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Item 2. Management’s Discussion and Analysis

2025-04-25 compared with 2024-10-25 · 145 added, 210 removed, 223 unchanged (61% of the section changed)

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(amounts in millions, except share and per share data, unless otherwise noted)

The following discussion and analysis of the financial condition and results of operations for the three and nine months ended September 30, 2024 and 2023 has been derived from and should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included in Part I, Item 1 herein for Amphenol Corporation (together with its subsidiaries, “Amphenol,” the “Company,” “we,” “our” or “us”).

The following discussion and analysis of the financial condition and results of operations for the three months ended March 31, 2025 and 2024 has been derived from and should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included in Part I, Item 1 herein for Amphenol Corporation (together with its subsidiaries, “Amphenol,” the “Company,” “we,” “our” or “us”).

The following discussion and analysis should also be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual Report”).

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The shares of Common Stock retain a par value of $0.001 per share.

All current and prior year data impacted by the stock split and presented in this Item 2 and throughout this Form 10-Q herein, including number of shares and per share information, earnings per share, and dividends per share amounts, among others, have been retroactively adjusted to reflect the effect of the stock split.

Prior year data impacted by the stock split and presented in this Item 2 and throughout this Form 10-Q herein, including number of shares and per share information, earnings per share, and dividends per share amounts, among others, have been retroactively adjusted to reflect the effect of the stock split.

Refer to Note 1 of the accompanying Notes to Condensed Consolidated Financial Statements for further information related to the stock split.

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political, economic, military and other risks related to operating in countries outside the United States, as well as changes in general economic conditions, geopolitical conditions, U.S.

trade policies (including, but not limited to, sanctions) and other factors beyond the Company’s control;

and other countries’ trade policies, export control laws, sanctions, legislation, treaties and tariffs and other factors beyond the Company’s control;

uncertainties associated with an economic slowdown or recession in any of the Company’s end markets that could negatively affect the financial condition of our customers and could result in reduced demand;

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risks associated with our inability to obtain certain raw materials and components, as well as the increasing cost of certain of the Company’s raw materials and components;

cybersecurity threats and techniques used to disrupt operations and gain unauthorized access to our information technology systems, including, but not limited to, malware, social engineering/phishing, credential harvesting, ransomware, malfeasance by insiders, human or technological error and other increasingly sophisticated attacks, that continue to expand and evolve, including through the use of artificial intelligence and machine learning, which could, among other things, impair our information technology systems and disrupt business operations, result in reputational damage that may cause the loss of existing or future customers, loss of our intellectual property, the loss of or inability to access confidential information and critical business, financial or other data, and/or cause the release of highly sensitive confidential or personal information, and potentially lead to litigation and/or governmental investigations, fines and other penalties, among other risks, and risks and impacts associated with an increasingly demanding regulatory environment surrounding information security and privacy, including additional fines, penalties and costs;

negative impacts caused by extreme weather conditions and natural catastrophic events, including those caused or intensified by climate change and global warming;

risks associated with the increasing scrutiny and expectations regarding environmental, social and corporate governance matters that could result in additional costs or risks or otherwise adversely impact our business;

risks associated with the improper conduct by any of our employees, customers, suppliers, distributors or any other business partners which could impair our business reputation and financial results and could result in our non-compliance with anti-corruption laws and regulations of the U.S.

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risks and difficulties in trying to compete successfully on the basis of technology innovation, product quality and performance, price, customer service and delivery time;

the Company’s dependence on end market dynamics to sell its products, particularly in the communications, automotive and defense end markets, pricing pressures resulting from large customers that regularly exert pressure on their suppliers, including the Company, and changes in defense expenditures of the U.S.

governments, which are subject to political and budgetary fluctuations and constraints, all of which could adversely affect its operating results;

the Company’s dependence on end market dynamics to sell its products, particularly certain end markets that are subject to cyclical and at times rapid periods of reduced demand;

difficulties and unanticipated expenses in connection with purchasing and integrating newly acquired businesses, including the potential for the impairment of goodwill and other intangible assets;

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litigation, customer claims, voluntary or forced product recalls, governmental investigations, criminal liability or environmental matters including changes to laws and regulations to which the Company may be subject;

and incremental costs, risks and regulations associated with efforts to combat the negative effects of climate change.

incremental costs, risks and regulations associated with efforts to combat the negative effects of climate change;

and risks associated with the increasing scrutiny and expectations regarding environmental, social and corporate governance matters that could result in additional costs or risk or otherwise adversely impact our business.

A further description of these uncertainties and other risks can be found in the 2024 Annual Report, Quarterly Reports on Form 10-Q and the Company’s other reports filed with the Securities and Exchange Commission.

These or other uncertainties not identified in these documents (that we either currently do not expect to have an adverse effect on our business or that we are unable to predict or identify at this time) may cause the Company’s actual future results to be materially different from those expressed in any forward-looking statements.

other uncertainties not identified in these documents (that we either currently do not expect to have an adverse effect on our business or that we are unable to predict or identify at this time) may cause the Company’s actual future results to be materially different from those expressed in any forward-looking statements.

Our forward-looking statements may also be impacted by, among other things, future tax, regulatory and other legal changes that may arise in any of the jurisdictions in which we operate.

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The Company aligns its businesses into the following three reportable business segments :

● Harsh Environment Solutions – the Harsh Environment Solutions segment designs, manufactures and markets a broad range of ruggedized interconnect products, including connectors and interconnect systems, printed circuits and printed circuit assemblies and other products for use in the industrial, defense, commercial aerospace, automotive, mobile networks and information technology and data communications end markets.

● Communications Solutions – the Communications Solutions segment designs, manufactures and markets a broad range of connector and interconnect systems, including high speed, radio frequency, power, fiber optic and other products, together with antennas, for use in the information technology and data communications, mobile devices, industrial, mobile networks, broadband communications, automotive, commercial aerospace and defense end markets.

● Interconnect and Sensor Systems – the Interconnect and Sensor Systems segment designs, manufactures and markets a broad range of sensors, sensor-based systems, connectors and value-add interconnect systems used in the automotive, industrial, information technology and data communications, mobile networks, defense and commercial aerospace end markets.

● Harsh Environment Solutions – the Harsh Environment Solutions segment designs, manufactures and markets a broad range of ruggedized interconnect products, including connectors and interconnect systems, specialty cable, printed circuits and printed circuit assemblies and other products for use in the industrial, defense, commercial aerospace, automotive, communications networks and information technology and data communications end markets.

● Communications Solutions – the Communications Solutions segment designs, manufactures and markets a broad range of connector and interconnect systems, including high speed, radio frequency, power, fiber optic and other products, coaxial and high-speed cable, as well as antennas, for use in the information technology and data communications, mobile devices, industrial, communications networks, automotive, commercial aerospace and defense end markets.

● Interconnect and Sensor Systems – the Interconnect and Sensor Systems segment designs, manufactures and markets a broad range of sensors, sensor-based systems, connectors and value-add interconnect systems used in the automotive, industrial, information technology and data communications, communications networks, defense and commercial aerospace end markets.

Refer to Note 13 o f the Notes to Condensed Consolidated Financial Statements, as well as the 2024 Annual Report, for further details related to the Company’s reportable business segments.

Inflation Reduction Act of 2022

On August 16, 2022, the President of the United States signed into law the Inflation Reduction Act of 2022 (the “IRA”), a tax and spending package that introduces several tax-related provisions, including a 15% corporate alternative minimum tax (“CAMT”) on certain large corporations and a 1% excise tax on certain corporate stock repurchases.

Companies are required to reassess their valuation allowances for certain affected deferred tax assets in the period of enactment but do not need to remeasure deferred tax balances for the related tax accounting implications of the CAMT.

The IRA provisions, which became effective for Amphenol beginning on January 1, 2023, did not have a material impact on the Company during the three and nine months ended September 30, 2024 and 2023.

While the full impact of these provisions in the future depends on several factors, including interpretive regulatory guidance, which has not yet been released, the Company does not currently believe that the provisions of the IRA, including several other non-tax related provisions, will have a material impact on its financial condition, results of operations, liquidity and cash flows.

Pillar Two Framework

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The European Union (“EU”) member states have agreed to adopt these rules in two stages.

The first component became effective on January 1, 2024, and the second component will become effective January 1, 2025.

The first component became effective on January 1, 2024, and the second component became effective January 1, 2025.

Non-EU countries have enacted or are expected to enact legislation on a similar timeline.

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The Company has done a preliminary review of currently enacted legislation.

