TE Connectivity plc (TEL)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements as a result of many factors, including but not limited to those under the heading “Forward-Looking Information” and “Part II. Item 1A. Risk Factors.”

Our Condensed Consolidated Financial Statements have been prepared in United States (“U.S.”) dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

The following discussion includes organic net sales growth (decline) which is a non-GAAP financial measure. See “Non-GAAP Financial Measure” for additional information regarding this measure.

Overview

TE Connectivity plc (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. As a trusted innovation partner, our broad range of connectivity and sensor solutions enable the distribution of power, signal, and data to advance next-generation transportation, energy networks, automated factories, data centers enabling artificial intelligence, and more.

Summary of Performance

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Outlook

In the fourth quarter of fiscal 2026, we expect our net sales to be approximately $5.25 billion, as compared to $4.75 billion in the fourth quarter of fiscal 2025. This increase is due to sales growth in both the Industrial Solutions and Transportation Solutions segments. In the fourth quarter of fiscal 2026, we expect diluted earnings per share from continuing operations to be approximately $2.84 per share. This outlook reflects the negative impact of foreign currency exchange rates on net sales of approximately $10 million in the fourth quarter of fiscal 2026 as compared to the same period of fiscal 2025. Also, this outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels. It does not include results related to our anticipated acquisition of Astrodyne TDI.

Acquisitions

On July 22, 2026, we entered into a definitive agreement to acquire Astrodyne TDI, a leading manufacturer of power and filter solutions, for approximately $1.4 billion in cash. The transaction, which is expected to close by the end of calendar year 2026, is subject to customary regulatory approvals and other closing conditions. The business will be reported as part of our Industrial Solutions segment.

During the first nine months of fiscal 2026, we acquired one business for a cash purchase price of $200 million, net of cash acquired. The acquisition includes certain earn-out provisions based on business performance for which we have estimated the acquisition-date fair value to be approximately $150 million. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition.

Results of Operations

Net Sales

The following table presents our net sales and the percentage of total net sales by segment:

The following table provides an analysis of the change in our net sales by segment:

Net sales increased $626 million, or 13.8%, in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025 due to organic net sales growth of 12.2% and the positive impact of foreign currency translation of 1.6% due to the strengthening of certain foreign currencies. Net pricing actions positively affected organic net sales by $34 million in the third quarter of fiscal 2026.

In the first nine months of fiscal 2026, net sales increased $2,060 million, or 16.5%, as compared to the first nine months of fiscal 2025 due to organic net sales growth of 11.4%, the positive impact of foreign currency translation of 2.9% due to the strengthening of certain foreign currencies, and the positive impact of 2.2% from acquisitions. Richards

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Manufacturing Co. (“Richards Manufacturing”), which was acquired on April 1, 2025, contributed incremental net sales of $227 million in the first six months of fiscal 2026 over the same period in fiscal 2025. Net pricing actions positively affected organic net sales by $85 million in the first nine months of fiscal 2026.

See further discussion of net sales below under “Segment Results.”

Net Sales by Geographic Region. Our business operates in three geographic regions—Asia–Pacific, Europe/Middle East/Africa (“EMEA”), and the Americas—and our results of operations are influenced by changes in foreign currency exchange rates. Increases or decreases in the value of the U.S. dollar, compared to other currencies, will directly affect our reported results as we translate those currencies into U.S. dollars at the end of each fiscal period.

Approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in the first nine months of fiscal 2026.

The following table presents our net sales and the percentage of total net sales by geographic region(1):

The following table provides an analysis of the change in our net sales by geographic region:

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the accompanying notes included elsewhere in this Annual Report. The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this Annual Report, particularly in “Part I. Item 1A. Risk Factors” and “Forward-Looking Information.”

Our Consolidated Financial Statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

Discussion of our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 is presented below. The “Segment Results” section also discusses fiscal 2024 compared to fiscal 2023 because of the change in our segment structure discussed below. Discussion of our financial condition and consolidated results of operations for fiscal 2024 compared to fiscal 2023 can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 27, 2024.

The following discussion includes organic net sales growth (decline) which is a non-GAAP financial measure. See “Non-GAAP Financial Measure” for additional information regarding this measure.

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Overview

We are a global industrial technology leader creating a safer, sustainable, productive, and connected future. As a trusted innovation partner, our broad range of connectivity and sensor solutions enable the distribution of power, signal, and data to advance next-generation transportation, energy networks, automated factories, data centers enabling artificial intelligence, and more.

