Hello, and welcome to the Third Quarter Earnings Conference Call for Amphenol Corporation. Following the presentation, there will be a question-and-answer session. Until that, you remain in a listen-only mode. At the request of the company, today's conference is being recorded today. [Operator Instructions]. I would now like to introduce today's conference host, Mr. Craig Lampo. Sir, you may begin.

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 third quarter 2022 conference call. Our third quarter 2020 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. In addition, all prior year comparative data discussed during this year -- during this call is on a continuing operations basis. The company closed the third quarter with record sales of $3.29 billion and record GAAP and adjusted diluted EPS of $0.80. Third quarter sales were up 17% in U.S. dollars, 21% in local currencies and 18% organically compared to the third quarter of 2021. Sequentially, sales were up by 5% in U.S. dollars, 7% in local currencies and 6% organically. Adam will comment further on trends by market in a few minutes. Orders in the quarter were $3.151 billion, resulting in a book-to-bill ratio of 0.96:1. Year-to-date, our book-to-bill remains strong at 1.07 to 1, and the company continues to have a robust order backlog. GAAP and adjusted operating income were $681 million and $693 million, respectively, in the third quarter of 2022. GAAP and adjusted operating margin were 20.7% and 21%, respectively, in the third quarter. On a GAAP basis, operating margin increased by 40 basis points compared to the third quarter of '21 and was flat sequentially. GAAP operating margin for the third quarter included $12 million of acquisition-related costs. On an adjusted basis, operating margin increased by 70 basis…

Well, thank you very much, Craig, and allow me to extend my welcome to all of you on the phone here today. And I certainly hope that all of you are having an enjoyable fall. Here we are in beautiful Wallingford, Connecticut, with the leaves turning a wonderful autumn hue. I'm going to highlight our third quarter achievements. I'll then spend a little time to discuss the trends and our progress across our served markets. And then finally, I'll comment on our outlook for the fourth quarter and the full year of 2022. And of course, we'll have time for some questions at the end. Turning to the third quarter. Our results in the third quarter were much stronger than expected and exceeded the high end of our guidance in sales and adjusted diluted earnings per share. Sales grew a very strong 17% in U.S. dollars and 21% in local currencies, reaching a new record of just under $3.3 billion. On an organic basis, sales increased by 18%, with broad-based growth across most of our served markets as well as contributions from the company's acquisition program. The company booked orders of $3.151 billion, representing a book-to-bill, as Craig mentioned, of 0.96 to 1. I would say that despite this slightly negative book-to-bill, the company's order backlog remains very robust. We are pleased to deliver strong profitability in the quarter, with adjusted operating margins reaching 21.0%, a 70 basis point increase from prior year and a 30 basis point increase from prior quarter. We achieved these results despite the continued wide range of operational, inflationary and supply chain challenges around the world. Adjusted diluted EPS grew strongly from prior year, increasing by 23% to a new record of $0.80, and just really an excellent reflection of our organization's continued strong execution…

Thank you. [Operator Instructions] Our first question is from Mark Delaney with Goldman Sachs. Please go ahead.

Yes. Thank you very much for taking question. In terms of the comments about a more challenging and dynamic environment that the company is expecting, is that more observing that there's the potential for business conditions to deteriorate given macroeconomic factors or is that consistent with the recent moderation in incoming orders that Amphenol has already seen in the third quarter and perhaps has continued or even accelerated in the fourth quarter to date?

Yeah. Thanks very much, Mark. Look, I think that we've talked before, first about orders that positive book-to-bills don't always grow to the sky. And so it was not surprising. It wasn't certainly surprising to us that our orders moderated a bit in the quarter, and we had a slightly negative book-to-bill. We still have built tremendous backlog over the recent quarters. At the same time, I think it's fairly clear that we are in a world where, economically, there are more cross currents. And those crosscurrents can always have an impact on markets that we serve. And I think some of our customers, in particular, in places like IT datacom, who are a little bit reacting to, as I talked about, the inventory position, that would be an example of a place where maybe customers have put a little more conservatism in their balance sheet. I think we saw also in industrial with our guidance, we've had very, very strong performance in industrial and maybe there's a little bit -- a few signs of some hesitation across a few customers in that area. But it's not like we're seeing anything that anybody else isn't seeing here. We're not projecting anything, but I think the world is volatile. Just look how it's reflected in the interest rate environment, the currency markets that Craig discussed earlier, and as always, in a market like that, it's not our job at Amphenol to try to guess whether there is going to be a recession 1 day or otherwise. But it is our job, and it's our track record to always be prepared regardless. And I've talked about this in the past. You've heard me say the term that we drive with 1 foot on the gas and 1 foot on the brake. And I can tell you, we're driving hard in both respects, doing everything we can to make sure that we're there for our customers, satisfying their demand, and we did that in a big way here in the third quarter, shipping nearly $3.3 billion in sales. But for those areas where we have seen real-time feedback from customers that they may need a little bit less of our product, you can bet that those 130 Amphenol general managers, the ones who may see some softening of demand, that they're rapidly adjusting their resources. They're rapidly taking all the steps that an Amphenol General Manager does take to be prepared to preserve the company's financial strength in that environment. So we're never going to try to guess when that recession is coming. We'll let lots of people, who are much more experts at that than we are, to do that. But we will always be prepared and there's no question that we are today.

