TE Connectivity : Second Quarter 2026 Earnings Webcast

Published: 2026-04-22 06:16:12 ET TEL

Published on 04/22/2026 at 06:16 am EDT

TE Connectivity Second Quarter 2026 Earnings

April 22, 2026

EVERY CONNECTION COUNTS

Q2 Results Exceeded Guidance with an Increase of 15% in Sales and 24% in Adjusted EPS Y/Y

Sales of $4.74B, increased 15% reported and 7% on an organic basis Y/Y

Record Orders of $5.3B, increased 25% Y/Y and 4% sequentially; book to bill of 1.12

Adjusted Operating Margins of 22%, expanded 130bps Y/Y driven by strong operational performance

Record Adjusted EPS of $2.73, increased 24% Y/Y

Strong Free Cash Flow generation of $1.3B in 1H FY26, increased 17% Y/Y

Returned $1.2B to shareholders in 1H FY26

Announced 10% increase in quarterly cash dividend

Q3 Guidance Reflects Double-Digit Sales and EPS Growth

Expect Sales of ~$5.0B, increasing 10% reported and 9% organically Y/Y

Expect Y/Y and sequential growth in both segments reinforcing broadening growth across the portfolio

Adjusted EPS of ~$2.83, increasing 17% Y/Y

3 Organic Net Sales Growth (Decline), Adjusted Operating Margin, Adjusted EPS, and Free Cash Flow are non-GAAP financial measures; see Appendix for descriptions and reconciliations

Reported FY25 FY26 FY26

Y/Y

Growth

Q/Q

Industrial

1,931

2,734

2,703

40%

(1)%

Transportation

2,315

2,386

2,621

13%

10%

Total TE

4,246

5,120

5,324

25%

Book to Bill

1.02

1.10

1.12

Q2 Q1 Q2

Book to bill above 1.0 in both segments

Industrial segment order trends reflecting momentum in all businesses

Transportation segment orders grew Y/Y and Q/Q in every business

Record order levels with Y/Y increases in every business

($ in millions)

Digital Data Networks

Strong growth driven by ongoing momentum in AI applications

Automation & Connected Living Growth across all regions driven by factory automation applications

Energy

Growth over market driven by grid hardening, data center, and clean energy applications, with benefit from acquisitions

AD&M

Performance reflects ongoing strength in commercial air and defense markets

Medical

Sales as expected, with sequential growth

$ in Millions

Q2 SALES

Q2 BUSINESS PERFORMANCE

Reported

Organic

Q2 ADJUSTED OPERATING MARGIN

Margin expansion of 260bps driven by strong operational performance and higher volume

$2,322

$1,829

Y/Y Growth Rates

Reported

Organic

Digital Data $714 Networks (DDN)

48%

46%

Automation

& Connected 579

13%

Living (ACL)

Energy 445

60%

11%

Aerospace,

Defense and 408

Marine (AD&M)

Medical 176

(3)%

(4)%

Industrial

Solutions $2,322

27%

17%

Q2 2025 Q2 2026

21.8%

19.2%

Q2 2025 Q2 2026

Adjusted EBITDA Margin 22.1% 25.3%

Double-digit sales growth building momentum for 2H

5 Organic Net Sales Growth (Decline), Adjusted Operating Margin, and Adjusted EBITDA Margin are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

Automotive

Sales as expected, with growth in Europe offset by market declines in North America and Asia

Commercial Transportation Strong growth over market across all regions

Sensors

Sales reflect growth in Asia, offset by weakness in North America and Europe

$ in Millions

Q2 SALES

Q2 BUSINESS PERFORMANCE

Reported

Organic

Q2 ADJUSTED OPERATING MARGIN

Strong margin performance reflecting continued execution by our teams

$2,422

$2,314

Y/Y Growth Rates

Reported

Organic

Automotive $1,762

(4)%

Commercial 433

Transportation

21%

17%

Sensors 227

(3)%

Transportation

Solutions $2,422

(1)%

Q2 2025 Q2 2026

21.4%

21.6%

Continue to outperform end markets with strong operational resiliency

Q2 2025 Q2 2026

Adjusted EBITDA Margin 25.6% 25.9%

6 Organic Net Sales Growth (Decline), Adjusted Operating Margin, and Adjusted EBITDA Margin are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

($ in Millions, except per share amounts)

Q2 FY25

Q2 FY26

Net Sales

$ 4,143

$ 4,744

Operating Income

$ 748

$ 954

Operating Margin

18.1%

20.1%

Acquisition-Related Charges

Restructuring & Other Charges, Net

Amortization Expense

Adjusted Operating Income

$ 846

$ 1,029

Adjusted Operating Margin

20.4%

21.7%

Earnings Per Share*

$ 0.04

$ 2.90

Acquisition-Related Charges

0.03

0.02

Restructuring & Other Charges, Net

0.11

0.04

Amortization Expense

0.11

0.15

Tax Items

1.91

(0.39)

