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    AME
    Earnings call· Jun 2026(Q2 FY26)

    AMETEK INC/ Q2 FY26 earnings call AME

    Aug 4, 2026 Source

    Executive summary

    AMETEK Q2 FY26 — Record Performance Driven by Strong Orders and Secular Tailwinds

    AMETEK delivered an outstanding second quarter, exceeding expectations with record sales, orders, and earnings, driven by broad-based organic growth and robust margin expansion. The company's strategic portfolio alignment with secular growth drivers like AI infrastructure, defense modernization, and medtech is fueling strong demand. Management raised full-year guidance, reflecting confidence in continued performance and a strong pipeline of acquisition opportunities.

    Highlights

    5

    • Record sales of $2.04 billion, up 15% year-over-year (10% organic).

    • Record orders of $2.3 billion, up 28% year-over-year (25% organic), leading to a record backlog of $4.1 billion.

    • Record diluted earnings per share of $2.09, up 17% year-over-year and above guidance.

    • Free cash flow up 37% to $452 million, with a strong 111% conversion rate.

    • Core operating margins expanded by 110 basis points to 27.1%.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year 2026 Overall Sales Growth
    up approximately 10%
    high materiality
    High
    Full-year 2026 Organic Sales Growth
    up mid- to high single digits
    high materiality
    High
    Full-year 2026 Diluted Earnings Per Share
    $8.20 to $8.30
    high materiality
    High
    Q3 2026 Overall Sales Growth
    up high single digits
    medium materiality
    High
    Q3 2026 Adjusted Earnings Per Share
    $2.08 to $2.10
    medium materiality
    High
    Full-year 2026 Effective Tax Rate
    between 18.5% and 19%
    low materiality
    High
    Full-year 2026 Capital Expenditures
    approximately $160 million
    medium materiality
    High
    Full-year 2026 Free Cash Flow Conversion
    110% to 115% of net income
    medium materiality
    High
    Full-year 2026 Process Segment Organic Sales Growth
    up mid-single digits
    medium materiality
    High
    Full-year 2026 Aerospace & Defense Organic Sales Growth
    up low double digits
    medium materiality
    High
    Full-year 2026 Power Businesses Organic Sales Growth
    up mid-single digits
    medium materiality
    High
    Full-year 2026 Automation & Engineered Solutions Organic Sales Growth
    up high single digits
    medium materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Electronic Instruments Group (EIG)
    EIG generated outstanding results with broad-based growth across process instrumentation, aerospace, and power businesses. Strong positions in attractive markets drove both sales and orders.
    Organic Sales Growth: 7%Acquisition Contribution to Sales Growth: 7%Foreign Currency Impact on Sales: flatOverall Orders Growth: 23%Organic Orders Growth: 20%Core Operating Margins: 30.1%Core Operating Margin Change: +40 bps
    		$1.32B14%—$385M
    Electromechanical Group (EMG)
    EMG delivered exceptional results with balanced sales growth across aerospace, defense, medtech, and automation businesses. Strong core margin expansion was driven by new product phasing and lean cost structure, particularly from Paragon Medical.
    Organic Sales Growth: 15%Acquisition Contribution to Sales Growth: ~2%Organic Orders Growth: 35%Core Operating Margins: 26.2%Core Operating Margin Change: +290 bps
    		$723M17%—$191M
    Process Businesses
    Sales driven by recent acquisitions and excellent organic growth. Project activity remains strong, with particular strength in semiconductor and energy-related instrumentation.
    Organic Sales Growth: high single-digitOrders: outstandingStrongest Growth Areas: semiconductor and energy-related instrumentation
    		—high teens——
    Aerospace & Defense Businesses
    Demand remains robust across all segments, benefiting from increased defense spending and the commercial aerospace super cycle.
    Demand: robustStrongest Growth Areas: commercial OE and commercial aftermarket
    		—mid-teens organic——
    Power Businesses
    Delivered mid-single-digit organic sales growth with strong orders momentum supporting the broader power grid build-out.
    Orders Momentum: strongPipeline: growing, in support of power grid build-out
    		—mid-single-digit organic——
    Automation & Engineered Solutions
    Outstanding organic growth, well-aligned with attractive growth applications in medtech, semiconductor, and automation.
    Growth: excellent and broad-basedAlignment: attractive growth applications in medtech, semiconductor, and automation
    		—mid-teens organic——

    Operational metrics

    22
    Operating Income
    $544Mup 18%
    Q2 FY26

    Record operating income for the quarter.