Thank you. The next question is from Samik Chatterjee with JPMorgan. You may go ahead.

Thank you for taking questions. I guess, Adam, I had a sort of a similar question, but more relative to your sort of performance here. When I go back and look at the last four quarters or so, every time you've reported a revenue number, you've guided sequentially the next quarter to be slightly slower, slightly lower in terms of revenue. And nevertheless, you've sort of executed above that number. And particularly through this year, you've continued to sort of ramp revenue sequentially as well. What's changing now when we look into December, we're seeing a similar trend in terms of you trying to probably bake in some of the macro in terms of the guidance for the December quarter, again, being sequentially lower in terms of revenue than September? But what's changing probably relative to the first 3 quarters of the year when we've seen sort of the execution being very different or maybe the industry conservatism that you baked in hasn't really come through? Maybe help me understand that.

Yeah. No, thank you very much, Samik. Listen, we always come out of the quarter and we try to give our best estimate of what the next quarter is going to be on behalf of everybody here. And it's a credit to our team that we've been able to outperform that, and you can bet that we're always going to try to outperform that. But it's not -- I mean, we do our best job here of doing that. And we shouldn't -- you shouldn't just say, well, Amphenol is conservative and they're naturally going to beat it. I mean there's no doubt that the world, as we see it from a macro and market standpoint, it is more dynamic. There are pockets -- more pockets of uncertainty. There are macro dynamics that are going on now. But all that being said, the underlying electronics revolution that has for us, always been a great platform for our outperformance. This continues to go unabated. Our position, our technology position continues to be broader than ever before. We've made 20 acquisitions since the beginning of 2019, each of which have added to our company in new capabilities, in new breadth, new access to customers in new geographies. So our company is well positioned to capitalize if there are opportunities for upside. And we'll certainly seek to take advantage of any of those that do come, but in the context that it is a world today that is clearly more uncertain than it was before. And I don't have to, I think, tell everybody here on the phone that you can get that by looking just at the front page of the Wall Street Journal on a daily basis. Are we always going to try to outperform what we are, but I'm not going to tell you that this quarter is the same as every other quarter that we're always going to outperform, and we're going to beat our guidance by as much as we did last quarter. We're going to work really hard to do that all the time, and we're going to navigate whatever environment comes our way.

Thank you. The next question is from Chris Snyder with UBS. You may go ahead.

Thank you. So margins have realized a pretty nice sequential improvement both over the last 2 quarters. I know at least part of that is price cost catch-up. What is the expectation on price cost into Q4 and early 2023 to the extent you have visibility on price in the backlog and where inventory costs are running at? And kind of with that, does the guided drop in Q4 operating margins really just reflect the volume deleverage into the fourth quarter? Thank you.

Thanks, Chris. Appreciate the question. No, we're really proud actually of the performance, both obviously here in the second quarter from a profitability, but certainly in the third quarter here, reaching 21%, matching our previous record that we had in the fourth quarter of 2018 and clearly, a very different cost environment. I mean, since the fourth quarter of '18, we've kind of had a pandemic. We've had supply chain challenges. We had a lot of inflation. We have energy costs. I mean you name it. And regardless of all that, I think we've been able to navigate that very well and just capitalize also on the strong demand environment and ultimately, be able to get our margins back up to kind of this level, I think, is just a testament to the overall management team. I would say that as we finished the third quarter, and I kind of said that similar to last quarter, I think we have offset a meaningful amount of kind of this inflation and supply chain-related cost pressures. I -- we certainly -- the management team has done a great job with that in managing kind of all elements of costs while continuing to kind of adjust price commensurate to the cost inflation. When we can't offset these with other actions, clearly, that's our priority to be able to do that within the bounds and the walls of the -- of our facilities, but we can't always do that. So you have to raise prices sometimes to your customers. And I think we've done a good job of all of that. In addition, I would tell you that I'm really proud that our team has continued to manage our cost structure even in these periods of robust growth. As you can see in our…

Thank you. The next question is from David Kelley with Jefferies. You may go ahead.

