Hello and welcome to the first quarter 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 first quarter 2024 conference call. Our first quarter 2024 results were released this morning, and I will provide some financial commentary, and then Adam will give an overview of the business and current market 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 first quarter with sales of $3,256,000,000 and adjusted diluted EPS of $0.80. First quarter sales were up 9% in U.S. dollars, 10% in local currencies, and 6% organically compared to the first quarter of 2023. Sequentially, sales were down 2% in U.S. dollars, 2% in local currencies, and 4% organically. Adam will comment further on trends by market in a few minutes. Orders in the quarter were $3,348,000,000, up 16% compared to the first quarter of 2023 and 66% sequentially, resulting in a Book-to-Bill Ratio of 1.03 to 1. GAAP and adjusted operating income was $685,000,000, and operating margin was 21% in the first quarter of 2024. On a GAAP basis, operating margin increased by 110 basis points compared to the first quarter of 2023 and 30 basis points compared to the fourth quarter of 2023. On an adjusted basis, operating margin increased by 90 basis points from the prior year quarter and decreased by 20 basis points sequentially. The year-over-year increase in adjusted operating margin was primarily driven by strong operating leverage on higher sales volumes, which was partially offset by the dilutive impact of acquisitions completed in the prior 12 months. On a sequential basis, the modest decrease in adjusted operating margin reflected better than typical conversion on the lower sales levels, partially offset by the dilutive impact of acquisitions made in the fourth quarter. We are very proud of the company's operating margin performance, which reflects the continued strong execution of our teams. Breaking down the first quarter results by segment relative to the first quarter of 2023, sales in Harsh Environment Solutions segment were $916 million and increased by 7% in U.S. dollars and 3% organically. The segment operating margin was 26.7%. Sales in the Communications Solutions segment were $1,266 million and increased by 12% in U.S. dollars and 11% organically. The segment operating margin was 22.6%. Sales in the Interconnect and Sensor Systems segment were $1.075 billion and increased by 8% in U.S. dollars and 2% organically, and segment operating margin was 18.2%. The company's GAAP effective tax rate for the first quarter was 16.7%, and the adjusted effective tax rate was 24%, which compared to 20.9% and 24% in the first quarter of 2023, respectively. GAAP diluted EPS was $0.87 in the first quarter of 2024, up 23% compared to the prior year period. On an adjusted basis, diluted EPS increased 16% to $0.80 compared to $0.69 in the first quarter of 2023. This was an excellent result. Operating cash flow in the first quarter was $599 million, or 120% of adjusted net income, and net of capital spending, our free cash flow was $506 million, or 101% of adjusted net income. We are pleased to have continued to deliver a strong free cash flow yield in the quarter. I would note here that we may see slightly elevated levels of CapEx in the coming couple of quarters as we invest to support some of the growth that we are seeing in certain markets. From a working capital standpoint, inventory days, days sales outstanding, and payable days were 89, 70, and 53 days, respectively, all within the normal levels. During the quarter, the company repurchased 1.4 million shares of common stock at an average price of approximately $108. When combined with our normal quarterly dividend, total capital return to shareholders in the first quarter of 2024 was $286 million. During the month of April, the company repurchased the remaining authorized amount of stock under its existing $2 billion stock repurchase plan, thus completing the plan. As noted in today's earnings release, the company's board of directors has approved a new $2 billion three-year open market stock repurchase plan. Total debt on March 31st was $4.3 billion, and net debt was $2.3 billion. Total liquidity at the end of the quarter was $5.7 billion, which included cash and short-term investments on hand of $2 billion, plus availability under our existing credit facilities. First quarter 2024 EBITDA was $810 million, and at the end of the first quarter of 2024, our net leverage was 0.7x. Following the close of the quarter in April, the company used $350 million in cash on hand to repay its maturing 3.2% U.S. senior notes, and our $750 million undrawn term loan matured and was not renewed. In addition, in early April, we completed a $1.5 billion U.S. bond offering, and the company intends to use the net proceeds from the bond offering together with cash on hand and other debt financing to fund the company's pending acquisition of Carlisle Interconnect Technologies, which we continue to expect to close by the end of the second quarter of 2024. As a result of the U.S. bond offering, we do expect quarterly interest expense to increase to approximately $55 million, although until CIT is closed, we also expect interest income generated from the increased cash balance to offset the increase in interest expense. As such, the impact on earnings will be relatively neutral until the CIT closing occurs. The company is in a very strong financial position, and we are well positioned to fund future opportunities as they arise. I will now turn the call over to Adam, who will provide some commentary on market trends. Well, thank you very much, Craig, and I'd like to extend my warmest welcome to all of you here from beautiful Wallingford, Connecticut, where spring is certainly in the air. As you know, as is typical, I'm going to highlight some of our achievements in the first quarter. I'll then discuss our trends and our progress across our diversified markets. Finally, I'll comment on the outlook for the second quarter, and of course, we'll have time for questions. Our results in the first quarter were stronger than expected, exceeding the high end of guidance in sales and adjusted diluted earnings per share. We're very pleased that our sales grew from prior year by 9% in U.S. dollars and 10% in local currencies, reaching $3,256,000,000. On an organic basis, our sales increased by 6%, with growth in IT Data com, commercial air, automotive, defense, and mobile devices