Adjusted EPS

$ 2.21

$ 2.73

20.9%

Adjusted Effective Tax Rate 22.2%

*Represents Diluted Earnings Per Share from Continuing Operations

7 Adjusted Operating Income, Adjusted Operating Margin, Adjusted Earnings Per Share, and Adjusted Effective Tax Rate are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

SALES

ADJUSTED OPERATING MARGIN

$ in Billions

$4.7

$4.1

Sales up 15% reported

and 7% organic Y/Y

21.7%

20.4%

130bps of margin expansion

Q2 2025 Q2 2026

ADJUSTED EPS

FREE CASH FLOW

$ in Billions

$2.73

$2.21

Up 24% Y/Y

$1.3

$1.1

Up 17% Y/Y

Q2 2025 Q2 2026

YTD 2025 YTD 2026

Delivered Growth of 15% in Sales and 24% in Adjusted EPS Y/Y; Increasing Dividend by 10% Y/Y

8 Organic Net Sales Growth, Adjusted Operating Margin, Adjusted Earnings Per Share, and Free Cash Flow are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

Additional Information

EVERY CONNECTION COUNTS

Sales

(in millions)

Adjusted EPS

Q2 2025 Results $4,143 $2.21

Operational Performance 417 0.42

FX Impact 184 0.06

Tax Rate Impact - 0.04

Q2 2026 Results $4,744 $2.73

10 Adjusted Earnings Per Share is a non-GAAP financial measure; see Appendix for description and reconciliation.

Sales

(in millions)

Adjusted EPS

Q3 2025 Results $4,534 $2.41

Operational Performance 415 0.37

FX Impact 51 0.02

Tax Rate Impact - 0.03

Q3 2026 Guidance $5,000 $2.83

11 Adjusted Earnings Per Share is a non-GAAP financial measure; see Appendix for description and reconciliation.

($ in Millions)

Q2 2025

Q2 2026

Cash from Operating Activities

$653

$947

Capital expenditures, net

(229)

(267)

Free Cash Flow

$424

$680

($ in Millions)

Q2 2025

Q2 2026

Beginning Cash Balance

$1,254

$1,251

Free Cash Flow

424

680

Dividends

(193)

(208)

Share repurchases

(306)

(414)

Net increase (decrease) in debt

1,349

(1)

Acquisition of businesses, net of cash acquired

(200)

Other

Ending Cash Balance

$2,554

$1,110

Total Debt

$5,614

$5,655

Free Cash Flow and Working Capital Liquidity, Cash and Debt

A/R

$3,193

$3,454

Days Sales Outstanding*

Inventory

$2,603

$2,995

Days on Hand*

Accounts Payable

$1,843

$2,224

Days Outstanding*

Free Cash Flow is a non-GAAP financial measure, see Appendix for description and reconciliation

12 * Calculated on a quarterly basis and adjusted to exclude the impact of acquisitions and divestitures

Appendix

EVERY CONNECTION COUNTS

We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. ("GAAP"). These non-GAAP financial measures provide supplemental information and should not be considered replacements for results in accordance with GAAP. Management uses non-GAAP financial measures internally for planning and forecasting purposes and in its decision-making processes related to the operations of our company. We believe these measures provide meaningful information to us and investors because they enhance the understanding of our operating performance, ability to generate cash, and the trends of our business. Additionally, we believe that investors benefit from having access to the same financial measures that management uses in evaluating our operations. The primary limitation of these measures is that they exclude the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using these non-GAAP financial measures in combination with the most directly comparable GAAP financial measures in order to better understand the amounts, character, and impact of any increase or decrease in reported amounts.

These non-GAAP financial measures may not be comparable to similarly-titled measures reported by other companies.

The following provides additional information regarding our non-GAAP financial measures:

Organic Net Sales Growth (Decline) - represents net sales growth (decline) (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any. Organic Net Sales Growth (Decline) is a useful measure of our performance because it excludes items that are not completely under management's control, such as the impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity. This measure is a significant component in our incentive compensation plans.

Adjusted Operating Income and Adjusted Operating Margin - represent operating income and operating margin, respectively, (the most comparable GAAP financial measures) before special items including restructuring and other charges, acquisition-related charges, amortization expense on intangible assets, impairment of goodwill, and other income or charges, if any. We utilize these adjusted measures in combination with operating income and operating margin to assess segment level operating performance and to provide insight to management in evaluating segment operating plan execution and market conditions. Adjusted Operating Income is a significant component in our incentive compensation plans.