Hi. This is Gavin Kennedy on for David Kelley. Your growth in the auto end market continues to be robust. Can you tell us how you're thinking about auto demand in the next 12 months? And are you seeing any signs of customers changing their buying habits? And then any insight into the inventory dynamics here would be great. Thank you.

Thanks very much, Gavin. Look, we're really proud of the automotive performance here. I mean, if you just look over several quarters, we've had real strong double-digit organic growth in automotive now for eight quarters in a row, which is really excellent and clearly outperforming. I think that, as I mentioned in my prepared remarks, we've seen strong growth being driven by, in particular, everything related to electrification, but not exclusively that. We've also seen robust growth and everything related to passenger connectivity, to safety, new electronic systems in cars, all this sort of extraordinary array of content that's being put into this generation and next generation of cars that has created a great opportunity for Amphenol. Both together with our interconnect products, our sensors, our antennas and that entire array of what we broadly refer to as interconnect products. In terms of the behavior of the customers and the outlook over the next 12 months, I mean it's hard for me to give kind of an outlook for the next 12 months. I think others have a better sense of what -- whatever the industry outlook will be, what inventories are both at dealerships and in the supply chain. But -- and for us, what's more important is the content that we see with customers, which continues to grow. In terms of inventories, I couldn't tell you that we have a perfect sense of what the inventories are with our customers, either at the end customers or at the OEM or in the supply chain. But we haven't seen real indications of abnormalities. And so orders continue to be at a good level. We continue to have strong performance and customers seem to want really a lot of our products as we saw in the third quarter. And as would be implied in our guidance also in the fourth quarter, which would make the full year of 2022 just a really exceptional year in automotive on the back of a year in 2021, which was itself also quite strong.

Thank you. The next question is from Amit Daryanani with Evercore. You may go ahead.

Good afternoon. Thanks for taking my question. I guess -- my question is around the calendar '22 performance, the midpoint achieved in December. You would end up being about 15% top line growth, give or take organically. And I think 1 of the peers, Adam, everyone has a lot of this growth is driven by inventory build that looks like to reverse in a more pronounced manner into '23. I know you don't track this quantitatively, but maybe qualitatively, you can talk about, when you think about the growth you've achieved in '23, how does that you think in end market and share gain driven versus inventory build that might start to reverse and if you've seen any of that happen? Thank you.

Yes. Thanks very much, Amit. Listen, I think we've talked about inventory in the IT datacom market, and that's already having some impact here in the third and the fourth quarter. If I look at the overall interconnect market, taking really broadly our position, I mean, it's clear that we are outperforming and not just outperforming the sort of GDP or end market, but outperforming our peers. And so when you think about the question of inventory, unless you are giving your customers a specific reason, a specific reason to build more inventory of your products then your outperformance should certainly not be a reflection of that inventory. And so I don't know what inventories we have in our -- amongst our customers. We have a sense of it in distribution. And there, I will tell you that it's relatively healthy. Nobody is ringing alarm bells in our distribution channel about inventory levels. But if you look at our outperformance, unless we had created specifically problems that customers were trying to remedy by building buffer stock over problems, that would certainly not be a result of inventory. And I would tell you that over the course of the last 4 quarters, if not more, we have been solving problems for customers, not creating them. And so I personally think, in a qualitative fashion, as you said as the question qualitatively, that it doesn't fit with me that our outperformance would be and all related to an inventory build. Now is the overall market having some piece of inventory build, that may very well be, but I think that when you look at our overall performance at roughly 15%, as you say, organic growth expectation for the year compared to an industry and industry peers, who are quite a bit below that, you would probably come away thinking to quite a bit of that to share gains. But that's not a scientific assessment, because you didn't for one, I couldn't give you one. But I think qualitatively, I feel like we've made a lot of progress as a company.