The initial implementation did not have a material impact on the Company’s condensed consolidated financial statements during the three and nine months ended September 30, 2024, and it is not currently expected to have a material impact on the Company’s operations, financial condition or cash flows in the future.

The implementation did not have a material impact on the Company’s condensed consolidated financial statements during the three months ended March 31, 2025, and it is not currently expected to have a material impact on the Company’s operations, financial condition or cash flows in the future.

However, the Company will continue to evaluate the potential impact of Pillar Two on the Company and its results as additional countries adopt legislation and issue individual guidance on their enacted legislation.

Results of Operations

Three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023

Net sales were $4,038.8 in the third quarter of 2024 compared to $3,199.2 in the third quarter of 2023, representing an increase of 26% in U.S.

dollars, 26% in constant currencies and 15% organically (excluding both currency and acquisition impacts), compared to the prior year period.

The increase in net sales in the third quarter of 2024 was primarily driven by strong organic growth in the Communications Solutions segment and moderate organic growth in the Interconnect and Sensor Systems segment and Harsh Environment Solutions segment, along with contributions from the Company’s acquisition program, as described below.

From an end market standpoint, the increase in net sales in the third quarter of 2024 relative to the prior year period was driven by strong organic growth in the information technology and data communications (“IT datacom”), mobile devices, mobile networks and commercial aerospace markets and moderate growth in the defense market, along with contributions from the Company’s acquisition program, partially offset by an organic decline in the broadband communications market.

Net sales were $10,904.9 in the first nine months of 2024 compared to $9,227.2 in the first nine months of 2023, representing an increase of 18% in U.S.

Three months ended March 31, 2025 compared to the three months ended March 31, 2024

Net sales were $4,811.0 in the first quarter of 2025 compared to $3,256.3 in the first quarter of 2024, representing an increase of 48% in U.S.

dollars, 49% in constant currencies and 33% organically (excluding both currency and acquisition impacts), compared to the prior year period.

The increase in net sales in the first nine months of 2024 was primarily driven by strong organic growth in the Communications Solutions segment and moderate organic growth in the Interconnect and Sensor Systems segment and Harsh Environment Solutions segment, along with contributions from the Company’s acquisition program, as described below.

From an end market standpoint, the increase in net sales in the first nine months of 2024 relative to the prior year period was driven by strong organic growth in the IT datacom, defense and commercial aerospace markets and moderate growth in the automotive and mobile devices markets, along with contributions from the Company’s acquisition program, partially offset by organic declines in the industrial and broadband communications markets.

Net sales in the Harsh Environment Solutions segment (approximately 29% of net sales) in the third quarter of 2024 increased 35% in U.S.

dollars, 34% in constant currencies and 3% organically, compared to the third quarter of 2023.

The increase in the third quarter of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the IT datacom, commercial aerospace and mobile networks markets and moderate growth in the defense market, partially offset by organic declines in the automotive and industrial markets.

Net sales in the Harsh Environment Solutions segment (approximately 29% of net sales) in the first nine months of 2024 increased 20% in U.S.

dollars, 20% in constant currencies and 2% organically, compared to the prior year period.

The increase in the first nine months of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the defense, commercial aerospace and IT datacom markets, partially offset by organic declines in the industrial, automotive and mobile networks markets.

Net sales in the Communications Solutions segment (approximately 42% of net sales) in the third quarter of 2024 increased 32% in U.S.

dollars, 32% in constant currencies and 30% organically, compared to the third quarter of 2023.

The increase in the third quarter of 2024 was primarily driven by strong organic growth in the IT datacom, mobile devices, automotive, industrial and mobile networks markets, along with modest contributions from the Company’s acquisition program, partially offset by an organic decline in the broadband communications market.

Net sales in the Communications Solutions segment (approximately 40% of net sales) in the first nine months of 2024 increased 23% in U.S.

dollars, 24% in constant currencies and 22% organically, compared to the prior year period.

The increase in the first nine months of 2024 was primarily driven by strong organic growth in the IT datacom, automotive and mobile devices markets and moderate growth in the industrial and mobile networks markets, along with modest contributions from the Company’s acquisition program, partially offset by an organic decline in the broadband communications market.

Net sales in the Interconnect and Sensor Systems segment (approximately 29% of net sales) in the third quarter of 2024 increased 12% in U.S.

dollars, 12% in constant currencies and 6% organically, compared to the third quarter of 2023.

T he increase in the third quarter of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the IT datacom market and moderate growth in the mobile networks market, partially offset by organic declines in the industrial and defense markets.

Net sales in the Interconnect and Sensor Systems segment (approximately 31% of net sales) in the first nine months of 2024 increased 11% in U.S.

dollars, 11% in constant currencies and 5% organically, compared to the prior year period.

T he increase in the first nine months of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the IT datacom market and moderate growth in the automotive market, partially offset by organic declines in the industrial, defense and mobile networks markets.

The increase in net sales in the first quarter of 2025 was primarily driven by strong organic growth in the Communications Solutions segment and moderate organic growth in the Harsh Environment Solutions and Interconnect and Sensor Systems segments, along with contributions from the Company’s acquisition program, as described below.

From an end market standpoint, the increase in net sales in the first quarter of 2025 relative to the prior year period was driven by strong organic growth in the information technology and data communications (“IT datacom”), mobile devices, defense and communications networks markets, and moderate organic growth in the industrial market, along with contributions from the Company’s acquisition program.

Net sales in the Harsh Environment Solutions segment (approximately 26% of net sales) in the first quarter of 2025 increased 38% in U.S.

dollars, 39% in constant currencies and 8% organically, compared to the first quarter of 2024.

The increase in the first quarter of 2025 was primarily driven by strong organic growth in the defense, industrial and communications networks markets, as well as the IT datacom market with particular strength in artificial intelligence (“AI”) related applications, along with contributions from the Company’s acquisition program, partially offset by organic declines in the commercial aerospace and automotive markets.

Net sales in the Communications Solutions segment (approximately 50% of net sales) in the first quarter of 2025 increased 91% in U.S.

dollars, 91% in constant currencies and 73% organically, compared to the first quarter of 2024.

The increase in the first quarter of 2025 was primarily driven by strong organic growth in the IT datacom market with particular strength in AI related applications, as well as strong organic growth in the mobile devices, automotive and industrial markets and moderate growth in the communications networks market, along with contributions from the Company’s acquisition program.

Net sales in the Interconnect and Sensor Systems segment (approximately 24% of net sales) in the first quarter of 2025 increased 5% in U.S.

dollars, 6% in constant currencies and 6% organically, compared to the first quarter of 2024.

T he increase in the first quarter of 2025 was primarily driven by strong organic growth in the IT datacom market with particular strength in AI related applications, partially offset by a slight organic decline in the industrial and automotive markets.

The table below reconciles Constant Currency Net Sales Growth and Organic Net Sales Growth to the most directly comparable U.S.

GAAP financial measures, by segment, geography and consolidated, for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

GAAP financial measures, by segment, geography and consolidated, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

Percentage Growth (relative to same prior year period) (1)

Sales Growth (4)

Three Months Ended September 30,

Net sales by:

Harsh Environment Solutions

Communications Solutions

Interconnect and Sensor Systems

Geography (6) :

United States

Nine Months Ended September 30,

Three Months Ended March 31,

Net sales by:

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(6) Net sales by geographic area are based on the customer location to which the product is shipped.

The comparatively weaker U.S.

dollar for the third quarter of 2024 had the effect of increasing sales by approximately $9.2 for such period, relative to the comparable period in 2023.

The comparatively stronger U.S.

dollar for the first nine months of 2024 had the effect of decreasing sales by approximately $34.9 for such period, relative to the comparable period in 2023.

Selling, general and administrative expenses were $492.0, or 12.2% of net sales, and $1,340.4, or 12.3% of net sales, for the third quarter and first nine months of 2024, respectively, compared to $381.6, or 11.9% of net sales, and $1,095.7, or 11.9% of net sales, for the third quarter and first nine months of 2023, respectively.

The increases in selling, general and administrative expenses as a percentage of net sales in the third quarter and first nine months of 2024 were primarily driven by the effect of acquisitions, which currently have higher selling, general and administrative expenses as a percentage of net sales compared to the Company average.

Administrative expenses represented approximately 5.0% and 4.9% of net sales for the third quarter and first nine months of 2024, respectively, and represented approximately 4.9% and 4.8% of net sales for the third quarter and first nine months of 2023, respectively.

Research and development expenses represented approximately 3.1% and 3.0% of net sales for the third quarter and first nine months of 2024, respectively, and represented approximately 2.7% of net sales for both the third quarter and first nine months of 2023.

