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    AME
    Earnings call· Dec 2025(Q4 FY25)

    AMETEK INC/ Q4 FY25 earnings call AME

    Feb 3, 2026 Source

    Executive summary

    AMETEK Q4 FY25 — Record Performance Across Sales, Orders, and Profit

    AMETEK concluded FY25 with record-setting Q4 performance across sales, orders, and profitability, driven by strong organic growth and strategic acquisitions. The company enters FY26 with robust momentum, a record backlog, and significant capital deployment capacity, focusing on continued innovation and operational excellence to drive long-term shareholder value.

    Highlights

    5

    • Record Q4 sales of $2 billion, up 13% from Q4 2024, with organic sales up 5%.

    • Record Q4 orders of $2 billion, up 18% from Q4 2024, with organic orders up 7%, leading to a record backlog of $3.58 billion.

    • Record Q4 operating income of $523 million, up 12% from Q4 2024, with core operating margins at 27.6%, up 100 basis points.

    • Record Q4 diluted EPS of $2.01, up 7% from Q4 2024, exceeding guidance of $1.90 to $1.95 per share.

    • Record Q4 free cash flow of $527 million, up 6% from Q4 2024, with 132% conversion to net income.

    Concerns

    1

    • The FARO Technologies acquisition, while strategic, initially dilutes margins, coming in at mid-teens EBITDA margin compared to AMETEK's 31% EBITDA margin, requiring a multi-year integration to reach target profitability.

    Guidance & targets

    20
    CategoryTargetConfidence
    Overall Sales Growth
    mid- to high single digits
    high materiality
    Medium
    Organic Sales Growth
    low to mid-single digits
    high materiality
    Medium
    Diluted Earnings Per Share
    $7.87 to $8.07
    high materiality
    Medium
    Overall Sales Growth
    up approximately 10%
    medium materiality
    Medium
    Adjusted Earnings Per Share
    $1.85 to $1.90
    high materiality
    Medium
    Effective Tax Rate
    18.5% and 19.5%
    medium materiality
    Medium
    Capital Expenditures
    $160 million
    medium materiality
    Medium
    Depreciation and Amortization
    $430 million
    low materiality
    Medium
    Free Cash Flow Conversion
    110% and 115% of net income
    medium materiality
    Medium
    General and Administrative Expenses
    approximately 1.5% of sales
    low materiality
    Medium
    Other Operating Expenses
    largely in line with 2025 levels
    low materiality
    Medium
    EIG Organic Sales Growth
    low to mid-single digits
    medium materiality
    Medium
    EMG Organic Sales Growth
    low to mid-single digits
    medium materiality
    Medium
    Process Segment Organic Sales Growth
    low single digits
    medium materiality
    Medium
    Aerospace and Defense Organic Growth
    high single-digit
    medium materiality
    Medium
    Power Businesses Organic Sales Growth
    mid-single digits
    medium materiality
    Medium
    Automation & Engineered Solutions Organic Sales Growth
    mid-single digits
    medium materiality
    Medium
    Medical Portfolio Organic Sales Growth
    mid-single digits
    medium materiality
    Medium
    Core Incremental Margins
    35%
    medium materiality
    Medium
    Operating Margin Expansion
    30 basis points
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Electronic Instruments Group (EIG)
    Delivered excellent operating performance with record sales and operating profit along with impressive core margin expansion. Organic sales growth showed steady improvement throughout 2025.
    Organic Sales Growth: 2%Acquisitions Contribution: 10 pointsForeign Currency Tailwind: 1 pointCore Operating Margins: 32.3% (up 50 bps)
    		$1.37 billion13%—$413.7 million (Operating Income)
    Electromechanical Group (EMG)
    Completed an outstanding year with very strong broad-based growth and excellent operating performance. Sales growth was strong across all EMG divisions, each growing double digits organically.
    Organic Sales Growth: 14%Foreign Currency Tailwind: 1 pointOperating Margins: 22.7% (up 240 bps)
    		$629 million15%—$142.5 million (Operating Income)
    US Sales
    Driven by strength in Automation & Engineered Solutions business.
    		—mid-single digits——
    Europe Sales
    Driven by strength in Aerospace and Automation businesses.
    		—low single digits——
    Asia Sales
    Strong performance across the board, with China driven by Process, Power, and Automation businesses.
    China Sales Growth: low double digitsAsia ex-China Sales Growth: high single digits
    		—10%——

    Operational metrics

    36
    Vitality Index
    30%
    Q4 FY25

    Measures sales of new products introduced over the last 3 years.

    Core Operating Margins
    27.6%up 100 bps
    Q4 FY25

    Reflects strong operating performance.

    EBITDA Margins
    30.9%
    Q4 FY25

    Strong EBITDA margins in the quarter.

    Free Cash Flow Conversion
    132%
    Q4 FY25

    Outstanding free cash flow conversion to net income.

    Overall Sales
    $7.4 billionup 7%
    FY25

    Record annual sales.

    Operating Income
    $1.94 billionup 7%
    FY25

    Record annual operating income.