Thank you. The next question is from Steven Fox with Fox Advisors. You may go ahead.

Hi, good afternoon. I had a question on the auto queue, but I'll save that for off-line. I was wondering if you could talk about the acquisition a little bit more in terms of how it fits in with all the other cable assembly acquisitions you've done. And specifically, this one how you expect to grow it and where the margins are versus where you would like to see them. Thank you.

Thanks so much, Steve. I'm glad you asked about ICA. It's really a great company. And you mentioned all the cables, some of the acquisitions we've done. I mean, if I think back since 2019, we've done 20 acquisitions since that time, about five of those acquisitions were kind of diversified cable assembly acquisitions. I think we've made like three center acquisitions. We've made four fiber optics acquisitions. We've made six acquisitions of just connector companies. We've had one MilAero value-add company, one automotive, and that sort of makes up the 20. And each of those really helps us to broaden our position with customers, expanding our capability and making sure that we can cover every corner of the electronics industry on a worldwide basis. And ICA really goes towards all of those. ICA is a North America-based company, which I think is a very opportune thing right now. They have factories across the U.S. as well as in Mexico, servicing a real diversified range of applications across primarily the industrial market. Everything from electrified industrial vehicles to types of things that are used in factories, factory automation, to instrumentation, and I could go on and on and on because it's a very fragmented and diversified customer base. And what they bring us really is a real local presence close to customers where sometimes value-add interconnect proximity can be a real asset actually. Because if you're in an area where there's a lot of companies building things, designing things, and you can be their sort of neighbor and supporter and partner, that allows you to get in very early in the design cycle. And then if you have the breadth of Amphenol, if you have the access to low-cost manufacturing, low-cost sourcing of Amphenol, all of a sudden, you can…

The next question is from Luke Junk with Baird. You may go ahead.

Yeah. Thanks for taking question. Maybe a bit of a bigger picture structural question. Adam, just wondering, is there anything inherent in the new segment structure of the company that could help with the margin? I'm thinking versus past cycles. If we do, in fact, go into a broader macro downturn, especially anything anecdotally, I think it would be helpful to illustrate the dynamic. I'm thinking enabling shared resources, identifying growth opportunities or things similar to that.

Well, thanks so much, Luke. Look, I talked about this early in the year when we announced the evolution of our organization into the three divisions, which are now our reportable segments with three division presidents. And for us, it's all about the scalability of that unique entrepreneurial culture of Amphenol, whereby today, we have 130 general managers around the world. And what's really important in times of crisis, and also in good times, by the way, is those 130, they don't just operate in a vacuum. They don't -- yes, every day, you have a general manager, who's running his or her business, reacting in real time to what customers are telling them, reacting in real time to what's happening in the environment, whether it be the supply chain or how technology is evolving or whatever. But also, they're working closely with our group general managers, who -- now we have 12 of those group general managers, who then work today with those division presidents to make sure that we're stimulating collaboration in real time to make sure that we're sharing best practices and information in real time, to make sure that we're cooperating with customers in real time, to bring to those customers the full suite of products. So in a time like this, the fact that now instead of just having one CEO doing that last year, that today, we have three division presidents, who are doing that on a much more active basis. They have three times as much time in their day by definition, as I have in my day, it means that we can have an even richer real-time reactivity to changes and dynamics that come in the marketplace. And that means opportunities, our ability to capitalize on them, our ability to migrate resources…

Thank you. Our next question is from Wamsi Mohan with Bank of America. You may go ahead.

Yeah. Thank you so much. I was wondering, Adam, if you could elaborate maybe a little bit on the pull forward comment you made on mobile devices. You had expected, obviously, to grow sequentially at a much slower rate. You did report very strong sequential growth. Maybe talk about the cadence of orders and why do you think that happened in the quarter? And if I could, if you could just maybe give us some sense of what you're seeing in China since you have such a good view into the region? If you'd characterize it maybe as things being stable or getting worse or getting better, that would be great. Thank you.

