AMETEK INC/ (AME)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Recent Trends

Recent geopolitical developments, including the conflict involving Iran, have contributed to increased uncertainty in global markets. Although we have limited Middle East sales exposure and do not have material operations or assets located in the region, we are not immune to the broader macroeconomic uncertainty an extended conflict may create on the global economy.

Our businesses have been proactive in addressing the impacts of tariffs, including targeted pricing initiatives, strategic adjustments to our global supply chains, and leveraging our worldwide manufacturing footprint to localize production and adapt to changing demand patterns. While recent tariff-related changes did not have a material impact on our results of operations for the six months ended June 30, 2026, as the situation continues to evolve, we cannot be certain of the outcome, which could adversely impact demand for our products, costs, inflation, customers, suppliers, and the overall global economy. We continue to monitor and analyze the impacts of the tariffs and the evolving macroeconomic environment and will continue to implement appropriate actions as necessary to mitigate their effects on our businesses.

Indicor, LLC Agreement

On May 5, 2026, the Company announced that it has entered into a definitive agreement to acquire a portfolio of instrumentation business from Indicor, LLC ("Indicor Instrumentation") in an all-cash transaction valued at approximately $5.0 billion. Indicor Instrumentation is a collection of leading businesses that design and manufacture mission critical solutions for demanding industrial and scientific applications. Its products serve customers across end markets that align closely with the Company's existing portfolio of instrumentation businesses. Indicor Instrumentation has annual sales of approximately $1.1 billion. The transaction is subject to customary closing conditions, including applicable regulatory approvals, and is expected to close in the second half of 2026. Following closing of the transaction, the businesses will be integrated into the Company's EIG or EMG based on product offerings and market alignment.

Results of Operations

For the quarter ended June 30, 2026, the Company posted record sales, operating income, net income, orders, and backlog, as well as strong operating margins. Contributions from the acquisitions of FARO Technologies ("FARO") in July 2025, LKC Technologies ("LKC") in January 2026, and First Aviation Services ("First Aviation") in May 2026, as well as our Operational Excellence initiatives had a positive impact on the second quarter of 2026 results. In the second quarter of 2026, the Company recorded $16.2 million of pre-tax acquisition-related costs related to the FARO, LKC, and First Aviation acquisitions, which are comprised of ongoing integration costs. These integration costs are recorded in Cost of sales and primarily include employee severance and fair-value inventory adjustments.

Results of operations for the second quarter of 2026 compared with the second quarter of 2025

Net sales for the second quarter of 2026 were a record $2,044.4 million, an increase of $266.3 million or 15.0%, compared with net sales of $1,778.1 million for the second quarter of 2025. The increase in net sales for the second quarter of 2026 was due to a 10% increase in organic sales, as well as a 5% increase from acquisitions.

Total international sales for the second quarter of 2026 were $963.7 million or 47.1% of net sales, an increase of $120.7 million or 14.3%, compared with international sales of $843.0 million or 47.4% of net sales for the second quarter of 2025. The increase in international sales was primarily driven by higher demand in Europe and Asia, as well as contributions from recent acquisitions.

Orders for the second quarter of 2026 were a record $2,284.0 million, an increase of $501.9 million or 28.2%, compared with $1,782.1 million for the second quarter of 2025. The increase in orders for the second quarter of 2026 was due to a 25% increase in organic orders and a 6% increase from acquisitions, partially offset by a 3% unfavorable effect of foreign currency translation. The Company's backlog of unfilled orders at June 30, 2026 was a record $4,110.2 million, an increase of $528.7 million or 14.8% compared with $3,581.5 million at December 31, 2025.

Cost of sales for the second quarter of 2026 was $1,309.4 million or 64.0% of net sales, an increase of $167.2 million or 14.6%, compared with $1,142.2 million or 64.2% of net sales for the second quarter of 2025. The cost of sales increase was primarily due to the net sales increase discussed above, partially offset by continued benefits from the Company's Operational Excellence initiatives.

