Snapshot
Ametek Inc/ reported $1.89B of revenue in Q3 2025, up 10.8% year over year, with diluted EPS of $1.60 and an operating margin of 25.8%.
- Revenue
- $1.89B
- YoY growth
- +10.8%
- Diluted EPS
- $1.60
- Operating margin
- 25.8%
What management said
- •Any references made on this call to historical results will be on an adjusted basis, excluding after-tax acquisition-related intangible amortization and excluding acquisition-related costs.
- •AMETEK delivered outstanding results in the third quarter with double-digit growth in sales, orders, operating profit, and diluted earnings per share.
- •Organic sales growth was strong in the quarter, leading to outstanding margin expansion and earnings well ahead of our expectations.
- •Given these excellent results and our outlook for the remainder of the year, we are increasing our full-year earnings guidance.
- •Sales were a record $1.89 billion, an increase of 11% from the third quarter of 2024.
- •Organic sales were up 4%, acquisitions added 6 points, and foreign currency translation was a 1 point benefit.
- •Orders were also very strong in the quarter, with overall orders up 13% to a record $1.97 billion and organic orders up 7%, leading to a record backlog of $3.54 billion.
- •Excluding the impact of recent acquisitions, margins were 27%, up 90 basis points versus the prior year.
- •EBITDA in the quarter was a record $592 million, up 11% versus the prior year, with EBITDA margins an outstanding 31.3%.
- •This operating performance led to record earnings of $1.89 per diluted share, up 14% versus the third quarter of 2024.
- •First, the Electronic Instruments Group (EIG) delivered outstanding operating performance in the third quarter with strong margin expansion and operating margin levels that reflect the differentiated nature of our products and solutions.
- •EIG sales were a record $1.25 billion, up 10% from last year's third quarter.
What went well
- •AMETEK delivered record third-quarter sales of $1.89 billion, up 11% from the prior year, with organic sales up 4%, acquisitions adding 6 points, and foreign currency a 1-point benefit.
- •Orders rose 13% to a record $1.97 billion with organic orders up 7%, producing a record backlog of $3.54 billion.
- •Operating income reached a record $496 million, up 11%, with margins excluding recent acquisitions of 27%, up 90 basis points, and record EBITDA of $592 million at a 31.3% margin.
- •The Electromechanical Group delivered record sales of $646 million (up 13%, organic up 12%) and record operating income of $164 million (up 25%), with operating margins up 250 basis points to 25.4%, led by Paragon Medical.
- •Aerospace and Defense grew organic sales low double digits with balanced strength across commercial OEM, aftermarket, and defense, while the company raised full-year earnings guidance.
- •Free cash flow was $420 million with a strong 113% conversion, and the company deployed about $920 million on the FARO acquisition, $150 million on buybacks, and $71 million on dividends while keeping net leverage at 0.9 times.
What went wrong
- •China demand was down mid single digits due to tariff repricing negotiations and export issues, with customers delaying orders to time lower tariffs.
- •Process segment organic sales were down slightly, with trade uncertainty leading to slower decision making and delays; full-year process organic sales are still expected flat to down low single digits.
