TE Connectivity: A Strong Start to 2025, With More to Come

TE Connectivity plc (NYSE: TEL) kicked off 2025 with a bang, reporting first quarter results that exceeded expectations and set new records. The company's strong operational performance, driven by growth trends like electrification and AI programs, has investors bullish on its prospects for the year ahead.

Record Cash Generation and Margin Expansion

TE Connectivity's first quarter was marked by record cash generation, with cash from operating activities up 22% year over year and free cash flow up 18% year over year. The company's adjusted operating margin reached a quarterly record of 19.4%, driven by strong operational execution and increased momentum in AI programs across multiple customers.



The company's bolt-on acquisition strategy and margin expansion plans are paying off, as TE Connectivity continues to capitalize on long-term growth opportunities. By acquiring complementary businesses and optimizing its cost structure, the company is well-positioned to maintain its strong financial performance and drive shareholder value.

Growth in AI and Electrification Trends

TE Connectivity's Industrial segment delivered double-digit sales growth and expanded margins, driven by momentum in AI programs across multiple customers. The company's products and solutions are well-suited to the increasing demand for AI-related applications, as they enable the distribution of power, signal, and data required for AI systems to function effectively.

In the Transportation segment, TE Connectivity continued to navigate an uneven global vehicle production environment to deliver a strong result. The company's focus on growth trends such as electrification and next-generation vehicle data connectivity is paying off, as it innovates with global customers in these areas.



Looking Ahead

TE Connectivity's strong first quarter performance sets the stage for an exciting year ahead. The company expects second quarter sales to be up sequentially and adjusted EPS to be up year over year and compared to the first quarter. With its strategic focus on growth trends like electrification and AI programs, as well as its bolt-on acquisition strategy and margin expansion plans, TE Connectivity is well-positioned to capitalize on long-term growth opportunities and deliver on its value creation model.

Investors should keep a close eye on TE Connectivity as it continues to execute on its strategic initiatives and capitalize on growth trends in the market. The company's strong first quarter performance is a testament to its operational excellence and its ability to adapt to changing market dynamics. As TE Connectivity continues to innovate and expand its product offerings, it is poised to be a leader in the connectivity and sensor solutions market for years to come.