Amphenol NYSE: APH reported a record first quarter for 2026, with management citing strong demand across most served markets and continued momentum in IT data communications tied to artificial intelligence investments. Executives also discussed the financial impact of the CommScope acquisition, updates related to a China tax matter, and the company’s outlook for the second quarter.
Record sales, orders, and profitability in Q1
Craig A. Lampo, Amphenol’s EVP and CFO, said the company closed the first quarter with “record sales of $7.6 billion” and adjusted diluted earnings per share of $1.06. Lampo reported that Q1 sales rose 58% year over year in U.S. dollars (57% in local currencies) and grew 33% organically compared with Q1 2025. Sequentially, sales increased 18% in U.S. dollars and 4% organically.
Orders were also a record. Lampo said bookings totaled $9.435 billion, up 78% year over year and 12% sequentially, producing a book-to-bill ratio of 1.24-to-1. He said the book-to-bill was positive across all end markets in the quarter.
On profitability, Lampo said GAAP operating income was $1.8 billion and GAAP operating margin was 24%. The quarter included $249 million of acquisition-related costs, primarily tied to the CommScope acquisition, which closed at the beginning of January. Those costs included $179 million of non-cash amortization related to acquired backlog and inventory step-up, and a $70 million charge for external transaction costs. Excluding acquisition-related items, adjusted operating income was $2.1 billion and adjusted operating margin was 27.3%.
Lampo attributed the year-over-year margin expansion to “robust operating leverage on the significantly higher sales volumes,” which he said more than offset dilution from acquisitions. He said the slight sequential decline in adjusted operating margin reflected acquisition dilution, partially offset by operating leverage on higher organic sales volumes.
Segment results and cash generation
Lampo provided segment details versus Q1 2025:
- Communication Solutions: Sales of $4.5 billion, up 80% in U.S. dollars and 47% organically; segment operating margin of 30.6%.
- Harsh Environment Solutions: Sales of $1.7 billion, up 34% in U.S. dollars and 23% organically; segment operating margin of 28%.
- Interconnect and Sensor Systems: Sales of $1.4 billion, up 23% in U.S. dollars and 17% organically; segment operating margin of 20.2%.
The company generated operating cash flow of $1.1 billion, which Lampo said was 120% of net income. Free cash flow was $831 million, or 89% of net income. Lampo noted that Q1 is typically “somewhat softer” for cash generation and said the company still expects strong cash flow generation in 2026, with free cash flow conversion within its “typical range over time.”
Amphenol repurchased 1.3 million shares at an average price of approximately $140. Including the quarterly dividend, total capital returned to shareholders in Q1 was about $485 million, Lampo said.
At March 31, total debt was $18.7 billion and net debt was $14.2 billion. Total liquidity was $7.6 billion, including $4.6 billion of cash and short-term investments plus availability under credit facilities. Lampo said the company expects quarterly net interest expense of about $200 million for the remainder of 2026. EBITDA was $2.3 billion and the net leverage ratio was 1.6x at quarter-end.
China tax matter and adjusted results
Lampo said Amphenol’s GAAP effective tax rate was 42.7% and the adjusted effective tax rate was 27%, compared with 22.7% GAAP and 24.5% adjusted in Q1 2025.
He said the quarter included a $130 million tax accrual related to a previously disclosed tax matter in China, after the company received “unfavorable tax determinations from certain relevant tax authorities in China.” Lampo said this $130 million accrual, combined with a $300 million accrual recorded in Q4 2025, covers the full amount of tax payment notices received.
Lampo also said the company reassessed certain tax-related assumptions applied to prior period results not subject to the China inquiries, resulting in an additional $160 million adjustment to the tax provision recorded in Q1. He said both the $130 million accrual and the $160 million additional tax provision were excluded from the company’s adjusted tax rate and adjusted diluted EPS. Looking ahead, Lampo said the company expects its adjusted effective tax rate to remain at 27% for the remainder of 2026, citing the China matter and “continued shift in income to higher tax jurisdictions” amid high growth.
Market trends: AI-driven IT data comm strength and diversified demand
President and CEO R. Adam Norwitt said Q1 results exceeded the high end of guidance for both sales and adjusted diluted EPS. He highlighted broad-based order strength, calling out IT data comm, defense, commercial air, and industrial as notable contributors.
