TE Connectivity (TEL) Q1 2026 earnings summary

Executive summary

• Net sales reached $4.7 billion in Q1 FY2026, up 22% year-over-year (15% organic), with both Industrial and Transportation segments contributing and sales surpassing guidance; the Richards Manufacturing acquisition added $107 million in sales.

• Adjusted EPS rose 33% year-over-year to $2.72, with GAAP EPS at $2.53; net income increased to $751 million from $528 million.

• Record quarterly orders of $5.1 billion, up 28% year-over-year and 9% sequentially, with a book-to-bill ratio of 1.1.

• Free cash flow was $608 million, with nearly 100% returned to shareholders through buybacks and dividends.

• Board declared a quarterly cash dividend of $0.71 per share, payable in March 2026.

Financial highlights

• Q1 net sales: $4.7 billion, up from $3.8 billion year-over-year; gross margin improved to 37.2% from 35.5%.

• Adjusted operating margin expanded to 22.2% (up 180bps); GAAP operating margin was 20.6%.

• Adjusted EBITDA margin improved to 26.5% from 24.3% year-over-year.

• Cash from operations: $865 million; free cash flow: $608 million, down from $674 million year-over-year.

• Total debt at quarter-end: $5.7 billion; ending cash balance: $1.25 billion.

Outlook and guidance

• Q2 FY2026 sales expected at ~$4.7 billion, up 13% year-over-year (6% organic); adjusted EPS guidance is ~$2.65, up 20% year-over-year.

• GAAP EPS for Q2 expected at $2.26.

• Double-digit sales and adjusted earnings growth anticipated for Q2; positive FX and acquisition impacts expected.

• CapEx to be ~6% of sales to support AI and program growth.

• Full-year tax rate expected at ~23%; at least 100% free cash flow conversion targeted for fiscal 2026.