Selling and marketing expenses represented approximately 4.1% and 4.3% of net sales for the third quarter and first nine months of 2024, respectively, and represented approximately 4.3% of net sales for both the third quarter and first nine months of 2023.

Operating income was $819.5, or 20.3% of net sales, and $2,203.2, or 20.2% of net sales, for the third quarter and first nine months of 2024, respectively, compared to $657.9, or 20.6% of net sales, and $1,869.6, or 20.3% of net sales, for the third quarter and first nine months of 2023, respectively.

Operating income for the third quarter and the first nine months of 2024 includes $63.6 and $133.6, respectively, of acquisition-related expenses, comprised primarily of (i) the amortization related to the value associated with acquired backlog resulting from the Carlisle Interconnect Technologies (“CIT”) acquisition and external transaction costs associated with acquisitions (such acquisition-related expenses aggregating $45.4 and $115.4, respectively, are presented separately in the Condensed Consolidated Statements of Income) and (ii) the amortization of acquisition-related inventory step-up costs in the third quarter of 2024 of $18.2 associated with the CIT acquisition (such costs are recorded in Cost of sales in the Condensed Consolidated Statements of Income) .

Operating income for the third quarter of 2023 included $9.0 of acquisition-related expenses, comprised of external transaction costs related to acquisitions.

Operating income for the first nine months of 2023 included $18.4 of acquisition-related expenses, comprised of external transaction costs incurred in the second and third quarters of 2023, as well as the amortization related to the value associated with acquired backlog resulting from an acquisition that closed in the first quarter of 2023.

Acquisition-related expenses during the three and nine months ended September 30, 2023 are presented separately in the Condensed Consolidated Statements of Income.

For the three and nine months ended September 30, 2024, the acquisition-related expenses had the effect of decreasing net income by $49.8, or $0.04 per share, and $109.7, or $0.09 per share, respectively, while for the three and nine months ended September 30, 2023, the acquisition-related expenses had the effect of decreasing net income by $8.4, or $0.01 per share, and $16.2, or $0.01 per share, respectively, as shown in the tables below.

Excluding the effect of these acquisition-related expenses, Adjusted Operating Income and Adjusted Operating Margin, each as defined in the “Non-GAAP Financial Measures” section below, were $883.1, or 21.9% of net sales, and $666.9, or 20.8% of net sales, for the three months ended September 30, 2024 and 2023, respectively.

Excluding the effect of these acquisition-related expenses, Adjusted Operating Income and Adjusted Operating Margin were $2,336.8, or 21.4% of net sales, and $1,888.0, or 20.5% of net sales, for the nine months ended September 30, 2024 and 2023, respectively.

The increases in Adjusted Operating Income and Adjusted Operating Margin for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by strong operating performance on the higher sales volumes, partially offset by the negative impact on operating margin related to acquisitions completed within the prior twelve months that are currently operating below the average operating margin of the Company.

Operating income for the Harsh Environment Solutions segment for the third quarter and first nine months of 2024 was $283.7, or 23.8% of net sales, and $787.8, or 25.0% of net sales, respectively, compared to $239.1, or 26.9% of net sales, and $705.7, or 26.8% of net sales, for the third quarter and first nine months of 2023, respectively.

The decreases in operating margin for the Harsh Environment Solutions segment for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by the negative impact on operating margin related to acquisitions completed within the prior twelve months, particularly the CIT acquisition, that are currently operating below the average operating margin of the Company.

Operating income for the Communications Solutions segment for the third quarter and first nine months of 2024 was $431.0, or 25.6% of net sales, and $1,067.7, or 24.3% of net sales, respectively, compared to $283.3, or 22.1% of net sales, and $752.4, or 21.1% of net sales, for the third quarter and first nine months of 2023, respectively.

The increases in operating margin for the Communications Solutions segment for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by strong operating performance on the higher sales volumes.

Operating income for the Interconnect and Sensor Systems segment for the third quarter and first nine months of 2024 was $217.6, or 18.8% of net sales, and $616.3, or 18.4% of net sales, respectively, compared to $188.9, or 18.3% of net sales, and $553.6, or 18.3% of net sales, for the third quarter and first nine months of 2023, respectively.

The modest increases in operating margin for the Interconnect and Sensor Systems segment for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by strong operating performance on the higher sales volumes, partially offset by the negative impact on operating margin related to acquisitions completed within the prior twelve months that are currently operating below the average operating margin of the Company.

Interest expense for the third quarter and first nine months of 2024 was $55.7 and $150.1, respectively, compared to $33.6 and $104.5 for the third quarter and first nine months of 2023, respectively.

The increases in interest expense for both the third quarter and first nine months of 2024 were driven by higher average borrowing levels, primarily intended to fully or partially fund acquisitions, including the CIT acquisition, along with the higher interest rate environment.

Provision for income taxes for the third quarter and first nine months of 2024 was at an effective tax rate of 21.4% and 19.6%, respectively.

Provision for income taxes for the third quarter and first nine months of 2023 was at an effective tax rate of 18.2% and 20.3%, respectively.

Various items incurred in the third quarter and first nine months of 2024 and 2023 had an impact on the Company’s effective tax rate and earnings per share , which impacted the effective tax rate and earnings per share by the amounts noted in the tables below.

For the third quarter and first nine months of 2024 and 2023, these items included excess tax benefits resulting from stock option exercise activity, along with the tax effect of the aforementioned acquisition-related expenses incurred during each period.

In addition, for the first nine months of 2024, the effective tax rate was further impacted by a discrete tax benefit related to the settlement of tax audits and associated lapses of statutes of limitation, along with a difference in a non-U.S.

dollar for the first quarter of 2025 had the effect of decreasing sales by approximately $28.1 for such period, relative to the comparable period in 2024.

Selling, general and administrative expenses (“SG&A”) were $575.2, or 12.0% of net sales for the first quarter of 2025, compared to $404.2, or 12.4% of net sales for the first quarter of 2024.

Approximately half of the increase in SG&A expenses compared to the first quarter of 2024 related to acquisitions closed in the prior 12 months.

Administrative expenses represented approximately 4.8% of net sales for the first quarter of 2025, and represented approximately 4.8% of net sales for the first quarter of 2024.

Research and development expenses represented approximately 2.9% of net sales for the first quarter of 2025, and represented approximately 3.0% of net sales for the first quarter of 2024.

Selling and marketing expenses represented approximately 4.3% of net sales for the first quarter of 2025, and represented approximately 4.6% of net sales for the first quarter of 2024.

Operating income was $1,024.8, or 21.3% of net sales, for the first quarter of 2025, compared to $684.8, or 21.0% of net sales, for the first quarter of 2024.

Operating income for the first quarter of 2025 includes $104.9 of acquisition-related expenses, comprised primarily of (i) the amortization related to the value associated with acquired backlog resulting from the acquisition of the Andrew Business and external transaction costs associated with acquisitions (such acquisition-related expenses aggregating $44.0 are presented separately in the Condensed Consolidated Statements of Income) and (ii) the amortization of acquisition-related inventory step-up costs of $60.9 associated with the acquisition of the Andrew Business (such costs are recorded in Cost of sales in the Condensed Consolidated Statements of Income).

For the three months ended March 31, 2025, the acquisition-related expenses had the effect of decreasing net income by $82.1, or $0.06 per share, as shown in the table below.

Excluding the effect of these acquisition-related expenses, Adjusted Operating Income and Adjusted Operating Margin, each as defined in the “Non-GAAP Financial

Measures” section below, were $1,129.7, or 23.5% of net sales, for the three months ended March 31, 2025, and $684.8 or 21.0% of net sales, for the three months ended March 31, 2024.

The increases in Adjusted Operating Income and Adjusted Operating Margin for the first quarter of 2025 relative to the comparable period in 2024 were primarily driven by strong operating performance on the higher sales volumes, partially offset by the negative impact on operating margin related to acquisitions completed within the prior 12 months that are currently operating below the average operating margin of the Company.

Operating income for the Harsh Environment Solutions segment for the first quarter of 2025 was $311.2, or 24.5% of net sales, compared to $244.4, or 26.7% of net sales, for the first quarter of 2024.

The decrease in operating margin for the Harsh Environment Solutions segment for the first quarter of 2025 relative to the comparable period in 2024 was driven by the negative impact on operating margin related to acquisitions completed within the prior 12 months, particularly the CIT acquisition, that are currently operating below the average operating margin of the Company, partially offset by normal operating leverage on the higher organic sales volumes.

