AMETEK Q1 Earnings Call Highlights

Key Points

• AMETEK reported an “excellent” Q1 with $1.93B in sales (up 11%), a record $2.2B of orders (up 23%) and a backlog of $3.87B, while margins expanded ~160 bps, EBITDA hit a record $620M and diluted EPS of $1.97 topped guidance (free cash flow conversion 107%).
• The company raised its full‑year outlook to sales up high single digits and adjusted EPS of $7.94–$8.14 (7%–10% growth), while maintaining a prudent margin assumption; AMETEK finished the quarter with a strong balance sheet (net debt/EBITDA ~0.7x) and increased its quarterly dividend by 10%.
• AMETEK agreed to acquire First Aviation Services (≈$80M revenue) to broaden defense MRO capabilities and cited broad end‑market strength—notably in defense (UAVs, missile defense, naval), aerospace and semiconductor equipment—while noting limited direct exposure to the Middle East (~2%).

AMETEK NYSE: AME reported what management called an “excellent” start to 2026, citing double-digit sales growth, record orders and backlog, expanding margins, and earnings that topped the company’s outlook. The company also announced a definitive agreement to acquire First Aviation Services, a defense and aviation MRO provider, in a deal aimed at broadening AMETEK’s defense aftermarket capabilities.

First-quarter results beat guidance as orders hit records

Chairman and CEO David Zapico said the first quarter was “highlighted by double-digit sales growth, exceptional orders growth, robust core margin expansion, record EBITDA, and a high quality of earnings that exceeded our expectations.”

AMETEK posted first-quarter sales of $1.93 billion, up 11% from the prior-year period, with organic sales up 5%. Zapico said acquisitions contributed 5 percentage points of sales growth, while foreign currency was a tailwind.

Orders rose sharply, reaching a record $2.2 billion, up 23% year over year. Organic orders increased 22%, which helped drive a record backlog of $3.87 billion.

Operating income increased 14% to $517 million. Operating margins were 26.8%, while core operating margins were 27.9%, up 160 basis points from the prior year. EBITDA rose 11% to a record $620 million, with EBITDA margin of 32.1%.

Diluted earnings per share were $1.97, up 13% and above AMETEK’s guidance range of $1.85 to $1.90 per share, Zapico said. Free cash flow conversion was 107% for the quarter, supported by what management described as strong operating performance and cash generation.

Segment performance: EIG order inflection, EMG margin expansion

Zapico pointed to strength in both operating groups. In the Electronic Instruments Group (EIG), first-quarter sales were $1.26 billion, up 11%, with organic sales up 2% and acquisitions adding 7 points. EIG organic orders increased 25%, which Zapico characterized as a “meaningful inflection” driven by broad-based growth across divisions and end markets, including defense, power, and semiconductors. EIG operating income rose 6% to $376 million, and core margins improved 40 basis points to 31.4%.

The Electromechanical Group (EMG) posted record sales of $664 million, up 13%, including 11% organic growth and a 2-point currency tailwind. Zapico said growth was broad-based across automation, engineered solutions, and aerospace and defense. EMG organic orders rose 16%, while operating income jumped 33% to $171 million. Core operating margins expanded to 26%, a 410-basis-point increase versus the prior year.

In response to analyst questions about whether large orders drove the quarter, Zapico said he did not see “much pull ahead at all,” adding that EIG’s improvement had been signaled previously as EMG strength typically leads EIG by six to nine months. CFO Dalip Puri also stressed the breadth of demand, saying order strength was broad-based and that “every sub-segment saw double-digit organic orders growth, and every division was up at least 5%.”

End-market commentary: defense strength, improving industrial backdrop, limited Middle East exposure

Management highlighted several end markets and program wins that contributed to strong orders. Zapico said the 22% organic orders growth reflected ongoing strength in aerospace and defense, continued growth in automation and engineered solutions, and an “inflection” in process instrumentation and power. He also cited several large orders aligned with defense, space, power, and semiconductor markets.

Within defense, Zapico said AMETEK is seeing strength across missile defense, UAVs, and naval applications, and noted the company was selected to provide technologies for three UAV programs—one in the U.S. and two with NATO allies—including ruggedized thermal management systems, power distribution equipment, sensors, and embedded computing applications. He also pointed to strength tied to nuclear submarines and said commercial nuclear demand in orders was also strong.

Zapico cited a sizable order at Kern Microtechnik to provide ultra-precision machining solutions and manufacturing services supporting RF components used in low Earth orbit satellites. He also pointed to an Abaco win in semiconductor capital equipment, describing demand tied to AI-driven needs for advanced tools, where Abaco’s computing technology is being used to control semiconductor manufacturing equipment.

