AMETEK makes two broad categories of things: electronic instruments that measure, monitor, and analyze conditions in factories, power plants, aircraft, and labs, and electromechanical devices like precision motors, surgical components, specialty metals, and aerospace parts. Customers pay for these products because they are highly specialized, often built to exact customer specs, and sometimes the only option for a particular job. The Electronic Instruments Group (EIG) brought in $4.9 billion in sales in 2025, while the Electromechanical Group (EMG) added another $2.5 billion. AMETEK grows in two ways at once: it pushes its existing businesses to make better products and run leaner operations, and it regularly acquires smaller specialized companies to add new capabilities. The diagram below traces where the money goes.
How AMETEK Makes Money
flowchart TD
A["Customer Orders
7.4B revenue"] --> B["Two Operating Groups
EIG and EMG"]
B --> C["Specialized Products
Instruments, sensors, components"]
C --> D["Sales to Niche Markets
52% EIG, 42% EMG international"]
D --> E["Operating Cash Flow
1.8B annually"]
E --> F["Strategic Acquisitions
933M spent in 2025"]
F --> B
E --> G["Operational Excellence
Lean manufacturing, efficiency"]
G --> H["Lower Costs, Higher Margins
25.8% operating margin"]
H --> D
E --> I["New Product Development
R&D investment"]
I --> C
Five years of data tell a consistent story. Revenue climbed from $5.5 billion in 2021 to $7.4 billion in 2025. That is not explosive growth, but it is steady and it has not reversed even once across that stretch. Gross margins have held in a narrow band, between 34% and 37%, which suggests AMETEK has real pricing power in the niche markets it serves. The more telling number is free cash flow, the cash left over after the company pays for its factories and equipment.
Free Cash Flow, 2021 to 2025 ($ billions)
Free cash flow jumped sharply between 2022 and 2023 and has held near those higher levels since, even as the company spent heavily on acquisitions.
That free cash flow jump from $1.0 billion in 2022 to $1.6 billion in 2023 is significant. It means the company is not just growing revenue on paper. It is converting more of that revenue into actual cash. Operating cash flow reached $1.8 billion in both 2024 and 2025. Net debt, the amount the company owes after subtracting cash on hand, was $2.2 billion in 2021 and has stayed in a manageable range, ending 2025 at $1.8 billion even after the company spent $933.2 million buying two new businesses that year.
$1.67B
Free cash flow in 2025, generated on $7.4 billion in sales
What is an acquisition-driven growth model?
Some companies grow mostly by selling more of their existing products. AMETEK grows partly that way, but also by buying smaller specialized companies and folding them in. The acquired company's sales get added to AMETEK's total, and AMETEK tries to cut costs and improve margins by applying its own operating methods. This works well when integration goes smoothly and the purchase price is reasonable, but it adds risk when deals are expensive or hard to combine.
Between 2021 and the end of 2025, AMETEK completed 15 acquisitions with combined annual sales of roughly $1.8 billion. The two biggest recent moves were Kern Microtechnik, a maker of high-precision machining and optical inspection tools acquired in January 2025, and FARO Technologies, a provider of 3D measurement and imaging solutions acquired in July 2025. Together those two deals cost $933.2 million in cash. FARO alone brought one-time integration costs of $37.3 million in 2025. This pace of acquisition means the company is always absorbing something new, which keeps things complex.
2025
milestone
FARO Technologies joins AMETEK
AMETEK acquired FARO Technologies in July 2025 for a significant portion of the $933.2 million it spent on deals that year. FARO makes portable 3D measurement arms, laser scanners, and imaging software. It expands AMETEK's existing precision measurement business, which already included Creaform and Virtek. The acquisition added scale but also pushed integration costs and temporarily diluted operating margins in EIG.
Now for the risks. They are specific and they matter. Almost half of AMETEK's sales, 48.2% in 2025, went to customers outside the United States. The company operates factories in 22 countries. That international footprint is an asset in good times, but it creates real exposure to tariffs, trade restrictions, and currency swings. Management flagged in 2025 that new U.S. tariffs did not materially hurt results that year, but added that the situation continues to evolve and the outcome cannot be predicted.
70%
Share of total assets made up of goodwill and intangible assets, on a total asset base of $11.3 billion
What is goodwill, and why does it matter?
When a company pays more for an acquisition than the fair value of the physical stuff it buys, the extra amount is recorded on the balance sheet as goodwill. It is an accounting placeholder for things like brand reputation and customer relationships. If the acquired business performs worse than expected, the company has to write that goodwill down, which creates a large one-time loss. The more acquisitions a company does, the bigger this risk becomes.
With goodwill and intangible assets making up 70% of AMETEK's $11.3 billion in total assets, a stretch of underperformance across acquired businesses could force large write-downs. That is not a prediction, just an arithmetic fact about how the balance sheet is built. The supply chain is another pressure point. Certain steel components and base metals come from only a limited number of suppliers. Semiconductor chips also fall into this category. A disruption from an armed conflict, a weather event, or a supplier shutdown could halt production with limited alternatives available. Cybersecurity rounds out the list of high-severity risks in the company's own filings.
Approximately 27% of AMETEK's 2025 sales came from products introduced in the past three years, which suggests the product pipeline is active. Research, development, and engineering spending was $382.8 million in 2025, up from $351.7 million in 2023.
$3,581.5M
Record backlog of unfilled orders at December 31, 2025, up 5.2% from 2024
The record backlog of $3.6 billion heading into 2026 provides some cushion. Orders for 2025 grew 11.3% to $7.6 billion, with organic order growth of 4% on top of acquisition contributions. That means customers are not just being absorbed through deals. They are choosing AMETEK products in the open market. How durable that demand is through a full economic cycle is the question that history cannot fully answer yet.
The Bet
AMETEK can keep finding specialized industrial businesses worth acquiring at prices that make sense, fold them in without destroying their value, and push them toward the same margin profile as the rest of the company. That chain has to hold. The growth model targets high single-digit annual sales growth and double-digit earnings per share growth over the business cycle, and acquisitions are a required part of reaching both goals. If the pipeline of attractive targets dries up, or if deals like FARO take longer than expected to reach target margins, the whole model grows more slowly than the targets imply. The balance sheet can absorb a few stumbles, but goodwill at 70% of total assets leaves limited room for repeated disappointments.
Open question
AMETEK's five-year record shows consistent revenue growth, expanding free cash flow, and a business that serves many different industries with products that are hard to replicate. But the company is built on a constant cycle of acquisition, integration, and margin improvement, and industrial demand swings with the broader economy. Can AMETEK keep acquiring the right businesses at the right prices, integrate them without margin erosion, and sustain demand across its cyclical end markets through a full economic slowdown, or does the model start showing cracks the first time industrial spending pulls back sharply?
Compiled · 10-K · FY2025