Segment operating income for the second quarter of 2026 was $559.0 million, an increase of $70.7 million or 14.5%, compared with segment operating income of $488.3 million for the second quarter of 2025. Segment operating margins, as a percentage of net sales, decreased to 27.3% for the second quarter of 2026, compared with 27.5% for the second quarter of

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2025. Operating income and operating margins for the second quarter of 2026 included $16.2 million of acquisition-related integration costs related to the FARO, LKC, and First Aviation acquisitions ("recent acquisitions"), which negatively impacted operating margins by 80 basis points. In the second quarter of 2026, segment operating margins were negatively impacted 80 basis points by the dilutive impact of recent acquisitions. Excluding the dilutive impact of recent acquisitions and acquisition-related costs, segment operating margins increased 140 basis points compared to the second quarter of 2025 due to the sales increase discussed above, as well as continued benefits from the Company's Operational Excellence initiatives.

Selling, general and administrative expenses for the second quarter of 2026 were $206.8 million or 10.1% of net sales, an increase of $32.5 million or 18.7%, compared with $174.3 million or 9.8% of net sales for the second quarter of 2025. Selling expenses increased primarily due to the net sales increase discussed above, as well as higher selling expense related to recent acquisitions. General and administrative expenses for the second quarter of 2026 were $30.8 million, compared with $26.7 million for the second quarter of 2025.

Consolidated operating income was $528.2 million or 25.8% of net sales for the second quarter of 2026, an increase of $66.6 million or 14.4%, compared with $461.6 million or 26.0% of net sales for the second quarter of 2025.

Interest expense for the second quarter of 2026 was $30.1 million, an increase of $13.2 million or 78.6%, compared with $16.9 million for the second quarter of 2025. Interest expense increased in the second quarter of 2026 primarily due to $10.0 million of fees associated with the bridge loan financing entered into in connection with the definitive agreement to acquire Indicor Instrumentation. The bridge loan was terminated in June 2026 following the execution of the Revolving Credit Agreement and the Term Loan Agreement. See Note 12 for additional information.

Other expense, net was $5.7 million for the second quarter of 2026, compared with $2.6 million of other expense, net for the second quarter of 2025.

The effective tax rate for the second quarter of 2026 was 17.4%, compared with 19.0% for the second quarter of 2025. The decrease in the quarterly effective tax rate was primarily driven by favorable international tax planning initiatives and favorable return to provision adjustments.

Net income for the second quarter of 2026 was a record $406.9 million, an increase of $48.5 million or 13.5%, compared with $358.4 million for the second quarter of 2025.

Diluted earnings per share for the second quarter of 2026 were a record $1.77, an increase of $0.22 or 14.2%, compared with $1.55 per diluted share for the second quarter of 2025.

Segment Results

EIG’s net sales totaled $1,321.2 million for the second quarter of 2026, an increase of $161.6 million or 13.9%, compared with $1,159.6 million for the second quarter of 2025. The net sales increase was due to a 7% organic sales increase as well as a 7% increase from recent acquisitions.

EIG’s operating income was $369.7 million for the second quarter of 2026, an increase of $25.3 million or 7.3%, compared with $344.4 million for the second quarter of 2025. EIG’s operating margins were 28.0% of net sales for the second quarter of 2026, compared with 29.7% for the second quarter of 2025. EIG's operating income and operating margins for the second quarter of 2026 included $15.0 million of acquisition-related integration costs related to the FARO and LKC acquisitions, which negatively impacted EIG's operating margins by 110 basis points. EIG's operating margins were negatively impacted 120 basis points in the second quarter of 2026 by the dilutive impact of recent acquisitions. Excluding the dilutive impact of recent acquisitions and acquisition-related costs, EIG's operating margins increased 60 basis points compared to the second quarter of 2025 due to the sales increase discussed above, as well as continued benefits from the Company's Operational Excellence initiatives.

