Snapshot
Ametek Inc/ reported $1.93B of revenue in Q1 2026, up 11.3% year over year, with diluted EPS of $1.74 and an operating margin of 26.7%.
- Revenue
- $1.93B
- YoY growth
- +11.3%
- Diluted EPS
- $1.74
- Operating margin
- 26.7%
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 cost.
- •AMETEK delivered an excellent first quarter, highlighted by double-digit sales growth, exceptional orders growth, robust core margin expansion, record EBITDA, and a high quality of earnings that exceeded our expectations.
- •We also raised our full-year earnings guidance to reflect our first quarter results and the outlook for the balance of the year.
- •Today, we also announced we signed a definitive agreement to acquire First Aviation Services, an attractive acquisition which strategically broadens our defense aftermarket capabilities.
- •Orders were outstanding in the quarter, with broad-based and meaningful growth across all AMETEK divisions.
- •Overall orders were a record $2.2 billion, up 23% versus the prior year, and organic orders were up 22%, leading to a record backlog of $3.87 billion.
- •Operating income in the quarter was $517 million, a 14% increase over the first quarter of 2025.
- •Operating margins were 26.8% in the quarter, and core margins were an impressive 27.9%, up a robust 160 basis points versus the prior year.
- •EBITDA in the quarter was a record $620 million, up 11% versus the prior year, with EBITDA margins a strong 32.1%.
- •Our excellent operating performance led to strong cash generation, with free cash flow to net income conversion of 107%.
- •Diluted earnings per share were $1.97, up 13% versus the first quarter of 2025, and above our guidance range of $1.85-$1.90 per share.
- •EIG had an excellent first quarter, with double-digit sales growth, strong operating performance, and a meaningful inflection in orders.
What went well
- •First quarter sales rose 11% to $1.93 billion, with organic sales up 5% and acquisitions adding 5 points.
- •Orders were a record $2.2 billion, up 23% year-over-year (organic orders up 22%), driving a record backlog of $3.87 billion with broad-based strength across all divisions.
- •Core operating margins expanded a robust 160 basis points to 27.9%, with EMG core margins up 410 basis points to 26% and EIG core margins up 40 basis points to 31.4%.
- •EBITDA reached a record $620 million, up 11%, with EBITDA margins of 32.1%, and diluted EPS of $1.97 came in above the $1.85-$1.90 guidance range.
- •Free cash flow was up 8% to $426 million with free cash flow conversion of 107% of net income, and the company raised full-year earnings guidance.
- •The company signed a definitive agreement to acquire First Aviation Services, an engineering-driven defense aftermarket MRO and proprietary parts provider with roughly $80 million in revenue.
What went wrong
- •About $15 million of discrete Middle East orders did not ship during the quarter due to safety concerns and disruptions, though no order cancellations occurred.
- •Medical and several EMG end markets face tougher comparisons in the back half of the year, so full-year growth rates moderate relative to the strong first quarter.
- •Management is watching the international commercial aviation aftermarket (less than 2% of sales) for potential weakness tied to aviation fuel availability and costs, with risk seen first in Asia, then Europe.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Process organic sales | FY2026 | Up low single digits | Up low to mid single digits | Raised |
| Aerospace & Defense growth | FY2026 | High single digits | Approximately 10% | Raised |
| Power organic sales | FY2026 | — | Up mid single digits | Maintained |
| Automation & Engineered Solutions organic sales | FY2026 | — | Up mid single digits | Maintained |
| Medical organic sales | FY2026 | — | Mid single digits | — |
| Core operating margin | FY2026 | — | Up around 50 basis points | — |
| Incremental margins | FY2026 | — | Approximately 35% | — |
| Effective tax rate | FY2026 | — | 18.5% to 19.5% | Maintained |
| Capital expenditures | FY2026 | — | Approximately $160 million (about 2% of sales) | Maintained |
| Depreciation & amortization | FY2026 | — | Approximately $430 million | — |
| Corporate G&A expense | FY2026 | — | Approximately 1.5% of sales | Maintained |
| Free cash flow conversion | FY2026 | — | Approximately 110%-115% of net income | Maintained |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total sales | +11% | Organic sales up 5%, acquisitions added 5 points, with foreign currency a tailwind. |
| EIG (Electronic Instruments Group) sales | +11% | Organic sales up 2% and acquisitions added 7 points; organic orders up 25% with notable growth in defense, power, and semiconductor businesses. |
