TE Connectivity (TEL) reported a solid fourth quarter of fiscal 2024 with revenue of $4.068 billion, up 2% organically year over year, and a full-year revenue of $15.8 billion. The quarter benefited from stronger contributions in the Communications Solutions segment, driven by AI applications, while Industrial Solutions remained challenged by weaker factory automation and general industrial end markets. TEL delivered a quarterly adjusted operating margin of 18.6% and a full-year adjusted margin of 18.9%, marking meaningful margin expansion versus 2023 (+220 bps) amid a dynamic market backdrop and strong cash-generation discipline. Free cash flow reached a quarterly run-rate of about $0.83 billion, supported by a full-year free cash flow of roughly $2.8 billion, underscoring the high quality of earnings and the company’s cash-generation model.
Management underscored three strategic pillars: (1) continued margin and EPS expansion supported by operational levers and a robust cash framework; (2) a pronounced AI-driven growth trajectory within Communications/Data & Devices and related AI applications, with AI revenue of $300 million in FY2024 and guidance to roughly double to ~$600 million in FY2025; and (3) a portfolio shift toward secular growth trends, notably electrification and data connectivity in vehicles, renewables, and AI-enabled data centers, complemented by a disciplined capital-allocation plan including a new $2.5 billion share-repurchase authorization. With the reorganization into two primary segments (Industrial Solutions and Communications Solutions) effective FY2025, TEL expects a gradual build-out of margins across the portfolio and a return to growth in 2025, led by AI programs, Asia-driven content, and auto electrification content growth.