EMG’s net sales totaled a record $723.2 million for the second quarter of 2026, an increase of $104.7 million or 16.9%, compared with $618.5 million for the second quarter of 2025. The net sales increase was due to a 15% organic sales increase as well as a 2% increase from recent acquisitions.

EMG’s operating income was a record $189.3 million for the second quarter of 2026, an increase of $45.4 million or 31.6%, compared with $143.9 million for the second quarter of 2025. EMG’s operating margins were 26.2% of net sales for the second quarter of 2026, compared with 23.3% for the second quarter of 2025. EMG's operating income and operating margins for the second quarter of 2026 included $1.2 million of acquisition-related integration costs related to the First Aviation

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acquisition, which negatively impacted operating margins by 10 basis points. Excluding the impact of acquisition-related costs, EMG's operating margins increased 300 basis points compared to the second quarter of 2025 due to the sales increase discussed above, as well as continued benefits from the Company's Operational Excellence initiatives.

Results of operations for the first six months of 2026 compared with the first six months of 2025

Net sales for the first six months of 2026 were $3,972.8 million, an increase of $462.8 million or 13.2%, compared with net sales of $3,510.0 million for the first six months of 2025. The increase in net sales for the first six months of 2026 was due to an 8% organic sales increase, as well as a 5% increase from acquisitions.

Total international sales for the first six months of 2026 were $1,887.3 million or 47.5% of net sales, an increase of $239.8 million or 14.6%, compared with international sales of $1,647.5 million or 46.9% of net sales for the first six months of 2025. The increase in international sales was primarily driven by increased demand in Europe and Asia, as well as contributions from recent acquisitions.

Orders for the first six months of 2026 were $4,501.5 million, an increase of $921.7 million or 25.7%, compared with $3,579.8 million for the first six months of 2025. The increase in orders for the first six months of 2026 was due to a 24% organic order increase, a 4% increase from acquisitions, partially offset by a 2% unfavorable effect of foreign currency translation.

Cost of sales for the first six months of 2026 was $2,520.2 million or 63.4% of net sales, an increase of $271.1 million or 12.1%, compared with $2,249.1 million or 64.1% of net sales for the first six months of 20

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Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report includes forward-looking statements based on the Company’s current assumptions, expectations and projections about future events. When used in this report, the words “believes,” “anticipates,” “may,” “expect,” “intend,” “estimate,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. In this report, the Company discloses important factors that could cause actual results to differ materially from management’s expectations. For more information on these and other factors, see “Forward-Looking Information” herein.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with “Item 1A. Risk Factors,” and the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

Business Overview

The Company benefits from its strategic initiatives under the AMETEK Growth Model's four key strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products. In 2025, the Company posted record sales, operating income, net income, diluted earnings per share, orders, and backlog, as well as strong operating cash flow. Positive market trends, the Company's backlog, contributions from recent acquisitions, and benefits from the continued implementation of the AMETEK Growth Model had a positive impact on 2025 results.

Highlights in 2025 were:

•Net sales for 2025 were a record $7,401.1 million, an increase of $459.9 million or 6.6%, compared with net sales of $6,941.2 million in 2024.

•Net income for 2025 was a record $1,480.1 million, an increase of $104.0 million or 7.6%, compared with $1,376.1 million in 2024.

•Diluted earnings per share for 2025 were a record $6.40, an increase of $0.47 or 7.9%, compared with $5.93 per diluted share in 2024.

•Orders for 2025 were a record $7,579.4 million, an increase of $769.1 million or 11.3%, compared with $6,810.3 million in 2024. The Company's backlog of unfilled orders at December 31, 2025 was a record $3,581.5 million.

•Cash provided by operating activities totaled $1,801.8 million in 2025. Free cash flow (cash flow provided by operating activities less capital expenditures) was $1,671.6 million in 2025.

