Detailed narrative
Record orders and the EIG inflection
Orders were a record $2.2 billion, up 23% (organic +22%), lifting backlog to a record $3.87 billion. Management framed the quarter as the long-signaled inflection where EIG follows EMG by roughly 6–9 months: EIG organic orders jumped 25% with notable strength in defense, power and semiconductor, while EMG organic orders rose 16%.
Every subsegment posted double-digit organic orders growth and every division was up at least 5%, so management stressed the strength was broad-based rather than lumpiness in a few areas. March was an all-time record month for orders, and April was tracking on target for another good month.
Large orders across defense, space, power and semiconductor
Several large orders aligned to attractive segments helped fill in the full-year sales outlook. In defense, AMETEK saw broad-based strength across missile defense, UAVs and naval applications, was selected on three UAV programs (one U.S., two with NATO allies), and booked strong EMIP fluid-transfer orders including for nuclear submarines.
Its Kern (Current Micro Technique) business won a sizable ultraprecision-machining order for RF components on low-earth-orbit satellites, and Abaco secured an agreement to supply advanced computing to a semiconductor-tool maker facing AI-driven demand. Commercial nuclear demand was also strong across fluid transfer, radiation detection and uninterruptible power solutions.
Margins and cash generation
Core operating margins expanded 160 bps to 27.9% (reported operating margins 26.8%, up 50 bps), with EMG core margins up a considerable 410 bps on productivity plus volume leverage and EIG up 40 bps on productivity. Core incremental margins exceeded 50% for the company and both groups.
Record EBITDA of $620M carried a 32.1% margin. Operating working capital improved 60 bps to 17.5% of sales, and free cash flow of $426M (up 8%) converted at 107% of net income. The company newly disclosed adjusted gross margin of 51% and will report it quarterly going forward⏳.
Capital deployment and the First Aviation acquisition
With gross debt-to-EBITDA of 0.9x and net of 0.7x, AMETEK cited capacity to deploy well over $5 billion while retaining an investment-grade rating, with M&A the top priority. It signed a definitive agreement to acquire First Aviation Services, a privately held defense/aviation MRO and proprietary-parts provider with six U.S. centers of excellence and ~$80M in annual sales — roughly two-thirds MRO services and one-third proprietary (PMA/DER) parts across rotorcraft and fixed-wing platforms.
Management declined to disclose the price or comment on media speculation about a larger potential deal, reiterating a preference for 'bite-sized' deals that are a small percentage of market cap. It also raised the dividend 10% to $0.34/share, a seventh straight year of 10%+ increases.
Geographic performance and macro watch items
Growth was balanced: U.S. and international both up mid-single digits, with Asia strongest (up low double digits, China up high teens on process and power). The U.S. was led by A&D and Materials Analysis; Europe was up low single digits on power and automation but carried modest Middle East headwinds — about $15M of discrete orders did not ship due to safety issues and disruptions.
Middle East exposure is only ~2% of sales, mostly EIG process/energy, and management sees no cancellations, instead noting quotations to rebuild energy infrastructure. The company is watching aviation-fuel availability/costs for the small (<2%) third-party commercial aftermarket, expecting any softness to show first in Asia, then Europe, with the U.S. most insulated.
New product: RTDS data-center simulation
RTDS Technologies, a leader in real-time digital simulation of power systems, updated its simulator platform with a new data-center module and an updated workflow that more accurately represents third-party power solutions, helping data-center operators model UPS systems and variable-frequency drives used in power and cooling.
The innovation generated two notable Q1 orders for data-center testing from large power-equipment providers. Management also highlighted its ARTEMIS 2 support, where the Sensors and Fluid Management Systems business supplied thin-film pressure transducers for life-support infrastructure on the Orion crew vehicle, alongside four other AMETEK businesses (FMH, UEI, NSI, and Zygo Pixellink).