    Operating Margins
    26.2%up 10 bps
    FY25

    Record annual operating margins.

    Core Operating Margins
    up 80 bps
    FY25

    Very strong core margin expansion for the full year.

    EBITDA
    $2.33 billionup 7%
    FY25

    Record annual EBITDA.

    EBITDA Margins
    31.5%
    FY25

    Very strong annual EBITDA margins.

    Diluted EPS
    $7.43up 9%
    FY25

    Record annual diluted earnings per share.

    Free Cash Flow Conversion
    113%
    FY25

    Very strong full-year free cash flow conversion.

    General and Administrative Expenses
    $10 millionup YoY
    FY25

    Slightly up as a percentage of sales from 2024 levels.

    Effective Tax Rate
    16.3%up from 12.8% in Q4 FY24
    Q4 FY25

    Higher than prior year due to abnormally low rate in Q4 2024.

    Effective Tax Rate
    17.8%
    FY25

    Full-year effective tax rate.

    Capital Expenditures
    $57 million
    Q4 FY25

    Capital expenditures for the quarter.

    Capital Expenditures
    $130 million
    FY25

    Full-year capital expenditures.

    Depreciation and Amortization
    $106 million
    Q4 FY25

    Depreciation and amortization for the quarter.

    Depreciation and Amortization
    $423 million
    FY25

    Full-year depreciation and amortization.

    After-tax Acquisition-Related Intangible Amortization
    $210 million
    FY26

    Expected for FY26.

    Operating Working Capital
    16.5%30 bps improvement vs Q4 FY24
    Q4 FY25

    Improvement in operating working capital.

    Total Debt
    $2.3 billionup $200 million from 2024
    Year-end 2025

    Increase due to FARO Technologies acquisition.

    Cash and Cash Equivalents
    $458 million
    Year-end 2025

    Cash balance offsetting total debt.

    Share Repurchases
    $285 million
    Q4 FY25

    Amount spent on share repurchases in the quarter.

    Share Repurchases
    $443 million
    FY25

    Total amount spent on share repurchases for the full year.

    Gross Debt-to-EBITDA Ratio
    1xessentially unchanged from 2024
    Year-end 2025

    Reflects conservative balance sheet.

    Net Debt-to-EBITDA Ratio
    0.8xessentially unchanged from 2024
    Year-end 2025

    Reflects conservative balance sheet.

    Investments in Growth Initiatives
    $90 millionincremental
    FY25

    Majority went into R&D, engineering, sales, marketing, and digital initiatives.

    Core Incremental Margins
    45%
    Q4 FY25

    Very strong core incremental margins.

    Medical Portfolio Organic Growth
    low double digits
    Q4 FY25

    Driven by Paragon and Rauland.

    Medical Portfolio Organic Growth
    high single digits
    FY25

    Full-year organic growth for the medical portfolio.

    Process Businesses Organic Growth
    low single digits
    Q4 FY25

    First time positive organic growth in Process businesses for the year.

    Aerospace and Defense Overall and Organic Sales Growth
    low double digits
    Q4 FY25

    Outstanding year with broad-based growth across commercial OE and aftermarket.

    Power Business Overall and Organic Sales Growth
    mid-single digits
    Q4 FY25

    Driven by RTDS and Power instruments businesses, supporting global grid modernization and data center buildout.

    Automation & Engineered Solutions Overall and Organic Sales Growth
    low double digits
    Q4 FY25

    Broad-based growth, with Paragon Medical businesses delivering the strongest growth.

    Aerospace & Defense Business Sales Share
    18%
    Q4 FY25

    Reflects the company's exposure to the defense industry.

    Industry KPIs

    9
    MetricValueDetails
    Equipment pricing—
    Book to bill ratio1.02
    Service attach mix40%%
    Orders bookings growth18%%
    M a acquisition contribution$1 billionUSD
    Backlog by segment end market$3.58 billionUSD
    Backlog shape delivery window—
    Data center exposure pipeline—
    Incremental flow through margin45%%

    Orderbook & backlog

    3
    Total Orders$2 billionQ4 FY25

    up 18% YoY

    Organic orders up 7% YoY. Record orders for the quarter.

    Total Backlog$3.58 billionend of Q4 FY25

    Record backlog. Conversion expected to be in the 30-50% range, with strong order pipelines.

    Book-to-bill Ratio1.02Q4 FY25

    Pretty broad-based across segments.

    Product announcements

    1
    ProductTypeDetails
    SPECTROMAXx and xSORTlaunch

    Deals & partnerships

    3
    LKC Technologiesacquisitionnot disclosed

    LKC Technologies is a leading provider of innovative technologies for diagnosing and managing ophthalmic conditions, helping detect early signs of diabetic retinopathy. It was privately held, headquartered in Germantown, Maryland, with about 60 employees. The acquisition combines LKC with AMETEK's Ultra Precision Technologies record business, leveraging adjacent technology and channels. Described as a smaller technology deal.

