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November 12, 2025 • 4 min read
TE Connectivity (NYSE: TEL), a key player in the world of connectors and sensors that power everything from cars to data centers, has just released its annual financial report. Let's dive into their Form 10-K filing for the fiscal year ending September 26, 2025, to see what's powering their performance.
For fiscal year 2025, TE Connectivity reported a solid 8.9% increase in net sales, reaching $17.3 billion. This growth wasn't just from acquisitions; the company's organic sales, which strip out the effects of acquisitions and currency fluctuations, grew by a healthy 6.4%. However, the bottom line tells a more complex story, with net income falling to $1.8 billion from $3.2 billion in the prior year. The primary reason for this drop wasn't a flaw in operations but a significant swing in their income tax line item, shifting from a large benefit in 2024 to a substantial expense in 2025.
The following flow diagram provides a visual breakdown of the company's revenue streams and costs for the fiscal year.
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TE Connectivity's performance in 2025 was clearly a story of two distinct segments moving in different directions. The company realigned its structure this year into two main divisions: Transportation Solutions and Industrial Solutions.
Industrial Solutions: The Growth Engine
The star of the show was undoubtedly the Industrial Solutions segment, which saw its net sales surge by 23.7% to $7.9 billion. This segment provides components for a wide range of markets, including data networks, factory automation, aerospace, and energy.
The most spectacular growth came from the Digital data networks business, which rocketed up 72.6% in organic sales. This boom is directly tied to the explosive demand for AI and cloud infrastructure, areas where TE's high-speed connectivity products are essential. The Energy market also delivered strong results with 15.0% organic growth, bolstered by the acquisition of Richards Manufacturing Co., an electrical components producer, for approximately $2.3 billion during the year. This move clearly signals TE's strategic focus on high-growth industrial applications.
Transportation Solutions: Hitting a Speed Bump
In contrast, the larger Transportation Solutions segment, which accounts for 54% of total sales, experienced a slight 1.0% decline in revenue to $9.4 billion. This division is a leading supplier to the automotive and commercial vehicle markets.
Beyond segment performance, two major external factors shaped TE Connectivity's year. First, the company officially completed its change of incorporation from Switzerland to Ireland. While not expected to impact operations, it's a significant corporate move.
Second, and more impactful to the bottom line, were changes in global tax regulations. The company noted that the implementation of the Organisation for Economic Co-operation and Development's (OECD) 15% global minimum tax rules, effective for TE in fiscal 2025, significantly affected its tax position. Specifically, new guidance impacted the future value of a ten-year tax credit a Swiss subsidiary had previously obtained. This led to a $574 million increase in the valuation allowance against deferred tax assets, a major contributor to the year's $1.36 billion tax expense.
TE Connectivity's 2025 results highlight a clear strategic direction. The company is successfully capitalizing on the AI and renewable energy megatrends through its Industrial Solutions segment, while its acquisition activity reinforces this focus. However, the sheer size of its Transportation business means that challenges in the global auto market remain a significant factor. The complex and shifting international tax landscape also presents an ongoing risk that could continue to influence profitability. Investors will be watching to see if the powerful growth in industrial markets can continue to outpace the headwinds in the transportation sector.
Last updated: November 12, 2025