01—Abstract
Summary
Summary of the 10-K filed November 10, 2025. Cited figures are marked; the original filing is the authoritative source.
TE Connectivity's fiscal 2025 (ended September 26, 2025) was a year of strong top-line and margin expansion, driven almost entirely by the Industrial Solutions segment.
Net sales rose 8.9% to $17.26 billiona (6.4% organic), with Industrial Solutions up 23.7% on AI/cloud-driven digital data networks demand (+72.6% organic) and the April 2025 acquisition of Richards Manufacturing (~$2.3 billion, contributing $179 million of sales). Transportation Solutions declined 1.0%, with sensors and commercial transportation weaker and automotive flat. Gross margin improved to 35.2% from 34.4%, and operating margin reached 18.6% versus 17.6%.
Operating income rose 15% to $3.21 billionb. Below the operating line, reported results were distorted by a $574 million non-cash tax charge tied to an OECD global minimum tax guidance change affecting a Swiss subsidiary's ten-year tax credit, which pushed the effective tax rate to 42.5% and cut net income to $1.84 billion ($6.16 diluted EPS) from $3.19 billion in fiscal 2024. That prior year had benefited from a large one-time tax credit recognition, so the year-over-year comparison is not a clean read of underlying earnings.
Operating cash flow improved to $4.14 billionc, and the company returned capital through $803 million in dividends and $1.36 billion in buybacks, with $1.4 billion remaining on the repurchase authorization. Balance sheet leverage increased meaningfully: total debt rose to $5.69 billion from $4.20 billion after several euro and dollar senior note issuances that funded the acquisitions.
Management guides fiscal 2026 first-quarter net sales of about $4.5 billiond (versus $3.8 billion a year earlier) and diluted EPS from continuing operations of about $2.33. Key risks include automotive concentration (about 41% of sales), roughly 25% of sales to China, ongoing tariff and trade exposure, unhedged currency translation (about 60% of sales invoiced in non-dollar currencies), a $8.8 billion deferred tax asset valuation allowance, and Irish-domicile governance considerations following the 2024 redomiciliation from Switzerland.
02—Key points
Key Highlights
- Net sales grew 8.9% to $17.26 billion (6.4% organic), led by Industrial Solutions, which rose 23.7% to $7.87 billion; Transportation Solutions declined 1.0% to $9.39 billion.
- Digital data networks was the standout driver, up 72.6% organically on AI and cloud demand, now 28% of Industrial Solutions sales.
- Gross margin expanded to 35.2% from 34.4%, and operating income rose 15% to $3.21 billion (operating margin 18.6%, up from 17.6%).
- Reported net income fell to $1.84 billion (diluted EPS $6.16) from $3.19 billion, largely due to a $574 million non-cash tax charge on a Swiss subsidiary's tax credit; the effective tax rate was 42.5%.
- Operating cash flow increased 19% to $4.14 billion; capex rose to $936 million, and $2.6 billion was spent on acquisitions, including Richards Manufacturing (~$2.3 billion).
- Total debt rose to $5.69 billion from $4.20 billion after new euro- and dollar-denominated senior notes; the company remained in compliance with its covenants.
- Shareholder returns totaled roughly $2.2 billion ($803 million dividends plus $1.36 billion buybacks); the quarterly dividend was raised to $0.71, and $1.4 billion remains on the buyback authorization.
- Q1 fiscal 2026 guidance calls for net sales of about $4.5 billion (versus $3.8 billion) and diluted EPS from continuing operations of about $2.33.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, TE Connectivity plc kept $0.11.
- Revenue$17.26B100.0%
- Cost of revenue−$11.18B64.8%
- Gross profit$6.08B35.2%
- Operating costs−$2.87B16.6%
- Operating income$3.21B18.6%
- Interest, other & tax−$1.37B7.9%
- Net income$1.84B10.7%
Where FY2025 revenue went
$17.26B- Cost of revenue: $11.18B, 65% of revenue
- Net income: $1.84B, 11% of revenue
- R&D: $699.0M, 4.0% of revenue
- SG&A: $1.87B, 11% of revenue
- Other operating costs: $303.0M, 1.8% of revenue
- Interest, other & tax: $1.37B, 7.9% of revenue
Kept 11% as net incomeNet income $1.84B · 11%Other operating costs $303.0M · 1.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed November 10, 2025Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $17.26B$15.85B | +8.9% |
| Cost of Revenue | $11.18B$10.39B | +7.6% |
| Gross Profit | $6.08B$5.46B | +11.4% |
| R&D Expenses | $699.00M$621.00M | +12.6% |
| SG&A Expenses | $1.87B$1.73B | +7.7% |
| Operating Income | $3.21B$2.80B | +14.8% |
| Net Income | $1.84B$3.19B | −42.3% |
| EPS (Basic) | $6.20$10.40 | −40.4% |
| EPS (Diluted) | $6.16$10.33 | −40.4% |
| Shares Outstanding (Basic) | 297.00M307.00M | −3.3% |
| Shares Outstanding (Diluted) | 299.00M309.00M | −3.2% |
05—Questions
Frequently Asked Questions
Why did net income fall so sharply in fiscal 2025 even though operating income grew?
The decline is driven by income tax expense of $1.36 billion versus a $397 million benefit in fiscal 2024. Fiscal 2025 included a $574 million charge from a valuation allowance increase on a Swiss subsidiary's ten-year tax credit after OECD global minimum tax guidance in January 2025. Fiscal 2024 had offsetting one-time benefits, including a $972 million tax credit recognition and a $262 million deferred tax revaluation. Excluding these items, underlying earnings growth was much stronger than the reported figures suggest.
How much of the growth came from acquisitions versus organic sales?
Total net sales growth of 8.9% comprised 6.4% organic growth and about 2.2% from acquisitions and divestitures net. Richards Manufacturing, acquired April 1, 2025, contributed $179 million, and two other acquisitions also contributed. Organic growth was concentrated in Industrial Solutions (+17.6%), while Transportation Solutions organic sales fell 1.0%.
What are the main risks investors should monitor?
Key risks include heavy automotive exposure (about 41% of sales, with flat organic automotive growth and regional declines in EMEA and the Americas), roughly 25% of sales to China amid U.S.-China trade tensions, and tariff impacts. The company does not hedge its translation exposure on roughly 60% of non-dollar sales, so a stronger U.S. dollar reduces reported results. Other items include a $8.8 billion deferred tax asset valuation allowance, rising leverage after the acquisition, and ongoing price erosion of 1% to 2% annually.
What is the outlook and how is capital being deployed?
For Q1 fiscal 2026, management expects net sales of about $4.5 billion and diluted EPS from continuing operations of about $2.33, including a favorable FX impact. Capex is expected to be about 5% of sales, and restructuring charges around $100 million. The company plans to fund $1.1 billion of senior notes maturing in February 2026 from cash and other sources, and continues to return capital through dividends and buybacks with $1.4 billion of authorization remaining.
How did the Transportation and Industrial segments differ in profitability?
Transportation Solutions generated $1.82 billion of operating income on $9.39 billion of sales, a 19.4% margin, down slightly from 19.8% on pricing pressure and sensor weakness. Industrial Solutions produced $1.39 billion on $7.87 billion, a 17.7% margin, up sharply from 14.4% on volume growth and net pricing actions. Industrial Solutions is now the faster-growing and increasingly important earnings contributor.
06—Continue