•During 2025, the Company spent $933.2 million in cash, net of cash acquired, to purchase two businesses:

•In January 2025, AMETEK acquired Kern Microtechnik ("Kern"), a leading manufacturer of high-precision machining and optical inspection solutions.

•In July 2025, AMETEK acquired FARO Technologies ("FARO"), a leading provider of 3D measurement and imaging solutions.

•EBITDA (earnings before interest, income taxes, depreciation, and amortization) was a record $2,296.9 million in 2025, compared with $2,151.7 million in 2024.

•In 2025, the Company repurchased approximately 2.3 million shares of its common stock for $443.0 million, compared with $212.0 million used for repurchases of approximately 1.2 million shares in 2024.

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•The Company continued its emphasis on investment in research, development and engineering, spending $382.8 million in 2025. Approximately 27% of sales in 2025 were from products introduced in the past three years.

Recent Trends

During 2025, the United States government announced additional tariffs and trade restrictions on goods imported into the U.S. from various nations. Our businesses have been proactive in addressing the potential impacts of tariffs, including targeted pricing initiatives, strategic adjustments to our global supply chains, and leveraging our worldwide manufacturing footprint to localize production and adapt to changing demand patterns. The recent tariff modifications did not materially impact our results for 2025, however, as the situation continues to evolve, we cannot be certain of the outcome, which could adversely impact demand for our products, costs, inflation, customers, suppliers, and the overall global economy. We continue to monitor and analyze the impacts of the tariffs and will continue to implement appropriate actions as necessary to mitigate their effects.

Results of Operations

The following “Results of Operations of the year ended December 31, 2025 compared with the year ended December 31, 2024” section presents an analysis of the Company’s consolidated operating results displayed in the Consolidated Statement of Income. A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on February 20, 2025.

For the year ended December 31, 2025 , the Company recorded $37.3 million of pre-tax acquisition-related costs related to the FARO acquisition, which are comprised of one-time transactions costs and ongoing integration costs. Acquisition-related integration costs of $25.3 million were recorded in Cost of sales and primarily include employee severance, change in control costs, and fair-value inventory adjustments. One-time acquisition-related transaction costs of $12.0 million were recorded in Other (expense) income, net and primarily include investment banker fees and representation and warranty insurance costs.

Results of Operations for the year ended December 31, 2025 compared with the year ended December 31, 2024

Net sales for 2025 were $7,401.1 million, an increase of $459.9 million or 6.6%, compared with net sales of $6,941.2 million in 2024. The increase in net sales for 2025 was due to a 4% increase from acquisitions, a 2% organic sales increase, as well as a 1% favorable effect of foreign currency translation. EIG net sales were $4,919.1 million in 2025, an increase of 5.6%, compared with $4,659.9 million in 2024. EMG net sales were $2,482.0 million in 2025, an increase of 8.8%, compared with $2,281.3 million in 2024.

Total international sales for 2025 were $3,570.5 million or 48.2% of net sales, an increase of $278.8 million or 8.5%, compared with international sales of $3,291.7 million or 47.4% of net sales in 2024. The increase in international sales was primarily driven by contributions from recent acquisitions and increased demand in all regions. Export shipments from the United States, which are included in total international sales, were $2,041.2 million in 2025, an increase of $160.4 million or 8.5%, compared with $1,880.8 million in 2024.

Orders for 2025 were $7,579.4 million, an increase of $769.1 million or 11.3% compared with $6,810.3 million in 2024. The increase in orders was due to a 4% increase from acquisitions, a 4% organic order increase, as well as a 3% favorable effect of foreign currency translation. The Company’s backlog of unfilled orders at December 31, 2025 was a record $3,581.5 million, an increase of $178.3 million or 5.2%, compared with $3,403.2 million at December 31, 2024.

Cost of sales for 2025 was $4,733.7 million or 64.0% of net sales, an increase of $269.0 million or 6.0%, compared with $4,464.7 million or 64.3% of net sales for 2024. The cost of sales increase was primarily due to the net sales increase discussed above.