Operating income for the Communications Solutions segment for the first quarter of 2025 was $660.8, or 27.4% of net sales, compared to $286.2, or 22.6% of net sales, for the first quarter of 2024.

The increase in operating margin for the Communications Solutions segment for the first quarter of 2025 relative to the comparable period in 2024 was primarily driven by strong operating leverage on the significantly higher organic sales volumes.

Operating income for the Interconnect and Sensor Systems segment for the first quarter of 2025 was $204.5, or 18.1% of net sales, compared to $195.4, or 18.2% of net sales, for the first quarter of 2024.

Interest expense for the first quarter of 2025 was $76.5, compared to $38.1 for the first quarter of 2024.

The increase in interest expense for the first quarter of 2025 was primarily driven by higher average borrowing levels from the April Senior Notes and October Senior Notes issuances, as well as the USCP Notes issued during the quarter, primarily intended to fully or partially fund acquisitions, including the acquisition of the Andrew Business.

Provision for income taxes for the first quarter of 2025 was at an effective tax rate of 22.7%, compared to 16.7%, for the first quarter of 2024.

Various items incurred in the first quarter of 2025 and 2024 impacted the effective tax rate and earnings per share by the amounts noted in the table below.

For the first quarter of 2025 and 2024, these items included excess tax benefits resulting from stock option exercise activity.

For the first quarter of 2025, the effective tax rate was further impacted by the tax effect of the aforementioned acquisition-related expenses incurred during the period.

For the first quarter of 2024, the effective tax rate was further impacted by a discrete tax benefit related to the settlement of tax audits and associated lapses of statutes of limitation, along with a difference in a non-U.S.

tax filing position.

For the first nine months of 2023, the effective tax rate was further impacted by the gain from the bargain purchase acquisition that closed in the second quarter of 2023 .

Excluding the effect of these items, the Adjusted Effective Tax Rate, a non-GAAP financial measure as defined in the “Non-GAAP Financial Measures” section below within this Item 2, for both the three and nine months ended September 30, 2024 and 2023 was 24.0%, as reconciled in the tables below to the comparable effective tax rate based on GAAP results.

Excluding the effect of these items, the Adjusted Effective Tax Rate, a non-GAAP financial measure as defined in the “Non-GAAP Financial Measures” section below within this Item 2, for the three months ended March 31, 2025 and 2024 was 24.5% and 24.0%, respectively, as reconciled in the table below to the comparable effective tax rate based on GAAP results.

Refer to Note 6 of the Notes to Condensed Consolidated Financial Statements for further information related to income taxes.

Net income attributable to Amphenol Corporation and Net income attributable to Amphenol Corporation per common share - Diluted (“Diluted EPS”) were $604.4 and $0.48, respectively, for the third quarter of 2024, compared to $513.9 and $0.41, respectively, for the third quarter of 2023.

Excluding the effect of the items listed in the tables below, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS, non-GAAP financial measures as defined in the “Non-GAAP Financial Measures” section below within this Item 2, were $632.8 and $0.50, respectively, for the third quarter of 2024, compared to $484.0 and $0.39, respectively, for the third quarter of 2023.

Net income attributable to Amphenol Corporation and Diluted EPS were $1,677.8 and $1.33, respectively, for the first nine months of 2024, compared to $1,413.6 and $1.14, respectively, for the first nine months of 2023.

Excluding the effect of the items listed in the tables below, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS were $1,686.9 and $1.34, respectively, for the first nine months of 2024, compared to $1,357.1 and $1.09, respectively, for the first nine months of 2023.

The following tables reconcile Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net Income attributable to Amphenol Corporation, Adjusted Effective Tax Rate and Adjusted Diluted EPS (each as defined in the “Non-GAAP Financial Measures” section below) to the most directly comparable U.S.

GAAP financial measures for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Reported (GAAP)

Amortization of acquisition-related inventory step-up costs

Acquisition-related expenses

Excess tax benefits related to stock-based compensation

Adjusted (non-GAAP) (2)

Nine Months Ended September 30,

Net income attributable to Amphenol Corporation and Net income attributable to Amphenol Corporation per common share - Diluted (“Diluted EPS”) were $737.8 and $0.58, respectively, for the first quarter of 2025, compared to $548.7 and $0.44, respectively, for the first quarter of 2024.

Excluding the effect of the items listed in the table below, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS, non-GAAP financial measures as defined in the “Non-GAAP Financial Measures” section below within this Item 2, were $799.8 and $0.63, respectively, for the first quarter of 2025, compared to $500.4 and $0.40, respectively, for the first quarter of 2024.

The following table reconciles Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net Income attributable to Amphenol Corporation, Adjusted Effective Tax Rate and Adjusted Diluted EPS (each as defined in the “Non-GAAP Financial Measures” section below) to the most directly comparable U.S.

GAAP financial measures for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Reported (GAAP)

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Acquisition-related expenses

Gain on bargain purchase acquisition

Excess tax benefits related to stock-based compensation

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Liquidity and Cash Requirements

As of September 30, 2024 and December 31, 2023, the Company had cash, cash equivalents and short-term investments of $1,583.3 and $1,660.2, respectively, with the majority of the Company’s cash, cash equivalents and short-term investments on hand located outside of the United States.

The Company’s primary sources of liquidity are internally generated cash provided by operating activities, our cash, cash equivalents and short-term investments on hand, as well as availability under the U.S.

As of March 31, 2025 and December 31, 2024, the Company had cash, cash equivalents and short-term investments of $1,671.7 and $3,335.4, respectively, with the majority of the Company’s cash, cash equivalents and short-term investments on hand typically located outside of the United States.

However, as of December 31, 2024, more than half of the Company’s cash, cash equivalents and short-term investments on hand was located in the United States, primarily as a result of the proceeds from the issuance of the October Senior Notes, which were subsequently used to fund the acquisition of the Andrew Business.

The Company’s primary sources of liquidity are internally generated cash provided by operating activities, cash, cash equivalents and short-term investments on hand, as well as availability under the U.S.

Commercial Paper Program, the Euro Commercial Paper Program, and the Revolving Credit Facility.

The Company believes that these sources of liquidity, along with access to capital markets (which the Company accessed in early April 2024 in connection with the issuance of the New Senior Notes), provide adequate liquidity to meet both its short-term (next 12 months) and reasonably foreseeable long-term requirements and obligations.

The Company believes that these sources of liquidity, along with access to capital markets (which the Company accessed in 2024 in connection with the issuances of both the April Senior Notes and October Senior Notes), provide adequate liquidity to meet both its short-term (next 12 months) and reasonably foreseeable long-term requirements and obligations.

The Company’s debt instruments are defined and discussed in more detail below within this Item 2.

Cash Requirements from Known Contractual and Other Obligations

The Company’s primary ongoing cash requirements will be for operating and working capital needs, capital expenditures, product development activities, repurchases of our Common Stock, dividends, debt service, payments associated with the one-time tax on the deemed repatriation of all of the Company’s pre-2018 accumulated unremitted earnings and profits of foreign subsidiaries (“Transition Tax”), which is payable in annual installments until 2025, taxes due upon the repatriation of foreign earnings (which will be payable upon the repatriation of such earnings), funding of pension obligations, and other contractual obligations and commitments included in Item 7 of the 2023 Annual Report.

The Company may also use cash to fund all or part of the cost of future acquisitions, as has been the case in recent years with the Company’s various acquisitions, including the acquisition of CIT in May 2024.

The Company’s debt service requirements primarily consist of principal and interest on the Company’s Senior Notes, and to the extent of any amounts outstanding, the Revolving Credit Facility and Commercial Paper Programs (all as defined below).

As of September 30, 2024 and December 31, 2023, the Company had no borrowings outstanding under the Revolving Credit Facility, U.S.

Commercial Paper Program and Euro Commercial Paper Program.

However, the Company borrowed under the U.S.

Commercial Paper Program throughout much of the first nine months of 2024, the proceeds of which were used for general corporate purposes, including, but not limited to, partially funding the acquisition of CIT in May 2024, as discussed later within this Item 2.

Although all such borrowings were repaid before the end of the third quarter of 2024, the Company may make additional borrowings under any of its debt instruments in the future.

Although the federal funds rate has increased in recent years, causing the floating interest rates related to our U.S.

Commercial Paper Program (as well as our Revolving Credit Facility, to the extent drawn upon in the future) to also increase substantially, the U.S.

Federal Reserve recently lowered the federal funds rate modestly in September of 2024.

To the extent that interest rates related to this floating rate debt decrease further and the Company borrows under any of these floating interest rate instruments in the future (and consistent with current year levels), interest expense and interest payments would decrease.