Sure. Thanks so much, Wamsi. Well, it's two questions, but I will say they're a little bit related, and let me say why. Look, if you look at our mobile devices market, it's been, as always, 1 of our most volatile markets. And I think if you go back over the last decade, we've had at least two fourth quarters, which were down in the kind of mid- to high teens on a sequential basis. So our outlook for this quarter being down sequentially low double digits, it's not a foreign concept to us that once in a while, you'll have a fourth quarter that will be down. I mean what we always think about in mobile devices, the one sure thing, and that's in a market where there are very few sure things is that the second half typically is quite significantly above the first half. And here, our guidance would imply that in the second half, we're still up north of 30% in the second half compared to the first half. So very robust and relatively normal kind of feel between the first and the second semester of 2022. I did mention that the -- we saw -- at the end of the quarter, really, a very strong demand in mobile devices pulls from customers. And why was that? You could come up with a number of different theories. I mean my own theory is that if you think about mobile devices, which are still today primarily manufactured in China, there was not only just holidays in China, but there were some other events going on over the last -- over the first few weeks of October in China. And it wouldn't surprise me if maybe some customers were preparing for both those holidays as well as the…

Thank you. The next question is from Jim Suva with Citigroup. You may go ahead.

Thank you. I have a question about strategy for either Adam or Craig. With interest rates higher and Craig gave some good details about interest expense that we should model for Q4 and going forward. I didn't know if that included any additional Fed raise next month or not. But the bigger strategy question is, does this make it so your use of capital you are looking to pay down debt a little bit more or higher returns on capital versus how you look at M&A or stock buybacks a little more, you start to balance things a little bit differently with higher interest rates, but just let us know about strategically if it impacts things at all in your decision tree. Thank you.

Thanks, Jim. Yeah, I would say that our overall kind of capital deployment strategy, we certainly have talked about many times in the past. And certainly, over the last number of years, it's been in the lower interest rate environment, but we've had a similar capital deployment strategy over many different interest rate environments over the years. And it really has been consistent, and it's really resulted in what we believe to be a great return of investment to our shareholders. And in the strategy, kind of advise strategy before has been flexible and how it's executed over time depending on the economic and market conditions is in balance in regards to ensuring that we're deploying capital towards our M&A strategy, which really we believe provides the best return in our return of capital to shareholders, and that's both our dividend program and the return of repurchase program -- share repurchase program. And I would say, given that kind of strong free cash flow generation that we've had over the years that I can say with confidence is that really the rising interest rate environment really won't impact our overall capital deployment strategy. And I would say in any real meaningful way. I mean we continue to look to deploy that half of our free cash flow towards M&A over time, in that other half towards that return of capital to shareholders. And if opportunities that are more significant in acquisitions, we're certainly going to adjust that towards those acquisitions in a fast and flexible manner. And I think that we do generate a lot of free cash flow, and we certainly expect to continue to do so. So I wouldn't say that really the interest rate environment is going to change that. I think debt paydown is certainly something that we would do if some of those other levers just certainly M&A and otherwise, just isn't available to us. And we have been able to kind of maintain and in certain cases, pay down debt over time anyways, even giving all those different actions that we take. So I wouldn't say that the current environment has really changed the way we think about that.

Thank you. Our next question is from Joseph Spak with RBC Capital Markets. You may go ahead.

Thanks so much. Adam, I was wondering if you could comment just broadly given the macro and all this uncertainty, whether you're seeing any widening of the acquisition funnel or maybe any loosening of evaluations as sellers might get more skittish or it doesn't remain to, I guess, the world it was or valuation that was. And if I could sneak in just a quick housekeeping. Would the book-to-bill have still been negative without FX movements?

Yeah. So I think just your little housekeeping question, I think -- I don't think it would have changed the book-to-bill with FX. Look, relative to M&A and the funnel, and we have a great pipeline of acquisitions. As I mentioned, over -- since the beginning of 2019, we've closed 20 deals through quite a cycle, I will say. I mean if you think about the cycle in which we've done that, this has been quite a cycle. And I think the compelling story of joining the Amphenol organization being part of something that is really special. It's something that we continue to tell to companies around the world, and we continue to find good reception to that. Does it become a kind of a buyer's market, for example, are sellers a little more skittish and were willing to sell. I'd be a little careful about in kind of overestimating the impact of the macro on the decision-making of sellers, many of whom are making the one decision in their life to do this. So in my experience, sellers are not kind of looking at what the S&P 500 is doing. They are looking at what the 10-year treasury is doing or looking at what FX rates are doing in that moment. When they think about selling, should they sell, should they not sell, and at what value. Can it impact on the margin, the current environment, what others are willing to pay for deals, and we're a very financially strong company. Maybe that could. I would hope that there's good reason among the universe of buyers around valuations. But we don't normally see just because macro shifts, a dramatic change in the M&A landscape. We have a fabulous funnel. We have a fabulous track record. We have a fabulous organizational culture that's really attractive to companies. I think all of those things will serve us well and will ensure that over the long term, we'll continue to find great companies become part of Amphenol. And I'll continue to be completely unable to predict when that's going to happen. But we're happy to have gotten one deal done here this quarter, and I'm confident over the long term we'll have some more.

