AI Interconnection Demand, Connector Leader Amphenol's Performance Exceeds Expectations

Anfeno's latest financial report exceeded expectations. Driven by AI data centers, the company's revenue and adjusted diluted EPS in Q4 2024 exceeded the guidance limit and market expectations
The sales revenue for the quarter was 4.318 billion US dollars (exceeding market expectations of 4.066 billion US dollars), with a year-on-year increase of 30% in US dollar terms and an endogenous increase of 20%; Adjusted operating revenue of 965.7 million US dollars, expected to be 885.3 million US dollars;
Adjusted net income of 695.2 million US dollars, expected to be 643.2 million US dollars;
According to the US Generally Accepted Accounting Principles (GAAP), diluted earnings per share were 59 cents, exceeding analysts' expectations of 51 cents, a year-on-year increase of 44%. Adjusted diluted earnings per share were 55 cents, a year-on-year increase of 34%, both setting a record.
The orders mainly come from AI expenditures related to data centers, especially for many large customers. 24Q4 orders reached a record high of 5.14 billion US dollars, a year-on-year increase of 58% and a month on month increase of 14%; The order to shipment ratio is 1.16:1 (reaching the highest historical level). In 2024, the total orders amounted to 16.835 billion US dollars, a year-on-year increase of 37%, with an order to shipment ratio of 1.11:1.
In 2024, its sales revenue was 15.223 billion US dollars, with a 21% increase in US dollar valuation and a 13% increase in endogeneity.
On the eve of the financial report release (January 22), Amphenol's stock price hit a new high, with a 59% increase in the company's stock price over the past year (from January 2, 2024 to present).
Amphenol dominates the high-speed connector market in the communication equipment and big data server industries, with its main products including fiber optic interconnect, harsh environment interconnect, high-speed interconnect, power interconnect, etc. It is the first supplier of Nvidia GB200 server copper cables, and its copper cables and connectors account for approximately 6% to 7% of the server value.
Anfeno President and CEO R Adam Norwitt stated that fourth quarter sales increased by 30% compared to last year, thanks to strong organic growth in the IT data communications, mobile networks, commercial aviation, mobile devices, broadband, and defense markets, as well as contributions from the company's acquisition plans. During the quarterly and full year periods, strong profitability was achieved, with adjusted operating profit margins reaching record highs of 22.4% and 21.7%, respectively.
According to Amphenol, its acquisition project created value in 2024, completing the acquisitions of Carlisle Interconnect Technologies, LutzeUS, and Lutze Europe, with an annualized revenue increase of over $1 billion. Signed the acquisition of CommScope in July, expected to be completed by Q1 25th.
In addition, Anfeno is optimistic about the long-term growth of the AI related market, with its Q1 2025 performance guidance exceeding expectations. Anfeno expects sales to be between $4 billion and $4.1 billion, a year-on-year increase of 23% to 26%. The adjusted diluted earnings per share are expected to be between $0.49 and $0.51, representing a year-on-year increase of 23% to 28%.
At the subsequent performance exchange meeting, Amphenol stated that the company has a strong position in AI and is making significant investments. Capital expenditures may fluctuate in specific quarters due to various reasons, and AI related orders and design wins have given the company great confidence. "We will enter 2025 with a very optimistic outlook," he said
Anfeno said that the opportunity for 2025 still lies in the electronic revolution. "The CES exhibition is very exciting, with robots, next-generation cars, next-generation consumer electronics, IoT, etc. Accelerating the computing revolution combined with device and product innovation is the true artificial intelligence, which will bring unprecedented opportunities to the industry