The Company’s primary ongoing cash requirements will be for operating and working capital needs, capital expenditures, product development activities, repurchases of our Common Stock, dividends, debt service, payments associated with the one-time tax on the deemed repatriation of all of the Company’s pre-2018 accumulated unremitted earnings and profits of foreign subsidiaries (“Transition Tax”), of which the last annual installment will be paid in the second quarter of 2025, taxes due upon the repatriation of foreign earnings (which will be payable upon the repatriation of such earnings), funding of pension obligations, and other contractual obligations and commitments included in Item 7 of the 2024 Annual Report.

The Company’s debt service requirements primarily consist of

principal and interest on the Company’s Senior Notes, and to the extent of any amounts outstanding, the Revolving Credit Facility and Commercial Paper Programs (all as defined below).

As of March 31, 2025, outstanding borrowings under the U.S.

Commercial Paper Program were at a weighted average floating interest rate of 4.57%, while there were no outstanding borrowings under the Revolving Credit Facility and Euro Commercial Paper Program.

The Company borrowed under the U.S.

Commercial Paper Program throughout much of the first quarter of 2025, the proceeds of which were used for general corporate purposes, including, but not limited to, partially funding the acquisition of the Andrew Business in January 2025, as discussed later within this Item 2.

The Company may make additional borrowings under any of its debt instruments in the future.

To the extent that interest rates change related to floating interest rate debt and the Company borrows under any of our floating interest rate instruments in the future (Commercial Paper Programs as well as our Revolving Credit Facility), our interest expense and interest payments will be impacted accordingly.

Although the Company does not expect changes in interest rates to have a material effect on income or cash flows for the remainder of 2025, there can be no assurance that interest rates will not change significantly from current levels.

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The Company intends to indefinitely reinvest the remaining pre-2025 foreign earnings.

As of September 30, 2024, the Company has accrued the foreign and U.S.

As of March 31, 2025, the Company has accrued the foreign and U.S.

state and local taxes associated with the foreign earnings that it intends to repatriate.

The Company intends to evaluate future earnings for repatriation, and will accrue for those distributions where appropriate, and to indefinitely reinvest all other foreign earnings.

In addition, the Company will pay the balance of the Transition Tax, net of applicable tax credits and deductions, in 2025, as permitted under the Tax Act.

In addition, the Company will pay the balance of the Transition Tax, net of applicable tax credits and deductions, in the second quarter of 2025, as permitted under the Tax Act.

Cash Flow Summary

The following table summarizes the Company’s cash flows from operating, investing and financing activities for the nine months ended September 30, 2024 and 2023, as reflected in the Condensed Consolidated Statements of Cash Flow:

Nine Months Ended September 30,

The following table summarizes the Company’s cash flows from operating, investing and financing activities for the three months ended March 31, 2025 and 2024, as reflected in the Condensed Consolidated Statements of Cash Flow:

Three Months Ended March 31,

Net cash provided by operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Operating Activities

The ability to generate cash from operating activities is one of the Company’s fundamental financial strengths.

Net cash provided by operating activities (“Operating Cash Flow”) was $1,967.6 in the first nine months of 2024 compared to $1,686.9 in the first nine months of 2023.

The increase in Operating Cash Flow for the first nine months of 2024 compared to the first nine months of 2023 is primarily due to the increase in net income, partially offset by a higher usage of cash related to the change in working capital.

In the first nine months of 2024, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $197.6, excluding the impact of acquisitions and foreign currency translation, primarily due to increases in accounts receivable of $358.9, inventories of $186.0 and prepaid expenses and other current assets of $83.2 , partially offset by increases in accounts payable of $319.2 and accrued liabilities, including income taxes, of $111.3.

In the first nine months of 2023, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $81.2, excluding the impact of acquisitions and foreign currency translation, primarily due to decreases in accrued liabilities, including income taxes, of $90.3 and accounts payable of $88.1, and an increase in prepaid expenses and other current assets of $17.2, partially offset by decreases in accounts receivable of $83.8 and inventories of $30.6.

The following describes the significant changes in the amounts as presented on the accompanying Condensed Consolidated Balance Sheets at September 30, 2024 as compared to December 31, 2023.

Accounts receivable increased $511.9 to $3,130.3, primarily due to the higher sales in the third quarter of 2024 relative to the fourth quarter of 2023, along with the impact of the two acquisitions (the “2024 Acquisitions”) that closed during the first nine months of 2024 and the effect of translation from exchange rate changes (“Translation”) at September 30, 2024 compared to December 31, 2023.

Days sales outstanding at September 30, 2024 and December 31, 2023 were 69 days and 70 days, respectively.

Inventories increased $411.7 to $2,578.8, primarily due to the impact of the 2024 Acquisitions, along with the impact of higher sales in the third quarter of 2024 relative to the fourth quarter of 2023 and Translation .

Inventory days at September 30, 2024 and December 31, 2023 were 87 days and 85 days, respectively.

Net cash provided by operating activities (“Operating Cash Flow”) was $764.9 in the first three months of 2025 compared to $599.5 in the first three months of 2024.

The increase in Operating Cash Flow for the first three months of 2025 compared to the first three months of 2024 is primarily due to the increase in net income, partially offset by a higher usage of cash related to the change in working capital.

In the first three months of 2025, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $271.3, excluding the impact of acquisitions and foreign currency translation, primarily due to increases in accounts receivable of $333.5, inventories of $117.2 and prepaid expenses and other current assets of $110.9 , partially offset by increases in accounts payable of $167.7 and accrued liabilities, including income taxes, of $100.3.

In the first three months of 2024, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $73.9, excluding the impact of acquisitions and foreign currency translation, primarily due to decreases in accounts payable of $69.9 and accrued

liabilities, including income taxes, of $52.3, and increases in prepaid expenses and other current assets of $20.3 and inventories of $15.1, partially offset by a decrease in accounts receivable of $83.7.

The following describes the significant changes in the amounts as presented on the accompanying Condensed Consolidated Balance Sheets at March 31, 2025 as compared to December 31, 2024.

Accounts receivable increased $632.4 to $3,920.3, primarily due to the higher sales in the first quarter of 2025 relative to the fourth quarter of 2024, along with the impact of the two acquisitions (collectively, the “2025 Acquisitions”) that closed during the first quarter of 2025 and the effect of translation from exchange rate changes (“Translation”) at March 31, 2025 compared to December 31, 2024.

Days sales outstanding at March 31, 2025 and December 31, 2024 were 69 days and 68 days, respectively.

Inventories increased $360.7 to $2,906.4, primarily due to the impact of the 2025 Acquisitions, along with the impact of higher sales in the first quarter of 2025 relative to the fourth quarter of 2024 and Translation .

Inventory days at March 31, 2025 and December 31, 2024 were both 80 days.

Prepaid expenses and other current assets increased $117.8 to $634.8, primarily due to increases in various prepaid expenses and other current receivables, along with the impact of the 2025 Acquisitions .

Property, plant and equipment, net, increased $143.1 to $1,854.9, primarily due to capital expenditures of $188.6 and the impact of the 2025 Acquisitions, partially offset by depreciation of $125.7.

Goodwill increased $1,259.7 to $8,352.1, primarily driven by goodwill recognized from the 2024 Acquisitions, in particular the CIT acquisition .

Other intangible assets, net, increased $412.2 to $1,247.0, primarily due to the recognition of certain intangible assets related to the 2024 Acquisitions, in particular the CIT acquisition, partially offset by the amortization associated with the Company’s current intangible assets as well as measurement period adjustments related to certain intangible assets associated with acquisitions that closed late in 2023.

Other long-term assets increased $93.6 to $542.8, primarily due to an increase in operating lease right-of-use assets resulting from new and renewed lease agreements entered into during the first nine months of 2024 as well as acquired leases resulting from acquisitions.

Accounts payable increased $412.1 to $1,763.0, primarily due to incr eased purchasing activity related to the higher sales levels in the third quarter of 2024 relative to the fourth quarter of 2023, along with the impact of the 2024 Acquisitions and Translation.

Payable days at September 30, 2024 and December 31, 2023 were 59 days and 55 days, respectively.

Total accrued expenses, including accrued income taxes, increased $287.6 to $1,735.6, primarily as a result of increases in accrued salaries, wages and employee benefits and various other accrued expenses, along with the impact of the 2024 Acquisitions, partially offset by a decrease in accrued income taxes.