Adjusted Income Tax (Expense) Benefit and Adjusted Effective Tax Rate - represent income tax (expense) benefit and effective tax rate, respectively, (the most comparable GAAP financial measures) after adjusting for the tax effect of special items including restructuring and other charges, acquisition-related charges, amortization expense on intangible assets, impairment of goodwill, other income or charges, and certain significant tax items, if any.

Adjusted Income from Continuing Operations -represents income from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, amortization expense on intangible assets, impairment of goodwill, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects.

Non-GAAP Financial Measures

Adjusted Earnings Per Share - represents diluted earnings per share from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, amortization expense on intangible assets, impairment of goodwill, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects. This measure is a significant component in our incentive compensation plans.

Adjusted EBITDA and Adjusted EBITDA Margin -represent net income and net income as a percentage of net sales, respectively, (the most comparable GAAP financial measures) before interest expense, interest income, income taxes, depreciation, and amortization, as adjusted for net other income (expense), income (loss) from discontinued operations, and special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, and other income or charges, if any.

Free Cash Flow (FCF) - is a useful measure of our ability to generate cash. The difference between net cash provided by operating activities (the most comparable GAAP financial measure) and Free Cash Flow consists mainly of significant cash outflows and inflows that we believe are useful to identify. We believe Free Cash Flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to monitor and evaluate cash flows generated from our operations. Free Cash Flow is defined as net cash provided by operating

activities excluding voluntary pension contributions and the cash impact of special items, if any, minus net capital expenditures. Voluntary pension contributions are excluded from the GAAP financial measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items, including cash paid (collected) pursuant to collateral requirements related to cross-currency swap contracts, are also excluded by management in evaluating Free Cash Flow. Net capital expenditures consist of capital expenditures less proceeds from the sale of property, plant, and equipment. These items are subtracted because they represent long-term commitments. In the calculation of Free Cash Flow, we subtract certain cash items that are ultimately within management's and the Board of Directors' discretion to direct and may imply that there is less or more cash available for our programs than the most comparable GAAP financial measure indicates. It should not be inferred that the entire Free Cash Flow amount is available for future discretionary expenditures, as our definition of Free Cash Flow does not consider certain non-discretionary expenditures, such as debt payments. In addition, we may have other discretionary expenditures, such as discretionary dividends, share repurchases, and business acquisitions, that are not considered in the calculation of Free Cash Flow.

Free Cash Flow Conversion - represents Free Cash Flow as a percentage of Adjusted Income from Continuing Operations. We use Free Cash Flow Conversion as an indicator of our ability to convert earnings to cash.

Non-GAAP Financial Measures (cont.)

For the Q uarters Ende d For the Six Months Ende d

March 27,

March 28,

March 27,

March 28,

2026 2025

($ in millions)

2026

2025

Net Sales

Transportation Solutions

$ 2,422

$ 2,314

$ 4,889

$ 4,557

Industrial Solutions

2,322

1,829

4,524

3,422

Total

$ 4,744

$ 4,143

$ 9,413

$ 7,979

O pe rating

Income

O pe rating

Margin

O pe rating

Income

O pe rating

Margin

O pe rating

Income

O pe rating

Margin

O pe rating

Income

O pe rating

Margin

Transportation Solutions

$ 503

20.8

$ 445

19.2

$ 1,004

20.5

$ 891

19.6

Industrial Solutions

451

19.4

303

16.6

913

20.2

547

16.0

Total

$ 954

20.1

$ 748

18.1

$ 1,917

20.4

$ 1,438

18.0

Adjusted

O pe rating Income (1)

Adjusted

O pe rating Margin (1)

Adjusted

O pe rating Income (1)

Adjusted

O pe rating Margin (1)

Adjusted

O pe rating Income (1)

Adjusted

O pe rating Margin (1)

Adjusted

O pe rating Income (1)

Adjusted

O pe rating Margin (1)

Transportation Solutions

$ 522

21.6

$ 495

21.4

$ 1,045

21.4

$ 990

21.7

Industrial Solutions

507

21.8

351

19.2

1,020

22.5

640

18.7

Total

$ 1,029

21.7

$ 846

20.4

$ 2,065

21.9

$ 1,630

20.4

(1) Adjusted operating income and adjusted operating margin are non-GAAP financial measures. See description of non-GAAP financial measures.