markets somewhat offset by declines in the mobile networks, broadband, and industrial markets. I'll talk about each of those markets here in a few moments. We're very pleased that the company booked $3.348 billion in orders in the first quarter and that that represented a positive book-to-bill of 1.03 to 1. Our profitability was very strong in the quarter, and adjusted operating margins reached 21% even in the quarter, a robust 90 basis point increase from last year's levels. From that profitability, we generated adjusted diluted EPS, which grew 16% from prior year to $0.80. Finally, we generated strong operating and free cash flow of $599.5 million, another clear demonstration of the high quality of the company's earnings. As Craig mentioned, we're very pleased that the board of directors has approved a new $2 billion three-year stock repurchase program, and this represents another important component of the company's balanced capital deployment. I'm extremely proud of our global team of Amphenolians. The company's results this quarter once again reflect the discipline and agility of our entrepreneurial organization, who continue to perform very well in a most dynamic of environments. Now, as we announced on January 30th, just after our Q4 earnings, we're very pleased to have signed an agreement to acquire Carlisle's Interconnect Technologies business for $2 billion in cash. CIT, as it is known, is a leading global supplier of harsh environment interconnect solutions, primarily to the commercial air, defense, and industrial end markets, with approximately 6,000 employees worldwide. The company's wide range of products, including wire and cable, cable assemblies, contacts, connectors, and sensors, are highly complementary to Amphenol's existing interconnect and sensor solutions. As previously announced, CIT is expected to have annual sales of approximately $900 million in 2024, with an EBITDA margin of approximately 20%. We do continue to anticipate that the transaction will be completed by the end of this second quarter. Accordingly, and based on CIT's current operating performance, we do expect this acquisition to add roughly $0.02 to earnings in the second half of 2024, excluding acquisition-related costs. As we look forward to welcoming the outstanding CIT team to Amphenol, I remain confident that our acquisition program will continue to create great value for the company. Our ability to identify and execute upon acquisitions really of all sizes and to successfully bring these new companies into Amphenol remains a core competitive advantage for the company. As our organization has evolved and scaled, so too has our ability to effectively manage a greater number of acquisitions of all sizes. Now, turning to our progress across our served markets, I would just comment that we continue to be pleased that the company's end market exposure remains highly diversified, balanced, and broad. This diversification continues to create great value for Amphenol, enabling us to participate across all areas of the global electronics industry while not being disproportionately exposed to the risks associated with any given market or application. Starting out with the defense market, this important market represented 11% of our sales in the quarter, and sales grew from prior year by a strong 13% in U.S. dollars and 11% organically. This was really driven by broad-based growth across most segments within the defense market. Sequentially, our sales were down by 2%, and this was modestly better than our expectations coming into the quarter. Looking into the second quarter, we expect sales to increase modestly from these first quarter levels. We remain encouraged by the company's strengthened position in the defense market, where we continue to offer the industry'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 well positioned to accelerate our new product development while also increasing our capacity to support this demand long into the future. The commercial aerospace market represented 4% of our sales in the quarter, sales increased by a strong 20% both in U.S. dollars and organically, and that was really driven by broad-based strength across virtually all aircraft applications. Sequentially, our sales grew a much better than expected 11% from the fourth quarter. As we look into the second quarter, we do expect a modest reduction in sales versus these very strong first quarter levels. I'm just really proud of our team working in the commercial air market. With the ongoing growth 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 for the company. We continue to see great long-term opportunities for expansion of our technology offering to this important market, including with the CIT acquisition, and look forward to realizing the benefits of our growth initiatives for many years to come. The industrial market represented 25% of our sales in the quarter, and our sales in this market did decline by 1% in U.S. dollars and 10% organically. During the quarter, we did see some growth in marine, public safety, rail mass transit, and oil and gas applications, but that was more than offset by moderating performance, particularly in battery and electric heavy vehicles, instrumentation, and factory automation. On a sequential basis, we were pleased that sales were up 6% from the fourth quarter, a bit better than our expectations, but that growth was really driven by our acquisitions completed in the fourth quarter. Looking into the second quarter, we expect sales in the industrial market to remain at similar levels as here in the first quarter. Despite this near-term pause in demand, I remain proud of our outstanding global team working in the industrial market. I'm 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 electronic revolutions that will no doubt continue to occur across the industrial market. The automotive market represented 24% of our sales in the first quarter, and sales in the first quarter grew 18% in U.S. dollars and 17% organically. That was really driven by broad-based strength across most automotive applications, including especially communications-related applications, as well as electric and hybrid electric vehicle drivetrains. Sequentially, our sales declined by 3% from the fourth quarter, which was better than our expectations, and that reflected strong execution by our team working in the automotive market. As we head into the second