Other long-term liabilities, including deferred tax liabilities, increased $108.0 to $928.7, primarily as a result of an increase in deferred tax liabilities resulting from the 2024 Acquisitions, along with an increase in long-term lease liabilities resulting from new and renewed lease agreements entered into during the first nine months of 2024 as well as acquired leases resulting from acquisitions.

Goodwill increased $1,038.1 to $9,274.3, primarily driven by goodwill recognized from the 2025 Acquisitions, in particular the acquisition of the Andrew Business .

Other intangible assets, net, increased $776.4 to $2,001.5, primarily due to the recognition of certain intangible assets related to the 2025 Acquisitions, in particular the acquisition of the Andrew Business, partially offset by the amortization associated with the Company’s current intangible assets.

Other long-term assets increased $57.1 to $638.2, primarily due to an increase in operating lease right-of-use assets resulting from new and renewed lease agreements entered into during the first three months of 2025 as well as acquired leases resulting from acquisitions.

Accounts payable increased $323.0 to $2,142.4, primarily due to incr eased purchasing activity related to the higher sales levels in the first quarter of 2025 relative to the fourth quarter of 2024, along with the impact of the 2025 Acquisitions and Translation.

Payable days at March 31, 2025 and December 31, 2024 were 59 days and 58 days, respectively.

Total accrued expenses, including accrued income taxes, increased $235.1 to $2,097.8, primarily as a result of increases in accrued income taxes, and various other accrued expenses, along with the impact of the 2025 Acquisitions, partially offset by a decrease in accrued salaries, wages and employee benefits.

Other long-term liabilities, including deferred tax liabilities, increased $102.8 to $988.9, primarily as a result of an increase in deferred tax liabilities resulting from the 2025 Acquisitions, along with an increase in long-term lease liabilities resulting from new and renewed lease agreements entered into during the first three months of 2025 as well as acquired leases resulting from acquisitions.

In addition to Operating Cash Flow, the Company also considers Free Cash Flow, a non-GAAP financial measure defined in the “Non-GAAP Financial Measures” section below, as a key metric in measuring the Company’s ability to generate cash.

The following table reconciles Free Cash Flow to its most directly comparable U.S.

GAAP financial measure for the nine months ended September 30, 2024 and 2023.

GAAP financial measure for the three months ended March 31, 2025 and 2024.

The increase in Free Cash Flow was driven by an increase in Operating Cash Flow, as described above, partially offset by an increase in capital expenditures:

Nine Months Ended September 30,

Three Months Ended March 31,

Operating Cash Flow (GAAP)

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Cash flows from investing activities primarily consist of cash flows associated with capital expenditures, proceeds from disposals of property, plant and equipment, net purchases (sales and maturities) of short- and long-term investments, and acquisitions.

Net cash used in investing activities was $2,398.2 in the first nine months of 2024, compared to $704.4 in the first nine months of 2023.

In the first nine months of 2024, net cash used in investing activities was primarily driven by the use of $2,099.8 to fund acquisitions and capital expenditures (net of disposals) of $458.5, partially offset by net sales and maturities of short-term investments of $161.0.

In the first nine months of 2023, net cash used in investing activities was primarily driven by the use of $292.6 to fund acquisitions, capital expenditures (net of disposals) of $265.7, and net purchases of short-term and long-term investments of $151.0.

The elevated capital expenditures for the third quarter and first nine months of 2024 were driven by investments primarily in support of the growth in our IT datacom and defense markets.

We expect this elevated level of capital spending to continue for the fourth quarter of 2024.

Net cash used in investing activities was $2,352.6 in the first quarter of 2025, compared to $17.0 in the first quarter of 2024.

In the first quarter of 2025, net cash used in investing activities was primarily driven by the use of $2,172.2 to fund acquisitions and capital expenditures (net of disposals) of $184.5, partially offset by net sales and maturities of short-term investments of $4.1.

In the first quarter of 2024, net cash used in investing activities was primarily driven by capital expenditures (net of disposals) of $93.8, partially offset by net sales and maturities of short-term investments of $75.7.

The elevated capital expenditures for the first quarter of 2025 were driven by investments primarily in support of the growth in our IT datacom and defense markets.

We currently expect this elevated level of capital spending to continue in 2025 to support the significant growth we are experiencing related to artificial intelligence applications in our IT datacom market.

Financing Activities

Cash flows from financing activities primarily consist of cash flows associated with borrowings and repayments of the Company’s credit facilities and other long-term debt, repurchases of Common Stock, proceeds from stock option exercises, dividend payments, and distributions to and purchases of noncontrolling interests.

Net cash provided by financing activities was $515.8 in the first nine months of 2024, compared to net cash used in financing activities of $822.4 in the first nine months of 2023.

In the first nine months of 2024, net cash provided by financing activities was primarily driven by (i) net cash proceeds from borrowings of $1,500.1, primarily related to the issuance of the New Senior Notes (as defined below), and (ii) cash proceeds of $320.3 from the exercise of stock options, partially offset by (a) repurchases of the Company’s Common Stock of $520.4, (b) dividend payments of $396.2, (c) debt repayments of $353.7, primarily related to the redemption of the 3.20% Senior Notes in the second quarter of 2024, (d) distributions to and purchases of noncontrolling interests of $20.8, and (e) payments of $14.7 related to debt financing costs associated with the Company’s amended and restated revolving credit facility in March 2024 as well as the issuances of the New Senior Notes in April 2024, as discussed further below.

In the first nine months of 2023, net cash used in financing activities was primarily driven by (i) net repayments of $632.6 related to the Company’s commercial paper programs, primarily the U.S.

Commercial Paper Program, (ii) repurchases of the Company’s Common Stock of $469.8, (iii) dividend payments of $375.0, (iv) other debt repayments of $10.3, (v) distributions to and purchases of noncontrolling interests of $8.0, (vi) payments of $2.3 related to debt financing costs associated with the March 2023 issuance of the 2026 Senior Notes (as defined below), and (vii) a payment of $1.5 associated with the deferred purchase price related to an acquisition, partially offset by (a) net cash proceeds from borrowings of $354.0, primarily related to the issuance of the 2026 Senior Notes, and (b) cash proceeds of $323.1 from the exercise of stock options .

Net cash used in financing activities was $88.6 in the first quarter of 2025, compared to $176.2 in the first quarter of 2024.

In the first quarter of 2025, net cash used in financing activities was primarily driven by (i) redemption of the 2.050% Senior Notes of $400.0, (ii) dividend payments of $199.5, and (iii) repurchases of the Company’s Common Stock of $180.9, partially offset by (a) borrowings under the U.S.

Commercial Paper Program of $639.8, and (b) cash proceeds of $53.2 from the exercise of stock options .

In the first quarter of 2024, net cash used in financing activities was primarily driven by (i) repurchases of the Company’s Common Stock of $153.8, (ii) dividend payments of $131.7, (iii) payments of $2.9 related to debt financing costs associated with the Company’s amended and restated revolving credit facility in March 2024, and (iv) other debt repayments of $1.1, partially offset by cash proceeds of $113.3 from the exercise of stock options.

The Company has significant flexibility to meet its financial commitments.

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The Company may utilize the Revolving Credit Facility for general corporate purposes.

As of September 30, 2024 and December 31, 2023, there were no outstanding borrowings under the revolving credit facility then in effect.

As of March 31, 2025 and December 31, 2024, there were no outstanding borrowings under the revolving credit facility then in effect.

The Revolving Credit Facility requires payment of certain annual agency and commitment fees and requires that the Company satisfy certain financial covenants.

On September 30, 2024, the Company was in compliance with the financial covenants under the Revolving Credit Facility.

On April 19, 2022, the Company entered into a two-year, $750.0 unsecured delayed draw term loan credit agreement (the “Term Loan”).

The Term Loan matured on April 19, 2024 without the Company drawing upon it throughout its term.

On March 31, 2025, the Company was in compliance with the financial covenants under the Revolving Credit Facility.

The Company has a commercial paper program (the “U.S.

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Commercial Paper Program by $500.0.

As of September 30, 2024, the maximum aggregate principal amount outstanding of USCP Notes at any time is $3,000.0.

As of March 31, 2025, the maximum aggregate principal amount outstanding of USCP Notes at any time is $3,000.0.

The Company utilizes borrowings under the U.S.

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The Company borrowed under the U.S.

Before the end of the third quarter of 2024, the Company repaid all of its USCP Notes then outstanding.

As of September 30, 2024 and December 31, 2023, there were no USCP Notes outstanding.

Commercial Paper Program throughout much of the first quarter of 2025, the proceeds of which were used for general corporate purposes, including, but not limited

to, partially funding the acquisition of the Andrew Business in January 2025.

