AMETEK Q4 Earnings Call Highlights

Key Points

• Record results: AMETEK reported record Q4 sales of $2.0 billion (up 13%), orders of $2.0 billion (up 18%) and a backlog of $3.58 billion, with Q4 diluted EPS of $2.01 and quarterly free cash flow of $527 million; full-year 2025 sales were $7.4 billion with EPS $7.43 and FCF $1.7 billion.
• 2026 guidance and margins: Management expects mid- to high-single-digit sales growth and EPS of $7.87–$8.07 (up 6–9%), with Q1 sales ~10% and EPS $1.90–$1.95, and plans modest margin expansion (~30 basis points) while using pricing to offset inflation and tariffs.
• Active M&A and capital deployment: AMETEK completed ~$1 billion of 2025 acquisitions (including FARO and Kern) adding about $400 million of annual sales, announced smaller LKC med‑tech buy, deployed >$1.8 billion in acquisitions/repurchases/dividends, and expects FARO integration to materially lift margins and deliver ~10% ROIC by year three.

AMETEK NYSE: AME executives highlighted record quarterly and annual results in the company’s fourth-quarter 2025 earnings call, pointing to double-digit growth in sales, orders, and operating profit during the period, alongside a record backlog and continued acquisition activity. Management also introduced 2026 guidance calling for mid- to high-single-digit sales growth and diluted earnings per share of $7.87 to $8.07.

Fourth-quarter results set new records

Chairman and CEO Dave Zapico said AMETEK posted records in the fourth quarter for sales, orders, operating income, EBITDA, diluted EPS, operating cash flow, free cash flow, and backlog. Fourth-quarter sales were a record $2.0 billion, up 13% year over year. Organic sales increased 5%, acquisitions contributed 7 percentage points, and foreign currency added 1 point.

Orders rose 18% to a record $2.0 billion, with organic orders up 7%, resulting in a record backlog of $3.58 billion. Zapico noted sales and order growth improved as 2025 progressed, with the strongest growth in the fourth quarter.

Operating income was a record $523 million, up 12%, with operating margins of 26.2%. Core operating margins were 27.6%, up 100 basis points. EBITDA was a record $618 million, up 10%, with EBITDA margins of 30.9%.

AMETEK generated record free cash flow of $527 million in the quarter, up 6%, with free cash flow conversion of 132% of net income. Diluted EPS was a record $2.01, up 7% and above the company’s guidance range of $1.90 to $1.95. Zapico added that adjusting for an “abnormally low” tax rate in the prior-year quarter would have resulted in 11% EPS growth.

Segment performance: EMG outpaces, EIG shows improvement

On a segment basis, the Electronic Instruments Group (EIG) reported fourth-quarter sales of $1.37 billion, up 13%. Organic sales increased 2%, acquisitions added 10 points, and foreign currency added 1 point. EIG operating income was a record $413.7 million, up 7%, with core operating margins of 32.3%, up 50 basis points. Zapico said the company was encouraged by EIG’s organic growth and “steady improvement” throughout 2025.

The Electromechanical Group (EMG) posted fourth-quarter sales of $629 million, up 15%, including 14% organic growth and a 1-point currency tailwind. Zapico said growth was broad-based, with each EMG division delivering double-digit organic growth. EMG operating income increased 28% to $142.5 million, and operating margins rose 240 basis points to 22.7%.

In the Q&A, management said EMG’s strong quarter did not reflect a one-time factor, citing double-digit growth across divisions and noting the company’s 2026 outlook included tougher comparisons and a “prudent” posture early in the year.

Full-year 2025: higher earnings, strong cash flow, capital deployment

For full-year 2025, AMETEK reported record annual sales of $7.4 billion, up 7%, and operating income of $1.94 billion, also up 7%. Operating margin was 26.2%, up 10 basis points, while core margins increased 80 basis points. EBITDA reached $2.33 billion, up 7%, with a 31.5% margin. Full-year diluted EPS was $7.43, up 9%.

Chief Financial Officer Dalip Puri said full-year free cash flow was $1.7 billion, with conversion of 113% of net income. He added that operating working capital ended the quarter at 16.5% of sales, a 30-basis-point improvement from the prior-year quarter.

Puri also detailed capital deployment and balance sheet metrics:

• 2025 acquisitions included FARO Technologies and Kern Microtechnik for about $1 billion, adding approximately $400 million in annual sales, according to Zapico.
• Share repurchases totaled about $285 million in the quarter and $443 million for the year.
• Year-end total debt was $2.3 billion (up $200 million due to the FARO acquisition), offset by $458 million in cash and cash equivalents.
• Gross debt-to-EBITDA was 1.0x and net debt-to-EBITDA was 0.8x at year-end, essentially unchanged from the prior year.

Puri said AMETEK deployed over $1.8 billion in 2025 across acquisitions, repurchases, and dividends while maintaining a “conservative” balance sheet.

Acquisition update: LKC deal and FARO integration

AMETEK announced the acquisition of LKC Technologies during the call. Zapico described LKC as a provider of technologies to diagnose and manage ophthalmic conditions, including tools designed to detect early signs of diabetic retinopathy and other eye conditions that can lead to vision loss. He said LKC broadens the company’s med tech exposure and complements AMETEK’s Reichert business within its Ultra Precision Technologies platform.

Management did not disclose deal terms, describing it as a smaller “technology deal.” Zapico said the business is headquartered in Germantown, Maryland, with about 60 employees, and that nearly 40% of sales are recurring revenue from tests and sensor strips. He also characterized the underlying testing approach as a portable alternative to historically larger and more expensive equipment.

On FARO, Zapico said the acquisition remains on plan. He reiterated expectations that cost synergies, elimination of public company costs, and integration into AMETEK’s infrastructure could lift FARO’s EBITDA margins from the mid-teens to about 30% over time, and that AMETEK expects to achieve a 10% return on invested capital by year three. Zapico noted restructuring actions and organizational work underway, including forming two business units, and referenced one-time charges of about $17.6 million.

2026 outlook: modest organic growth, continued margin focus

For 2026, Zapico guided for total sales growth in the mid- to high-single-digit range, with organic sales up low- to mid-single digits. Full-year diluted EPS is expected to be $7.87 to $8.07, up 6% to 9% from 2025. For the first quarter, AMETEK expects sales to rise about 10% and adjusted EPS of $1.90 to $1.95, also up 6% to 9%.

Management said it expects to offset inflation and “existing known tariffs” through pricing in 2026, after reporting a positive price-cost spread in the fourth quarter. Zapico added that pricing “is not going backwards” given the company’s differentiated, mission-critical products.

On margins, Zapico said AMETEK’s core operating margins rose 100 basis points in the fourth quarter, with core incrementals of 45%. For 2026, he said the company is planning for 30 basis points of margin expansion and about 35% reported incremental margins, describing the outlook as conservative. In response to questions about first-quarter margin dynamics, management pointed to the dilutive effect of lower-margin acquisitions such as FARO, while saying core margins are expected to expand.

Looking at end markets, Zapico said aerospace and defense delivered low double-digit overall and organic sales growth in the quarter and is expected to post high-single-digit organic growth in 2026. He cited power demand tied to grid modernization and data center build-outs, and said automation and engineered solutions grew low double digits organically in the quarter, with Paragon Medical delivering the strongest growth. Zapico also addressed regional performance, stating U.S. and international sales were up mid-single digits, Europe grew low single digits, and Asia was up 10%, with China up low double digits.

Zapico said AMETEK entered 2026 with a record backlog and “solid momentum,” while emphasizing a strong acquisition pipeline and what he described as the ability to deploy more than $5 billion while maintaining an investment-grade rating.

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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