quarter, we do expect a modest sequential decline in sales. But I'm just so proud of our team working in the automotive market. Our continued and clear-cut performance is yet another confirmation of the benefit of our team's focus on driving new design wins with customers who are implementing a wide array of new technologies into their vehicles. And while that includes electrified drivetrains, it also includes a multitude of other exciting applications. And we look forward to benefiting from that strong position for many years to come. The mobile devices market represented 8% of our sales in the quarter. Our sales were flat from prior year in U.S. dollars but grew 2% organically as growth in laptops and smartphones was offset by declines in tablets, wearables, and other products. Sequentially, our sales declined by a better than expected 29% compared to the fourth quarter. As we head into the second quarter, we now expect a mid-single-digit sales decline from these first quarter levels as customers prepare for new model launches in the second half of 2024. While mobile devices will no doubt always remain one of our most volatile of markets, our outstanding and agile team is poised, as always, to capture any opportunities for incremental sales that may arise in 2024 and beyond. Our leading array of antennas, interconnect products, and mechanisms continues to enable a broad range of next-generation mobile devices, which positions us well for the long term. The mobile networks market represented 3% of our sales in the quarter, and sales did decline from prior year by 13% in U.S. dollars and 25% organically as we continue to manage through a broad-based reduction in spending by network operators and wireless equipment manufacturers. Sequentially, though, we were pleased to see that our sales did grow by 5% from the fourth quarter as we had expected coming into Q1. As we look into the second quarter, we now expect a high single-digit increase in sales, which does reflect some increased demand that we are seeing from our mobile operator customers. While no doubt the short-term investment environment in the mobile networks market has been challenging, I can just tell you that 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 wireless investments, we look forward to benefiting from the increased potential that comes from our unique position with both equipment manufacturers and mobile service providers. We're poised to build on that position as wireless technology continues to accelerate long into the future. The information technology and data communications market represented 21% of our sales in the quarter. Sales in the first quarter grew by a very strong 29% in U.S. dollars and 28% organically. This was driven by accelerating demand for our products used in artificial intelligence data centers. On a sequential basis, sales increased by 1% from the fourth quarter, which was substantially better than our expectation for a mid-single-digit decline. We continue to experience strong orders for AI-related interconnect products. Accordingly, as we look into the second quarter, we expect sales to grow in the low double-digit range from these first quarter levels. I can tell you that we're more encouraged than ever by the company's position in the global IT Data com market. Our team continues to do a really outstanding job securing future business on next-generation IT systems, particularly those enabling AI. Indeed, this revolution in AI that we're all living through right now has created a unique opportunity for Amphenol, given our leading high-speed and power interconnect products. With machine learning driving a more intensive usage of these highest technology interconnect products, we're very well positioned for the future. Whether it's high-speed, power, or fiber optic interconnect, our products are critical components in these next-generation networks. That just creates a continued long-term growth opportunity for the company. The broadband market represented 4% of our sales in the quarter. Sales declined by 19% in U.S. dollars and organically from prior year as broadband operators continued to reduce their procurement levels. On a sequential basis, sales were flat, which was slightly worse than our expectations coming into the quarter. As we look into the second quarter, we anticipate sales to remain roughly at these first quarter levels. Regardless of the current demand dynamics in broadband, we do remain encouraged by the company's strengthened position. 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. Now, turning to our outlook and, of course, assuming current market conditions as well as constant exchange rates, for the second quarter, we expect sales in the range of $3,240 million-$3,300 million, and adjusted diluted EPS in the range of $0.79-$0.81. This would represent sales growth of 6%-8% and adjusted diluted EPS growth of 10%-13% compared to the second quarter of last year. I just wanted to note that, as is our usual practice, this guidance does not include acquisitions which have not yet closed, including CIT. I remain confident in the ability of our outstanding management team to adapt to the many opportunities and challenges in the current environment and to continue to grow our market position while driving sustainable and strong profitability over the long term. And finally, I would just like to take again this opportunity to thank the entire global team of Amphenolians around the world, nearly 100,000 of them worldwide, for their truly outstanding efforts here in the first quarter. And with that, operator, we'd be very happy to take any questions. Thank you. The question-and-answer period will now begin. Please limit to one question per caller. Our first question is from Amit Daryanani with Evercore. You may go ahead. Good afternoon. Thanks for taking my question. I guess, Adam, you talked a little bit about AI as well, but it's certainly a big focus for everyone, including investors. So I'm hoping you could maybe perhaps help us understand what solutions, what products does Amphenol really sell to their customer base right now when it comes to AI infrastructure? How does that really differ from what you sell to processor companies versus the cloud providers that are running their own infrastructure? I'd love to just understand that. If there's any way to put dimensions around how big this business can get for you folks over