The amount of USCP Notes outstanding as of March 31, 2025 was $638.9, with a weighted average interest rate of 4.57%.

As of December 31, 2024, there were no USCP Notes outstanding.

The Company and one of its wholly owned European subsidiaries (the “Euro Issuer”) also have a commercial paper program (the “Euro Commercial Paper Program” and, together with the U.S.

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The Company utilizes borrowings under the Euro Commercial Paper Program for general corporate purposes, which may include, for example, fully or partially funding acquisitions.

The Company did not borrow under the Euro Commercial Paper Program during the first nine months of 2024, and, as of September 30, 2024 and December 31, 2023, there were no ECP Notes outstanding.

The Company did not borrow under the Euro Commercial Paper Program during the first quarter of 2025, and, as of March 31, 2025 and December 31, 2024, there were no ECP Notes outstanding.

Amounts available under the Commercial Paper Programs may be borrowed, repaid and re-borrowed from time to time.

In conjunction with the Revolving Credit Facility, as of September 30, 2024, the authorization from the Board limits the maximum aggregate principal amount outstanding of USCP Notes, ECP Notes, and any other commercial paper or similar programs, along with outstanding amounts under the Revolving Credit Facility, at any time to $3,000.0 in the aggregate.

In conjunction with the Revolving Credit Facility, as of March 31, 2025, the authorization from the Board limits the maximum aggregate principal amount outstanding of USCP Notes, ECP Notes, and any other commercial paper or similar programs, along with outstanding amounts under the Revolving Credit Facility, at any time to $3,000.0 in the aggregate.

The Commercial Paper Programs are rated A-2 by Standard & Poor’s and P-2 by Moody’s and, based on the Board’s authorization described above, are currently backstopped by the Revolving Credit Facility, as amounts undrawn under the Revolving Credit Facility are available to repay Commercial Paper, if necessary.

The Company reviews its optimal mix of short-term and long-term debt regularly and may replace certain amounts of Commercial Paper, short-term debt and current maturities of long-term debt with new issuances of long-term debt in the future.

As of September 30, 2024, the Company has outstanding senior notes (the “Senior Notes”) as follows:

As of March 31, 2025, the Company has outstanding senior notes (the “Senior Notes”) as follows:

February 2030

September 2031

November 2054

May 2026 (Euro Notes)

October 2028 (Euro Notes)

On April 5, 2024, the Company issued three series of unsecured senior notes (collectively, the “New Senior Notes”):

(i) $450.0 aggregate principal amount of unsecured 5.050% Senior Notes due April 5, 2027 at 99.887% of face value (the “2027 Senior Notes”), (ii) $450.0 aggregate principal amount of unsecured 5.050% Senior Notes due April 5, 2029 at 99.900% of face value (the “2029 Senior Notes”) and (iii) $600.0 aggregate principal amount of unsecured 5.250% Senior Notes due April 5, 2034 at 99.900% of face value (the “2034 Senior Notes”).

The Company used net proceeds from the New Senior Notes, together with a combination of cash on hand and borrowings under the U.S.

Commercial Paper Program, to fund the cash consideration for the CIT acquisition in May 2024, as discussed in further detail in Note 11 of the accompanying Notes to Condensed Consolidated Financial Statements herein, along with the fees and expenses related thereto.

On April 1, 2024, the Company used cash on hand to repay the $350.0 aggregate principal amount of unsecured 3.20% Senior Notes due April 1, 2024 upon maturity.

On March 30, 2023, the Company issued $350.0 aggregate principal amount of unsecured 4.750% Senior Notes due March 30, 2026 (the “2026 Senior Notes”).

The Company used the net proceeds from the 2026 Senior Notes to repay certain outstanding borrowings under the U.S.

Commercial Paper Program.

On March 3, 2025, the Company used a combination of cash on hand and borrowings under the U.S.

Commercial Paper Program to repay the $400.0 aggregate principal amount of unsecured 2.050% Senior Notes due March 1, 2025 upon maturity.

On April 5, 2024, the Company issued three series of unsecured senior notes (collectively, the “April Senior Notes”):

(i) $450.0 aggregate principal amount of unsecured 5.050% Senior Notes due April 5, 2027 at 99.887% of face value (the “Original 2027 Senior Notes”), (ii) $450.0 aggregate principal amount of unsecured 5.050% Senior Notes due April 5, 2029 at 99.900% of face value (the “2029 Senior Notes”) and (iii) $600.0 aggregate principal amount of unsecured 5.250% Senior Notes due April 5, 2034 at 99.900% of face value (the “2034 Senior Notes”).

The Company used net proceeds from the April Senior Notes, together with a combination of cash on hand and borrowings under the U.S.

Commercial Paper Program, to fund the cash consideration for the CIT acquisition in May 2024, as discussed in

further detail in Note 11 of the accompanying Notes to Condensed Consolidated Financial Statements herein, along with the fees and expenses related thereto.

On October 31, 2024, the Company issued three series of unsecured senior notes (collectively, the “October Senior Notes”):

(i) $250.0 aggregate principal amount of unsecured 5.050% Senior Notes due April 5, 2027, (the “Additional 2027 Senior Notes”), which constituted a further issuance of the Company’s Original 2027 Senior Notes issued in April 2024, thus forming a single series with, and having the same terms (other than the issue date, issue price and the first interest payment date) as, the Original 2027 Senior Notes, and thus having a total aggregate principal amount of $700.0 of unsecured 5.050% Senior Notes due April 5, 2027 outstanding (the Original 2027 Senior Notes, together with the Additional 2027 Senior Notes, collectively referred to as the “2027 Senior Notes”), (ii) $750.0 aggregate principal amount of unsecured 5.000% Senior Notes due January 15, 2035 (the “2035 Senior Notes”) and (iii) $500.0 aggregate principal amount of unsecured 5.375% Senior Notes due November 15, 2054 (the “2054 Senior Notes”).

On January 31, 2025, the Company used the net proceeds from the October Senior Notes, together with borrowings under the U.S.

Commercial Paper Program and cash on hand, to fund the cash consideration for the Company’s acquisition of the Andrew Business, along with the fees and expenses related thereto.

All of the Company’s outstanding senior notes in the United States (the “U.S.

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The Senior Notes impose certain obligations on the Company and prohibit various actions by the Company unless it satisfies certain financial requirements.

On September 30, 2024, the Company was in compliance with all requirements under its Senior Notes.

On March 31, 2025, the Company was in compliance with all requirements under its Senior Notes.

Refer to Note 4 of the Notes to Condensed Consolidated Financial Statements for further information related to the Company’s debt.

On April 23, 2024, the Board authorized a new stock repurchase program under which the Company may purchase up to $2,000.0 of its Common Stock during the three-year period ending on the close of business on April 28, 2027 (the “2024 Stock Repurchase Program”).

On April 23, 2024, the Board authorized a stock repurchase program under which the Company may purchase up to $2,000.0 of its Common Stock during the three-year period ending on the close of business on April 28, 2027 (the “2024 Stock Repurchase Program”).

The 2024 Stock Repurchase Program became effective on April 29, 2024.

During the three and nine months ended September 30, 2024, the Company repurchased 2.7 million and 4.5 million shares of its Common Stock for $176.2 and $294.8, respectively, under the 2024 Stock Repurchase Program.

Of the total repurchases made during the nine months ended September 30, 2024 under the 2024 Stock Repurchase Program , 1.8 million shares, or $118.6, have been retired by the Company, with the remainder of the repurchased shares retained in Treasury stock at the time of repurchase.

From October 1, 2024 to October 22, 2024, the Company repurchased 0.6 million additional shares of its Common Stock for $35.8, and, as of October 23, 2024, the Company has remaining authorization to purchase up to $1,669.4 of its Common Stock under the 2024 Stock Repurchase Program.

During the three months ended March 31, 2025, the Company repurchased 2.7 million shares of its Common Stock for $180.9 under the 2024 Stock Repurchase Program.

All of the repurchased shares during the first three months of 2025 were retired by the Company.

From April 1, 2025 to April 22, 2025, the Company repurchased 0.7 million additional shares of its Common Stock for $43.9, and, as of April 22, 2025, the Company has remaining authorization to purchase up to $1,311.6 of its Common Stock under the 2024 Stock Repurchase Program.

The timing and amount of any future repurchases will depend on a number of factors, such as the levels of cash generation from operations, the volume of stock options exercised by employees, cash requirements for acquisitions, dividends paid, economic and market conditions and the price of the Common Stock.