Change in Place of Incorporation

During fiscal 2024, our board of directors and shareholders approved a change in our jurisdiction of incorporation from Switzerland to Ireland. In connection with the change, TE Connectivity Ltd., our former parent entity, entered into a merger agreement with TE Connectivity plc, its then wholly-owned subsidiary and a public limited company incorporated under Irish law. Under the merger agreement, TE Connectivity Ltd. merged with and into TE Connectivity plc, which was the surviving entity, in order to effect our change in jurisdiction of incorporation from Switzerland to Ireland. The merger was completed on September 30, 2024, thereby changing our jurisdiction of incorporation from Switzerland to Ireland. Effective for fiscal 2025, we are organized under the laws of Ireland. We have not had and do not anticipate any material changes in our operations or financial results as a result of the merger and change in place of incorporation.

New Segment Structure

Effective for fiscal 2025, we reorganized our management and segments to align the organization around our current strategy. We now operate through two reportable segments: Transportation Solutions and Industrial Solutions. Prior period segment results have been recast to conform to the new segment structure. See additional information regarding our segments in Notes 1 and 20 to the Consolidated Financial Statements.

Summary of Fiscal 2025 Performance

Economic Conditions

Our business and operating results have been and will continue to be affected by worldwide economic conditions. The global economy has been impacted in recent years by supply chain disruptions, inflationary cost pressures, and, most recently, tariff and trade policies. We are monitoring the current environment and its potential effects on our customers and the end markets we serve.

In recent years, we have experienced inflationary cost pressures including increased costs for transportation, energy, and raw materials. However, we have been able to mitigate increased costs and supply chain disruptions through productivity and/or price increases. Also, we have taken and continue to focus on actions to manage costs, including restructuring and

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other cost reduction initiatives such as reducing discretionary spending and travel. Additionally, we are managing our capital resources and monitoring capital availability to ensure that we have sufficient resources to fund our future capital needs. See further discussion in “Liquidity and Capital Resources.”

We are actively monitoring developments in tariff and trade policies and the potential impacts on our business. In addition, we are using pricing actions and sourcing changes to largely mitigate the impacts of new tariffs and changes in existing tariff rates.

We continue to monitor military conflicts in certain parts of the world as well as escalating tensions in surrounding countries and associated sanctions. These did not have a significant impact on our business, financial condition, or results of operations during fiscal 2025 and 2024.

Outlook

In the first quarter of fiscal 2026, we expect our net sales to be approximately $4.5 billion as compared to $3.8 billion in the first quarter of fiscal 2025. This increase reflects sales growth in both the Industrial Solutions and Transportation Solutions segments. The Industrial Solutions segment will benefit from the acquisition of Richards Manufacturing. We expect diluted earnings per share from continuing operations to be approximately $2.33 per share in the first quarter of fiscal 2026. This outlook reflects the positive impact of foreign currency exchange rates on net sales and earnings per share of approximately $113 million and $0.02 per share, respectively, in the first quarter of fiscal 2026 as compared to the same period of fiscal 2025 and includes the impact of currently enacted tariffs. Also, this outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels.

Acquisitions

As discussed above, on April 1, 2025, we acquired 100% of Richards Manufacturing, a U.S.-based producer of overhead and underground electrical and gas distribution products, for cash of approximately $2.3 billion, net of cash acquired. The acquired business has been reported as part of the energy business within our Industrial Solutions segment from the date of acquisition.

During fiscal 2025, we acquired two additional businesses for a combined cash purchase price of $321 million, net of cash acquired. The acquired businesses have been reported as part of our Industrial Solutions segment from the date of acquisition.

During the first quarter of fiscal 2024, we acquired approximately 98.7% of the outstanding shares of Schaffner Holding AG (“Schaffner”), a leader in electromagnetic solutions based in Switzerland, for CHF 505.00 per share in cash for a purchase price of CHF 294 million (equivalent to $339 million), net of cash acquired. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition. During the third quarter of fiscal 2024, we completed a squeeze-out of the remaining minority shareholders for $5 million and the Schaffner shares were delisted from the SIX Swiss Exchange.

See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.

Divestitures

During fiscal 2024, we sold one business for net cash proceeds of $59 million. In connection with the divestiture, we recorded a pre-tax gain on sale of $10 million. Prior to divestiture, the business was reported in our Transportation Solutions segment.

See Note 3 to the Consolidated Financial Statements for additional information regarding divestitures.

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Results of Operations

Net Sales

The following table presents our net sales and the percentage of total net sales by segment:

The following table provides an analysis of the change in our net sales by segment:

Net sales increased $1,417 million, or 8.9%, in fiscal 2025 as compared to fiscal 2024. The increase in net sales resulted primarily from organic net sales growth of 6.4% and the net positive impact of 2.2% from acquisitions and a divestiture. Richards Manufacturing, which was acquired on April 1, 2025, contributed net sales of $179 million in fiscal 2025. In fiscal 2025, net pricing actions positively affected organic net sales by $51 million. See further discussion of net sales below under “Segment Results.”

Net Sales by Geographic Region. Our business operates in three geographic regions—Asia–Pacific, EMEA, and the Americas—and our results of operations are influenced by changes in foreign currency exchange rates. Increases or decrea

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