time, it would be really helpful. Thank you. Well, thanks very much, Amit. And really appreciate the question. Look, we're really excited about the renewed and really revolutionary investments that are being made in AI right now. I mean, I have to confess that I am a consumer of these products. I've been using them. It's amazing. I mean, last night, my wife made me tacos because, of course, it's Tuesday. And she went on ChatGPT, and she said, "Give me a great taco recipe." And it's just unbelievable what you can do for these things. And the underlying magic of these systems is just extraordinary computations, creating essentially probability models that are based on comparing everything to everything else. And to do that, you need the chips, which whether they be GPUs or TPUs or Tensor or whatever the chips that there are, they need to be connected to each other in essentially a fabric network. And these calculations and computations and comparisons have to happen virtually at light speed. And thus, that requires an enormous degree of high-speed, low-latency interconnect products that are different in their architecture. You have much more use, for example, of cable assemblies than you did in the past using maybe printed circuit boards. You have really direct connecting as close as possible to the chip of those high-speed products. And these are extraordinarily challenging products to build. These are products that we've been working on for so many years, I mean, more than a decade of effort in developing these products. They're just extremely challenging, extremely high technology, and extremely critical to the good performance of those products. It doesn't just start and end with high speed. I think it's been broadly discussed lately, power. What does power mean for AI? Is there even enough power in the world to energize these AI data centers that people are talking about? You can imagine that there's an enormous focus as well on the efficiency of the power interconnect in these systems. That's another area where Amphenol is participating with some of our leading-edge power interconnect, whether that's connectors, cable assemblies, bus bars, and all the like. Then there's obviously fiber optics and the fact of using optical interfaces, whether those are active or passive fiber optic products. Those are all things that we can offer to our customers. I mean, we have the broadest, deepest, highest technology offering into the data center market. We've been working and preparing for kind of this moment for so many years as we've been developing this sort of type of interconnect architecture that needs to be used. And fortunately, over the last kind of 5 quarters or so, that's really taken hold. And I think this AI seems to really have a lot of value for the end users. It seems to draw an enormous amount of investment and capital, maybe by the way, even a little bit of cannibalizing of capital from more traditional data centers. It's not just about having the right products, but it's also about being able to ramp up those products and being able to react quickly to our customers who are really having, in many ways, kind of an arms race. When I talked about the IT Datacom market, I mentioned all of our growth. In fact, a little bit more than all of our growth this quarter, which was very substantial growth, 28% organically, came from products that are being integrated into AI data centers. It's something that, as we look into next quarter, where we still have a favorable view of that, I think our team is realizing the benefits of really a lot of labors for many years in the past. Thank you. Our next question is from Luke Junk with Baird. You may go ahead. Good afternoon. Thank you for taking the question. Just hoping you could help us unpack a little bit more of the uptick in orders and the book-to-bill going positive this quarter, just particular areas of strength that are driving that and maybe areas that are still lagging at this point. Thank you. Well, thanks so much, Luke. First of all, we're really pleased to see the positive book-to-bill. 1.03. I mean, I know during COVID, there were some funny book-to-bills at a few points where it was like 1.15 to 1, and then there were some negative book-to-bills. I mean, traditionally, 1.03 is actually a very strong book-to-bill for us because our lead times are not that long. We're a very reactive company. And I think that's a really good sign. It shouldn't be surprising that maybe the two places where we saw slightly negative book-to-bill would have been in mobile networks and in industrial. Otherwise, we saw either flat or positive book-to-bill. And probably our strongest bookings on a book-to-bill came out of IT Data com as well as Commercial Air, which were really good book-to-bill. Thank you. Our next question is from Saree Boroditsky with Jefferies. You may go ahead. Hi. Thanks for taking the question. I wanted to dig in more on the Carlisle CIT acquisition. It's relatively large. It was held by a commercial roofing company before. So what's the opportunity here being under your ownership? And where do you see potential to improve margins? Thank you. Well, thank you very much, Saree. I mean, first, I just want to compliment Carlisle, the corporation. I work closely with the CEO of Carlisle. He's a wonderful guy. It's a fabulous company, actually. It's true. Their focus and their stated strategic focus is to be in the building materials industry. They were a wonderful steward of Carlisle Interconnect for many years. There's no doubt that Interconnect was not where they were focused strategically. I'm really pleased and happy for the corporate team at Carlisle because I think they've really been able to realize their vision to be a focused building materials company. At the same time, Carlisle Interconnect is a fabulous company. I've known this company for most of my quarter century in Amphenol. It's one of those companies that we actually don't compete with them very much, very little, actually. It's such a complementary company. I've always admired the company. We've always admired the company for their great technology, fabulous people. I've known some of the people at CIT also for many, many years. I just can't tell you how happy I am that they're going to be on our side of the table, that they're going to join the Amphenol family. That's really just, it's such a fabulous organization inside of CIT. I