    Operating Margins
    26.6%up 60 bps
    Q2 FY26

    Excellent operating margins.

    Core Operating Margins
    27.1%up 110 bps
    Q2 FY26

    Strong core margin expansion.

    EBITDA
    $644Mup 14%
    Q2 FY26

    Record EBITDA for the quarter.

    EBITDA Margins
    31.5%
    Q2 FY26

    Impressive EBITDA margins.

    Free Cash Flow Conversion
    111%
    Q2 FY26

    Outstanding conversion reflecting operating performance and working capital management.

    General and Administrative Expenses
    1.5%in line with prior year
    Q2 FY26

    In line with last year's second quarter.

    Interest Expense
    $20M
    Q2 FY26

    Second quarter interest expense.

    Other Operating Expenses
    $6Mvs $3M in Q2 2025
    Q2 FY26

    Due to higher acquisition diligence spend.

    Effective Tax Rate
    17.5%down from 19%
    Q2 FY26

    Down from Q2 2025.

    Capital Expenditures
    $32M
    Q2 FY26

    Second quarter capital expenditures.

    Depreciation and Amortization Expense
    $106M
    Q2 FY26

    Second quarter expense.

    Operating Working Capital
    16.4%220 bps improvement vs 18.6% in Q2 2025
    Q2 FY26

    Impressive improvement reflecting excellent operational execution and inventory discipline.

    Total Debt
    $2Bdown from $2.3B at end of 2025
    June 30, 2026

    Total debt at quarter end.

    Cash and Cash Equivalents
    $495M
    June 30, 2026

    Offsetting total debt.

    Gross Debt-to-EBITDA Ratio
    0.8x
    Q2 FY26

    Leverage ratio at quarter end.

    Net Debt-to-EBITDA Ratio
    0.6x
    Q2 FY26

    Leverage ratio at quarter end.

    New Product Vitality
    25%
    Q2 FY26

    Reflects investments in new products driving organic growth.

    Productivity Target
    $160Mincreased from $155M
    FY26

    Increased full-year productivity target due to strong performance.

    Business tied to AI/Data Center/Military Modernization/Commercial Aerospace/Power Infrastructure
    ~50%
    current

    Combined share of business aligned with these key secular growth drivers.

    Price Realization
    more than offset inflation and tariffs
    Q2 FY26

    Ability to offset cost pressures due to differentiated product portfolio.

    Acquisition-related intangible amortization
    $210M
    FY26

    Expected full-year after-tax acquisition-related intangible amortization.

    Industry KPIs

    6
    MetricValueDetails
    Book to bill ratio1.12
    Orders bookings growth$2.3BUSD
    M a acquisition contribution5points
    Backlog by segment end market$4.1BUSD
    Data center exposure pipeline~50%%
    Incremental flow through margin40%%

    Orderbook & backlog

    2
    Total Backlog$4.1BQ2 FY26

    up 21% from end of year

    ~80% will ship within the next 12 months

    Overall Orders$2.3BQ2 FY26

    up 28% YoY

    Organic orders up 25% YoY

    Product announcements

    2
    ProductTypeDetails
    Microfoillaunch
    A2 GLF oxygen sensorlaunch

    Deals & partnerships

    3
    Indoor Instrumentation (Indicor)Acquisition of a group of high-quality businesses with leading market positions in attractive niche markets, differentiated technologies, strong IP, and deep domain expertise.$5B

    Teams are working through integration planning. The acquisition is expected to close in the second half of the year. Post-closing, AMETEK will retain substantial financial capacity ($2.5B cash and credit facilities).

    FerroAcquisition of a company that designs and develops advanced 3D metrology and digital reality solutions, complementing AMETEK's Creaform business.

