AMETEK, Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This filing covers the quarterly period ended June 30, 2026. AMETEK, Inc. operates through two reportable segments: the Electronic Instruments Group (EIG) and the Electromechanical Group (EMG). The company reported record sales, operating income, net income, orders, and backlog for the quarter. Significant corporate activity includes the acquisition of LKC Technologies and First Aviation Services in 2026 and a definitive agreement to acquire Indicor Instrumentation for approximately $5.0 billion.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Net Sales | $2,044.4 million | $1,778.1 million | $3,972.8 million | $3,510.0 million |
| Operating Income | $528.2 million | $461.6 million | $1,043.1 million | $916.5 million |
| Net Income | $406.9 million | $358.4 million | $806.3 million | $710.1 million |
| Diluted EPS | $1.77 | $1.55 | $3.51 | $3.07 |
| Operating Margin | 25.8% | 26.0% | 26.3% | 26.1% |
| Free Cash Flow (YTD) | $877.7 million (vs. $724.3 million YTD 2025) | |||
| Total Debt, Net | $2,036.2 million (as of June 30, 2026) | |||
| Cash & Equivalents | $495.4 million (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Q2 2026 net sales increased 15.0% year-over-year, driven by a 10% organic increase and 5% from acquisitions. YTD sales grew 13.2%.
- Profitability: Net income rose 13.5% in Q2 and 13.5% YTD. Operating margins were slightly compressed in Q2 (25.8% vs. 26.0%) due to $16.2 million in acquisition-related integration costs and the dilutive impact of recent acquisitions.
- Orders and Backlog: Q2 orders reached a record $2,284.0 million (up 28.2%). Backlog increased to a record $4,110.2 million as of June 30, 2026.
- Interest Expense: Q2 interest expense increased 78.6% to $30.1 million, primarily due to $10.0 million in fees associated with bridge financing for the Indicor acquisition, which was subsequently terminated.
- Segment Performance: EIG sales grew 13.9% and EMG sales grew 16.9% in Q2. EMG operating margins expanded significantly to 26.2% from 23.3%.
Guidance, Outlook, and Risks
- Acquisition Activity: The company is proceeding with the $5.0 billion acquisition of Indicor Instrumentation, expected to close in the second half of 2026. Financing includes a new $3.5 billion revolving credit facility and a $4.0 billion term loan facility.
- Dividends: The Board approved a 10% increase in the quarterly dividend to $0.34 per share, effective February 2026.
- Macroeconomic Risks: Management cites geopolitical uncertainty (specifically the conflict involving Iran) and evolving tariff environments as potential risks to global demand, costs, and supply chains, though no material impact was recorded in the first half of 2026.
- Tax Rate: The effective tax rate decreased to 17.4% in Q2 (from 19.0% in Q2 2025) due to favorable international tax planning and return-to-provision adjustments.
Investor Verification Checklist
- Indicor Acquisition Status: Verify the timeline and regulatory approval status for the $5.0 billion Indicor Instrumentation deal.
- Integration Costs: Monitor the run-rate of acquisition-related integration costs ($16.2 million in Q2) and their impact on future margins.
- Debt Structure: Confirm the drawdown status of the new $4.0 billion term loan facility intended for the Indicor acquisition.
- Organic Growth Sustainability: Assess whether the 10% organic sales growth in Q2 is sustainable given the noted geopolitical and tariff risks.
- Backlog Conversion: Track the conversion rate of the record $4.1 billion backlog into future revenue.