Net Sales

Change in Net Sales for the Q uarter Ended March 27, 2026 versus Net Sales for the Q uarter Ended March 28, 2025

O rganic Net Sales

Transportation Solutions:

Growth (Decline)

Growth (Decline) (1)

($ in millions)

Translation (2) Acquisition

Automotive

$ 27

1.6

$ (67)

(3.8) %

$ 94

$ -

Commercial transportation

21.3

17.1

Sensors

2.3

(7)

(3.0)

Total Transportation Solutions

108

4.7

(12)

(0.5)

120

Industrial Solutions:

Digital data networks

232

48.1

222

46.1

Automation and connected living

13.1

8.2

Aerospace, defense, and marine

9.1

5.4

Energy

166

59.5

11.2

120

Medical

(6)

(3.3)

(7)

(3.5)

Total Industrial Solutions

493

27.0

309

16.9

120

Total

$ 601

14.5 %

$ 297

7.2 %

$ 184

$ 120

Change in Net Sales for the Six Months Ended March 27, 2026 versus Net Sales for the Six Months Ended March 28, 2025

Net Sales O rganic Net Sales

Transportation Solutions:

Growth Growth (Decline) (1)

($ in millions)

Translation (2) Acquisitions

Automotive

$ 190

5.5

$ 45

1.3

$ 145

$ -

Commercial transportation

134

20.0

113

16.7

Sensors

1.9

(12)

(2.7)

Total Transportation Solutions

332

7.3

146

3.2

186

Industrial Solutions:

Digital data networks

526

58.8

510

57.0

Automation and connected living

137

13.8

9.8

Aerospace, defense, and marine

11.4

8.0

Energy

356

71.9

12.7

271

Medical

0.6

0.4

Total Industrial Solutions

1,102

32.2

728

21.3

102

272

Total

$ 1,434

18.0

$ 874

11.0

$ 288

$ 272

(1) Organic net sales growth (decline) is a non-GAAP financial measure. See description of non-GAAP financial measures.

(2) Represents the change in net sales resulting from changes in foreign currency exchange rates.

Adjustme nts Acquisition- Re structuring

Re late d

U.S. GAAP Charge s (1)

and O the r Charge s, Ne t (1

Amortiz ation Expe nse (1)

Tax Ite ms (2)

Adjuste d (Non-GAAP) (3)

($ in millions, e xce pt pe r share data)

Operating income:

Transportation Solutions

$ 503

$ -

$ 1

$ 18

$ -

$ 522

Industrial Solutions

451

507

Total

$ 954

$ 8

$ 10

$ 57

$ - $

1,029

Operating margin

20.1

21.7 %

Income tax expense

$ (87)

$ (2)

$ 2

$ (12)

$ (114)

$ (213)

Effective tax rate

9.2

20.9

Income from continuing operations

$ 855

$ 6

$ 12

$ 45

$ (114)

$ 804

Diluted earnings per share from continuing operations

$ 2.90

$ 0.02

$ 0.04

$ 0.15

$ (0.39)

$ 2.73

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

(2) Represents a net income tax benefit related primarily to the settlement of prior period tax matters.

(3) See description of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 27, 2026

U.S. GAAP

Adjustments Acquisition- Restructuring

Related and O ther Amortization Charges (1) Charges, Net (1 Expe nse (1)

($ in millions, except per share data)

Adjusted Tax Items (2) (Non-GAAP) (3)

Operating income:

Transportation Solutions

$ 445

$ -

$ 33

$ 17

$ -

$ 495

Industrial Solutions

303

351

Total

$ 748

$ 12

$ 45

$ 41

$ - $

846

Operating margin

18.1

20.4 %

Income tax expense

$ (742)

$ (2)

$ (11)

$ (8)

$ 574

$ (189)

Effective tax rate

98.3

22.2

Income from continuing operations

$ 13

$ 10

$ 34

$ 33

$ 574

$ 664

Diluted earnings per share from continuing operations

$ 0.04

$ 0.03

$ 0.11

$ 1.91

$ 2.21

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

(2) Represents income tax expense related to a net increase in the valuation allowance for certain deferred tax assets associated with a ten-year tax credit obtained by a Swiss subsidiary in fiscal 2024.

(3) See description of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 28, 2025

Adjustme nts Acquisition- Re structuring

Re late d and O the r

U.S. GAAP Charge s (1) Charge s, Ne t (1)

Amortiz ation Expe nse (1)

Adjuste d Tax Ite ms (2) (Non-GAAP) (3)

($ in millions, e xce pt pe r share data)

Operating income:

Transportation Solutions

$ 1,004

$ -

$ 5

$ 36

$ -

$ 1,045

Industrial Solutions

913

1,020

Total

$ 1,917

$ 14

$ 20

$ 114

$ - $

2,065

Operating margin

20.4

21.9 %

Income tax expense

$ (297)

$ (3)

$ (1)

$ (23)

$ (114)

$ (438)

Effective tax rate

15.6

21.4

Income from continuing operations

$ 1,606

$ 11

$ 19

$ 91

$ (114)

$ 1,613

Diluted earnings per share from continuing operations

$ 5.43

$ 0.04

$ 0.06

$ 0.31

$ (0.39)

$ 5.45

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

(2) Represents a net income tax benefit related primarily to the settlement of prior period tax matters.

(3) See description of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 27, 2026

Disclaimer

TE Connectivity plc published this content on April 22, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 22, 2026 at 10:15 UTC.