Norwitt emphasized that extraordinary AI investment and Amphenol’s share gains made IT data comm “just over 40% of our sales” in the quarter. He said the company remains committed to broadening its portfolio across markets and customers.
Norwitt detailed end-market performance and Q2 expectations:
- Defense (8% of sales): Sales up 44% in U.S. dollars and 25% organically year over year; up 2% sequentially. Norwitt said Q2 defense sales are expected to increase in the high single digits sequentially.
- Commercial air (4%): Sales up 22% in U.S. dollars and 20% organically; down 3% sequentially. He expects a slight further sequential moderation in Q2.
- Industrial (20%): Sales up 52% in U.S. dollars and 16% organically; up 29% sequentially driven by the addition of CommScope’s building connectivity business, with organic sequential growth of 6%. He expects high single-digit sequential growth in Q2.
- Automotive (11%): Sales up 7% in U.S. dollars and 2% organically, with strength in North America and Europe partially offset by softer Asia; down 7% sequentially. He expects modest sequential growth in Q2.
- Communications networks (12%): Sales up 91% in U.S. dollars driven by the additions of Andrew and CommScope; flat organically year over year. Sequential sales rose 57% due to CommScope; organic sales were flat sequentially. He expects Q2 sales to remain around Q1 levels.
- Mobile devices (4%): Sales up 2% in U.S. dollars and 1% organically; down 22% sequentially, which he said was better than expected. He expects a modest seasonal decline in Q2.
- IT data comm (41%): Sales up 99% in U.S. dollars and 81% organically; up 27% sequentially, with 16% organic sequential growth “virtually all” driven by AI-related products. Norwitt expects a further sequential increase in Q2 in the low-teens range.
On industrial subsegments, Norwitt told analysts the “vast majority” of internal industrial subsegments grew organically year over year, with strength cited in instrumentation, electrification, oil and gas, lighting, medical, heavy equipment, and factory automation. He cited “a little bit less performance” in areas such as “RMT” and marine.
CommScope integration, AI architectures, pricing, and Q2 outlook
Management repeatedly addressed how the CommScope acquisition expands Amphenol’s position in AI-related data center interconnect, including fiber capabilities. Responding to questions about co-packaged optics and evolving architectures, Norwitt said Amphenol is working across “current, next, and next generation” systems with customers “up and down the stack of the AI ecosystem,” and argued the company’s breadth across copper, power, and optics—plus execution—positions it well regardless of how architectures evolve.
On CommScope’s performance, Norwitt said the acquired business grew in Q1 “largely similar to the organic growth that we had across Amphenol,” which he said outperformed what the company expected when it signed the deal. He added that Amphenol continues to expect CommScope to deliver roughly $4.1 billion in sales for the year and $0.15 of earnings accretion. Asked about fiber supply constraints, he acknowledged “a lot of demand for fiber right now around the world,” while saying the team is doing “a fabulous job” meeting customer needs.
Lampo addressed margin drivers and the cost environment, saying execution, cost discipline, productivity efforts, and vendor work helped offset pressures. He said pricing is “a function of ultimately the value you bring to your customers,” and noted the company manages these decisions at the general manager level rather than centrally. On orders and lead times, Norwitt said he did not see anything “categorically,” while noting some customers have “opened up their order apertures” in connection with investments Amphenol is making.
For the second quarter, Norwitt said that assuming current market conditions and constant exchange rates, Amphenol expects sales of $8.1 billion to $8.2 billion and adjusted diluted EPS of $1.14 to $1.16. He said the outlook implies year-over-year growth of 43% to 45% in sales and 41% to 43% in adjusted EPS versus the prior-year second quarter.
About Amphenol NYSE: APH
Amphenol Corporation NYSE: APH is a leading global manufacturer of electronic and fiber optic connectors, interconnect systems, and related components. The company designs, engineers and produces a broad range of products including electrical connectors, cable assemblies, fiber optic solutions, sensors, antennas and electromechanical devices used to transfer power, signal and data across complex systems. Its product portfolio spans ruggedized connectors for harsh environments to high-speed solutions for data centers and telecommunications networks.
Amphenol serves a diverse set of end markets, including automotive, broadband and telecom, data communications, mobile devices, industrial, energy, and military/aerospace.
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