Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported July 22, 2026 · Beat 7 of last 7 quarters
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TE Connectivity's record orders and raised guidance underscore the accelerating AI infrastructure buildout, with DDN and Energy both benefiting from data center and power infrastructure investment. The company's positioning across both data and power connectivity makes it a bellwether for the AI infrastructure cycle, and its backlog suggests continued growth into fiscal 2027.
TE Connectivity delivered record Q3 results with sales of $5.2B (+14% reported, +12% organic) and adjusted EPS of $2.94 (+22%). Industrial Solutions grew 22% reported/21% organic, led by DDN (+34%) and Energy (+33% organic). Transportation grew 7% reported/5% organic, with Commercial Transportation up 20% reported/18% organic. Orders hit a record $5.7B, up 27% YoY, with double-digit growth in every business. The company announced the acquisition of Astrodyne TDI for ~$1.4B, a power and filter products company with ~$250M annual sales.
Management raised full-year guidance: sales now expected to grow ~15% (over $2.5B incremental revenue) and adjusted EPS up 23% YoY. Q4 guidance calls for sales of ~$5.25B (+11% YoY) and adjusted EPS of ~$3.05. Record orders and backlog, particularly in DDN and defense, provide visibility into continued broad-based growth into fiscal 2027. The company expects DDN to grow sequentially in Q4 and AI to become an increasing share of DDN. ACL market growth is now expected high single digits. Management also announced the $1.4B acquisition of Astrodyne TDI, expected to close by end of calendar year, which will be accretive to growth and margins.
“We are at the intersection of the largest technology and infrastructure investment cycle that's taking place around the world.”
on Strategic positioning
“Importantly, our record order momentum and growing backlog provide increasing visibility into continued broad-based growth as we move into next year, reinforcing our strategy and our ability to compound earnings that create long-term value for our owners.”
on Order momentum and backlog
“We are delivering well ahead of our through-cycle business model, generating strong margins, earnings growth, and cash flow.”
on Financial performance
Can you talk a little bit about the ramp you expect in your FAU optical business?
Terrence Curtin explained that copper remains the heavy workload within the rack, while optics will be used for scale-out and moving off the switch. The RAM Photonics acquisition provides incremental TAM, with meaningful revenue expected in 2028 and beyond. The company is investing in scaling manufacturing and engineering to meet customer intercept points.
How are record orders and backlog setting up revenue growth for 2027, and why isn't DDN revenue tracking better given AI order momentum?
Terrence Curtin noted that DDN orders were up 70% year-to-date, but program ramps will deliver more into next year than this year. DDN is expected to grow sequentially in Q4. The order strength is broad-based across Industrial and Transportation, supporting confidence in 2027.
How are you tracking versus your AI revenue targets, and how do you see copper, optical, and power complementing each other?
Terrence Curtin confirmed DDN is on track with prior guidance, with AI becoming an increasing percentage of DDN. He emphasized that copper remains the workhorse within the rack, while optics like CPO at the switch level represent incremental TAM. Power connectivity content can increase 1.5x with higher voltage architectures.