| EMG (Electromechanical Group) sales | +13% | Record $664 million on 11% organic growth plus a 2-point FX tailwind, with broad-based strength in automation, engineered solutions, and aerospace and defense. |
| EMG operating income | +33% | Strong sales growth plus excellent productivity drove a 410 basis point core margin increase to 26%. |
| Aerospace & Defense | High single digit growth | Broad-based strength with notable defense demand; about 60% defense and 40% commercial of the A&D portfolio. |
| Medical | Up low double digits | Led by strong performance at Paragon and Reichert; about 20% of total exposure. |
| Process | Up mid teens | Driven by acquisitions and low single-digit organic growth with broad-based orders growth. |
| Power | Low single digit growth | Record-level orders driven by power generation, backup power, data center microgrids, and power simulation systems demand. |
| Automation & Engineered Solutions | High single digit organic growth | Solid demand across niche markets in both automation/engineered solutions and the eMet business. |
| Geographic: Asia | Up low double digits | Driven by strong China, up high teens, led by process and power markets. |
| Geographic: U.S. | Up mid single digits | Very strong growth in A&D and materials analysis businesses. |
| Geographic: Europe | Up low single digits | Strength in power and automation, partly offset by modest Middle East headwinds. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Record orders and backlog | Signaled order inflection in prior calls | Record $2.2 billion orders up 23%, record $3.87 billion backlog, with March the all-time record month | rising |
| EIG order inflection following EMG | Highlighted EIG would follow EMG by six to nine months | EIG orders inflected with organic orders up 25%, as anticipated | rising |
| Defense demand | — | Broad-based strength across missile defense, UAVs, naval/submarine, nuclear, driven by budget modernization and geopolitical conflict | rising |
| M&A capital deployment | Stated M&A would differentiate performance over coming years | First Aviation Services signed; over $5 billion deployment capacity; M&A is the top capital priority | rising |
| Core margin expansion | — | Core margins up 160 bps with core incrementals greater than 50% company-wide | rising |
| Macro and tariff/inflation caution | — | Prudent guidance amid geopolitical uncertainty; expects to offset inflation including tariffs with pricing | steady |
| Commercial aviation aftermarket risk | — | Watching international aftermarket (under 2% of sales) for fuel-related weakness, seen first in Asia then Europe | steady |
Q&A summary
What are you seeing across the regions and any buying hesitancy or macro pressure at the margin?
Balanced growth with U.S. and international both up mid-single digits; Asia strongest (China up high teens on process and power), Europe up low single digits with modest Middle East headwinds. No cancellations or delays; March was an all-time record orders month and April is on target.
Was there any pull-forward from Q2 into Q1 orders, and will Q2 be unusually weak?
Little to no pull-forward; the strength reflects continued EMG momentum and the anticipated EIG inflection. Some orders are for full-year shipments, but management does not expect a slowdown, while not expecting a repeat 23-25% orders growth rate.
Can you discuss the medical end market, which was not highlighted in prepared remarks?
Medical is a little over 20% of exposure and was up low double digits in Q1, led by Paragon and Reichert. Tougher comps later in the year lead to full-year expectation of mid-single-digit growth.
Can you provide details on the First Aviation Services acquisition?
It is an engineering-driven aftermarket services and proprietary parts provider, primarily defense with some business jet and commercial; roughly two-thirds MRO services and one-third proprietary parts (PMA and DER-approved repairs across rotorcraft and fixed-wing), adding capabilities like propeller blades, rotor assemblies, landing gear, and advanced electronics.
How do you view the risk/reward of larger deals versus small bolt-ons?
Deals must match strategy and add value; deal sizes have naturally grown over the past decade while staying in niche markets. The company will not acquire anything the size or half the size of AMETEK, focusing on bite-sized deals; it has never written off goodwill and prioritizes strong returns on capital.
What were the incremental margins and the outlook for operating leverage and price/cost?
Core margins were up 160 bps with core incrementals greater than 50% company-wide (EIG and EMG both over 50%). For the full year, management expects roughly 35% incrementals and core margins up around 50 bps, expecting to offset inflation and tariffs with pricing.