    FARO Technologiesacquisitionapproximately $1 billion

    Acquired in 2025 (combined with Kern Microtechnik). FARO designs and develops advanced 3D metrology and digital reality solutions, including measurement arms, laser scanners, and integrated software. It is an excellent strategic fit with AMETEK's Creaform business, complementing metrology capabilities. Integration involves forming two business units: Metrology and Digital Reality.

    Kern Microtechnikacquisitionapproximately $1 billion

    Acquired in 2025 (combined with FARO Technologies). The integration of the business is progressing well, with the AMETEK growth model being applied.

    Risks & headwinds

    6
    Abnormally low tax rate in Q4 2024Q4 FY25

    Q4 FY25 diluted EPS growth of 7% would have been 11% if adjusted for the prior year's abnormally low tax rate.

    Sluggish industrial markets and macroeconomic uncertaintyFY25 (past)

    Navigated through in FY25.

    Mitigation: Strong portfolio and execution of growth strategy.

    More challenging comparable periods for medical portfolioFY26

    Medical portfolio organic growth expected to slow from high single digits in FY25 to mid-single digits in FY26.

    Mitigation: Still very healthy businesses and performing well.

    Macro uncertainty around broader deglobalizationOngoing

    Unquantified.

    Mitigation: Industrial renaissance across the west should help offset any drag; conditions remain constructive with positive interest rate policies and favorable M&A environment.

    Tariff pressureOngoing

    Offset by pricing in Q4 FY25.

    Mitigation: Pricing power due to highly differentiated products and niche market leadership; expectation to offset inflation and existing known tariffs in FY26.

    Real estate hangover and deflation in ChinaOngoing

    Unquantified.

    Mitigation: Strong positions in niche markets within China (e.g., high-value manufacturing, automation, environmental, nuclear power, EV testing) that are less impacted by broader economic issues.

    Q&A highlights

    8

    Can you provide more detail on the medical portfolio's performance across EIG and EMG, and the medium- to long-term algorithm for Paragon and Rauland?

    The broader healthcare exposure is about 21% of the business. Paragon and Rauland drove low double-digit organic growth in Q4 FY25 and high single-digit for full-year FY25. For FY26, organic growth is expected to be mid-single digits due to more challenging comps, but the businesses remain healthy.

    “It's about 21% of our business now, the broader health care exposure. If you look at the health -- across both groups, Paragon and Rauland driving the results, they were up low double digits in Q4.”

    asked by Matt Summerville · answered by David Zapico

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Investments & Innovation

    AMETEK continues to invest significantly in growth initiatives, with an incremental $90 million in 2025 and an expected $100 million in 2026, primarily in research, development, engineering, sales, marketing, and digital initiatives. These investments have yielded strong results, evidenced by a Vitality Index of 30% in Q4 FY25, reflecting sales from new products introduced over the last three years. The company's engineering capabilities are driving viable product development plans and technology roadmaps, positioning it well for a strengthening market.

    02

    Defense Market Expansion

    The company is experiencing growing demand in its defense businesses, particularly in Europe, leveraging differentiated technology and product portfolios. Examples include AMETEK's Rotron and Airtechnology businesses providing advanced cooling solutions for European air defense systems, Abaco business supplying integrated high-performance computing for European aircraft, and power and data systems businesses providing power generation systems for UAV platforms. Aerospace & Defense currently represents about 18% of total sales, with more defense sales than commercial.

    03

    China Market Performance

    China sales were up low double digits in Q4 FY25, driven by strong performance in Process, Power, and Automation businesses. This positive trend is attributed to AMETEK's products supporting high-value manufacturing processes, automation, environmental improvements, nuclear power infrastructure, and the electric vehicle industry in China. Despite broader macroeconomic challenges🌐 like deflation and real estate issues, AMETEK maintains strong positions in its niche markets within the region.

    04

    M&A Strategy & Capacity

    AMETEK maintains a disciplined capital deployment strategy, with acquisitions as the top priority. The company has a robust balance sheet and significant financial capacity, able to deploy over $5 billion in capital while maintaining an investment-grade credit rating. Management sees a strong pipeline of high-quality acquisition candidates, including a good mix of normal quality and larger deals, which could differentiate performance over the next few years.

    05

    Pricing & Cost Management

    In Q4 FY25, AMETEK achieved a positive price/cost spread, with pricing offsetting both inflation and tariffs. Management expects this trend to continue in FY26, leveraging its highly differentiated product portfolio, leadership in niche markets, and mission-critical products to maintain pricing power. The company anticipates being able to offset inflation and existing known tariffs in the coming year.

    06

    FARO Integration Progress

    The integration of FARO Technologies, acquired for approximately $1 billion in 2025, is progressing well. The business has been restructured into Metrology and Digital Reality units, combining talent from both legacy AMETEK and FARO. The company aims to double FARO's EBITDA margins from mid-teens to 30% and achieve a 10% return on invested capital by year 3, driven by cost synergies, elimination of public company costs, and integration into AMETEK's global infrastructure.

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