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Segment operating income for 2025 was $2,026.0 million, an increase of $141.1 million or 7.5%, compared with segment operating income of $1,884.9 million in 2024. Segment operating income, as a percentage of net sales, increased to 27.4% in 2025, compared with 27.2% in 2024. Segment operating income and operating margins in 2025 were negatively impacted 60 basis points by the dilutive impact of recent acquisitions and 30 basis points from acquisition-related integration costs. Segment operating income and operating margins in 2024 included $29.2 million of acquisition-related integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 40 basis points. Excluding the dilutive impact of the recent acquisitions, acquisition-related integration costs, and the Paragon acquisition-related integration costs, segment operating margins increased 70 basis points compared to 2024, due to the continued benefits from the Company's Operational Excellence initiatives.

Selling, general and administrative expenses for 2025 were $757.1 million or 10.2% of net sales, an increase of $60.2 million or 8.6%, compared with $696.9 million or 10.0% of net sales in 2024. Selling expenses increased primarily due to the increase in net sales discussed above. General and administrative expenses for 2025 were $115.7 million, compared with $105.3 million in 2024.

Consolidated operating income was $1,910.3 million or 25.8% of net sales for 2025, an increase of $130.7 million or 7.3%, compared with $1,779.6 million or 25.6% of net sales in 2024.

Interest expense was $81.3 million for 2025, a decrease of $31.7 million or 28.1%, compared with $113.0 million in 2024. Higher borrowings under the revolving credit facility related to the December 2023 Paragon acquisition resulted in higher interest expense in 2024.

Other expense, net was $30.7 million for 2025, compared with $5.1 million of other expense in 2024. Other expense increased in 2025 primarily due to $12.0 million of acquisition-related transaction costs and increased environmental spend, compared to 2024.

The effective tax rate for 2025 was 17.7%, compared with 17.2% in 2024. See Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further details.

Net income for 2025 was $1,480.1 million, an increase of $104.0 million or 7.6%, compared with $1,376.1 million in 2024.

Diluted earnings per share for 2025 were $6.40, an increase of $0.47 or 7.9%, compared with $5.93 per diluted share in 2024.

Segment Results

EIG’s net sales totaled a record $4,919.1 million for 2025, an increase of $259.2 million or 5.6%, compared with $4,659.9 million in 2024. The net sales increase was due to a 6% increase from acquisitions and a 1% favorable effect of foreign currency translation, partially offset by a 1% organic sales decrease.

EIG’s operating income was a record $1,447.1 million for 2025, an increase of $18.7 million or 1.3%, compared with $1,428.4 million in 2024. EIG’s operating margins were 29.4% of net sales for 2025, compared with 30.7% of net sales in 2024. EIG's operating income was negatively impacted 100 basis points by the dilutive impact of recent acquisitions and 50 basis points for acquisition-related integration costs in 2025. Excluding the dilutive impact of recent acquisitions and acquisition-related integration costs, EIG's operating margins increased 20 basis points in 2025 compared to 2024 due to the sales increase discussed above, as well as continued benefits from the Company's Operational Excellence initiatives.

EMG’s net sales totaled a record $2,482.0 million for 2025, an increase of $200.7 million or 8.8%, compared with $2,281.3 million in 2024. The net sales increase was due to an 8% organic sales increase and a 1% favorable effect of foreign currency translation.

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EMG’s operating income was a record $578.9 million for 2025, an increase of $122.4 million or 26.8%, compared with $456.5 million in 2024. EMG’s operating margins were 23.3% of net sales for 2025, compared with 20.0% of net sales in 2024. EMG's operating income and operating margins for 2024 included $29.2 million of acquisition-related integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 130 basis points. Excluding the Paragon acquisition-related integration costs, EMG operating margins increased 200 basis points compared to 2024, due to the sales increase discussed above, as w

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