Welcome to the Q3 earnings conference call for Amphenol Corporation. Following today's presentation, there will be a formal question-and-answer session. Until then, all lines will remain in a listen-only mode. At the request of the company, today's conference is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to introduce today's conference host, Mr. Craig Lampo. Sir, you may begin. Thank you very much. Good afternoon, everyone. This is Craig Lampo, Amphenol's CFO, and I'm here together with Adam Norwitt, our CEO. We would like to welcome you to our Q3 2023 conference call. Our Q3 2023 results were released this morning. I will provide some financial commentary, and then Adam will give an overview of the business and current trends. Then we will take questions. As a reminder, during the call, we may refer to certain non-GAAP financial measures and make certain forward-looking statements, so please refer to the relevant disclosures in our press release for further information. The company closed the Q3 with sales of $3.199 billion in GAAP and adjusted diluted EPS of $0.83 and $0.78, respectively. Q3 sales were down 3% in US dollars and local currencies, and 5% organically compared to the Q3 of 2022. Sequentially, sales were up 5% in US dollars, local currencies and organically. Adam will comment further on trends by market in a few minutes. Orders in the quarter were $3.164 billion, which was flat compared to the Q3 of 2022 and up 4% sequentially, resulting in a book-to-bill ratio of 0.99 to 1. GAAP operating income was $658 million in the Q3 of 2023, which included $9 million of acquisition-related transaction costs. Excluding these costs, adjusted operating income was $667 million. GAAP and adjusted operating margins were 20.6% and 20.8%, respectively, in the Q3. On a GAAP basis, operating margin was down 10 basis points compared to the Q3 of 2022 and increased by 30 basis points sequentially. On an adjusted basis, operating margin decreased by just 20 basis points compared to the Q3 of 2022, but increased by 40 basis points sequentially. This modest year-over-year decrease in adjusted operating margin was primarily due to the dilutive impact of recent acquisitions, which are currently operating well below the corporate average. On an organic basis, we were very pleased with our operating margin performance, which represented a smaller than typical downside conversion on the lower organic sales levels. This strong organic performance reflected the agility of our team in adjusting costs, as well as the continued benefit of pricing actions taken in the prior year. On a sequential basis, the increase in adjusted operating margin reflected strong conversion on the higher sales levels. Our team continued to execute well in the quarter, and we are proud to have sustained these healthy levels of profitability despite the continued range of challenges around the world. Breaking down Q3 results by segment relative to the Q3 of 2022, sales in the Harsh Environment Solutions segment were $887 million and increased by 12% in US dollars and 7% organically. Segment operating margin was 26.9%. Sales in the Communication Solutions segment were $1,279 million and declined by 16% in the US dollars and organically. Segment operating margin was 22.1%. Sales in the Interconnect and Sensor Systems segment were $1.033 billion and increased by 5% in US dollars and 1% organically. Segment operating margin was 18.3%. The company's GAAP effective tax rate for the Q3 was 18.2%, and the adjusted effective tax rate was 24.0%, which were compared to 23.1% and 24.5% in the Q3 of 2022, respectively. GAAP diluted EPS was up 4% at $0.83, compared to $0.80 in the prior year period, and on an adjusted basis, diluted EPS decreased 3% to $0.78, compared to $0.80 in the Q3 of 2022. This was an excellent result, especially considering the variety of challenges that the company continued to face during the quarter. Operating cash flow in the Q3 was $618 million or 128% of adjusted net income and net of capital spending. Our free cash flow was $544 million, or 112% of adjusted net income. We are pleased to continue to deliver such a strong cash flow yield. From a working capital standpoint, inventory days, days sales outstanding, and payable days were 87, 70, and 52 days, respectively, all within the normal levels. As mentioned in today's earnings release, the company's board of directors has approved a 5% increase in the company's quarterly dividend to $0.22, effective for payments beginning in January 2024. During the quarter, the company repurchased 1.7 million shares of common stock at an average price of approximately $86, and when combined with our normal quarterly dividend, total capital return to shareholders during the Q3 of 2023 was approximately $275 million. Total debt on September thirtieth was $4.3 billion, and net debt was $2.6 billion. Total liquidity at the end of the quarter was $5 billion, which included cash and short-term investments on hand of $1.7 billion, plus availability under existing credit facilities.... Q3 2023 EBITDA was $784 million, and at the end of the Q3 of 2023, our net leverage ratio was 0.8 times. We are very pleased that the company's financial condition remains extremely strong by any measure. I will now turn the call over to Adam, who will provide some commentary on current market trends. Well, Craig, thank you very much, and I'd like to extend my welcome to everybody on the phone here today, and I hope that you're all having an enjoyable fall so far. It's a pleasure here in Wallingford to see the beautiful orange and red hues out of our windows. As Craig mentioned, I'm going to highlight our Q3 achievements. I'll then discuss our trends and progress across our diversified end markets, and then I'll comment on our outlook for the Q4 and for the full year of 2023. Turning to the Q3, our results in the Q3 were better than expected as we exceeded the high end of our guidance in sales and adjusted diluted earnings per share. Sales declined by 3% in US dollars and local currencies, reaching just under $3.2 billion, with growth in the commercial, air, military, and automotive end markets, as well as contributions from our acquisitions, which were more than offset by moderations in the mobile networks, mobile devices, IT datacom, broadband, and industrial end markets. On an organic basis, sales declined by 5%, but sales did increase sequentially by 5% from Q2 levels. We're pleased that the company booked orders of $3.164 billion, and that represented a book-to-bill of 0.99 to 1. I'm especially encouraged that our orders in the Q3 did exceed prior year levels, and that, that's an encouraging sign going forward. Profitability was very strong in the quarter. We generated adjusted operating margins of 20.8%, and that was down just 20 basis points from prior year. Sequentially, our margins improved by 40 basis points, and as Craig already mentioned, these operating margins in the Q3 reflected just outstanding execution by our global management team, who continued to manage dynamically and effectively, even in the face of moderating sales. Adjusted diluted EPS in the quarter was $0.78, and that declined just 3% from prior year, and increased by a strong 8% on a sequential basis. Then finally, we're very pleased with the company's cash flow generation in the quarter, with operating and free cash flow of $618 million and $544 million, respectively, in the Q3, clear demonstrations of the high quality of Amphenol's earnings. I come out of this quarter extremely proud of the team, and I'll just say that our results this quarter once again reflect the discipline and agility of our entrepreneurial organization as we continue to perform well amidst a dynamic and challenging environment. Our acquisition team has been extremely busy this year so far, and I'm really pleased that since our last earnings call, we've closed on three acquisitions: Connor Manufacturing, Q Microwave, and XMA Corporation. In addition, we signed an agreement to acquire PCTEL. With its headquarters in Illinois, Connor is a global manufacturer of power interconnect products, including especially high-voltage busbars for the automotive and industrial markets, with annual sales of approximately $100 million. Based in California, Q Microwave is a designer and manufacturer of mission-critical radio frequency components utilized in military platforms with annual sales of approximately $20 million. Based in New Hampshire, XMA is also a provider of RF components for the military, as well as the IT datacom market, with annual sales of approximately $15 million. We're very pleased that we signed a definitive agreement to acquire PCTEL. PCTEL is a leading global provider of antennas for a broad array of markets, as well as purpose-built industrial IoT products and test and measurement solutions. We expect the PCTEL transaction to close by early 2024. I'm very excited to welcome the Connor, Q Microwave, and XMA teams to Amphenol, and I certainly look forward to welcoming the PCTEL team once that deal closes. Most importantly, I remain confident that our acquisition program will continue to create great value for the company. In fact, our ability to identify and execute upon acquisitions and then to successfully bring these companies into our entrepreneurial organization, this remains a core competitive advantage for Amphenol. Now, turning to our served markets, we're very pleased that the company's end market exposure remains highly diversified, balanced, and broad, and that creates great value for the company, particularly amidst these dynamic times. So turning to each of our served markets, the military market represented 11% of our sales in the quarter. Sales grew from prior year by a very strong 26% in U.S. dollars and 22% organically, and this was really driven by broad-based strength across virtually every segment of the military market. Sequentially, our sales grew by 3%, which was better than our expectations coming into the quarter. As we look into the Q4, we expect sales to remain roughly at these robust Q3 levels. For the full year of 2023, we expect a high-teens increase in sales from prior year. With the acquisitions last quarter of both Q Microwave and XMA, we further broadened our industry-leading RF product offering into this important defense market. In general, we remain encouraged by the company's strengthened position across the defense industry, where we continue to offer the market's widest range of high-technology interconnect products. Amidst today's dynamic geopolitical environment, countries around the world are expanding their investments in both current and next-generation defense technologies, thereby increasing the long-term demand potential for Amphenol. We're going to continue to accelerate our new product development while also increasing our capacity, and thus are well positioned to support this increased demand long into the future. The commercial aerospace market represented 4% of our sales in the quarter, had another really strong quarter, with sales increasing by a very robust 40% from prior year and 37% organically, and this was driven by broad-based strength across all aircraft applications. On a sequential basis, sales did decline by just 1%, and that was a bit better than our expectations coming into the quarter. As we look into the Q4, we now expect a modest seasonal sequential decline in sales, and for the full year of 2023, we expect sales to increase in the mid-30% range compared to 2022. I'm truly proud of our team working in the commercial air market. With the ongoing recovery in travel and thus, demand for jetliners, our efforts to strengthen our breadth of high-technology interconnect products while diversifying our market position into next-generation aircraft are paying real dividends. We look forward to realizing the benefits of these initiatives for many years to come. The industrial market represented 24% of our sales in the quarter. Sales in the quarter did decline by 6% in U.S. dollars and 13% organically, as growth in medical, oil and gas, and rail mass transit applications was more than offset by declines in other segments of the industrial market. I did want to highlight that our sales into the distribution channel were particularly soft in the Q3, as many distributors have taken steps to reduce their inventory positions in the industrial market. Sequentially, sales declined by 4% from the Q2, which was somewhat worse than our expectations coming into the quarter. Looking into the Q4, we expect sales to moderate slightly from these Q3 levels, and for the full year of 2023, we expect sales to be roughly flat versus prior year as some organic moderations are offset by the benefit of our acquisitions. Despite this near-term demand pause in the industrial market, I continue to remain so proud of our outstanding global team working in this important area. They continue to pursue growth opportunities across the many exciting segments of this truly diverse market. I remain confident that our long-term strategy to expand our high-technology interconnect, antenna, and sensor offering, both organically and through complementary acquisitions, has positioned us to capitalize on the many revolutions that will no doubt continue to occur across the industrial electronics market. The automotive market represented 23% of our sales in the quarter, and sales grew by a very robust 13% in US dollars and 12% organically. This was driven by broad-based strength across most automotive applications, including electric and hybrid electric vehicle platforms. Sequentially, our sales increased by 7% from the Q2, and this was much better than our expectations that we had coming into Q3. For the Q4, we expect sales to remain roughly at these levels, and for the full year of 2023, we expect sales to increase by approximately 10% compared to prior year. I'm really proud of our team working in the automotive market. You know, their performance so far this year is yet another confirmation of the benefits of their focus on driving new design wins with customers who are implementing a wide array of new technologies into their vehicles, including electrified drivetrains, as well as a multitude of other exciting new applications. With the addition of Connor to the Amphenol family, we now have an even broader array of products for global electric vehicle manufacturers, and we look forward to benefiting from this position for many years to come. The mobile device market represented 10% of our sales in the quarter, and our sales moderated by 20% in US dollars and 18% organically, as strong growth in smartphones was more than offset by declining sales of products that are incorporated into laptops, tablets, and wearables. On a sequential basis, our sales increased by a much stronger than expected 25%, and that was really driven by higher-than-expected sales in smartphones and wearables. Looking to the Q4, we expect sales to moderate in the high single digits sequentially. As strong growth in smartphones, we expect to be more than offset by continued declines in laptops and wearables. For the full year, we anticipate sales to decline in the mid-teens compared to 2022. While there's no question that mobile devices remains our most volatile end market, our team once again in the Q3, did an outstanding job of capitalizing on opportunities to realize incremental sales. Their agility and ability to adjust resources in real time with the changing levels of demand continues to create value for Amphenol. As we head into the end of 2023, our team stands poised, as always, to leverage their leading array of antennas, interconnect products, and mechanisms... to capture any opportunities for incremental sales that may arise this year and beyond. The mobile networks market represented 3% of our sales in the quarter. Sales declined by 35% in U.S. dollars and 43% organically, as we continued to manage through a broad-based reduction in spending by network operators and wireless equipment manufacturers. On a sequential basis, our sales declined by 6%, which was a bit worse than our expectations coming into the quarter. For the Q4, we expect sales to decline in the mid- to high-single digits sequentially, and for the full year, we anticipate a moderation in sales in the sort of mid-20% range versus 2022. Despite this more challenging short-term wireless investment environment, our team continues to work aggressively to realize the benefits of our efforts to expand our position in next-generation 5G equipment and networks around the world. When customers once again drive renewed investments in these next-generation systems, we look forward to benefiting from the increased potential that comes from Amphenol's unique position with both equipment manufacturers and mobile service providers. The IT Data comm market represented 20% of our sales in the quarter, and while sales did decline by 12% in U.S. dollars and organically from prior year, our performance in the quarter was actually much better than we had expected 90 days ago. In fact, on a sequential basis, our sales increased by a strong 13% in the Q3, much better than previous expectations. The growth in our sales from the Q2 was driven by an accelerating surge in demand from customers who are making significant investments in AI data centers. We also continued to see robust orders for AI-related applications, a confirmation of our team's success in positioning Amphenol as a leader in the complex interconnect systems that support alternative intelligence or artificial intelligence. As we look towards the Q4, we expect sales to remain at these Q3 levels, and for the full year of 2023, we expect a mid-teens decline in sales compared to prior year. While we've certainly had to manage through the inventory adjustments in the broader IT market, I am more encouraged than ever by the company's position in the global IT datacom industry. This revolution in AI is creating a true and unique opportunity for Amphenol, given our leading high-speed and power interconnect products. With machine learning applications driving a more intensive usage of our highest technology interconnect products, we're very well positioned for the future. In addition, our team just continued to do an outstanding job developing leading high-speed power and fiber optic interconnect products that are enabling our OEM and web service provider customers to continue to drive their equipment and networks to higher levels of performance. This creates a continued long-term opportunity for the company. Finally, the broadband market represented 5% of our sales in the quarter, and sales were down 8% in U.S. dollars and organically, as broadband operators continued to moderate their procurement levels. On a sequential basis, sales were down by 6%, in line with our expectations coming into the quarter. For the Q4, we expect a modest sequential increase in sales, and for the full year of 2023, we expect sales to decline in the mid-single digits from prior year. Regardless of the current demand dynamics, we remain encouraged by the company's position in the broadband market. We look forward to continuing to support our service provider customers around the world, all of whom are working to increase their network coverage and bandwidth to support the proliferation of high-speed data applications to homes and businesses. In addition, we're very well positioned to benefit from the broad array of government-funded initiatives, particularly in North America, thereby giving us confidence for the future. Now, turning to our outlook, there's no question that the current economic environment remains uncertain. And assuming market conditions do not meaningfully worsen, and also assuming constant exchange rates, for the Q4, we expect sales in the range of $3.09 billion-$3.15 billion, and adjusted diluted EPS in the range of $0.75-$0.77. This would represent a sales decline of 3%-5% and an adjusted diluted EPS decline of 1%-4% compared to prior year. Our Q4 guidance also represents an expectation for full-year sales of $12.317 billion to $12.377 billion, and full-year adjusted diluted EPS of $2.94 to $2.96. This outlook represents full-year sales and adjusted EPS declines of 2% and 1%-2%, respectively. I'm very confident in the ability of our outstanding management team to adapt to the many opportunities and challenges in the current dynamic environment, and to continue to grow Amphenol's market position while also driving strong profitability. In addition, I just want to reiterate that our entire Amphenol team around the world remains committed to delivering long-term, sustainable value. I would like to finally take this opportunity to thank each and every one of our 90,000 employees around the world for their truly outstanding efforts here in the Q3. With that, operator, we'd be very happy to take any questions. ... The question and answer period will now begin. Please limit to one question per follower. Amit Daryanani with Evercore, your line is open. Yep, thanks a lot. I guess, Adam, maybe for you, I'm hoping you can just talk a little bit about, you know, what are you hearing from your customers broadly and, you know, really on the industrial side, given the ongoing macro volatility? I heard you talk about the distributors' side is somewhat weaker, but, you know, what are you hearing from the OEMs? Are the trends at OEMs much different than what you're seeing in the channel? And how do you see that kind of pan out, you know, maybe into December quarter and beyond that, especially as you think about the inventory normalization? Amit, thank you very much. Yeah, I think when we look at the industrial market, I mean, the beauty of our industrial business is we have a very broad presence across, you know, really every segment of the industrial market. We did see some of those segments actually performing very strongly. I highlighted that we saw very robust growth in oil and gas and rail mass transit, saw a strong growth in medical applications, heavy equipment, another one. But then there's other segments of the market where, which were down, and I think some of those have been pretty widely reported, areas like factory automation, alternative energy, which seems to be having a little bit of a pause in the investment cycle for a variety of reasons. But by and large, our OEM business was only modestly down, and it was really the bigger impact here was the impact from the distribution channel, who it turns out, you know, feels that they have a little bit too much inventory right now. And we started to see some signs of that maybe coming into the quarter, and I think it maybe accelerated a little bit through the quarter. And our guidance as we look out into the Q4 certainly incorporates a continued adjustment by our distributors, in particular, as well as some on the OEM side as well. And that's what's envisioned in our sort of modest sequential moderation that is implied in our guidance. You know, how long will that last? We certainly, 90 days from now, will try to give a good sense of what it looks like, at least in the Q1 of next year. I would expect that, you know, it, it's hard to predict, but the underlying electronification and electrification of the industrial market broadly has not slowed down. I think, yes, there are certain things like Semicap and others where there's a bit of a digestion period right now, but we continue to see an enormous array of new innovations, new programs, new applications across the breadth of our industrial market. And I think we've built such a broad offering of interconnect products, sensors, antennas, that wherever those next revolutions are going to be in industrial, there's no doubt that Amphenol is going to be well represented there. So I view this as a bit of a pause. I don't take an overly macro view of what's happening right now. I understand that some may look at industrial as sort of a macro proxy. And maybe there are certain areas like the German industrial market, which is really where more of the factory automation is, that could have a little bit more, you know, linkage between that. But the general trend of more electronics, more content being driven across all these areas of the industrial market is something that we don't see slowing down. And so, you know, as we get into next year, we'll certainly try to give a good read on where that looks like 90 days from now. But we feel really good about our overall position in the industrial market, despite this pause today. Thank you. Our next question is from Chris Snyder with UBS. You may go ahead. Thank you. I wanted to ask on the IT Datacom market, you know, it came in, you know, much better than what you guys were expecting three months ago. It sounds like a big part of that is the AI demand surge that you referenced, Adam. So, you know, can you maybe just talk about, you know, how the AI business is ramping, if there's anything you could provide to us around, you know, size of the business today, and any sort of, you know, outlook that we could think about into next year? Because it does sound like the orders, you know, remain quite robust. And then, you know, just kind of staying on IT Datacom, any update on the broader, the non-AI part of the business? Do you feel like that piece is kind of gotten through the inventory correction that's been going on since really, I guess, the back half of last year? Thank you. Yeah, no, thanks. Thanks very much, Chris. Appreciate it. Look, I think we're really excited about where we are with our customers in AI. And I'll just put some historical perspective on this. I mean, we've been working on the innovation of products that ultimately support AI for many, many years. This is not like, you know, all of a sudden, you know, something like ChatGPT shows up in the newspaper, and we start frantically developing products. We've been working with customers for a long time on the type of products that uniquely are required for an AI, for an AI processing system. You know, we talked a little bit about this 90 days ago, but the nature of an AI system, the fact that it is a neural network-based system, where you have these very high-powered chips that all have to talk to each other across a fabric-like architecture, just means that there's a uniquely larger component of interconnect to allow those chips to ultimately talk to each other. And the requirements of that, those interconnect products, both from a speed, a latency perspective, not even to mention the significant power requirements that go into these AI data centers, which consume dramatically higher levels of power and thereby require, you know, higher technology, higher efficiency types of power interconnect to ensure that these AI data centers aren't just chewing up all the electricity in America, for example. You know, these are, these are really challenging and exciting opportunities where we've been investing in new product development for many, many years. It's clearly ramping. I mean, I talked about the fact that really I, I would say all of our sequential growth from Q2 to Q3 came from AI. And as you recall, we had already, you know, a decent amount of AI business in the Q2. And, you know, we don't split that out. We already talked about data and markets, and we don't necessarily talk about every little subcomponent of that. But I would just tell you that it's, it's a very significant, it's, it's a very significant opportunity for the company long term, medium term, and, and short term, as it's really driving that, that sequential growth that we've seen both in the Q2 and then the follow-on sequential growth that, that we got here in the Q3. What, what is the long term of AI going to be? I, I don't think anybody knows the answer to that, but I think we all know that it's going to change a lot of things. And there's no doubt that the investments that are being put into these AI data centers, which are not-- you know, these are not amounts that are for the faint of heart, you know, they're gonna really have dramatic impact on a lot of the ways that we interface and interact with and use data networks and data systems. And, you know, we're just really excited to be able to play, you know, our portion of that, to enable, to enable these next-generation systems. You know, as it relates to the kind of non-AI and the inventory correction that we certainly have talked about for nearly four quarters, I would tell you that as we look into the Q4, I think we're feel that it's largely behind us, that inventory correction. Now, you could also say that some of the AI investments are, quote-unquote, "cannibalizing" some of the non-AI investments. I think there's plenty of people discussing from that vein. But I think the inventory positions have become much healthier today, and now it's all about investing in this exciting new revolution of AI and figuring out how to do that in an effective fashion. And from an interconnect perspective, we're really standing, you know, right there in the front of the line, making sure that our customers have what they need. Thank you. The next question is from Luke Junk with Baird. You may go ahead. Hi. Good afternoon. Thanks for taking the question. Adam, you've done what I would consider to be a few higher degree of difficulty deals in the past couple of years, namely a public company in MTS, some heavier cost work with RFS, and now another public company in your agreement to acquire PCTEL. I'm just wondering how much new muscle, if you will, the organization has grown in terms of integrating deals like this, especially public companies, and just what it might mean for the acquisition funnel going forward in terms of the prospects that you're looking at. Thank you. Yeah, Luke, thanks. It's actually a really great question. I mean, if I go back, everybody on the phone will recall that it was the beginning of 2022, when we evolved our organization and created now three global divisions, which are our reportable segments, and then under those global divisions, initially 12 and now 13 operating groups. And each of those operating groups is run by just an outstanding group general manager. I think in my career, I was a general manager, then I was a group general manager, myself before I came here to headquarters nearly 17 years ago. And those group general managers run very significant businesses. They're deeply involved in the operations of the company, and they're deeply involved in the identification, the assessment, and ultimately, the welcoming of these new companies to Amphenol. And we now have just a broader platform of extraordinarily capable individuals. I've talked many times about how I view, you know, kind of my priorities as a CEO of this company, and I view them really twofold. One is to be the protector of our culture, that unique entrepreneurial culture that I believe is really second to none in its value and its impact on our results. And the second is to ensure the scalability of that culture so that we can grow as a company really in perpetuity. You know, I joined a quarter century ago. We were less than $1 billion in sales, but the culture was identical. It was general managers around the world who have full authority to run their businesses and ultimately can be held accountable therefore. You know, today, we've gone from when I joined the company, less than 20, to today, around 130 of those general managers, and we've scaled the organization in support of that. And that's why today we have the three global divisions and the 13 groups. And that has included as well our acquisition program, because if you go back in time and look back, we always used to talk about M&A representing roughly one-third of our growth over the long term. We would always get questions, you know, "Well, as you grow, that means you either have to do more acquisitions or bigger acquisitions." And I think I've consistently said, "Well, that's right, arithmetically, and we will do, and we have done both of those things, both more deals and bigger ones." And we've acquired 26 companies so far since the beginning of 2019. That has included our first ever public company that has now. We have now announced the signing of our second public company. RFS is one that maybe requires a little more, but you go back even 10 years when we acquired the sensor company from GE, which has been a fabulously successful acquisition, and we'll celebrate just in a couple of months here, the 10th anniversary of that acquisition. We acquired, you'll recall, FCI, which required, you know, a little bit more work to align FCI into the Amphenol approach of entrepreneurial general managers. So I'd tell you that our muscle has grown commensurate with the scale of the company, and our ability to do acquisitions, large, small, private, public, whatever you may say, all of that ability has remained very strong. And then the last thing I'll say is, if you look at our balance sheet, I mean, we came out of this quarter with leverage of only 0.8 times. We have enormous availability of capital. We have cash flow that is really at, you know, close to historical levels. I mean, free cash flow that is 17% of our sales in the quarter. And, you know, all of the financial means of doing the acquisitions, together with the organizational means, are all there. But I'll say one thing: we will always stay disciplined. We are a company that is always true to our principles. We're not just going to become, you know, a little private equity company. We're not gonna be a holding company. We're not gonna go out and buy bad companies run by bad people. We're always gonna look for the same criteria for acquisitions that I've talked about for many years. Number one, we want great people, number one. And number two, we want great product technology. And number three, an outstanding market position. We got all three of those with the acquisitions of Connor, Q Microwave, and XMA, and I'm sure we'll do the same with PCTEL. We'll continue to be very disciplined as we go forward, at the same time as we have a real larger aperture of capabilities to continue to do M&A at the levels that we'd like to. Thank you. The next question is from Andrew Buscaglia with BNP Paribas. You may go ahead. Hey, guys. Nice to meet you, and thanks for taking my question. Yes, nice to meet you too, Andrew. So, yeah. So, you know, I wanted to start off, you know, with the automotive market. Just given the size of it, you definitely some, you know, some skittishness with investors heading into the quarter, into year-end. On two areas, you know, within North America, you got the workers strike, what's the ripple effect on that? And then, you know, just weakness in China, China auto, too. But you guys continue to outperform. So I'm just, my question is, you know, when peeking around the corner, do you have concerns that you guys can maintain, you know, your outperformance relative to the overall market? And can you kind of dig into some of the details around what you're hearing from customers in each of the markets? Yeah. Well, Andrew, thanks again, and welcome to the call here. Not so often we get a new analyst, so it's a pleasure to have you here. Look, the automotive market's a really exciting one for the company. I'm just so proud of our team working in the automotive market. The results that they've driven in what has not been an easy environment, quite the contrary. Growing last quarter by 12% organically, I mean, you will recall that last year we grew by 29% organically in a market that was essentially flat to down in units. And if you look at the long-term performance of our automotive company over the nearly 15 years that I've been CEO, I still remember very well my Q1 as CEO. You know, by the way, this is my 60th of these earnings calls as CEO. In my first one of those, we had an automotive business that was 5%, and our overall sales were $660 million that quarter. So that's, you know, $33-$35 million. And here we are this quarter, at close to $3.2 billion, and our automotive market's 23% of sales. And I think we've just done a fabulous job over those years, not of taking market share out of the hands of incumbents, but of enabling new electronic systems as they were adopted in cars over that decade and a half. And I think you've just seen a collection of revolutions in the automotive industry, the most prominent and most recent of which being the electrification of vehicles, but that's not the only thing. I mean, there's so many new systems being put into these cars, and each time there's an opportunity for us to intersect those with high technology, interconnect sensors, and antennas. I think our team's done a great job of that. You know, how is that going to go into 2024? Again, I think I said this already on the call. Nine days from now, we'll try to give everybody a decent sense of where we think at least the beginning of 2024 is headed. But I see no reason to say that we will not continue to maintain our outperformance that we have been so consistently delivering really over a decade and a half during this time period. I'm just really proud of our team working in automotive, and I'm really pleased with the broad array of technologies for all these exciting new applications in the car. Thank you. The next question is from Wamsi Mohan with Bank of America. You may go ahead. Yes, thank you so much. Adam or Craig, I was wondering if you could talk about some of the puts and takes on operating margins as we look out over the next quarter. At the midpoint of the revenue guide, you'd be absorbing almost $24 million of decremental margins of operating profit. And you're also absorbing impact of M&A from three new deals and three prior deals. So when we look at your guide, it's clearly reflecting a much better outlook than that. So, A, is the assumption around decremental margins still the same as historical, or have you made changes in the business that's creating less lower decremental margins. And B, as we think about sort of that operating guide, which is so resilient, you know, what are some of the other drivers that are enabling you to do that? Thank you. Yeah. Thanks, Wamsi. I appreciate the question. You know, I think if you look at, you know, our profitability in 2023, and certainly, you know, here in the Q3, and I'll talk about the Q4 in a minute too. You know, I wouldn't say there's certainly no changes in regards to, you know, how we think about decremental margins, you know, in the long term. But 2023, a few things have happened, and we certainly were, you know, we've done a great job of, number one, we're benefiting a bit from pricing. In no particular order here, but, you know, we're certainly benefiting a bit from pricing that we did last year in 2022, and we did, as you recall, we talked a bit about, you know, the work we did last year to catch up with the inflationary environment that, you know, kind of by the Q3, you know, into the Q4 of last year, we pretty much did, you know, the majority of the work. We were pretty much back to kind of where we wanted to be and expected to be from a balance between price and cost perspective. So we're certainly still benefiting on a year-over-year basis from that. You know, in addition, I think we just executed very well. Certainly, you know, some of the markets that we've seen, you know, a reduction, you know, from, and certainly communications markets, IT datacom being the biggest of them. We certainly have, you know, done a really great job of kind of offsetting some of those, you know, some of those declines just from just great execution. And, and if you actually look at the year-over-year margins, and you take out some of the acquisitions impacts, we actually are—it's well under those, those decremental margins that we, you know, typically would target. But I'd say, you know, those are the, you know, some of—one of the two kind of bigger things that really are impacting it. I mean, 20.8% here in the Q3 is not quite a record, but certainly given the, you know, the market mix in terms of the challenges that we've had from the ups and downs of, of a growth perspective, not mix of margin on from a market piece. We don't have a significant, margin, you know, range from a market, but just the mix of the growth that we've had, you know, ups and downs, it really has, you know, really been a, I think, great execution on the team's part to be able to manage, manage that. So as we look forward into the Q4, I think our implied guidance would be that we've continued to have these strong margins into the Q4, and that are offsetting some of the acquisitions that do clearly have lower than average margin levels and that we're working to, you know, get up to the company average over time. But no doubt, we're really proud of it. I think the longer term, kind of, decremental margins haven't changed from this to the 30%, but I think this year, given a few of the factors I mentioned, you know, I think has really benefited us. And, you know, certainly we're proud of it. You know, these are the margins we should be at, at these revenue levels, and we're going to continue to strive to do better. Thank you. Our next question is from Samik Chatterjee with JP Morgan. You may go ahead. Hi, good afternoon. Thanks for taking my question. I guess, on a more broader level, Adam, you have a fairly diversified business, and there are many puts and takes in terms of where the different end markets are. Some are recovering, some are still at a lower level, but you managed to grow orders year over year, as you pointed out, despite that dynamic here. I'm just wondering, like, how should we translate that into thinking about the order growth translating into revenue growth in the near term? More curious, because your revenue numbers for the last couple of quarters have been above the order number, but the guide seems to be more in line with what you reported for orders. So how should we think about the opportunity to return to revenue growth since orders are already higher year over year? Thank you. Yeah. Well, thank you very much, Samik. I mean, look, our, I think we just talked about the auto market, and we've been consistently outperforming the overall auto, whatever you want to call it, unit volumes or whatever markets that you want to talk about. I guess when we talk about orders from a year-over-year perspective, more broadly in the company, yes, we were this quarter on a year-over-year basis, higher in our orders than last year, and that was the first time in four quarters. And I think that, you know, that should translate eventually to year-over-year growth. I think we've guided for next quarter in a certain way, and, you know, we're going to keep fighting for that, and we'll guide for the Q1 at the same time, when we come to that 90 days from now. You know, you can imagine that our team is very focused on returning to growth, and we don't love having it be down this quarter. We don't like having it be down next quarter, and we don't like having it be down last quarter either. And there's a whole Amphenol team around us that's fighting for that. You know, when you look across our end markets, one of the beauties of the diversification of the company is that we have end markets which are growing substantially already. We have others, though, which are down because of the various reasons that we've talked about. So, you know, when you think about, for example, IT Datacom, which was down quite significantly last quarter, I think it was something like 24% or so, and then this quarter down 12%. I think at our current guidance, you know, that would be pretty close to prior year ±. So that's a sign, I think, of that returning to the growth trajectory that we would for sure look forward to seeing across the company. ... Thank you. The next question is from Mark Delaney with Goldman Sachs. You may go ahead. Yes, good afternoon, and thank you very much for taking my question. I had one on mobile networks. Do you think 6G is needed for that business to re-accelerate, or can other opportunities like Open RAN, industrial 5G and wireless broadband be enough of a catalyst, and perhaps, you know, some combination of those, along with the end of inventory reductions? Yeah. Hey, Mark, good to hear your voice. Look, I think 6G will come one day, but we still haven't even invested totally in 5G. So, you know, when I think about how the mobile networks market tends to go, and I've been around long enough working in the wireless market, long enough that I've kind of seen 1G, 2G, 3G, 4G, and now 5G, and I have a decent sense of how that works. Generally, what happens is there's an initial kind of investment of that new generation, and then the operators digest and figure out the economics of it. Because these are significant investments that they make, and if they can't figure out how to monetize that incremental investment, you know, that, that's a challenge. And I think the 5G, there's a lot of work going on to figure out how to monetize that. But I think there's a separate question, and that is, you know, it is. Yes, this is a tough period for the wireless market. You've seen all the releases over the last several days and the capital spending of the big operators here in the U.S., which is all down in the kind of 20%-30% range. The equipment manufacturers, in some cases, down even more in this region at least. And certainly our business down on an organic basis, as it was by 43%. And I think we're in that digestion period of this new technology. But it's, there's still a very modest proportion of the build-out that has become truly 5G. And I don't know what the number is. Is it 15%? Is it 20%? But it's certainly not 50%. It's certainly not 60, 70, 80%. I mean, we're still, I believe, in the early innings of the 5G, and I think people are just taking kind of a third inning stretch on this right now to figure out how to make more money from the system. But if you think about what's going on in data more broadly, think about AI, think about video, think about all the like extraordinarily bandwidth-hungry applications that continue to proliferate, accelerate, and be used everywhere you go. I mean, it's actually unbelievable when you see how data is being consumed and where it's being consumed. I mean, I watch my kids, you know, who used to—my son is a gamer, and he used to only game on his computer at home. Well, now he can be moving around, and he can be in the car, and he can be gaming and playing with, you know, all these strange creatures that they play with. I mean, really strange name things like Jörmungandr and things like this, and weird things like that. And like all these crazy, crazy things that you can do that are not connected to a cable, not connected to a desktop. And so when you think about the mobile internet and mobility of data long term, I see no doubt that there's gonna be a continued acceleration and drive for next-generation ways for people to do this. And when we look at our company's position here, we have a very unique position. We're one of the only companies who operates directly with the operators as well as directly with the OEMs. And that puts us in a very unique position as they go about driving their systems to next-generation capabilities. And I think the acquisition that we made of RFS earlier this year, other acquisitions that we've made, put us in a really strong position. And yeah, it's a tough quarter or two and a pause of a year, but no doubt in my mind that long term, the mobile networks market is gonna be great. Thank you. The next question is from Will Stein with Truist Securities. You may go ahead. Great. Thanks for taking my questions, and congrats on the strong results and good outlook. Adam, I'm wondering if you can comment on the test and measurement part of PCTEL. You had this situation with a prior acquisition where there was a test and measurement equipment business bundled into it, which at the time you said did not fit in the portfolio. I wonder if it fits in this case? Yeah, Will, thanks very much. And look, we're really excited about the PCTEL acquisition, and, you know, we PCTEL, we've known them for many, many years as a really broad and very successful antenna company. Probably a little too small to be a public company, and that's certainly one thing I would say. And yes, they have a small test and measurement business, but we're really excited about this company, and we look forward to working to bring it towards closure. And I probably wouldn't say more about it, given that we've just signed the deal. Thank you. The next question is from Steven Fox with Fox Advisors. You may go ahead. Hi, good afternoon. I was wondering if I could get a little bit more color on the smaller M&A deals that you did during the quarter. Specifically, I was curious on RF, it seems, Adam, you already have, like, such a great position in RF. I can't imagine what else you need to acquire. And then secondly, on bus bars, which it seems like bus bars is a sleepy technology that's getting more attention lately. Can you talk about why you did those deals? Thanks. ... Yeah, thanks, Steve. I really appreciate the question. Yeah, I mean, look, XMA and Q Microwave are fabulous companies. They're certainly at a smaller scale for now. You can imagine that we have high expectations for them over the long term. And you correctly stated, we have really the broadest position in RF interconnect technology. And these companies bring us. You know, just as we've gone a little bit into active optics, these companies bring us a little bit extra in RF that we can offer to our customers, a little bit more sort of conditioning capabilities in the RF, in the RF interconnect products. And that's something, especially in the mil-aero market, that we see as being a really important part of our interconnect offering to our customers in mil-aero. I think that's really exciting. Busbars is an area that we've been in for, gosh, I mean, almost the whole of my career. I remember, you know, 23 years ago or so when I was a general manager, and we were making one of our first busbars at the time. And we've been involved in busbars in the telecom industry. We've been involved in busbars in IT. We've made great acquisitions. You'll recall the acquisition of Auxel several years ago, which brought us more into the industrial market. And what we really like about Connor is Connor brings us really solidly into the busbar market, in the automotive market, in particular around EVs. And while we have today an outstanding offering of high-voltage interconnect products that are used in EVs, there's no doubt that a complement to that is the busbar systems that are used also to move the energy around the car. And Connor just does a fabulous job there. We're just really excited to have them, and it's a continued expansion of the reach of the interconnect system, making sure that our core technologies that we have, we have them in every one of the end markets where those find favor. And I think Connor is a wonderful piece of that puzzle. Thank you. Our next question is from Matt Sheerin with Stifel. You may go ahead. Yes, thank you, and good afternoon, everyone. Adam, I'm hoping you can comment a little further on mobile device business. You called out relative strength in smartphones and wearables, but continued weakness on PCs and notebooks. And we're hearing from some other suppliers and part of the supply chain that things are bottoming there, and that some of the players in Taiwan are starting to see some signs of a recovery there. Do you have any visibility in terms of your customers as you get into next year in terms of the refresh cycle and other things? Yeah. Thanks very much, Matt. I think you correctly stated the case here, which is, you know, we've actually had a pretty good year in smartphones, and our team's done a fabulous job there. But no doubt there's been a digestion period in the other devices, in particular, the devices like tablets and laptops and the like. And I think what we've seen over this pandemic-impacted kind of last four years is there was an unusual surge and a kind of disruption of the normal buying patterns of these devices. Because when everybody got sent home, either to work or to study or however they wanted to interact, they had to get new devices to do that, and there was just a massive surge in the consumption of those devices at the end of the day. I think there's still a digestion from that. What is it gonna be next year? I mean, look, I have a hard time guiding this market 90 days out. I'm generally wrong when I do that, and I certainly wouldn't get ahead of my skis and try to guide it for next year. But of course, at some point, that digestion of that surge of demand for those kind of devices, you would hope would normalize, and I would expect that it would normalize. I mean, I know for sure my own devices, I'm probably getting them. I run them a little longer than maybe most because we're pretty cost-conscious here at Amphenol, but even a couple of my devices, I'm starting to think about whether I need to get a new one soon. Thank you. Our last question comes from Joe Giordano with TD Cowen. You may go ahead. Hey, good afternoon. This is Michael on for Joe. Good afternoon, Michael. So recently, there's been a few, like, noteworthy EV and, like, semi plant construction or equipment delays. So we're just curious on how, like, the cadence of these projects, you know, influence internal decision-making or guidance, whatnot. Yeah, I mean, look, we read all the same papers, and I think, you know, individual plants may be accelerated or delayed at a given time, and I wouldn't think that... You know, an individual announcement doesn't really have a dramatic impact on our overall business. But look, I did talk about in particular, one area, which is the semiconductor capital equipment market, which I think if you asked everybody a year ago, and I'd say everybody, except for maybe the two of us sitting here, they would have said, "Oh, you know, this will never, ever have a cycle ever again." And sure enough, here we are this year, and there is a bit of a cycle in semi cap equipment. We have a really strong position there. We've done a great job to position ourselves long term as really an interconnect supplier of choice to that market. And clearly, you know, I mentioned earlier that, you know, we did see a moderation of our sales into semicap equipment as part of our industrial market. I don't think that's because of any individual plant, but I'd say that is more related to, I think, a bit of a pause in the capital spending of some of the larger semiconductor manufacturers. EV-related, I think we still see that market as pretty strong. We had a really strong performance in our automotive market last quarter, and, you know, again, 90 days from now, we'll see what that looks like next year. But I, I wouldn't necessarily point to any specific things related to EV factories being built or not being built. Well, operator, I think that's our last question, and once again, on behalf of Craig and I and our whole 90,000 team around the world, we'd like to just thank everybody for your time today. We, we wish you all the best and wish that you and your families all stay safe. Thank you so much. Thank you. Thank you for attending today's conference, and have a nice day.