Amphenol Corporation (APH) Income Statement

The 55% YoY growth in Q2 2026, up from 9.5% in Q1 2024, indicates a dramatic inflection in demand, likely tied to AI infrastructure and defense spending. While the pace is unsustainable, the sequential increase from $7.6B in Q1 2026 suggests momentum remains strong. Investors should monitor whether this reflects organic share gains or inorganic contributions, as the latter may not be repeatable.

The 710 basis point gross margin expansion over ten quarters suggests Amphenol is benefiting from pricing power in high-mix, low-volume niches, consistent with its decentralized model. Operating margin of 29.5% in Q2 2026 is well above peers like TE Connectivity (18.8%), implying a structural advantage. However, commodity price swings in copper and gold could pressure margins if not passed through.

SG&A as a percentage of revenue fell to 10.7% in Q2 2026 from 12.3% in Q1 2024, indicating that overhead is scaling slower than sales. This is a hallmark of the decentralized structure, where costs are pushed to business units. The 29.5% operating margin suggests that incremental revenue is highly profitable, but investors should watch for any rise in SG&A as the company integrates larger acquisitions.

The 710 basis point improvement in gross margin indicates that Amphenol is effectively managing raw material costs and passing through price increases. R&D is not separately disclosed in most quarters, but the absence of a line item suggests it is embedded in SG&A or COGS, which may understate true investment. The low SG&A ratio of 10.7% implies disciplined overhead control, but investors should monitor for any increase as the company scales.

The inflection began in Q2 2025 when revenue growth jumped to 56.5% YoY, coinciding with a surge in AI infrastructure spending. This period also saw gross margin expand from 34.2% to 36.3%, indicating a mix shift toward higher-value products. The lasting impact is a larger revenue base and improved profitability, but the sustainability of this growth depends on continued AI capex and successful integration of acquired businesses.