TEL · Q4 2025 Earnings

Bullish

TE Connectivity

Reported October 29, 2025

30-second summary

30-second take: TE Connectivity closed FY2025 with Q4 revenue of $4.75B (+16.7% YoY), beating its own $4.55B guide by $199M, and adjusted EPS of $2.44 vs guide of $2.27 — a clean operational beat across the board. Industrial Solutions grew 34% (24% organic) with Digital Data Networks +80% and Energy +83%, while AI revenue tripled YoY to over $900M for the year. Q1 FY2026 guide of $4.5B and $2.53 EPS (+17% / +23% YoY) signals management thinks the inflection continues; the Western auto and general industrial drags remain, but management is now framing them as stabilizing rather than worsening.

Headline numbers

EPS

Q4 FY2025

$2.44

Revenue

Q4 FY2025

$4.75B

+16.7% YoY

Gross margin

Q4 FY2025

34.9%

Free cash flow

Q4 FY2025

$1.15B

Operating margin

Q4 FY2025

19.3%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$4.75B	+16.7%	$4.53B	+4.7%
EPS	$2.44	—	$2.27	+7.5%
Gross margin	34.9%	—	35.3%	-40bps
Operating margin	19.3%	—	18.9%	+40bps
Free cash flow	$1.15B	—	$0.96B	+20.0%

Guidance

Q4 FY2025 beat both revenue and EPS guidance; company projects accelerating growth into Q1 FY2026 with double-digit sales and earnings expansion.

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

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2025	$4.55 billion	$4.749 billion	+$0.199 billion above guide	Beat
Revenue YoY Growth	Q4 FY2025	12% reported basis	16.7% actual YoY growth	+4.7pts above guide	Beat
Adjusted EPS	Q4 FY2025	$2.27	$2.44	+$0.17 above guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q1 FY2026	$4.5 billion	17% reported basis, 11% organically
Adjusted EPS	Q1 FY2026	$2.53	23% year over year

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Transportation Solutions	$2.413B	+3.6%
Industrial Solutions	$2.336B	+34.4%
Industrial Segment Organic Growth	23.9%	—
Digital Data Networks Growth	79.9%	—
Energy Business Growth	83.1%	—

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Orders	$4.7 billion

Profitability

Q4 FY2025

Segment	Q4 FY2025
Adjusted Operating Margin	19.9%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Cash Returned to Shareholders (Q4)	$650 million
Full Year Cash Returned to Shareholders	$2.2 billion
Full Year Bolt-on Acquisitions Deployment	$2.6 billion

Management tone

Q1 customer-optimization caution → Q2 AI-as-emerging → Q3 AI-as-executing → Q4 AI-and-Industrial-as-structural

The AI disclosure has crossed from forward narrative to backward-looking print. Three quarters ago AI was discussed as a tailwind without dollar figures; last quarter management put $800M-on-track and >$1B-next-year on the table; this quarter the full-year actual ($900M, 3x growth) is being delivered alongside a $1.5B-run-rate forward signal. Anchor quote: "For the full year, we generated over $900 million in AI revenue, tripling our AI sales versus the prior year." The willingness to publish hard numbers across years signals management thinks the ramp is durable enough to be held accountable for.

Industrial Solutions has been reframed from a recovery play to a structural growth driver. Last quarter the +30% YoY Industrial print was discussed as the convergence of restructuring + AI + energy; this quarter at +34% reported and +24% organic, management is no longer treating it as cyclical recovery at all. The DDN +80% and Energy +83% prints are now being described in secular-tailwind language. The implication: the 20% Industrial operating margin floor is being defended as a baseline, not as a peak.

The macro-uncertainty hedge has thinned materially. A quarter ago management was still emphasizing regional unevenness as a meaningful risk; this quarter the framing pivots to "order rates improve in the general industrial end markets, and we believe this indicates stability" — a notable softening of one of the recurring caution items. General industrial stabilization, if real, removes one of the larger drag stories in the portfolio.

Transportation tone shifted from defensive to balanced. Last quarter Western auto weakness was offset by Asia strength; this quarter management is calling for 87-88M global auto units in FY2026 (flat) and reaffirming 4-6% content outgrowth, with the Q&A explicitly noting Western production declines are "becoming more balanced/flatter." The framing is no longer "Asia carries the segment" but "all regions contribute."

Localization as offense, not defense. Repeat of Q3's framing but with more conviction: "We continue to demonstrate operational resilience with our global manufacturing strategy where we've invested heavily to ensure in-region support of our customers." In a year where peers are scrambling on tariff exposure, TE is treating its localized footprint as a sales asset.

Recurring themes management leaned on this quarter:

AI and hyperscale demand acceleration (80% DDN growth, $900M AI revenue)Energy infrastructure secular tailwind (83% reported growth, 24% organic)Record financial performance (sales, earnings, free cash flow)Margin expansion across both segments at 20% operating marginRegional divergence: Asia strength offsetting Western weaknessOperational resilience and in-region manufacturing localization

Risks management surfaced:

Uneven macro environment requiring navigationWestern region auto production weakness offsetting Asia growthNorth America commercial transportation ongoing weaknessGeneral industrial end market timing uncertaintyValuation allowance tax charge on deferred tax assets

Q&A highlights

Scott Davis · Milius Research

AI revenue guidance update: Last quarter forecast was $26B, actual was $900M. Asking for updated forecast and timeline to achieve 2x+ company average margins in AI business.

Management confirmed $900M AI revenue in 2025 (up from $300M in 2024, 3x growth). Baseline expectation for 2026 is ~$600M incremental growth given 20% hyperscale CapEx growth and strong order momentum. Also highlighted $500M non-AI cloud business (doubled YoY) and enterprise/telecom growing double-digit, collectively driving 80% DDN segment growth.

