AME Q3 Deep Dive: Broad-Based Growth and Margin Expansion Drive Guidance Raise

Electronic products manufacturer AMETEK (NYSE:AME) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 10.8% year on year to $1.89 billion. Its non-GAAP profit of $1.89 per share was 7.4% above analysts’ consensus estimates.

Is now the time to buy AME? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

AMETEK’s third quarter was marked by strong operational execution, highlighted by double-digit growth in both sales and orders, and a notable expansion in margins. Management attributed these results to robust performances across its Electromechanical and Electronic Instruments Groups, effective integration of recent acquisitions, and sustained demand in key end markets such as Aerospace & Defense and Power. CEO David Zapico credited the company’s distributed operating structure and focus on operational excellence as central to AMETEK’s ability to quickly respond to changing market dynamics and deliver solid results.

Looking to the remainder of 2025, AMETEK’s raised earnings guidance is built on expectations for continued momentum in its core markets, the contributions from recent acquisitions, and steady investment in organic growth initiatives. Management highlighted specific opportunities in data center power, automation, and aerospace as key growth drivers. Zapico emphasized, “The durability of our operating model and strong cash flow provide us with the flexibility to navigate challenging market conditions and continue to proactively invest in our businesses and strategic acquisitions.”

Key Insights from Management’s Remarks

Management pointed to broad-based end-market strength, successful acquisition integration, and margin resilience as the main reasons AMETEK's results surpassed analyst expectations this quarter.

• Electromechanical Group Momentum: The Electromechanical Group (EMG) saw broad-based growth, particularly in medical, aerospace, and automation markets, with Paragon Medical leading order growth and margin expansion. Management noted that restructuring efforts and new product wins are positioning EMG for further profitability improvements over the next year.
• Automation & Engineered Solutions Upswing: Automation businesses experienced high single-digit organic sales growth, driven by discrete automation demand, especially from precision equipment manufacturers. CEO David Zapico explained that "destocking cycles are ending, and discrete automation is rebounding faster than factory automation."
• Power Market Demand: AMETEK’s power businesses benefited from grid modernization and electrification trends, including increased demand for backup power systems for data centers and microgrids. The IntelliPower business, which supplies uninterruptible power systems, is seeing early traction in data center applications.
• Acquisition Integration: Recent acquisitions such as FARO, Virtek, Kern, and Paragon are integrating well, contributing to both top-line growth and margin expansion. Management highlighted the strong performance of the FARO team and the strategic fit with existing businesses.
• Pricing Offsets Inflation and Tariffs: Management stated that strategic pricing actions successfully offset inflationary pressures and tariffs, resulting in a positive price-cost spread for the quarter. This was achieved without sacrificing competitive positioning in key markets, especially in China, where tariff negotiations are ongoing.

Drivers of Future Performance

Management expects sustained growth and margin resilience, driven by investments in innovation, acquisition integration, and exposure to secular trends in automation, defense, and power markets.

• Data Center and Electrification Tailwinds: AMETEK anticipates continued growth in its Power group, supported by rising data center buildouts and electrification needs. Management noted early wins with mission-critical backup power systems for data centers, which are expected to become a more significant revenue stream as market demand increases.
• Aerospace & Defense Program Expansion: Ongoing content wins on new aerospace and defense programs are expected to drive high single-digit growth in this segment. Zapico pointed to a strong backlog and balanced growth across commercial, aftermarket, and defense subsegments as factors supporting the outlook.
• Acquisition Pipeline and Integration: The company is actively pursuing a robust pipeline of acquisition opportunities, with a focus on high-return, strategic targets. Management sees further upside as integration synergies from recent deals are realized and as additional acquisitions are completed.

Catalysts in Upcoming Quarters

In the coming quarters, our analyst team will be closely watching (1) the pace of adoption and order growth in data center and grid electrification applications, (2) integration progress and margin improvement from recent acquisitions such as Paragon Medical and FARO, and (3) sustained momentum in Aerospace & Defense content wins. Ongoing tariff negotiations and pricing discipline will also be important markers of AMETEK’s ability to navigate external headwinds.

AMETEK currently trades at $198.93, up from $184.20 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

Stocks That Trumped Tariffs

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.