TE Connectivity makes the small but critical parts that hold modern machines together: connectors, sensors, and wiring systems that carry power, data, and signals through cars, aircraft, data centers, factories, and power grids. It sells to manufacturers, not consumers, so most people never see its name on a product. The company earns money every time a carmaker wires a new vehicle, every time a factory installs a new robot, or every time a data center gets built to run artificial intelligence software. Revenue comes from two segments: Transportation Solutions, which covers cars, trucks, and sensors, and Industrial Solutions, which covers everything from energy grids to aerospace to data networking equipment. The diagram below traces where the money goes.
Five years of financial data tell a story of a business that dipped and then accelerated. Revenue was $14.9 billion in 2021, climbed to $16.3 billion in 2022, then plateaued near $16 billion in 2023 and $15.8 billion in 2024, before jumping to $17.3 billion in 2025. That 2025 jump was not just organic growth. The company spent approximately $2.3 billion to acquire Richards Manufacturing, a producer of electrical distribution products, in April 2025. That deal alone added $179 million in sales in the partial year it was owned.
The more encouraging number is free cash flow, which is the cash left over after the company pays for its factories and equipment. Free cash flow was $2.0 billion in 2021 and grew to $3.2 billion in 2025. That is a meaningful improvement, even as the company spent heavily on acquisitions and restructuring. Gross margin, which measures how much money is left after production costs, slipped slightly from 2021 to 2023, then recovered to 35.2% in 2025. That recovery came from higher sales volume and better manufacturing productivity, according to the company's own filings.
The Industrial Solutions segment is where the growth story is most visible right now. Sales in digital data networks, which includes equipment used by data centers running artificial intelligence applications, jumped 72.6% on an organic basis in 2025. Energy products grew 15.0% organically. Aerospace, defense, and marine grew 9.5%. These faster-growing areas are now 46% of total company revenue, up from 40% in 2024. Meanwhile, the Transportation Solutions segment, which is still 54% of revenue, saw total sales fall 1.0% in 2025, dragged down by weaker sensor demand and softer vehicle production in Europe and the Americas.
Net debt, which is total borrowings minus cash on hand, stood at $4.4 billion at the end of 2025, up from $2.5 billion in 2023. The increase reflects the debt the company took on to fund acquisitions. The company issued several rounds of new senior notes during 2025, including euro-denominated bonds due in 2028 and 2033 and dollar-denominated bonds due in 2031 and 2035. Two older bonds totaling $850 million come due in February 2026, which the company says it expects to repay from operating cash flows.
The risks facing TE Connectivity are specific and documented. The biggest one involves China. About 25% of fiscal 2025 sales came from Chinese customers, and the company runs 19 major manufacturing sites there. Any escalation in trade tensions between the United States and China, including new tariffs or export restrictions, could disrupt both sales and production at the same time. The company says it is using pricing actions and sourcing changes to manage existing tariffs, but it acknowledges that changes in trade policy remain a live threat.
Currency risk is the second large exposure. About 60% of 2025 sales were invoiced in currencies other than the US dollar, including euros at 27% and Chinese renminbi at 20%. The company does not hedge this exposure. When the dollar strengthens, reported revenue and profits shrink in dollar terms even if the underlying business is doing fine. This has already affected results in recent years and is built into the company's current financial profile.
The third documented risk is the concentration in automotive customers. About 41% of total fiscal 2025 sales came from car and truck manufacturers, an industry that can slow sharply in a recession. Large automakers have significant negotiating power over their suppliers and can push for lower prices year after year. The company's own filings acknowledge ongoing net price erosion in the Transportation Solutions segment. A sustained downturn in vehicle production would hit TE Connectivity's largest single revenue stream directly.
Raw material costs are a fourth specific pressure. The company purchases large quantities of copper, gold, silver, and palladium. In fiscal 2025 it bought approximately 191 million pounds of copper at an average price of $4.25 per pound, up from $3.91 in 2024. Gold averaged $2,560 per troy ounce in 2025, up from $2,027 in 2024. These materials come from a limited number of suppliers worldwide, and their prices are affected by tariffs, supply chain disruptions, and global demand. If prices rise faster than the company can pass costs on to customers, margins shrink.