$900M AI revenue in 2025 vs $300M in 2024$600M expected incremental AI revenue growth into 2026$500M non-AI cloud business revenue (doubled vs prior year)80% overall DDN segment growth

Mark Delaney · Goldman Sachs

End market trends beyond DDN over past 90 days: Changes in transportation, industrial, and other segments, with early views for fiscal 2026.

Transportation: Auto orders up YoY and sequentially; expect 87-88M unit range (flat) but confident in 4-6% content outgrowth. Industrial Transport still uneven (Europe/Asia growing, North America declining). Industrial segment showing broad consistent growth: Energy +20% organic (grid hardening, renewables), AD&M improving with supply chain, ACL factory automation growing across regions but HVAC/appliances weak. Overall guidance: 17% growth, 11% organic growth in Q1 FY26.

Auto production guidance: 87-88M units (flat)Content outgrowth target: 4-6% over marketEnergy segment: 20% organic growthOverall growth guidance: 17% total, 11% organic for Q1 FY26

Amit Duryanani · Evercore ISI

DDN growth drivers: Is 1.5B revenue run-rate from end demand/units or share gains? And what's driving DDNXAI 40%+ growth well above end market growth?

AI/cloud growth primarily from program ramps with hyperscalers, share stable but benefiting from technology co-design. Outside AI, enterprise/cloud growing 15%, edge/IoT double-digit. Cloud CapEx expected to grow 20% overall, with bump-down effect cascading technology into non-AI applications. Non-AI cloud revenue doubled to $500M; AI and non-AI lines blurring.

Enterprise/cloud non-AI growth: ~15%Edge/IoT growth: double-digitCloud CapEx overall growth: 20%Non-AI cloud revenue: $500M (doubled YoY)

Colleen Langan · Wells Fargo

Auto outlook 4-6% content outgrowth: Will slowing EV adoption in developed markets keep TE at lower end of range or below?

Management reframed growth drivers beyond EV: Asia EV adoption full steam ahead; hybrid adoption offsetting some EV content loss in other regions. Balanced by Ethernet connectivity for autonomy/sensors, software OTA updates, safety/comfort features. Committed to detailed content walk at upcoming Investor Day.

Asia EV adoption continuing strongHybrid adoption provides partial content offset outside AsiaEthernet connectivity for autonomy/sensors as key growth lever4-6% content outgrowth range maintained despite EV slowdown in developed markets

Luke Jank · Baird

Transportation orders: Growth in all regions noted—does this signal more balanced geographic outgrowth vs. Asia-heavy trend? Any TE-specific dynamics beyond production rebalancing?

Geographic rebalancing underway: Western production decline becoming more balanced/flatter. Content per vehicle higher in West, so prior headwind from Asia bias. As Western declines flatten, expect content growth in all regions contributing above baseline to reach 4-6%. Electrified powertrains Asia-driven, data connectivity universal, feature sets region-specific but all increasing.

Western production headwind moderatingContent per vehicle higher in Western marketsAll regions showing content growth, differing ratesElectrified powertrains primarily Asia-driven

Answers to last quarter's watch list

Does AI revenue clear $1B in FY2026 as guided? — FY2025 closed at $900M (vs the >$800M Q3 commentary), and management guided $600M of incremental AI revenue in FY2026, implying ~$1.5B run-rate — comfortably above the $1B threshold set last quarter. Status: Resolved positively

Industrial segment margin durability — Industrial operating margin held at ~20% with the segment growing 34% reported / 24% organic in Q4. No margin compression observed despite the volume mix shift. Status: Resolved positively

Transportation Solutions organic growth inflection — Transportation revenue grew 3.6% YoY (vs 2.8% in Q3), with management saying auto orders are up YoY and sequentially and Western production decline is moderating. Marginal improvement, not a clean inflection. Status: Continue monitoring

Q4 organic growth of 6% guide vs Q3's 9.1% print — Q4 organic growth came in at 11% (reported) vs the 6% guide — a clean ~500bps beat on the organic line. Status: Resolved positively

Capex trajectory and FCF conversion — FY2025 FCF came in at $3.21B (18.6% margin) on $17.26B revenue, with $650M returned to shareholders in Q4 alone and $2.6B deployed on bolt-on M&A for the year. Conversion remained healthy despite elevated capex. Status: Resolved positively

What to watch into next quarter

Does AI revenue track to the implied ~$1.5B FY2026 run-rate? Q1 FY2026 should show DDN growth sustaining north of 50% YoY; anything below would suggest the $600M incremental guide is back-half loaded or at risk.

Industrial organic growth — can 24% hold through a tougher comp? Q1 FY2026 organic guide of 11% implies meaningful deceleration; watch the segment-level breakout to see whether Industrial alone is still printing 20%+ organic or whether the slowdown is broad-based.

General industrial stabilization — real or premature? Management called it stable based on order rates this quarter. Watch whether Q1 industrial book-to-bill confirms or whether HVAC/appliance weakness deepens.

Transportation content outgrowth — does it move above the 4-6% range now that Western production is flatter? Management is teeing up the Investor Day for a detailed content walk; the print before that event sets expectations.

Capex and FCF conversion as AI capacity builds out — FY2025 FCF margin held at 18.6%; watch whether Q1 FCF margin compresses meaningfully as AI capex ramps further, and whether the >100% conversion bar is maintained.

Sources

TE Connectivity Q4 FY2025 press release, filed October 29, 2025: https://www.sec.gov/Archives/edgar/data/1385157/000110465925103388/tel-20251029xex99d1.htm
TE Connectivity Q4 FY2025 earnings call transcript (prepared remarks and Q&A), October 29, 2025.

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.