On regional trends, Zapico told RBC Capital Markets that growth was balanced, with the U.S. and international markets both up mid-single digits and the strongest growth in Asia. He said Europe was up low single digits, and he cited about $15 million of “discrete orders” that did not ship during the quarter due to safety-related disruptions tied to the Middle East, though he said AMETEK had not seen cancellations from the region. Zapico reiterated that AMETEK’s sales exposure to the Middle East is about 2% and said the company does not expect a meaningful direct impact, though it is monitoring broader macro uncertainty and energy-market spillover effects.

Zapico also addressed medical exposure, telling Deutsche Bank that medical represents “a little over 20%” of AMETEK’s exposure. He said medical was up low double digits in the first quarter, led by Paragon, and that Reichert also had a strong quarter. For the full year, he said AMETEK expects mid-single-digit growth in medical due largely to tougher comparisons later in the year.

Acquisition: First Aviation Services to expand defense MRO

AMETEK announced a definitive agreement to acquire First Aviation Services, which Zapico described as “a leading provider of defense and aviation MRO services, as well as proprietary part design and manufacturing.” First Aviation is privately held, has six U.S.-based centers of excellence, and generates approximately $80 million in annual sales. The acquisition is subject to customer closing conditions, including regulatory approvals.

In Q&A, Zapico said AMETEK’s existing MRO operations are “largely commercial biased,” and the company sought to add more defense exposure. He said First Aviation is “primarily a defense business,” with roughly two-thirds of revenue from MRO service and one-third from proprietary parts, including PMA and DER-approved repairs. Zapico said the deal adds capability across rotorcraft and fixed-wing platforms and expands MRO coverage for systems including propeller blades, rotor assemblies, landing gear, and advanced electronics.

Zapico declined to comment on market rumors about other potential M&A, reiterating AMETEK’s policy not to address speculation while emphasizing that the acquisition pipeline includes “larger, medium, and small technology deals.” He also said AMETEK would not pursue a deal “the size of AMETEK” or “half the size of AMETEK,” describing its approach as continuing to focus on “bite-sized deals” and disciplined returns.

Guidance raised; margin outlook remains “prudent” amid uncertainty

AMETEK raised its full-year outlook following the first-quarter performance. Zapico said the company now expects 2026 sales to be up high single digits, with organic sales up mid-single digits. Full-year diluted EPS guidance was raised to $7.94 to $8.14, up from the prior range of $7.87 to $8.07, and representing expected growth of 7% to 10% versus last year’s results.

For the second quarter, AMETEK expects sales up high single digits and adjusted EPS of $1.96 to $2.00, up 10% to 12% from the prior year.

On margins, Zapico said first-quarter core margin expansion was driven by productivity, with companywide core margin up 160 basis points. He said incremental margins were above 50% in the quarter on both a reported and core basis, but the full-year outlook assumes 35% incrementals and roughly 50 basis points of core margin improvement. Zapico described the outlook as conservative, citing geopolitical uncertainty and potential inflationary pressures, while adding that AMETEK expects to offset inflation, “including tariffs,” with pricing.

CFO Dalip Puri said first-quarter free cash flow rose 8% year over year to $426 million, while operating cash flow increased 8% to $452 million. He said operating working capital improved to 17.5% from 18.1% a year earlier. AMETEK ended the quarter with $2.2 billion of total debt and $481 million in cash and cash equivalents, with gross debt-to-EBITDA of 0.9x and net debt-to-EBITDA of 0.7x. Puri reiterated the company has flexibility to deploy “well over $5 billion” while maintaining an investment-grade credit rating.

Puri also noted AMETEK increased its quarterly dividend 10% to $0.34 per share in February and said the company enhanced its financial reporting by adding gross margin disclosure and a related reconciliation to its Investor Relations website, reporting an adjusted gross margin of 51% for the quarter.

About AMETEK NYSE: AME

AMETEK, Inc is a global manufacturer of electronic instruments and electromechanical devices that serves a broad range of industries. Headquartered in Berwyn, Pennsylvania, the company designs and produces precision instruments, electronic measurement devices, specialty sensors, and electric motors and motion control systems. Its product portfolio includes analytical and monitoring instruments, calibration equipment, power supplies, embedded electronics, and industrial motors and drives used for critical applications.

The company operates through two primary business platforms — an electronic instruments group focused on analytical, test and measurement and sensor products, and an electromechanical group that supplies motors, actuators, and related power and motion solutions.

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