mean, what we really love about this company. They are a true leader in the technologies around wire and cable, in cable assemblies, in contact technologies, which is just so complementary to our leadership position on connectors and other value-add interconnect, on things like backshells and the like. When we bring that together, that offering to customers, whether that's in the Commercial Air market, whether that's in the defense market, whether that's in certain segments of the industrial market where they participate, we will be able to bring a total solution to those customers at a time when those customers really want to have reliable partners. I mean, you think about some of the dynamics that are evident, for example, in Commercial Air, the reliability of your partners is an enormous premium in these things. I mean, you're making such critical devices, airplanes, that hundreds of passengers go on. Being able to go to one company and say, "Can you bring us a total suite, a total set of solutions for our interconnect needs?" That has a really, really wonderful and comforting dynamic for the customers. In terms of the profitability, CIT is a great company. It is operated in a bit of a holding company structure. I can tell you that we in Amphenol have a lot of different sister companies, brother companies around the world who have figured out lots of tricks of the trade, of accessing low-cost manufacturing, of helping to reduce in the supply chain, and all of that. While the CIT team, they're going to still run this company. It's not like we're going to parachute a bunch of folks into CIT and say, "Go run it on their behalf." Quite the contrary. I mean, the existing management team is going to stay running that company as part of Amphenol. But they will be able to avail themselves of experience, of collaborative interactions with folks around Amphenol that, in our experience, ultimately leads to better performance. We've had a good track record, and some may call it a great track record, of buying companies that were great companies with great technology, great people that just were maybe part of the wrong parent company, all the way back to nearly 19 years ago when we acquired Teradyne Connection Systems from Teradyne Corporation. Again, Teradyne is an outstanding company in the test and measurement industry, but they were not an interconnect company. When we acquired the advanced sensors business from GE and again, GE is an outstanding company. And just as you know, they've focused now, and it's now GE Aerospace. And a wonderful company, but they were not an interconnect company. And here again with MTS, the company that we acquired in 2021, another example of a great company that ultimately was not an interconnect or, in that case, a sensor company. I think as part of now an interconnect company where they really belong, I have really high hopes long term for the progress that the CIT team will make. This will not come overnight. There's no doubt about it. That takes time. We're patient in that respect. We're very hopeful, and we have really a strong vision for the future of this company as part of the Amphenol family. Thank you. Our next question is from Wamsi Mohan with Bank of America. You may go ahead. Yes. Thank you so much, Adam. Maybe back to this AI topic a little bit. Thanks for all the color you shared. Clearly, Amphenol has been in this space for a long time, and you continue to push on both in terms of data speeds and signal integrity issues. So can you just talk about how you're seeing pricing evolve, maybe generation to generation? What's been the history there? How are you anticipating that, given the higher value and kind of much more so we're transmitting 800 gigs instead of 400 gig speed? So clearly, there's value in there, but the density of applications is becoming more complicated, and the unit volumes are also growing kind of order of magnitude higher. So putting all those together, how should we think about just the opportunity here? And is it right to think about maybe a you're guiding to a 30% growth in this end market right here in the next quarter. Is that something that's possible to continue into 2025? Thank you so much. Well, thanks, Wamsi. A lot wrapped up in that question. I mean, look, I guess to the very end of your question, I'm not going to get out ahead of myself and try to give a guidance about this revolutionary thing into 2025. As you know, we give guidance for the quarter ahead of us, and then we try to make sure we're maximizing our position of whatever the market will bring us long term. But I would say this. Number one, you mentioned pricing. I mean, we are always trying to deliver to our customers value. And so our goal is to deliver the maximum amount of value to our customers at the lowest price that they can get. And if we can deliver enough value to our customers, then there will be some of that value left over for us. And I think what you see in AI is the criticality of the interconnect in these systems. I mean, there is a direct correlation between the power of these AI learning and inference models and the quality and performance and capability of the interconnect systems because, again, you're talking about speed and latency. And so when you think about how long does it take to build a model? Well, if you have even the tiniest proportion of higher latency between the chips, then all of a sudden, what may take a month takes 3 months to build these complex models that are using trillions of learning factors across them. And if you take 3 months and your competitor takes 1 month and your model is more up to date than your competitor's, all of a sudden, you as a service provider are not able to monetize these massive investments that you're making. So if you think about that correlation between the speed and the latency and then, in fact, the economics of the models, you can understand that there is a lot of value embedded in our products as it relates to what it creates in terms of functionality for our customers, whether that's at the chip processor level, whether that's inside the data centers with the cloud operators, whatever that is. Now, there's no doubt about it that we have to build also our capacity and that these are extremely high-precision products. They require intensity of testing. They require intensity of automation. Craig, I think, alluded to in his prepared remarks a little bit that we might see a couple quarters of a little bit more CapEx, not just for this market but for other markets as well. But this is one of those areas where we're really building up phenomenal capabilities. And I just have to take one last moment here in answer to your question. Everything that I'm talking about, it's easy for me to say all these things. I can't tell you how hard our team is working to execute on these words. I mean, again, these are complex products with complex production processes, complex systems, extremely high reliability, a lot at stake because of those underlying economics. And boy, I have rarely been as grateful as I am to those folks who are working 24/7 across Amphenol, around the world, to really ramp up in support of our customers that are implementing these AI data centers. Thank you. Our next question is from Mark Delaney with Goldman Sachs. You may go ahead. Yes. Good afternoon. Thanks very much for taking my question. I'm hoping to better understand how Amphenol is thinking about capital allocation for the rest of the year, especially with the pending Carlisle Interconnect transaction. Is the M&A funnel still active? And with the new repurchase authorization you announced this morning but also the potential cash usage for M&A such as Carlisle, how active might the company be on buybacks this year? Yeah. Thanks a lot, Mark. Yeah. I think in regards to our capital deployment, we've had a very consistent policy and practice over many years with regards to our capital deployment and over a whole host of years where we've done a significant amount of M&A and less M&A. And we continue to be kind of it continues to be a balanced and flexible deployment strategy. In the current year with CIT, I talked about how strong our balance sheet is, the 0.7 times net leverage, the strong free cash flow that we generate and continue to generate. So I wouldn't think even with CIT, I wouldn't say that that would have any impact ultimately on our capital deployment strategy. We did just renew or have a new $2 billion, three-year share repurchase program. Certainly, that's one of the legs in our return to capital shareholders. Ultimately, over time, we want to return about 50% or roughly half of our free cash flow to our shareholders. Part of that is our dividend yield, which is roughly 1%. We continue to target that over time as well as our share repurchase plan. So I would say this new plan is just consistent with that, our dividend policy is consistent with that. Ultimately, that M&A continues to be the focus. Ultimately, over time, we believe that that will continue to drive strong returns. So if there was a time where we generated a significant closing of sales in a particular year, we think about maybe dialing back share repurchases. But at the end of the day, just considering the significant free cash flow that we generate, we really haven't had to do that and certainly wouldn't expect this year just with CIT to have to have any adjustment to that. And Mark, relative to the M&A pipeline, I would just tell you that our pipeline remains strong. Yes, we completed last year 10 acquisitions. Yes, we announced in January our largest ever acquisition with CIT. But I can tell you we have the appetite, the capacity, and the ability and agility to continue to make acquisitions large and small. I think we continue to demonstrate our ability to do more acquisitions, to do bigger acquisitions. The beauty of this industry and the beauty of this market is that there's just so many great opportunities to find companies with great people and great technology in a very complementary market position to Amphenol. We remain extremely disciplined in our acquisition program. We will walk away if we get a bad feeling up until the last second before we wire money. There's no doubt about it that there's great, great opportunities for us for the future. As Craig mentioned, our financial condition is in really a fantastic position with 0.7x leverage here at the end of the quarter. Our leverage will just be, what, a touch above 1 following the acquisition of CIT. And so we have really the capacity, the capability, and the appetite to continue. Thank you. Our next question is from Steven Fox with Fox Advisors. You may go ahead. Hi. Good afternoon. I was just wondering on the auto markets, the 17% growth you talked about. I know you highlighted communications. And I know you guys don't like to count cars per se, but can you just sort of provide some color on the backdrop you're selling into right now and into Q2? And what exactly would you call out as sort of leading products that you're especially doing well on right now? Thanks. Yeah. Thanks very much, Steve. And you're right. I don't like counting cars necessarily. I mean, the market is what the market is. But look, we have taken advantage, I think, for a very long time, not of an overall growing auto market. I mean, if you look over, I don't know, eight years or something, it's still sort of a similar level of total worldwide auto production. But there's no doubt that the content has expanded dramatically over these years. And I think we've taken a real advantage of that. So when we think about our opportunities, we've talked a lot over the past years about electrified drivetrains, the high-voltage connectors, for example, sensors that go into that. But we've also talked about all the other applications. And so when you think about communications, as I highlighted earlier, there's just more and more communications technology being put into cars. And as a leader in RF technology for cars, as a leader in antennas for cars, as someone who participates really across that whole signal chain of communications, that creates a great opportunity. There's other areas like connectivity, passenger connectivity, engine control. By the way, there's still the vast majority of cars that are built are using fuel-based engines or ICE vehicles. And those require an enormous amount of different contents as well. Most of actually what we sell into cars is agnostic to the drivetrain. But it's not agnostic to the increase in content in cars. As there's more electronics, there's going to be more opportunities for Amphenol. Thank you. Our next question is from Samik Chatterjee with JP Morgan. You may go ahead. Hey. Thanks for the question. This is Joe Cardoso on for Samik. Can you just give us an update on where we stand