- •EIG organic sales were flat in the quarter.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Full-year earnings | FY2025 | — | Increased / raised | Raised |
| Q4 total sales growth | Q4 2025 | — | Approximately 10% | — |
| Effective tax rate | FY2025 | — | 18% to 18.5% | — |
| Capital expenditures | FY2025 | — | Approximately $150 million (about 2% of sales) | — |
| Depreciation and amortization | FY2025 | — | Approximately $425 million | — |
| Free cash flow conversion | FY2025 | — | Approximately 110% to 115% of net income | — |
| Incremental organic growth investment | FY2025 | — | $90 million | — |
| Aerospace & Defense sales growth | FY2025 | — | Up high single digits | — |
| Process segment sales growth | FY2025 | — | Up mid to high single digits; organic flat to down low single | — |
| Power and industrial organic sales growth | FY2025 | Mid single digits implied | Up low to mid single digits | Raised |
| Automation and engineered solutions organic growth | FY2025 | — | Mid single digits (maintained) | Maintained |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total sales | +11% | Organic sales up 4%, acquisitions added 6 points, and foreign currency a 1-point benefit. |
| EIG sales | +10% | Organic flat, acquisitions added 9 points, and foreign currency a 1-point tailwind. |
| EMG sales | +13% | Organic up 12% with broad-based growth across all EMG businesses, led by Paragon Medical as medical destocking ended. |
| EMG operating income | +25% | Sizable margin expansion to 25.4% (up 250 bps) from outstanding organic growth and ended destocking across EMG businesses. |
| Diluted EPS | +14% | Record $1.89 per share driven by strong organic growth, margin expansion, and double-digit earnings growth. |
| Europe sales | Up low double digits | Broad strength across Dunkermotoren, automation, Paragon, Materials Analysis, and aerospace businesses. |
| China sales | Down mid single digits | Tariff repricing negotiations and export issues delaying customer orders. |
| Effective tax rate | 17.2% vs 18.8% | Lower effective international tax rate for 2025. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tariffs and trade dynamics | — | Pricing offset total inflation and tariffs with a positive spread; tariff repricing delaying China orders | steady |
| M&A pipeline and capital deployment | — | Strong pipeline across deal sizes and end markets with significant balance sheet capacity; FARO, Virtek, Kern, Paragon integrating well | rising |
| Paragon Medical turnaround | Source of concern from medical destocking | Led EMG with double-digit-plus orders; restructuring about half done; margins now in line with AMETEK, targeting 35%+ EBITDA | rising |
| Process market recovery | Sluggish | Orders trending up across most markets and geographies except China; improving visibility, optimistic on 2026 | rising |
| Data center power opportunity | Initial successes noted last quarter | IntelliPower UPS backlog north of $25 million plus ~$30 million pipeline; RTDS simulation traction with hyperscalers | rising |
| Automation / EMG destocking end | Called bottom last quarter | High single-digit organic growth as destocking ended, led by discrete automation and German machine builders in Europe | rising |
Q&A summary
Can you tour the key platforms and regions, and what stood out, including Paragon?
Process sales up low teens (organic down slightly) with improving visibility; A&D organic up low double digits balanced across OEM, aftermarket and defense; power and industrial up mid single digits with raised guidance; automation up high single digits led by Paragon. Geographically the US and international were up mid single digits, Europe up low double digits, while China was down mid single digits.
Any comments on tariffs and the China softness?
China softness is driven by tariff repricing; Chinese customers must renegotiate higher prices with government entities to cover tariffs, causing delays and tariff gamesmanship, but AMETEK is competitively strong with few viable competitors and remains confident long term.
Can you give more granularity on Paragon's organic performance, orders, and profitability versus your view at acquisition?
Paragon led EMG with outstanding double-digit-plus orders in attractive medtech markets; restructuring including plant closures is a little over halfway done, margins are now in line with AMETEK, and management expects it to become a 35%-plus EBITDA business with further upside.
On the Q4 top-line guide of about 10%, how do organic, M&A, and FX break down?
Acquisitions contribute a mid-to-high single-digit number to get to roughly 10%, with a range on earnings due to trade dynamics; management expects no FX impact on the top or bottom line in Q4 given the dollar-centric business.
Is the industrial and power upside all data center power or broader?
The upside is on the power side, including backup power systems, microgrids, server racks, and nuclear, with IntelliPower and RTDS gaining traction; the industrial side is solid but not the driver, and traditional transmission and distribution build-out provides additional benefit.
Why is core growth so much wider in EMG versus EIG this quarter?
EMG carries specialized OEM products that went through a pandemic-era supply chain surge and then a destock; that destock has now ended and is flowing through Paragon Medical, EMIP, automation, and aerospace businesses, whereas EIG did not experience a destock.