Amphenol (APH) Q2 FY26 earnings call: guidance and Q&A

Clarification on what types of projects (optical, building, broadband) are driving CommScope's strong performance, especially in IT datacom.

Adam Norwitt confirmed that IT datacom is a major driver, with CommScope's IT datacom business (which is entirely optics-focused) nearly doubling year-over-year, particularly in AI-related applications. He also noted growth in communications networks and building connectivity. He emphasized that being part of Amphenol has helped CommScope leverage existing relationships in the data center ecosystem.

“I mean, in fact, if you look at their IT datacom business on a year-over-year basis, it's essentially doubled on a year-over-year basis, which is really, really impressive. And all of what they do in IT datacom is, in fact, optics, advanced complex optical interconnect solutions for customers, doing a broad array of things.”

asked by Steve Volkmann · answered by R. Norwitt

Why CommScope's EPS outlook more than doubled despite a smaller revenue raise, asking if it's operating leverage or better gross margin.

Craig Lampo stated that the profitability improvement is due to operational execution across the board, including leveraging growth, controlling SG&A, and factory efficiency, rather than just gross margin or pricing. He highlighted CommScope's Q2 operating margin of over 20% (including amortization). Adam Norwitt added that the CommScope team's passion and aggressive pursuit of opportunities, combined with Amphenol's culture and expertise in interconnect, have been key factors.

“I mean, they're essentially in the second quarter, operating over 20%, including the amortization that we have kind of embedded in those numbers now from the acquisition. So they've done a great job in the factory with their vendors, with controlling cost on SG&A kind of across the board.”

asked by Joseph Cardoso · answered by Craig Lampo

Whether the AI connectivity opportunity is a copper vs. fiber debate, and a quantitative framework for the fiber business within Amphenol's AI revenue.

Adam Norwitt stated that customers need "more of everything" – high-speed copper, fiber optic solutions, and power solutions. He confirmed Amphenol has a very strong high-speed copper business, a significantly scaled leadership position in optics for AI (including CommScope's optics business), and a leadership position in power interconnect for AI. He declined to give specific decimal point numbers but emphasized the strength across all three.

“As we talk to our customers and we talk to them about what's going on today, what they expect next year, what they expect the years thereafter, the one consistent thing we hear from our customers is they need more of everything. They need more of everything, more high-speed copper, more fiber optic solutions and more power solutions.”

asked by Amit Daryanani · answered by R. Norwitt

If a conversion from cablized spine backplane to PCB in AI infrastructure would be a challenge or benefit for Amphenol, given its involvement in various architectures.

Adam Norwitt explained that the core question is increased overall content of interconnect, not the specific architecture. Amphenol's breadth of technologies (cable, PCBs, assemblies) allows it to enable customers regardless of their design choices. He emphasized that customers are doing "really, really hard things" and are all moving towards more content, which creates opportunities for Amphenol.

“Whether one or another decides to go to a backplane versus a cable versus a printed circuit board, this is really not the core question. The core question is, is there more overall content of interconnect?”

asked by William Stein · answered by R. Norwitt

Concerns about fiber supply potentially negatively impacting CommScope's acquisition and overall optical portfolio growth.

Adam Norwitt stated that CommScope has managed its supply chain effectively, including securing fiber, which is reflected in their outstanding results and positive outlook. He praised the CommScope team's entrepreneurial spirit in overcoming impediments, including fiber supply.

“Yes, of course, there's a lot of demand for lots of things, including demand for fiber optics. And the CCS team has done a fabulous job of managing their supply chain, expanding their supply chain and making sure that they have a ready source of availability for all the materials that they need in order to support their customers.”

asked by Asiya Merchant · answered by R. Norwitt

Any internal or external bottlenecks beyond fiber supply, especially given a peer's report of such issues.

Adam Norwitt reiterated that Amphenol does not see any broad bottlenecks constraining its ability to satisfy customers or deliver results, citing the 30% organic growth. He attributed this to the company's decentralized entrepreneurial culture, where 150 general managers proactively manage challenges, make investments, and diversify sourcing. He noted that Amphenol has doubled its size in two years, with two-thirds organic growth, requiring significant vendor capacity increases.

“Do we see anything broadly in terms of bottlenecks that are constraining our ability to satisfy our customers or deliver results? We don't. I mean else, we wouldn't have produced 30% organic growth in the quarter, growing 13% sequentially on an organic basis.”

asked by Andrew Buscaglia · answered by R. Norwitt