Financial Trends -- 8/10
Near-textbook high-quality industrial. Revenue re-accelerating (+16.8% Q1'26) on data-center power,
grid electrification, and US reshoring. Operating margins expanding through-cycle. Share count
declining. FCF growing. Blemishes: GAAP/gross-margin compression in Q1'26 from Boyd Thermal close
+ commodity/wage inflation, and large debt step-up (~$9.55B acquisition). Neither is operational
deterioration. No penalty modifiers.
Weight: 25%
Margins
Expanding
Through-cycle improvement | Positive
FCF
Growing
Positive and accelerating | Strong
Share Count
Declining
Buyback-driven | No dilution
Quarterly Revenue Trajectory ($M)
Clear revenue acceleration: +4.6% (Q4'24 trough) to +16.8% (Q1'26).
Five consecutive quarters of accelerating top-line growth driven by data-center power, grid
electrification, and US reshoring tailwinds. Boyd Thermal acquisition closed in Q1'26 adds
inorganic contribution on top of strong organic growth.
Gross Profit ($M)
Gross profit dollars grew +8.4%, but GAAP gross margin compressed ~280 bps
in Q1'26. This is attributable to the Boyd Thermal acquisition close (purchase accounting
amortization, integration costs) and commodity/wage inflation. Not operational deterioration --
underlying segment operating margins continue to expand through-cycle.
Annual Financial Summary (FY ends December)
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
| Total Net Sales ($M) | $17,858M | $19,628M | $20,752M | $23,196M | $24,878M | $27,448M |
| Rev YoY | — | +9.9% | +5.7% | +11.8% | +7.3% | +10.3% |
| Adj EPS | $4.24 | $6.62 | $7.57 | $9.12 | $10.80 | $12.07 |
| Adj EPS YoY | — | +56.1% | +14.4% | +20.5% | +18.4% | +11.8% |
| Total Seg Margin | 16.4% | 18.9% | 20.2% | 22.0% | 24.0% | 24.5% |
| WA Diluted Shares (M) | 404.0 | 401.6 | 400.8 | 401.1 | 399.4 | 391.2 |
| Net Income ($M) | $1,410M | $2,144M | $2,462M | $3,218M | $3,794M | $4,087M |
Key trends
- Revenue compounding at ~9% CAGR: From $17.9B (2020) to $27.4B (2025), now re-accelerating to +16.8% in Q1'26 on data-center power and electrification
- Adj EPS compounding at 23% CAGR: Five consecutive years of double-digit growth ($4.24 to $12.07)
- Margin expansion through-cycle: Total segment margins expanded 810 bps over five years (16.4% to 24.5%)
- Share count declining: Diluted shares fell from 404M to 391M (-3.2% over 5 years), buyback-driven with no dilution
Segment Revenue ($M, Annual)
| Segment | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
| Elec Americas | $6,680M | $7,242M | $8,497M | $10,098M | $11,436M | $13,276M |
| Elec Global | $4,703M | $5,516M | $5,848M | $6,084M | $6,248M | $6,815M |
| Aerospace | $2,223M | $2,648M | $3,039M | $3,413M | $3,744M | $4,249M |
| Vehicle | $2,118M | $2,579M | $2,830M | $2,965M | $2,790M | $2,505M |
| eMobility | $292M | $343M | $538M | $636M | $662M | $604M |
| Total | $17,858M | $19,628M | $20,752M | $23,196M | $24,878M | $27,448M |
Segment Operating Margins (Annual)
| Segment | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
| Elec Americas | 20.2% | 20.6% | 22.5% | 26.5% | 30.2% | 29.9% |
| Elec Global | 15.9% | 18.7% | 19.4% | 19.3% | 18.4% | 19.4% |
| Aerospace | 18.6% | 21.9% | 23.2% | 22.9% | 22.9% | 23.8% |
| Vehicle | 11.5% | 17.4% | 16.0% | 16.3% | 18.0% | 16.7% |
| Total Segment | 16.4% | 18.9% | 20.2% | 22.0% | 24.0% | 24.5% |
Free Cash Flow ($M)
FCF positive and growing. FY2025 FCF of $3.55B despite a capex
surge to $919M (+14% YoY). Three-year FCF CAGR of ~22% ($1.9B to $3.6B). FY2025 FCF growth
stalled at +1% due to capacity investment phase, but absolute FCF generation remains strong
and is expected to re-accelerate as ramp costs abate.
Share Count & Buybacks
- Share count declining steadily: 404M (2020) to 391M (2025), -3.2% cumulative, buyback-driven
- No dilution: Five consecutive years of share count reduction
Blemishes -- Not Operational Deterioration
| Blemish | Detail | Penalty |
|---|---|---|
| GAAP/Gross Margin Compression | Q1'26 gross margin compressed ~280 bps YoY from Boyd Thermal close (purchase accounting, integration costs) + commodity/wage inflation | None |
| Large Debt Step-Up | ~$9.55B acquisition debt from Boyd Thermal; temporary balance sheet lever-up | None |
Both blemishes are acquisition-related, not operational.
GAAP gross margin compression is mechanical (purchase accounting amortization on Boyd Thermal).
Debt step-up is financing-related and expected to delever over 2-3 years. Underlying segment
operating margins continue to expand through-cycle, confirming no deterioration in the core
business.
Score Rationale
Score of 8/10 reflects a near-textbook high-quality industrial compounder. No penalty modifiers applied.
Supports 8/10:
- Revenue re-accelerating to +16.8% YoY in Q1'26 on data-center power, grid electrification, and US reshoring
- Operating margins expanding through-cycle (total segment margins +810 bps over five years)
- FCF positive and growing ($1.9B to $3.6B over three years)
- Share count declining, buyback-driven, no dilution
- Five consecutive years of double-digit adj EPS growth ($4.24 to $12.07, 23% CAGR)
- Gross profit dollars growing +8.4% YoY in Q1'26
Acknowledged blemishes (no penalty):
- GAAP/gross margin compression in Q1'26 from Boyd Thermal close -- not operational
- ~$9.55B acquisition debt step-up -- financing, not operational
- Commodity/wage inflation headwinds -- industry-wide, being offset by pricing power
Data sourced from Daloopa (company_id: 365). Fiscal year ends December 31. All financials in USD.