On April 27, 2021, the Board authorized a stock repurchase program under which the Company could purchase up to $2,000.0 of its Common Stock during the three-year period ending April 27, 2024 (the “2021 Stock Repurchase Program”).

During the nine months ended September 30, 2024, the Company repurchased 4.1 million shares of its Common Stock for $225.6 under the 2021 Stock Repurchase Program, which were the final repurchases under the 2021 Stock Repurchase Program.

All of the repurchased shares under the 2021 Stock Repurchase Program during the first nine months of 2024 have been retired by the Company.

During the three and nine months ended September 30, 2023, the Company repurchased 3.5 million and 11.7 million shares of its Common Stock for $149.3 and $469.8, respectively, under th e 2021 Stock Repurchase Program.

Of the total repurchases made during the nine months ended September 30, 2023 under the 2021 Stock Repurchase Program, 8.2 million shares, or $320.5, were retired by the Company, with the remainder of the repurchased shares retained in Treasury stock at the time of repurchase.

Contingent upon declaration by the Board, the Company pays a quarterly dividend on shares of its Common Stock.

The following table summarizes the declared quarterly dividends per share as well as the dividends declared and paid during the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

On July 23, 2024, the Board approved an increase to the Company’s quarterly dividend rate from $0.11 per share to $0.165 per share, effective with dividends declared in the third quarter of 2024, contingent upon declaration by the Board.

The following table summarizes the declared quarterly dividends per share as well as the dividends declared and paid during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Dividends declared per share

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Dividends paid (including those declared in the prior year)

On October 24, 2023, the Board approved an increase to the Company’s quarterly dividend rate from $0.105 per share to $0.11 per share, effective with dividends declared in the fourth quarter of 2023, and on July 23, 2024, the Board approved an additional increase to the Company’s quarterly dividend rate from $0.11 per share to $0.165 per share, effective with dividends declared in the third quarter of 2024, contingent upon declaration by the Board.

During the nine months ended September 30, 2024, the Company completed two acquisitions, including the acquisition of CIT (collectively, the “2024 Acquisitions”), for approximately $2,099.8, net of cash acquired.

Both acquisitions have been included in the Harsh Environment Solutions segment.

The 2024 Acquisitions were each funded using cash on hand, proceeds from the New Senior Notes or borrowings under the U.S.

During the three months ended March 31, 2025, the Company completed two acquisitions (collectively, the “2025 Acquisitions”), including the acquisition of the Andrew Business from CommScope, for approximately $2,172.2, net of cash acquired.

The Andrew Business has been included in the Communications Solutions segment, and the other acquisition has been included in the Harsh Environment Solutions segment.

The 2025 Acquisitions were each funded using cash on hand, proceeds from the October Senior Notes, borrowings under the U.S.

Commercial Paper Program, or a combination thereof .

The 2025 Acquisitions were not material, either individually or in the aggregate, to the Company’s financial results.

On May 21, 2024, the Company completed the acquisition of CIT for approximately $1,995.3, net of cash acquired and subject to customary post-closing adjustments.

The Company funded the CIT acquisition through a combination of net proceeds from the New Senior Notes, as discussed earlier in this Item 2, together with borrowings under the U.S.

Commercial Paper Program and cash on hand .

CIT, headquartered in St.

Augustine, FL, is a leading global supplier of harsh environment interconnect solutions, primarily to the commercial aerospace, defense and industrial end markets.

CIT’s wide range of products include wire and cable, cable assemblies, contacts, connectors and sensors, which management believes are highly complementary to Amphenol’s existing interconnect and sensor solutions.

CIT has been included in the Harsh Environment Solutions segment.

During the year ended December 31, 2023, the Company completed 10 acquisitions (the “2023 Acquisitions”) for approximately $970.4, net of cash acquired.

Five of the acquisitions have been included in the Harsh Environment Solutions segment, three acquisitions have been included in the Interconnect and Sensor Systems segment, and two acquisitions have been included in the Communications Solutions segment.

The 2023 Acquisitions were each funded using cash on hand or borrowings under our Commercial Paper Programs, or a combination thereof.

One of the 2023 Acquisitions, which closed in the second quarter of 2023, represented a bargain purchase, where the estimated fair value of assets acquired, net of liabilities assumed, exceeded the purchase price.

The Company recognized a non-cash gain of $5.4 on the bargain purchase acquisition during the nine months ended September 30, 2023, which was recorded separately in the Company’s Condensed Consolidated Statements of Income.

During the year ended December 31, 2024, the Company completed two acquisitions (collectively, the “2024 Acquisitions”), including the acquisition of CIT, for approximately $2,156.4, net of cash acquired.

Both acquisitions have been included in the Harsh Environment Solutions segment.

The 2024 Acquisitions were each funded using cash on hand, proceeds from the April Senior Notes or borrowings under the U.S.

Commercial Paper Program, or a combination thereof.

The 2024 Acquisitions were not material, either individually or in the aggregate, to the Company’s financial results.

Acquisition-related expenses

During the three and nine months ended September 30, 2024, the Company incurred $63.6 ($49.8 after-tax) and $133.6 ($109.7 after-tax), respectively, of acquisition-related expenses, comprised primarily of (i) the amortization related to the value associated with acquired backlog resulting from the CIT acquisition and external transaction costs associated with acquisitions (such acquisition-related expenses aggregating $45.4 and $115.4, respectively, are presented separately in the Condensed Consolidated Statements of Income) and (ii) the amortization of acquisition-related inventory step-up costs in the third quarter of 2024 of $18.2 associated with the CIT acquisition (such costs are recorded in Cost of sales in the Condensed Consolidated Statements of Income) .

During the three months ended September 30, 2023, the Company incurred $9.0 ($8.4 after-tax) of acquisition-related expenses, comprised of external transaction costs related to acquisitions.

During the nine months ended September 30, 2023, the Company incurred $18.4 ($16.2 after-tax) of acquisition-related expenses, comprised of external transaction costs incurred in the second and third quarters of 2023, as well as the amortization related to the value associated with acquired backlog resulting from an acquisition that closed in the first quarter of 2023.

During the year ended December 31, 2023, the Company incurred $34.6 ($30.2 after-tax) of acquisition-related expenses, comprised primarily of external transaction costs associated with the 2023 Acquisitions, as well as the amortization related to the value associated with acquired backlog resulting from three of the 2023 Acquisitions.

Such acquisition-related expenses are presented separately in the Condensed Consolidated Statements of Income.

Purchase Agreement to Acquire CommScope’s Mobile Networks-related Businesses

On July 18, 2024, the Company entered into a Purchase Agreement with CommScope Holding Company, Inc.

(“CommScope”) to acquire CommScope’s mobile networks-related businesses, specifically the Outdoor Wireless Networks segment and the Distributed Antenna Systems business (collectively, the “Mobile Networks Business”), for an aggregate purchase price of approximately $2,100 in cash, subject to customary post-closing adjustments.

Subject to the receipt of certain regulatory approvals and satisfaction of other customary closing conditions, the acquisition is now expected to be completed in the first quarter of 2025.

The Company expects to finance this acquisition through a combination of cash on hand and debt.

The Mobile Networks Business provides mobile networks solutions, with advanced technologies in the areas of base station antennas and related interconnect solutions, as well as distributed antenna systems.

The Mobile Networks Business’s wide range of products add advanced antenna and associated interconnect products, technologies and capabilities, which management believes are highly complementary to Amphenol’s existing product portfolio for next-generation wireless networks.

If and when the acquisition is consummated, the Company expects to report the Mobile Networks Business within its Communications Solutions segment.

During the three months ended March 31, 2025, the Company incurred $104.9 ($82.1 after-tax) of acquisition-related expenses, comprised primarily of (i) the amortization related to the value associated with acquired backlog resulting from the acquisition of the Andrew Business and external transaction costs associated with acquisitions (such acquisition-related expenses aggregating $44.0 are presented separately in the Condensed Consolidated Statements of Income) and (ii) the amortization of acquisition-related inventory step-up costs of $60.9 associated with the acquisition of the Andrew Business (such costs are recorded in Cost of sales in the Condensed Consolidated Statements of Income) .

Environmental Matters

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The reconciliations of these non-GAAP financial measures to the most directly comparable U.S.

GAAP financial measures for the three and nine months ended September 30, 2024 and 2023 are included in “Results of Operations” and “Liquidity and Capital Resources” within this Item 2:

GAAP financial measures for the three months ended March 31, 2025 and 2024 are included in “Results of Operations” and “Liquidity and Capital Resources” within this Item 2:

● Adjusted Diluted EPS is defined as diluted earnings per share (as reported in accordance with U.S.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis