tapebrief
TEL · Q2 2026

TEL · Q3 2026 Earnings

Bullish

TE Connectivity

Reported July 22, 2026

30-second summary

30-second take: TE Connectivity beat its Q3 guide across every line — revenue $5.16B (+13.8% YoY, press release headline rounds to 14%) vs $5.0B guide, organic 12.2% vs 9% guide (press release headline rounds to 12%), adjusted EPS $2.94 (+22% YoY, +3.9% above guide) — with Industrial Solutions +21.9% YoY, Digital Data Networks +34.2%, Energy +34.4%, and orders now running at +27% YoY. Q4 guide of $5.25B (+11% reported/organic) and $3.05 adjusted EPS (+18% YoY) extends double-digit growth into year-end, and management's framing has shifted from "well over $2B of growth" to "significantly outperforming our business model outlined during our Investor Day" — a rhetorical escalation that references 2027 momentum in the same sentence as FY2026 delivery.

Headline numbers

EPS

Q3 FY2026

$2.94

+3.2% vs est.

Revenue

Q3 FY2026

$5.16B

+13.8% YoY

+3.0% vs est.

Gross margin

Q3 FY2026

35.6%

Free cash flow

Q3 FY2026

$0.88B

Operating margin

Q3 FY2026

19.0%

Key financials

Q3 FY2026
MetricQ3 FY2026Q3 FY2025YoYQ2 FY2026QoQ
Revenue$5.16B$4.53B+13.8%$4.74B+8.8%
EPS$2.94$2.27+29.5%$2.73+7.7%
Gross margin35.6%35.3%+30bps36.8%-120bps
Operating margin19.0%18.9%+10bps20.1%-110bps
Free cash flow$0.88B$0.96B-8.2%$0.68B+29.9%

Guidance

Strong Q3 beat across revenue and EPS with raised Q4 guidance reflecting accelerating momentum; company outperforming its business model with double-digit growth continuing into fiscal year-end.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ3 FY2026$5.0B$5.16B+$0.16B (+3.2%) above guideBeat
Adjusted EPSQ3 FY2026$2.83$2.94+$0.11 (+3.9%) above guideBeat
GAAP EPS (continuing operations)Q3 FY2026$2.44$2.55+$0.11 (+4.5%) above guideBeat

New guidance

MetricPeriodGuideYoY
RevenueQ4 FY2026$5.25B+10.5% YoY
Adjusted EPSQ4 FY2026$3.05+18% YoY
GAAP EPS (continuing operations)Q4 FY2026$2.84+27% YoY

Segment performance

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
Transportation Solutions$2.58B$2.418B+6.7%
Industrial Solutions$2.58B$2.116B+21.9%
Digital Data Networks$0.814B—+34.2%
Energy$0.515B—+34.4%
Industrial Segment Organic Growth21.0%——
Transportation Segment Organic Growth4.5%——

Platform metrics

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
Order Growth YoY27%——
Organic Revenue Growth12.2%——

Profitability

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
Adjusted Operating Margin21.9%19.9%—
Free Cash Flow Conversion74.4% of operating cash flow——

Management tone

Q4 FY2025 AI-and-Industrial-as-structural → Q1 FY2026 above-through-cycle commitment → Q2 FY2026 "well over $2B of growth" → Q3 FY2026 "significantly outperforming Investor Day model"

Note: no earnings-call transcript was available for this quarter, so the tone read below draws exclusively on the press release language and management's quoted commentary vs the prior four quarters' framings.

The framing benchmark has escalated for the fourth consecutive quarter. A year ago management described growth relative to a 6-8% through-cycle band; two quarters ago it committed to "growth ahead of our through-cycle target"; last quarter the language became "well over $2 billion of growth"; this quarter the anchor has moved again — anchor quote: "We are significantly outperforming our business model outlined during our Investor Day, setting us up for double-digit increases in sales and EPS for fiscal 2026." Each quarter the reference has shifted upward and the confidence gap between commitment and delivery has widened. A company that historically prized guidance conservatism is now serially framing performance against progressively higher internal benchmarks.

