How is AMETEK thinking about strategic price capture going forward, especially after recent inflation and tariff pressures?

In Q4 FY25, AMETEK achieved a positive price/cost spread, offsetting inflation and tariffs. Management expects this to continue in FY26, leveraging differentiated products and niche market leadership. Pricing is not expected to recede, and the company anticipates a positive price/cost dynamic for the year. “For the fourth quarter of '25, we had a positive price/cost spread. So we -- our pricing offset both inflation and tariffs. So we think that, that is going to be what's going to happen in '26.”

Could you provide an update on key end markets and platforms, including regional dynamics?

Process businesses saw mid-teens overall sales growth and low single-digit organic growth in Q4 FY25, with FY26 organic sales expected up low single digits. Aerospace & Defense had low double-digit organic growth in Q4 FY25, with high single-digit organic growth expected in FY26. Power businesses grew mid-single digits organically in Q4 FY25, driven by grid modernization and data center buildout, with mid-single digit organic growth expected in FY26. Automation & Engineered Solutions had low double-digit organic growth in Q4 FY25, with mid-single digit organic growth expected in FY26. Geographically, US and Europe were up mid-single and low single digits respectively, while Asia was up 10%, with China up low double digits. “Yes, we have -- both U.S. and international sales were up mid-single digits. So it's kind of good strength across the board.”

Can you provide an update on the FARO acquisition, its progress, and key learnings?

FARO is an excellent strategic fit with Creaform, complementing metrology capabilities. AMETEK expects to double FARO's EBITDA margins from mid-teens to 30% and achieve a 10% ROIC by year 3 through cost synergies and integration. The business has been restructured into Metrology and Digital Reality units, with positive leadership impact. Initial restructuring charges were $17.6 million. “So we acquired the business for about 2.7x, and we feel that the cost synergies will allow us to more than double EBITDA margins from the current mid-teens level to a 30% level and achieve a 10% return on invested capital by year 3.”

AME

AMETEK (AME) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Industrials· Feb 3, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Overall Sales Growth	mid- to high single digits high materiality	FY26	Medium
Organic Sales Growth	low to mid-single digits high materiality	FY26	Medium
Diluted Earnings Per Share	$7.87 to $8.07 high materiality	FY26	Medium
Overall Sales Growth	up approximately 10% medium materiality	Q1 · FY26	Medium
Adjusted Earnings Per Share	$1.85 to $1.90 high materiality	Q1 · FY26	Medium
Effective Tax Rate	18.5% and 19.5% medium materiality	FY26	Medium
Capital Expenditures	$160 million medium materiality	FY26	Medium
Depreciation and Amortization	$430 million low materiality	FY26	Medium
Free Cash Flow Conversion	110% and 115% of net income medium materiality	FY26	Medium
General and Administrative Expenses	approximately 1.5% of sales low materiality	FY26	Medium
Other Operating Expenses	largely in line with 2025 levels low materiality	FY26	Medium
EIG Organic Sales Growth	low to mid-single digits medium materiality	FY26	Medium
EMG Organic Sales Growth	low to mid-single digits medium materiality	FY26	Medium
Process Segment Organic Sales Growth	low single digits medium materiality	FY26	Medium
Aerospace and Defense Organic Growth	high single-digit medium materiality	FY26	Medium
Power Businesses Organic Sales Growth	mid-single digits medium materiality	FY26	Medium
Automation & Engineered Solutions Organic Sales Growth	mid-single digits medium materiality	FY26	Medium
Medical Portfolio Organic Sales Growth	mid-single digits medium materiality	FY26	Medium
Core Incremental Margins	35% medium materiality	FY26	Medium
Operating Margin Expansion	30 basis points medium materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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 billion	13%	—	$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 million	15%	—	$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%	—	—

AME operating KPIs by quarter

AME operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Sep 2025 Q3 FY25	This call Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Backlog	$3.4B with positive organic growth across both our EIG and EMG segments, and we ended the quarter with a strong backlog of $3.4 billion. Source: earnings call transcript	$3.47B Book-to-bill in the quarter was 1.04, and we ended the first quarter with a backlog of $3.47 billion near record levels. Source: earnings call transcript	$3.54B Orders were also very strong in the quarter with overall orders up 13% to a record $1.97 billion and organic orders up 7%, leading to a record backlog of $3.54 billion. Source: earnings call transcript	$3.58B Orders were very strong in the quarter with overall orders up 18% to a record $2 billion and organic orders up 7% versus the prior year, leading to a record backlog of $3.58 billion. Source: earnings call transcript	$3.87B Overall, orders were a record $2.2 billion, up 23% versus the prior year organic orders were up 22%, leading to a record backlog of $3.87 billion. Source: earnings call transcript	—	+8.1%
Book-to-bill ratio	—	1.04 ratio Book-to-bill in the quarter was 1.04, and we ended the first quarter with a backlog of $3.47 billion near record levels. Source: earnings call transcript	—	1.02 ratio So it was broad-based, and there was a similar pattern from Q3 and the book-to-bill of AMETEK was 1.02, and it was pretty broad-based. Source: earnings call transcript	—	1.12 ratio Our backlog was now $4.11 billion, up about 21% from the end of the year, and we had a positive book-to-bill of 1.12 in the quarter, both groups positive -- and we also are executing very well. Source: earnings call transcript	—
Vitality Index	—	26% Our vitality index, which measures the sales of new products introduced in the past 3 years was a strong 26% in the first quarter. Source: earnings call transcript	26% The tangible results of this focus are clear with our third quarter Vitality Index, a strong 26%. Source: earnings call transcript	30% In the fourth quarter, our Vitality Index, which measures sales of new products introduced over the last 3 years was an outstanding 30%. Source: earnings call transcript	25% In the first quarter, our vitality index which measures sales of new products introduced over the last 3 years was an outstanding 25%. Source: earnings call transcript	25% In the second quarter, our new product vitality was a strong 25%. Source: earnings call transcript	0 pt
Orders	—	—	$1.97B Orders were also very strong in the quarter with overall orders up 13% to a record $1.97 billion and organic orders up 7%, leading to a record backlog of $3.54 billion. Source: earnings call transcript	$2B Orders were very strong in the quarter with overall orders up 18% to a record $2 billion and organic orders up 7% versus the prior year, leading to a record backlog of $3.58 billion. Source: earnings call transcript	$2.2B Overall, orders were a record $2.2 billion, up 23% versus the prior year organic orders were up 22%, leading to a record backlog of $3.87 billion. Source: earnings call transcript	$2.3B Overall orders were a record $2.3 billion, up 28% versus the prior year, with organic orders up sharply at 25%, being to a record backlog of $4.1 billion. Source: earnings call transcript	+4.5%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Total Orders $2 billion Q4 FY25

up 18% YoY

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

Total Backlog $3.58 billion end of Q4 FY25

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

Book-to-bill Ratio 1.02 Q4 FY25

Pretty broad-based across segments.

Product announcements

Product	Type	Timeline	Details
SPECTROMAXx and xSORT	launch	—

Deals & partnerships

LKC Technologies acquisition not 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 Technologies acquisition approximately $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 Microtechnik acquisition approximately $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

Abnormally low tax rate in Q4 2024 Q4 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 uncertainty FY25 (past)

Navigated through in FY25.

Mitigation:Strong portfolio and execution of growth strategy.

More challenging comparable periods for medical portfolio FY26

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 deglobalization Ongoing

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 pressure Ongoing

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 China Ongoing

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

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.