AMETEK, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This filing covers the quarterly period ended March 31, 2026. AMETEK, Inc. operates through two reportable segments: the Electronic Instruments Group (EIG) and the Electromechanical Group (EMG). The company reported record operating income, orders, and backlog for the quarter, driven by organic growth, recent acquisitions (FARO Technologies and LKC Technologies), and Operational Excellence initiatives.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $1,928.4 million | $1,732.0 million |
| Operating Income | $514.9 million | $454.8 million |
| Net Income | $399.4 million | $351.8 million |
| Diluted EPS | $1.74 | $1.52 |
| Operating Margin | 26.7% | 26.3% |
| Free Cash Flow | $426.0 million | $394.4 million |
| Total Debt (Net) | $2,177.5 million | $2,283.3 million (Dec 2025) |
| Cash and Equivalents | $481.3 million | $399.0 million |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 11.3% year-over-year, driven by a 5% organic increase, 4% from acquisitions, and 2% favorable foreign currency translation.
- Orders and Backlog: Orders reached a record $2,217.6 million (up 23.3%), and backlog increased to a record $3,870.7 million (up 8.1% from Q4 2025).
- Segment Performance:
- EIG: Sales up 10.6%; operating income up 5.6% to $373.9 million. Margins were 29.6%, down 140 basis points due to acquisition dilution.
- EMG: Sales up 12.9% to a record $663.9 million; operating income up 32.7% to a record $170.8 million. Margins expanded 380 basis points to 25.7%.
- Acquisitions: The company acquired LKC Technologies in January 2026 for $209.6 million (net of cash). Integration costs of $1.6 million related to the FARO acquisition were recorded in Q1 2026.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted strong demand in Europe and Asia and the positive impact of Operational Excellence initiatives. The company increased its quarterly dividend by 10% to $0.34 per share. No specific full-year 2026 financial guidance was provided in this text.
Risks and Contingencies:
- Geopolitical: Uncertainty regarding conflicts in the Middle East and potential impacts on the global economy.
- Tariffs: While recent tariff changes did not materially impact Q1 results, management notes ongoing monitoring of potential adverse effects on costs and demand.
- Legal/Environmental: The company faces asbestos litigation (indemnified by sellers) and environmental remediation obligations. Total environmental reserves were $40.4 million as of March 31, 2026.
Subsequent Event: In April 2026, AMETEK agreed to acquire First Aviation Services, Inc. (approx. $80 million annual sales) for the EMG segment.
Investor Verification Checklist
- Acquisition Integration: Verify the timeline for full integration of LKC Technologies and FARO Technologies to assess future margin normalization.
- Tariff Exposure: Review supply chain adjustments and pricing strategies to mitigate potential future tariff impacts mentioned in the MD&A.
- Backlog Conversion: Monitor the conversion rate of the record $3.87 billion backlog into future revenue.
- Debt Covenants: Confirm continued compliance with debt covenants, noting the net debt-to-capital ratio of 13.4%.
- First Aviation Acquisition: Assess the strategic fit and financial terms of the pending First Aviation Services acquisition.