Forward-looking language now extends past FY2026. Prior quarters anchored commentary to the fiscal year in progress; this print explicitly pulls 2027 into view. Anchor quote: "strong growth and operating momentum as we head towards 2027." This is the first time in the four-quarter arc that management has committed rhetorical capital to a fiscal year beyond the one being guided. The signal: the order book — running at +27% YoY, with aerospace/defense and AI programs carrying longer lead times — is giving management visibility into 2027 that they're now willing to reference publicly.

Orders disclosure has been elevated in prominence. Q3 order growth of +27% YoY, totaling $5.7B, is featured explicitly in the demand-strength narrative alongside the segment growth prints. Management is framing this as the leading indicator supporting the Q4 guide and 2027 confidence, rather than a lagging validation of results — asking investors to weight the book more heavily than the print.

Answers to last quarter's watch list

Does the AI revenue upgrade cadence continue? — This press release did not restate a full-year AI revenue figure. DDN grew +34.2% YoY in Q3, comfortably above management's earlier "growth across every hyperscale customer" framing. Without an updated dollar figure in the release, the cadence question remains unresolved on the print — the transcript may add color. Status: Continue monitoring
Q3 organic growth vs the 9% guide — Organic printed 12.2% vs 9% guide, a 320bps beat, suggesting guidance is not narrowing to visible bookings — management continues to build conservatism into the organic line. Status: Resolved positively
Industrial segment organic growth deceleration path — Industrial Solutions printed +21.0% organic. Absolute growth remains strong. Status: Continue monitoring
FCF margin recovery vs the 6%-of-sales capex commitment — Q3 FCF of $883M implies an FCF margin of ~17.1%. FCF conversion of ~74.5% of operating cash flow in the quarter, alongside 9-month FCF of $2.17B on $3.0B of operating cash flow, is consistent with the ~100% FY conversion bar surviving intact. Status: Continue monitoring
GAAP-to-non-GAAP gap — Q3 GAAP EPS of $2.55 vs non-GAAP of $2.94 — a $0.39 non-GAAP premium. Q4 guide of $2.84 GAAP vs $3.05 non-GAAP maintains a similar structure. Status: Resolved positively
Transportation Solutions content outgrowth above flat production — Transportation organic growth of 4.5% lands at the low end of the committed 4-6% band. Structural content gains are holding above the flat-production baseline, but only barely — a further step down would test the through-cycle commitment. Status: Continue monitoring

What to watch into next quarter

Does Q4 organic growth beat the 11% guide? A continued material outperformance would confirm the pattern of conservative organic guides; a narrowing beat would signal guidance is finally calibrated to bookings.

Q4 FCF and full-year conversion vs the ~100% bar — 9-month FCF of $2.17B leaves Q4 needing to deliver strong FCF to keep FY conversion near 100% against the 6%-of-sales capex commitment.

Transportation organic growth above 4% — Q3 landed at 4.5%, thin against the 4-6% content-outgrowth commitment. A Q4 print below 4% would break the multi-quarter commitment and force a re-framing of the segment story.

Industrial sub-segment trajectory — DDN +34.2% and Energy +34.4% both remain well above the segment average. Watch whether Q4 sustains that pace or whether comps begin to weigh on the growth rates.

Any FY2026 revenue or EPS anchor in the transcript — Management has escalated qualitative language to "significantly outperforming Investor Day model" without publishing an updated FY dollar figure since Q2's "well over $2B of growth." A dollar-anchored FY2026 update would be a confidence signal; continued qualitative-only framing would suggest management wants optionality on the print.

2027 setup commentary — This quarter management pulled 2027 into the framing for the first time. Watch whether Q4 commentary begins putting quantitative shape around 2027 (order book coverage, AI program run-rates, capex-to-revenue tie) or whether the 2027 reference remains purely rhetorical.

Sources

  1. TE Connectivity Q3 FY2026 press release, filed July 22, 2026: https://www.sec.gov/Archives/edgar/data/1385157/000110465926085589/tel-20260722xex99d1.htm
  2. Prior-quarter Tapebrief coverage (Q3 FY2025, Q4 FY2025, Q1 FY2026, Q2 FY2026) for cross-quarter trajectory framing.

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