    Integration is on plan, and the teams are working well. It was an excellent strategic fit, putting together market leaders.

    UndisclosedRenewal of committed revolving credit facility.$3.5Buntil June 2031

    The size of the revolver facility increased to $3.5 billion, and the maturity was extended until June 2031. Positions the company well to support future growth initiatives.

    What to watch in Q3 FY26

    5

    Indicor Acquisition Closing & Integration

    H2 FY26
    CurrentIntegration planning underway, expected H2 FY26 close
    TargetAcquisition closed, integration progressing as planned

    Why it matters

    The $5 billion acquisition is a significant capital deployment and is expected to drive future growth and synergies.

    We remain excited for the acquisition of Indoor Instrumentation. Our teams are working through the integration planning and we continue to expect the acquisition to close in the second half of the year.

    Q&A highlights

    6

    Can you provide an update on end market and regional performance, and are you seeing positive inflection in the non-data center industrial economy, similar to ISM trends?

    Dave Zapico provided a comprehensive overview of end market performance (Process, A&D, Power, Automation) and regional strength (US, Asia, Europe). He confirmed broadening growth beyond just AI, citing defense modernization, energy security, and commercial aerospace as multi-year infrastructure build-outs driving demand for AMETEK's mission-critical products.

    “So when I look at this thing, we're really -- there's durability because the underlying capital spend our customers is driving a multiyear infrastructure build-out, and we are supplying mission-critical essential products for new semiconductor fabs, new power plants, the A&D market, defense modernization. So I believe we're in the beginning stages of a multiyear infrastructure built on, and we're incredibly well positioned.”

    asked by Deane Dray · answered by David Zapico

    2 min read6 chapters

    Detailed Narrative

    01

    Exceptional Q2 Performance and Raised Outlook

    AMETEK reported a record second quarter, surpassing expectations with double-digit organic sales growth, robust orders, and strong core margin expansion. This performance led to a significant increase in full-year sales and earnings guidance. The company's ability to execute across its diverse portfolio, coupled with disciplined operational management, positions it for continued growth through the remainder of the year.

    02

    Strategic Alignment with Secular Growth Drivers

    The company highlighted its strategic alignment with powerful secular growth drivers, including AI infrastructure, defense modernization, and energy security. Businesses like RTDS and Zygo are directly benefiting from increased demand in data center power systems and advanced semiconductor manufacturing. This broad alignment across multiple thematic drivers provides durability and reduces dependence on any single market.

    03

    Key Business Unit Highlights and Innovation

    Several business units demonstrated strong performance and innovation. Paragon Medical achieved outstanding growth driven by new design wins in orthopedics and drug delivery. The Used Trailer business introduced Microfoil, a next-generation lightweight heat exchanger for aerospace and defense. AlphaSense received the Innovation Award for its A2 GLF oxygen sensor, the world's first Galvanic lead-free oxygen sensor, designed for demanding environmental applications.

    04

    Robust Capital Deployment and Acquisition Strategy

    AMETEK's strong balance sheet and consistent cash flow support its top capital deployment priority: strategic acquisitions. The company is progressing with the integration planning for the Indoor Instrumentation (Indicor) acquisition, expected to close in the second half of the year. Post-acquisition, AMETEK anticipates substantial financial capacity for further growth initiatives, reinforcing its commitment to portfolio expansion.

    05

    Internal AI Integration and Efficiency Gains

    AMETEK is actively leveraging AI to enhance efficiency and accelerate growth across all functions, from speeding up due diligence and automating document processing to improving customer service and predicting supply delays. AI is also being integrated into product development, shortening design cycles and enhancing predictive maintenance capabilities, demonstrating a commitment to becoming an AI-enabled company.

    06

    Broad-Based End Market and Geographic Strength

    Growth was broad-based across all major end markets and geographies. Process, Aerospace & Defense, Power, and Automation & Engineered Solutions segments all reported strong organic sales growth. Geographically, the U.S. and Asia were particularly strong, with Europe also contributing mid-single-digit growth, indicating widespread demand for AMETEK's mission-critical solutions.

    AI-generated summary of the company’s earnings call. Not investment advice.