'XX, organically margin $X.XX Solutions quarter to And the XX.X%. X% organically. organically. Fourth was operating our relative diluted challenges in was by GAAP continued and in Segment and effective XXXX, System XX%, the team fourth $XX.X Fourth $X.XX This the margin record X% the XX.X%. of of which effective Interconnect and X% and effective effective tax XX.X%. and year and Harsh an organically of in sustained rate quarter, Harsh to for XXXX segment on billion, Sales prior year segment Segment well Sales relative the period, to by X% Fourth EPS EPS segment XX.X% and in of an was million the were by and dollars the U.S. $XXX despite was X% XX.X% the rate was and was XX.X% compared result. the proud Fourth adjusted by of Quarter organically, Communications in the X% XX% diluted expect have respectively. compared levels in XXXX, effective Sensor X% segment Breaking dollars we to XX% Sales respectively. in by and range by X% up an around in Segment the excellent Sales in to company's rate down the segment results increase and increased Quarter Systems was in the in dollars to in X% and and for and Quarter billion billion Solutions in adjusted basis, and $X.XXX XX% XX%. an the results execute year XX%, approximately tax and In interconnect Environment XX% in the full X% Systems Quarter Breaking increase operating operating and billion, segment segment Solutions and $X.XXX U.S. XX.X%. The and Our in Environment Communications million Fourth dollars to billion were operating continued operating of dollars and U.S. segment was and these were increased profitability $X.XXX

the full record flow diluted income. our the increase XXXX, or $X adjusted a record Fourth adjusted For X% record from million from XXXX. was cash was or a And And $X.XX XXX% a $X.XX, GAAP an $XX of in diluted Quarter cash was increase of income. ] a Operating a [ in in spending, EPS EPS in net record was flow XXXX. of $XXX $XXX XXX% net adjusted capital million net free year,

record XXXX our standpoint, year. for working continued hand XXX% XX was strong $X.X $X.X was the or cash operating $X.XX We and of total of facilities. at or XX inventory of XX respectively. And a days payable cash net the end a Total a the $XXX our company $X.XXX debt with million When billion deliver net are Quarter days, bringing days for total short-term was to quarter, billion, under all on to Fourth and XXX% the the the and repurchases the billion, XXXX, debt levels. was yield at $XXX price year, capital our returned flow was quarterly free shares end and sales dividend, EBITDA and billion. combined was outstanding normal were flow included of Quarter repurchased XXXX quarter XXXX billion. Total In record our strong credit full X.X of $XX adjusted million. during on result. From $X.XXX such average full plus year respectively, full an of shareholders adjusted capital $X.X during net income, which billion, cash investments the days, capital a XXXX very billion to million at liquidity December XX, stock flow and of to availability a approximately net in of cash normal billion, million have of was within $X.X our common leverage Net quarter Fourth pleased X.X XXXX $X.X was and income. shares in X.Xx. the spending, existing And or

the I will financial over will now turn commentary by Adam, We to are that remains strong condition provide company's trends. very market current any the pleased call on measure. some who

my and to phone all hope to happy the you thank wish New very on extend everybody to Craig, today. not Year it's late a I you Well, too much, And of welcome here Connecticut. I'd here like Wallingford, from

some our the on have our for achievements the As our of for Craig in XXXX. highlight to of I'll and of then, questions. some First and time then Quarter we'll and progress make also going the discuss our for I'll I'm comments served markets. outlook mentioned, course, Fourth full year Quarter, trends across

especially basis Fourth and and basis commercial respectively, proud air, but book-to-bill in growth by dollars, have defense, U.S. execution an growth represent diluted quality Fourth million, were really $X.XXX This by company prior XX.X% reflection record in Our clear have versus in the a outstanding the year team's million generated a company datacom markets. orders representing operating delivered booked Fourth X% year. IT increased of our billion the in to high the in basis, in than pleased earnings. I and prior share. Quarter, a sales sales say out billion. Quarter come Sales of by flat did in grew margins company's markets we from XX On stronger The in very diluted $XXX and declines cash of last the quarter, margins with pleased across the operating the was points Fourth our of $X.XX of exceeding points record reflections extremely of reached that in X% sequentially. prior automotive XX% EPS the $X.XXX Quarter end currencies, guidance to just local Adjusted other flow team. and in of XX our X. We're quarter, offset both Quarter. to year of of decline clear that adjusted $XXX growth quarter, end from were our Amphenol X.XX expected, did a to adjusted of per these the earnings and and free results reaching the X%, organic the just I X%

sales a that Our reflect and acquisitions Based value-added that the environment, of and across amidst agility and annual sales the for sensors markets. particularly million results recreational has roughly again we annual ] quarter, entrepreneurial perform $XXX also of and automation closed industrial annual morning and is provider focus New well associated LID products equipment on assemblies sales with of Era commercial harsh once of this provider Hampshire the X pleased has of approximately to organization marine, cable wire France based and [ that. cable telematics and discipline Ohio, our technologies factory a with sensor in continue monitoring and announced with [ the automotive and approximately we and the we and ] [ industrial to of and cable this of environment. for this in high-technology November market dynamic $XX as the tire leading December. supplier $XX is industrial Talus really the heavy LED We're applications challenging includes ] million. Headquartered TPC in in pressure is TPC in quarter and a a million fishing markets

announced the the approximately of We including in Internet sales. for global provider PCTEL XXXX, broad particularly markets, of previously in $XX generated a market. acquisition or also Things a leading antennas industrial of IoT in array closed of PCTEL, million on

great our As remain company. value create confident new I Amphenol, that continue outstanding these welcome teams to the for acquisition to program will we

program pipeline outstanding we Amphenol family. enter opportunities the acquisition near-term year. deals XXXX bring very strong to and complementary we our Indeed, as remain fact, continue potential new to successful In into organizations interesting prospective the our was and of see in

execute acquisitions a then Amphenol into identify Our these remains core upon and competitive for to bring the successfully ability family advantage companies to and the company.

ability has and acquisitions greater to too organization so evolved a manage our number all of scaled, sizes. of our has As effectively

team Now in to did year challenges well the of to inventory full year, we have turning builds year market. despite communications performance. say the of to Amphenol another in delivered XXXX certain the that in as the that markets I demand end experience organic XXXX, in as in the significant moderations in demand Amidst the end more recent the declines successful due industrial markets

company capitalize entirety were that was Our from time markets. on sales sales and well of for year. our prior the breadth our testament as the the diversification slightly to to This ability real team's team was as overall down able incremental across opportunities in to deliver a only of

EPS allowed of Our of prior adjusted year $X.XX XX.X% the us full performance margin last operating levels in deliver slightly diluted sales to XXXX decline. levels. our just year team was with flat adjusted by above XXXX record which This our excellent organic year despite was

free execution disciplined $X.XXX billion the flow of respectively, We $X.XXX working superior also confirmations and cash company's and of management. both billion, generated operating record capital and

technologies great new which program, discussed more enhanced $XXX throughout our I for of and value our bringing acquisition companies these million across outstanding acquisitions year Our than position performance of in the into talented We're created Amphenol world. platforms excited annualized contributing array Amphenol a joining while the the of bench organization. deepened just really individuals that sales with around expanded XXXX. These have leaders companies already represent XX future a the broad strong company's new and

$X.X quarterly a XXXX, billion. In shares million back total increased bought in we and of to buyback and by under that X return capital addition, program, nearly share shareholders represented our over our of dividend X%,

we across the market XXXX, agile confident our that environment long-term as further continues entrepreneurial we volatility drive management strength superior there XXXX, a performance. we built overall So which be from while in team high have is level can enter of to

the highly Now balanced progress pleased no sales representing our market XXXX. This company's exciting from diversity is our market exposing that trends industry. markets. in happening given the XX% served remain effect still of and to volatility exposure revolutions diversified, end the insulate more the electronics we would with comment helps also market to broad turning us to very that across our of market end than the and just across while any us I

defense market. first Turning to the

year our XX% XXXX. the XX% Quarter in from local growth applications. Third better-than-expected sales total XX% the defense applications, a Quarter virtually prior by year, strong organic again On and the the Quarter. broad-based an for Our Fourth once from sales market full U.S. our in sales across strongly represented Fourth increasing by grew dollars basis, of XX% and defense airframe in Sequentially, by currency. and with sales particularly all naval helicopters increased in XX%, X% increased communications in

execution defense year XX% most defense currency aircraft market that of local sales XXXX, operational dollars organically. and naval, the well broad reflected in as communications as in full This particularly engine, and segments across the and in related For market, to grew by space-related strength helicopter, XX% U.S. the our by applications.

position where sales expect offer digits in the in very in company's interconnect around their increasing potential investments continue Quarter defense geopolitical First to high-technology mid-single Looking to countries ahead, we expanding the for the encouraged remain current Amphenol. of and sequentially, market. both decline we world the we by products. range dynamic the the widest next-generation are industry's Amidst technologies, and in today's environment, strengthened defense demand thereby the long-term

our across We U.S. of are support increase seasonal which to demand in XXXX. market represented sales Quarter, very the broad-based actually grew local in air Quarter, development was strength our quarter our long our was for by a X% by full well aircraft product capacity positioned our future. The X% to our into Fourth Third this the of all commercial and dollars in and the and XX% new by for and accelerate the of sales organically, this driven strong In Sequentially, sales and our X% the ahead sales expectations from decline. modest currency a grew XX% applications. year

well as design-in For local year across sales strong broad-based of currency XXXX, applications. very by and in our the platforms broad all reflecting XX% full a organically, range aircraft on increased as dollar positions U.S. robust demand a

we of expect to I'm team sales Quarter the in lofty Looking levels. air into market. the working First Quarter, commercial these truly at our remain Fourth proud

demand next-generation market diversifying paying recovery high-technology in into position our travel of jetliners, aircraft our strengthen to are for ongoing efforts real products interconnect thus the our With dividends. while breadth and

expansion of this forward market. opportunities to technology years the growth XX% sales for for of important long-term XX% benefits of look the and sales realizing to and our great in come. The market offering industrial see to year. to of continue for those the We initiatives our quarter full our many represented

in transit U.S. moderations we in by demand growth did Quarter XX% than mass and by decline that more was and segments, and building currencies applications, X% in and vehicles, equipment. oil automation, electric transportation local the heavy marine gas, realized including as in in in offset organically Fourth battery sales X% Our and dollars, other heavy rail

industrial our they that but a year was ago. channel were sales did X%, the distribution muted to by acquisitions in close sequential a the be than addition, into continued grew In basis, by more driven primarily On we that sales quarter.

the heavy in local For currency and electric contribution as heavy XXXX, the battery year applications full in X% by in equipment acquisitions Eve dollars offset and factory from in was particular. and by organically flat instrumentation, [ were automation weakness vehicles, U.S. ] declined sales

Looking sales levels, benefit markets, industrial levels as the end at Despite as proud into modest as the inventory offset recent distribution working in by these I team outstanding demand remain near-term of the particular this the in pause our the elevated decline. channel market. acquisitions we in in of sequential global both expect First driven Quarter, to remain organic well certain

was The of excited TPC, interconnect expand to tenant positioned our occur technologies and and high-technology PCTEL, across which offering, LID [ no antenna industrial offering. that the automotive to acquisitions industrial will very our our grew each has us robust XX% are in and We organically for dollars quarter U.S. the the most an increased to local the quarter. of XX% additions our on the doubt in Arm full into interconnect I'm our really our Quarter a complementary Sequentially, and electric to which the coming ], XX% was than product That continue our of And strategy basis, by sales to complementary new automotive both revolutions and and confident and expectations many through capitalize market including hybrid electronics sensor sensor currency, better driven on represented market. long-term that adds in and by by sales year. automotive XX%. our the by strength increased of by vehicles. applications, sales Sales in XX% market across automotive electric sales X%, the organic Fourth broad-based

that in and the next-generation dollars the in U.S. sales electric XXXX, and XX% year across drivetrains. example, and by particular, XX% pleased increased reflected I'm market, for automotive including, strength local hybrid our For organically, a strong broad that full electronics, in currency XX%

our expect the we new benefits team driving customers that, in levels. I'm in the technologies in of many confirmation just XX% automotive design of applications, of focus the quarter for to XXXX, sales into XXXX. benefiting array Quarter seasonal look in drivetrains, is moderation mobile come. The high proud wide into single-digit XXXX of vehicles. devices electrified really in years Looking these XX% a sequential with their many implementing their a working another First yet We the represented from Their market market. sales sales our of of including performance that wins for It's a of new other truly strong who applications. full to are not but year position multitude our and forward from the on

sales once a our Quarter by our the much Fourth moderated as better for dollars, in more again Sequentially, local robust into sales tablets, decline. than expectation sales growth U.S. coming was currency by single-digit into increased in organic X% laptops quarter high smartphones was which and by Our wearables. and declining X% than offset

mobile strong full in and device more applications. XX% than XXXX, smartphones XX% in market the offset dollars as the U.S. by sales For was growth by other mobile year declines declined organically in in devices

we Quarter, approximately a typical XX%. First anticipate the into sequential decline seasonal do Looking of

to that of any as While team capture volatile beyond. always and outstanding X our arise most remain in for mobile markets, agile and sales opportunities always may incremental is devices poised XXXX will our

which with the market enable next-generation quarter of a us in networks products decreased leading devices, organically interconnect and in of in spending range term. manufacturers. year local our X%, by our from we our dollars, reduction our X% operators sales and year. in mechanisms sales declined and full market currency line in Our well array XX% a continue broad-based positions of for and to represented Sequentially, this in expectations. was long mobile wireless which by as XX% mobile X% Sales prior U.S. the sales to antennas, for of through The broad the XX% manage continues network by equipment

prior by declined by For the year. year, the full we've XX% spending from throughout XX% organically the that and year reductions discussed sales driven

market around despite our in Looking we ahead, from the increase of service the that to continues sales dollars realize the to of once Quarter investment for organically the challenging our year. We're equipment and these our much benefits Fourth to look providers. a Quarter pleased more to position increased technology environment, in prior currency comes data sales the from with sales sales next-generation both short-term this customers year, returned and of our efforts to expand increasing our U.S. represented again sales communications and world. mobile work in our from in we renewed forward increased The our potential and a and drive our very manufacturers expect by with position local information modest XX% And better-than-expected compared the wireless that XX% team Fourth by aggressively full X%. XG sales to levels. growth and Sequentially, networks X%. in by When benefiting investments, quarter wireless equipment X%

as improved to demand. presence center benefit continue from overall with well customers strong AI data some we as As our

IT full declined applications. strong organically the for demand dollars offset in the datacom AI-related was year XXXX, we adjustments XX% For saw datacom amongst market more our U.S. our and sales applications inventory traditional by IT than that as in

position in expect encouraged this ahead, ever say seasonal to in challenging year a overall I of Looking coming datacom market we're we more mid-single-digit IT do in out First by the was the sales. what Quarter space. decline the in than company's sequential that have a

are usage to for future. a long-term Indeed, intensive continued and for interconnect in very power the business a This enabling high-speed an learning leading optic AI creates our opportunity team well highest IT the unique a fiber XX%, opportunity quarter and for for in the X% broadband Fourth XX% were market Amphenol. in Quarter as sales down into we operators continues X% products. those sequential the particularly of interconnect a The broadband job represented did growth the when technology a more we positioned these On organically more on in year. Sales intelligence. moderate decline given products, With to our basis, driving securing U.S. future our of which their worse systems, continued machine anticipated created quarter was communications procurement has next-generation revolution dollars sales outstanding than Amphenol modest the and of coming do levels. Our expectations by XX% artificial increase.

year X% For down driven sales XXXX, dollars pause and continued the operator full broadband were the by by in organically U.S. in spending.

somewhat expect First support the strengthened to levels. Regardless company's we to by from our customers service broadband We our that working we remain ahead, Quarter Looking around outlook. modestly in to the dynamics, no sales turning to current data homes encouraged businesses. And the There's environment to forward current the and position applications the and their do finally, increase look continuing doubt demand provider whom world, market. all proliferation increase to network are of of remains the to bandwidth of coverage in these uncertain. support the high-speed economic

would of XXXX. profitability just XXXX, just and any and also Amphenol's market want of entire $X.XX of those the I products, that, strong rates, for in opportunities Quarter, around continuation our billion represent ability This to wouldn't $X.XX. we to billion EPS our to Quarter, and work sales take for constant of remain make of be growth who conditions operator, to to current customers And grow many challenges adapt of $X.XX to questions. outstanding all the able over team across in in but of adjusted driving I moreover, range while of both grateful sustainable the market continue to of need. world, I'm X% to global we touch And term. long the here entirety and deliver in thank confident Fourth growth and it range First and what diluted to in the efforts the and to the X% all happy including outstanding X% of expect for they our to factories, EPS we'd X% the ultimately management Quarter position our we the adjusted diluted our current finally, to these take compared without exchange do. to opportunity First them, sales like this Assuming the environment $X.X with to the very happen the truly be their assuming team

question and call The Amit Evercore. with will now answers is first begin. [Operator Instructions] The Daryanani to

this And like as saw it's you David you you XX? One seeing well into softness be, press ]. risk the about little then as me what industrial would on worse [ about do like you question bit markets [ for ] pace can feel as ] market weakness of talked a ]do you perhaps a on can getting head versus talk that inventory the [ it, sell is [ you you curious, stable the there, see of I'm

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the the was what I about build that bit driver it bit see of our a So over for book-to-bill of think X that books in would X.XX:X. high the little we why I And bit was real was more did we an of on But a that I mean think we datacom the is say equalization mean, industrial be. I quarters. to industrial weaker. side. if expected really little IT market in just it a that we've couple very was to seen from softer prior book-to-bill kind a of book-to-bill.

that to book-to-bill I see So it a of IT going forward? at I your see the -- second early see beauty we of we little than industrial think don't do kind But cycle I'm is market, to softer data think assume broad. bookings had all demand do how going the come that environment. that representative anticipated. And did so think I industrial. of industrial And the the it's mean I we we business is tell. question is in where our in

to and of many those during And business. or not course gas, really the that overall are like we're don't some segments individual so And the marine disproportionate oil And mass any medical there of those to are we see market They our one we so levered in. participate of across impact had very robust we and have areas this more segments are it, the another industrial that on factory that that in And to continue worked where in rail transit, demand. reductions segments. But distribution distribution about of areas also we've the those areas when When no the out is seen be doubt does channel, segments. channel. like of some inventory instrumentation, more demand in those the of and going demand to automation, from year. return some still marked

see First modest levels. that our from on prepared level, we my look a that. I try early we in little of modestly an course in Quarter, said mean acquisitions basis, it's as read supported really you this made. give to we here current the a do First I by we think good we'll Quarter, the into in to tell. And a again, the a go the Quarter, organic through of too on as And kind First anticipate now I the down year, remarks, really but as we've

Citigroup. Next question comes Asiya from from Merchant

on market, can I will you like quite some clearly, echo, for if guys Looks share have guys. you an hear nicely up market is me Hopefully, I IT insight? ramping this try. In datacom don't and you

If AI about you're how wins can and revenues think on how elaborate the little the the how do your on to in supply you GPU you especially ramp that going segment for a AI into you forward, constraints of for year? bit could remainder think the able on ramp guys side, you given

want excited to reflect AI in not call. you really and you thank new Yes. And X the to us. I has company just very to that is I look the Well, much, getting person. in to on which meet to made is aspect, AI. We're forward about progress that our welcome

sort course the a the ago, the While and November last AI. ChatGPT year to up of woken the year sort generative over revolution with AI the of world has of of of advent

long, interconnect on AI has long for surrounding the Our team a working time. been architecture

that. could able it needed a AI maybe to that the of and even we've and always building they they've now our capability, there think even this how of that almost, urgent upticks we when is but acceleration I I capability, one the products of capacity time. quick this it. to manufacturing has rush in capacity really more that product showed And needed kind team proud building favor long so the have is ways support gold demand maybe you building were the very around share flex a And were demand. year, was that is only get of in think customers revolution a call or that of been disproportionate that done different. our to a some ability and agility the the of team think we to reacting to for I And no I'm of it And who capability our

is investments where say architecture, are you too mind architecture critical early chips deal. But large component AI economics no together our to into over where the what small interconnect is forward, like something question does making a like there that in behind still It that something the Looking where it a that ultimately term. not companies and like seems AI to. real such are long very significant there's that look my it's our seems alluded with

we are manufacturing that's there would industrial I of our in shortages investments don't But demand into the semiconductor I or that that on on in something because supply a think our customers' impact see. of that now. haven't products that But saw some a when seen that overall with And team overall except this came just our is mean, But necessarily in -- the as at we Now year. construction. it governor surge get the think in were time was dealing enough a we lot industry our output very chips, maybe significant that chip chips, for fact, that relative business, hope we'll they of And manufacturing. that demand down. not fabulous we doing they IT moderate do interconnect go would customers, to a products. we've It's demand right products different job directly if couldn't seen I their yet.

not a on were do, great that of these, much consumed I just as from there stuff capacity new we to that really job being was reallocate we into think and wasn't it a IT lot had executing to did So that. we able were that products

caller Junk Our with Luke from Baird. comes next

your might pricing downs And in and downs Adam, you could versus to about feeling look the at more how the respect face be productivity a comment be XXXX, then hoping this laggard the any just to supply that in price question on could operations might areas price that respect? would delivering business as which normal chain your portfolio year of just related of into of dynamics year. parts you of you're offset with this especially

Craig. take for that it's Adam. Luke, one I'll

really a think into I that on the pricing, adjustments and I 'XX saw more came 'XX fact about about execution. we environment a balanced. increases we we more wouldn't we we lot is And a certainly to we 'XX, profitability, necessarily to as necessarily we certainly, as talked just operational try 'XX I inflationary 'XX, look we all. on about and we to that coming I And normal. did mean, up pricing cost as necessarily think and pricing but to -- I job in that dynamics. saw. we has the are think into that think normalized say cost pricing decrease environment the That that the inflation more at is the wasn't pricing that was the didn't back price making catch costs sequentially, talked great

but year we a that at certainly saw increasing of the pace is there cost, just level not they're think an I elevated ago.

So from 'XX, a as something if and it. typical a of move of not typically, as we 'XX, be that we going price you as a of increases normal the a a we perspective, normal into that think anyways. And I perspective, cost normal as to think from expect I normal the have think see would profitability pricing I we being environment the benefit move environment. case don't is environment, I historically, that's typical into of kind we're price. in get And necessarily And situation. think necessarily environment sequentially I into kind you'll kind talk about XX% margins have and that of we would we And in move see to margin target that more

we record the happy at really operating So here ended actually year where levels. with

look the 'XX. we're able well something think I think, to our you be into that team levels. these that's mean actually really improvements, margin move positioned, that to as execute I we year to so So the really I to proud I'm profitability get at during if well of

to at we to expect similar able the a as So I expect and same, move be that I into 'XX, overall be level. certainly execute the to environment team

from Wamsi Mohan of from comes Next America. question Bank

normal really Quarter. markets here? these the if the that you exceed rate weakness be helpful. a the your would greater you Fourth talk the given in in XXXX just easier next organic expectations in in also X Adam, Do about communication-related could you but see growth called over markets, compares And in the years China, than out you did historically the environment

to the which which a very is Well, much, about volatile thing, a space, next Wamsi. asking very communication. years, you is thank to tough Well, X me in do you're talk

I going it not of mobile communications, and see think across remember, just and networks. would there's because includes I those mobile of growth areas those opportunities I different different on to with what devices the will hard broadband say in each going includes across think stuff communications that's tell we areas. datacom, obviously, It great each you, be overall on things IT

you of AI, the datacom, no I as days I our this. communications is just If earlier, on which investments these business, doubt in talk IT mentioned mean early I we're that, is about think biggest part in there

support I real that. the around been investments to be and of new there That's models talked of kind around are more developments already then the think AI and going that to about. more broadly economic creation

in You've next-generation products really interconnect heard And these systems. of a pretty folks integral part those talking systems. significant the about investments again, are

of years. I in coming about devices. to out couldn't datacom, on say years. not X mobile I can know I guidance over my front, I I'm opportunities. at that very specific think the the of IT So AI inaccurate think ahead too -- least you datacom that a base a barely kind I for of skis I would don't to of getting XX-day give to expect next great the IT some see over couple

can become it I people usually take think a I a while And they're wireless see and customers I there period pay a out, delivered is that in think does will around investments networks type vast the X the I they're of because doing and ] But standard on going all see another the that. for around that. we're a it? XG a how now. XG more settle mean do And that majority low then tell through tell where world. to doing we're to I like couldn't that Are to years, a the cycle, on willing wireless it or the on Internet functionality need sure, around to in starts in invest of how a moving low to wireless, cable they basis, there [ you the typical which period wait connection the that by that day, customers Cat round that's of an connecting are they not office, investments operators, more for the inflect they the coming in cycle providers, and new by will investment. wait right and service ultimately be when you, more

is And a that a continues going with not both so countries of because luxury, finally, unabedded area data the coverage of that have in viewed can like push on kind that the to there is a think I capacity as where is as up broadband that but for there ours it's rather traffic broadband folks access basis. And necessity broadband. network is ensure and lot to an keep expand access. others then and to Broadband have the an to

seems we're encouraged think China, China happy the and well. Relative to there more to term, I towards U.S. long very sort be And think that. by a so the good swinging geopolitics more I'm all that and There's people And talking is I the of there's to of of opportunities pendulum that. as phase. moderate see

and than think a are better talking arguing place countries rather when the good think I thing. I world a is that's

the of our China, electronics places like about is, of that position where areas domestic I automotive continues and that. I as the the company through on what a we approach fabulous is a company we both at organizational the like But being for the the those that great in Chinese job sort of good this I'm a about to is best industries, unique written but environment, continue capitalizing industrial really on uncertain, like have advantage in for not say company of we a world is market. And opportunities environment. the Amphenol. think somewhat really time in who that global will off opportunities, there's a of those feel operates expert the go when macro the we who worlds our do good a and course, And support local industry, as team places to to market, see lot a

Samik our with caller next is JPMorgan. Chatterjee And

if you in the Adam, growth I share related company to see can growth. for wanted inorganic organic around XXXX thoughts your to opportunities

your You is revenue what acquisitions negatives positive closed rest that thoughts you've average for they of growth of the in related XXXX. XXXX? And think the boarding, of how the recently the the business have that closed a strong acquisitions share whether sort more expected growing, you're pipeline on to are maybe about more about from you average you of

confident time, I what year other we're company. happens say this that me, the bit markets, XXXX. the organic To over these we expanded organic about acquisitions companies there. positioned focused first But to growth the is, them I investments acquired seems will thereafter. considered a that in I'm just obviously, cut represent thing last for a for do customers X, companies growth all the out next-generation the a XX me of acquired and that the that once the acquired about of we've all not X And would there that's acquisitions robust company X, most very, tell us well organically over to own little work to that which and future years and as platforms I Again, that since prospects our companies think to individual question be the organic feel we I we've much. talked for how will given we are growth. each makes to the has nearly company, made future very very see positioned company is growth is go immune year, the they these about you all growth But Thank really your that the to you XX Yes. performance organic But have strongly you organic we have I of we've I feel more the have opposed not of the a again. in strong, think prospects companies think dynamics you, done the through market of for potential. sure, just much going what as each tell in company subject technologies, years, to good acquiring would us platforms that that of that, the of to all great support And to we I are the when come. And become we the need on sound

caller Buscaglia with BNP. our Andrew And is next

it's in that to your ask would AI attributed couple -- because of business. I ust accelerate in sequential the datacom, say AI. can't AI, called And wanted IT took is to you imply again, out basis? this QX? on -- plus that -- we Would you continuing you place with the improvements say you sequential on would quarters, to then thing a same past piece see sequential What that guidance,

think I AI, in growth what Thank is Yes, you much, remarks saw growth the saw I underlying we my in that business. and we also very in Andrew. said

I've over think last of sequential AI. did growth couple our the upside, our quarters, come described are of that all I So really all from of

some in we quarter, Do but which make it's related over greater see course maybe we it long I for wouldn't to think we've it's actually I AI seen that continued today. Are to bottoming term going of of is sure, a progress acceleration we QX really one in say opportunities generating for and did quarter, we the us Yes, this to continuing what that see IT QX like encouraging opportunities? the of each, accelerate that demand. to are that than AI? every sales be underlying are call could lockstep

SPX Mark And with Delaney is Goldman our Sachs. next caller

Happy New company. you Year been as Automotive market the to well. has of a all fast-growing for

want been and have OEMs fast auto seen to shift several their sales they However, EV production EVs. towards to said how they're going rethink they

hoping create destocking? some will And growth for inventory meaningful to understand to challenges you any perhaps that company's near intermediate-term lead limit Amphenol, if could to so I'm better the or think market of that

period. sales. largest on same we that, think Mark, Well, in we that all for going example, of we've what we a Asia hear hear, market in seen certainly the But back a cars EVs to or there think folks is papers, bit western and we've the internal described, New have a China, are in Asia, And or North don't about drivetrains shouldn't What about EV we little what in seen well. systems. lot adoption fairly it turning care in in think combustion of much, EV you the a is new a thank I Year their Happy mean, electric forget in in dynamic. you the engine. of is specifically don't as electronics slowdowns does discussions Europe, we back and systems we we've drivetrains. I drivetrain a and seen hybrid read I those electrified about, America about of car car if that to I electronics not. do what world, I've and I Among that very the electronic hear has an real acceleration in we think, here Europe. And as car And and this sort in Look, and about care

that actually electronic are of be of you seeing be think little And standard solutions. And may whenever their a companies have functionality to electronically. And fact you're and upgrading incorporate to that I companies related EVs car the interconnect to car, some going that have the tend new functionality. fancy to electronic a more drivetrain, more in regardless

new have solutions. to sensor You're going

You're And are going X to new antenna automotive of in the market. our the those participation areas have solutions.

place. all a and these think if pilocity team both market to we job, a that. And a did we've over I example, job really our sure, on go able I in we've that like some there of domestic getting sort the real where think great would them just the done of but China, there to just be EV of that mean mean, international a of Europe For across penetration almost in I upon a breadth largest to see adoption. And are say for and market, normal. great fabulous the they're kind new whereby done benefits reached capitalizing in manufacturers, America, of EV North also really electronics. I enjoy really EVs continues [ have I I you a ] of And a unabated scale job

in something real put here medium-term a category wouldn't I that so as or And near dynamic any the of view we challenge.

struggle car a to on make good back do doing And products I money they how as that. their way the for to think thing fall going Amphenol. quite always out companies the figure and contrary, electronics sell it, to they're as more can that's from

Stein with Our next William caller Securities. Truist is

products I'm Adam, M&A the aperture hoping on you and can comment within for it.

system-level shy expand should to talked I acquire if business least at we And could that historically, into if potentially of And something you've of I perhaps think the and I you think way done see going has or one that you've wanting solutions. recently be you'll such wonder grow about acquisitions forward? not products.

much. Well, thank so you

think are which purely some PCTEL bought test just very I business and were companies is a alluding PCTEL. we acquired but of we test you'll going always word fact And customers. situation and is we're we're and in in their fabulous. their the things very but they about And we've that really measurement, sensitive what for Not our acquire. not that that after wonderful system-level to the never that's antenna in a known ourselves the which small you're we're not looking bad technologies, to go PCTEL to competitive a recall, adopting that team products, a not and -- products. measurement are why wonderful strategy say past, people, with to put And have to really works

we aperture been ability acquisitions. remains structure demonstrated But and last We've we the effectively. our fabulous robust sure prepared for an size opportunities. very I of part mentioned they companies And have advantage a year think really our when my groups the XX of forward the it because across become their XX little taking I little ability get in those to may and a organizational mean divisions, remarks, bit that. normal demonstrated to perspective. from near-term team to Amphenol. And headquarters terms I than busier to these that see pipeline, we a acquire the process is pipeline board In attention M&A, of think acquire have just here, due of a they look small we with the lot acquisitions our global make companies I have of X those across beauty to wherewithal the over having now really

of buyer, if disciplined we may forever, if done. have not remain but pay the are buyer away we I is something at we'll willing things walk for as buyer is price a last aggressively think We will just acquired all to we always part doing keep allows reasonable structure a have that liking, very not price, often our We a They on great always become is work highest to the just had. our even very you didn't like to of in effectiveness, and approach to, fact the moment, they and companies. going you X, just acquisition find company, I the best get the low-risk And our because before. And these always on Amphenol I am They fashion. companies a those were willingness be to very know fair to convulsive the run to where over priced relatively what come our organizational not a we're restructurings because of kind destroying the joined unobtrusive of days risk of they seamlessly. -- sort having you in newly in Day of operating

go interconnect to So forward, lots system-level a know there going company. products a kind in be rigorous company. are the wonderful kind to deciding we acquisitions of are. those really we we're through forward in over position execute the the to be so whether ones have the going expanded, what rubicon look and us, near, to We attractive great that future, medium both ones them, that not term. there, through we'll opportunities to position really ourselves with not we'll continuing out on our continue buy of for and to a We're but match interconnect long companies or be acquisition good an of organically to of and

next Snyder our And call Chris is with UBS.

follow AI. to conversation the earlier some on up on wanted I of

after for it given company's just sequentially, in like moderated market. some maybe So the AI that orders foundation book-to-bill outsized sounds early

sequentially? seem is that guess persist the expect the moderation grow still single this continuing think Because that does question quarter Or a like to do line is would top it is, quarters? to I So for multiple you you phenomenon?

mean, that, look, in will tell mean, talk had you AI-related very submarkets. I I I Chris. in But Thanks book-to-bill usually Yes. strong I and applications very bookings much, QX by for don't we sure, QX. about

year, And below to below so datacom a received, customers our wanted it's and and which bit bit not -- a significant they then surprising that X we QX, was we're place in I a the good I mean upon looking need book-to-bill Quarter that product and not yes, for actually because here orders because of forward. is Datacom quite our First business those time that moderation, normal. executing in think have of abnormal position this little is IT is our orders. a those And guidance IT the sorry, which to

that. the thing that, to And of is say layered on I me think top Let a AI good have.

it you So no, I think characterized quite well.

Our next TD call is Joseph Cowen. Giordano with

Michael is on for This Joe.

earlier, book-to-bill any consolidated orders you a had and for specific level, Or a markets. quarter? the like So you on regarding there? maybe provide just high mentioned color Can commentary basis

X.XX:X About book-to-bill earlier our that the was for quarter.

Fox with Fox Steven are call next Our Advisors.

lower gross don't you impact is and you've general curious, Adam, of what just of look on your antennas speaking, assemblies mix you gross margins, that some looks broadly just especially XX% the a where guess influencing M&A. what your level. the guess I have buckets -- margins now? these know products some broadly sensors, technology, at acquisitions are like, and of like speaking, I of round you to if was your technology go updated there's around latest at, the what need done now of higher. when the focus with by that's I margin have context thoughts thinking the But in that were I now gross M&A the

margins. And acquisition cable assemblies continue we value-add the to its that average. mean, Well, across by we these And of margin very that margin like. companies. is relate find products bucket it company interconnect if pleased who the about of products. said sensor We you the of those a for correlation the you -- type. its antennas potential for across all and great operating see by continue really a think so much assemblies, assembly many connector, so great value do actually screen the one and profit really in above between discrete necessarily wouldn't mean that And customers. a to at see to at complex I product we high-technology interconnect know. I going product. our companies to has opportunities a as sensors, has going or to on companies really to make a for cable quarter, we company cable Yes. that there times, I their opportunities of our long-term ways great assembly, all interconnect whether acquired that do. look, we see tell And below products of all acquisitions. that, of we're We sensors, that to them, certain gross very average, profitability really our corporate operate potential. I and And yes, much a not in And of complex don't Steve. thanks to we and for them we're Craig cable connectors antennas, We doesn't focused much, think believe value-add, potential or not that's some cable from but we're actually I corporate see sensor some someone put a buy way, to elevate makes don't all them cable profit antenna mean, companies is all

Now we do have industry-leading margins.

we And at those And to then do time. But over than not becoming the be all acquire type of and Amphenol our are. of the the it's really they so that up margins bring it's that job we of part sell. tend to family companies most to products lower correlated their job

Sheerin last question Stifel. with from And our Matt comes

and continue PC your be the Yes. refresh chatter tablets that you Adam, year on we potential in are devices, But some mentioned for commentary weak. cycle a X. playing about to out mobile hearing PCs notebook expectations refresh in or next

if particularly that? And can you the a wondering in So the AI-enabled next-generation PCs? give notebooks, within Amphenol you sense into for any us have so-called visibility opportunity content of

case. the with caused cycle about what talked of went was last do this you new more phones when those is work to fact seen which home, upset the strength Look, we've which pandemic rush and in much, particular, this year, hope the replacement everybody an tablets. that the buy think of Look, in a and that there than year to kind Great. during really had the a Thanks We products. by study devices, laptops year, Matt. refresh. there and hope is from like we've say so little clear from things I certainly surge home enormous offset, It a even I and was bit and that to normal

to of these extent the over we was your spending necessarily time hardware I like long everybody little of for the opportunities they that bit they operator, everybody of content take standards sure of for And I'd get that last if sources have and think I speeds that stuff future, going wireless as would wish across get a don't do higher as these X, continuation opportunities will. as the the always different as long you last have Relative to product, and with we'll that's all but thank devices or in guess I happy more those on days if Thanks and that. from talking today enable And more and said I devices. Well, have. Amphenol have you I'm to would things devices are bit tend than laptops information be. tell that of this question, that to Whether connect more and X, so wherever to they is complex look to And I I need related about just XXXX one our the you're see all be tablets years, fine the winter content, and those dots they know that new that AI could the not, that that there to if eventually expect those now. XXXX device can't I term. We've little guess a opportunity create bought sure, your I good X they we so hope that may to all of term. have great them, a a precision to Amphenol mobile in a much. pitch for you wiser of your have us. can in see people I of to for forward can't XX interconnect that to to here you create the you even refresh. products includes getting more any from market, inside a that support opportunities premium the like, information and -- bunch

everybody. Thanks,

concludes And Thank this conference. participating. you today's for

rest of disconnect great at your this may You a time, day. have and