on the inventory destocking headwinds in the industrial market and how you're thinking about timing of when we see that normalizing? And then maybe as a quickie second, if I can, can you just touch on the CapEx investments that you highlighted in your prepared remarks? How should we be thinking about magnitude? And besides IT Data com that you mentioned, what are the other major buckets of investments there? Thank you. Yeah. I mean, just very quickly on industrial, I mean, I think we continue to see the demand in industrial to be somewhat muted. There is no doubt an impact from destocking with distributors. But it's not just destocking. I think distributors' orders themselves are also down. And so it's not just that they have too much inventory, but the demand in certain pockets of industrial. And I would say in particular in places like Europe, maybe to a lesser extent in some parts of Asia, and then even to a lesser extent in North America. With regards to our comments on CapEx, I mean, I talked about it in the context of AI. But you can imagine we're growing strongly in a number of our markets, including in particular in defense. We grew last year in defense by 20%. We grew last quarter by 11% organically. We continue to see strong momentum. And the defense industry uses also extremely high-technology products. We have a very vertically integrated capability and offering to our customers. And usually, you can't grow by 20% in defense-related products. It's just impossible to flex. And I think our team's just done a fabulous job of flexing their capacity. But that may require a little bit more. But look, we're not talking about big numbers here. I mean, we said we expect slight elevation in CapEx. Our CapEx is still very, very reasonable. I think, Craig, it was less than 3% last quarter. And so this is not a big deal. We expect to still have very strong and robust free cash flow through the year. Thank you. Our next question is from William Stein with Truist Securities. You may go ahead. Great. Thanks for taking my question. I'm going to ask yet another on AI. We understand that the three main connector vendors in this space, Amphenol and two others, have very solid positions, very good technical capabilities. I'm wondering if you can talk about the competitive dynamics among the three of you and also the degree to which you can capture some of their share or whether it's possible that another entrant among the hundreds of connector companies globally could realistically attack this market. Yeah. Thank you. Well, thanks very much, Will. Look, I'm not going to comment on our peers. I have great respect for them. They're fabulous companies. What I will say is that we've been working in this area for a very, very long time. As the leader in high-speed interconnect technology, you can imagine that we also have a very robust position here. This is not something that we have just recently developed. This is a very, very long, intensive, and real leading position in development of those technologies. But I have great respect for all of our competitors. And this AI is a great thing for our industry because it is really a multiple of content because of the unique architecture of these products. We're not going to win 100% of everything. But I can tell you that we certainly get more than our fair share. In terms of new entrants, I mean, look, there can always be new folks who come along. These are among the hardest products that are made in the interconnect industry. I think I already spent some time talking about the economics of those products and how those economics mean that as a customer, you want to be very careful to not use a product that cannot meet the requirements that you need in these high-performance systems. Thank you. Our next question is from Asiya Merchant with Citigroup. You may go ahead. Great. Thanks for taking my questions and great results. Just the incremental gross margins, if I did the calculation here right, were sorry, operating margins were very strong. Maybe you can talk about how you guys think about the trajectory of those incremental margins as the quarter progresses or as the year progresses, especially when you think about rolling in a pretty sizable acquisition in the back half, how we should be modeling for that. Thank you. Yeah. Thanks, Asiya. Yeah. No, we are really proud of the 21% operating margins here in the first quarter. I mean, a first quarter typically is the more challenging quarter in the year given the sequential quarter typical decline we have. And certainly, you always do a good job. But this quarter, really, I think, is an outstanding quarter from being able to achieve 21%, 30% year-over-year, and really sequentially about 30%. And we did 10 acquisitions last year, as you know. And those acquisitions were significantly under our company average. So when you really pull out and to look at the organic conversion on our 6% growth on a year-over-year basis, it's significantly stronger than the 30% that kind of in the reported numbers. And sequentially, kind of the same dynamic with the acquisitions we did in the fourth quarter being well under the average profitability of the company. Sequentially, that conversion really is well under that 30% kind of on the face. So really strong execution by the team. I mean, the team has done an outstanding job of really not only the teams that are growing, but also the teams that are impacted on the negative side, as you know, our industrial market is more challenged than a few other markets as well. And they've just done an outstanding job at controlling cost on the downside as well. So the combination of those two really has just turned into really strong profitability for the company. I mean, as we look forward, taking out CIT, I'll talk about that in a second, I would expect that, again, more normal profitability levels on incremental kind of revenue. We talk about the 25% longer-term target. I would expect more in that normal range as we kind of get into more of the normal cadence from a pricing-cost perspective that we're in right now. But no doubt our teams will continue to manage it at a very strong level and do their best to maximize profitability as they have. But I think 25% or so is kind of what I would kind of expect as we kind of go throughout the year. Now, when we layer in CIT, when CIT does close that we expect here by the end of Q2, there's no doubt, though, that business is well under our average company profitability levels currently. And there would be some impact on the profitability, on the margins slightly from an operating margin perspective. And over time, we would certainly work, and the team would work, as Adam kind of mentioned earlier, to get those back up to the company average. But certainly, in 2024, we would expect some impact on the second half from a profitability perspective from them. But it's a great team. And certainly, we would expect over time to improve upon that. Thank you. Our next question is from Andrew Buscaglia with BNP Paribas. You may go ahead. Hey. Good afternoon, guys. Good afternoon. Yes. Following up on that question, CIT, I think, had a great price. And as part of a holding company, you guys alluded to maybe not run optimally. But is this integration, is this company a cost-saving story? Or if you look at CIT, their growth historically wasn't all that exciting. Is this more of an opportunity to reaccelerate their growth, or is it both? And then comment if you could comment, that potential margin dilution in the back half, what might that be at this point? Yeah. I don't know that we have a specific number to give you for the margin dilution. I mean, we'll talk about it when we own the company. In terms of the priorities, I mean, every acquisition we make, we want them to accelerate their growth and make more money doing it. And so you can imagine that with the CIT team, we're already talking about to the extent that we can before closing, we're already talking about how do they both accelerate their growth, expand their market position, take advantage of being part of Amphenol, take advantage of the broader access that we have as a company, take advantage of the broader suite of technologies that we have to grow their business. And in turn, how do they take advantage of our low-cost manufacturing? How do they take advantage of the broader relationships we have in the supply chain, whatever that may be? And also just how do they take advantage of now being part of a high-performance interconnect company like Amphenol? I will tell you, in years past, when we've seen companies improve their performance, some of that was just they came in and they saw, "Oh my goodness, I didn't realize I could make that much money." And they just figured it out and made it happen. And it's not that we parachute in with a bunch of folks from headquarters or otherwise. But there is inside of the company so many great role models of organizations run by entrepreneurs, run by Amphenolian general managers who have just figured it out. And that is we don't have an Amphenol business system. We don't have an Amphenol way. The Amphenol way is just to liberate people, to give them the authority, and to hold them accountable as entrepreneurs. And that mindset is very different from most other companies. And again, Carlisle is a fabulous organization, the parent company, but they're not an interconnect company. And I think CIT, as part of Amphenol, with our unique culture, with our uniquely broad suite of products and relationships, I can't tell you exactly how they're going to do it, but I have a lot of confidence that they will. Thank you. And our last question comes from Joe Giordano with TD Cowen. You may go ahead. Hey. Thanks, guys. Just curious, with the AI stuff, is there any inherent margin differential between the products that you're selling on these next-gen technologies versus more traditional data center or versus more the company average? And then if I could, I asked your competitor this this morning, but when you think about the CapEx that you need to do and the scale of what these customers of yours are thinking over a multi-year period is massive, how do you bring that down to your own spend and rationalize? Is this doable? How fast do we want to spend ahead of something that might be a five-year story? How do you balance that? Yeah. Look, I may let Craig comment on the margins, except I mean, it's an easy answer. It's just like, look, we make margins based on selling value to customers. If we can create value for our customers, then usually, there's value for us to be had there. And I think that's basically what I would say in this respect. Relative to scaling and working with our customers, I mean, you can imagine that we have very intensive discussions with our customers in every market. Here, because of the economics behind it, because of the pressure on our customers and the big vision, you can imagine that we're having even more intensive discussions. And so this is not just like you get an order, and then you say, "All right. Well, I'm going to go invest X, Y, Z." I mean, this is a very iterative, interactive discussion. But it's all done under the context of the Amphenol approach. It's not that we're making decisions here at headquarters and allocating capital. We have general managers making and having responsibility for specific products. And they're going to figure out how do they satisfy the customer, but also knowing that it's their capital, that they're spending. And if they spend more than they should, that's going to hit their P&L, not just going to hit Amphenol's P&L. It's going to hit their P&L. And that accountability of sort of from birth to death of a program is something that I think is very unique in our organization. And over time, when I think about why does Amphenol spend what we spend on capital expenditures, it is in large part because the ownership of that, the accountability, the authority for that, is resident in individuals who also go to the customer every day, who also are in charge of the factory, who also are in charge of developing the products. And when you have that comprehensive authority, you tend to make wiser decisions about this. It's not like, "Well, I'm going to overinvest now and let the next person clean it up on my behalf." These folks are there for the long term, and they own it all. And I think they're going to make wise decisions accordingly. Thank you. And I'll now turn the call back over to Mr. Norwitt for any closing remarks. Well, thank you very much. And again, thanks to everybody for your time today. We appreciate everybody's attention. And I wish that everybody has a fabulous spring. And we'll talk to you again in 90 days or so. Take care. Thank you. Thank you for attending today's conference and have a nice day.