Thank you. Our next question is from William Stein with Truist. You may go ahead.

Thank you for taking my question. Adam, I don't normally ask about -- I guess it doesn't normally get a ton of attention, the broadband end market, but the growth has been very strong and for a while now. I wonder if you can comment as to longer-term trends here. We've heard some other component suppliers talk about this end market looking strong for more than just a couple of quarters. We hear about cable MSOs and carriers making pretty significant spending commitments. And I wonder if you're seeing that dynamic and whether that's reflected in really substantial backlog there or if that might be overstating things. Thank you.

Yeah. Well, thanks for the question. And look, I'm really happy to talk about the broadband market. It's always been a core for Amphenol even if there's been a few challenging years as the sort of operators in broadband were merging and buying each other and waiting for certain technologies to come. And with all that consolidation and that kind of waiting period, there was a relatively flat kind of investment in the broadband market. And what I think we've seen this year with the real spike up of our performance in this space and can only be termed out. If you look at where we are today on a run rate basis, we're more than 50% higher than we were a year ago. And over the last kind of three-four years, it was running at a relatively stable pace on a quarterly basis, broadband, and now it's at quite a higher level. And I think it's a reflection of really one thing, the extraordinary expansion of data traffic in the world and the necessity of operators to work to support that. I mean, think about all the things that we do on a given day. And there's rarely a minute that goes by where you're not somehow using some data somewhere and creating traffic. I'm going to give a little shout out, because I have a new baby niece, who my little brother had his first child just a few days ago, and I have spent more time on face time, looking at this beautiful young thing, whose name is Chloe. I have spent more time looking at this beautiful thing on real-time video over the last six days, then I think I have face timed ever in my life. I mean it's extraordinary. And the fact that you…

Thank you. Our next question is from Joe Giordano with Cowen. You may go ahead.

Hey, thanks again here. Good afternoon, everyone. I know we all appreciate like the beauty of Amphenol is like when 1 part of your business is doing well. So 1 part is doing weaker, one is doing stronger and it kind of balances the other out. But if we were to like normalize for the size of the relative end markets you have, is there -- can you kind of like which parts are the -- have the most impact on your margins if you were to normalize for size? Like if there was something to be down, which would be the last one you'd want to be down, if you were to kind of think about it that way?

Joe, thanks for the question. I actually wouldn't really call out any market that really has significantly lower margins. I mean some have lower gross margins, but then lower SG&A, and we talked about the structure being a little bit different depending on the market. But from an operating margin perspective, honestly, I wouldn't say that there's much of a significant difference. I mean, you see that there's some differences in our operations. Our segments have a little bit of a difference. But from a market perspective, I really wouldn't call that out. I mean broadband, which is really some -- it used to be more the cable business, and it really isn't only the cable business anymore, because some of the acquisitions we've done in that space that's really broadened our portfolio out in that market. And it's actually somewhat of the reason why we've seen some of this big growth historically was lower margin, but I wouldn't even call that out as some of this big growth has been -- having lower margins associated with it. So long-winded answer to your question is, I really wouldn't call out any particular markets.

And our last question comes from Matt Sheerin with Stifel. You may go ahead.

Thank you. Thanks, Adam and Craig for all the details so far. My final question here is just on the aerospace market, where you've had some nice momentum over the last few quarters, still below where you were pre pandemic, but it looks like you've got really strong backlog. So could you talk about the momentum you're seeing there, Adam, and the content opportunity going forward?

For sure, Matt, and thanks so much. It's a great last question. Look, I mentioned in my prepared remarks, just how proud I am of our team working in this market. It is not easy. Let me tell you, it is not easy to be servicing a space, an end market and to have that end market drop by as much as it did in the case of broadband. And let alone to do it well, some of your fellow colleagues are in spaces that aren't dropping by that much. So you don't even have the misery less company kind of dynamic. And what is the playbook for Amphenol in times like that. It's not to run and hide, it's not to just cower and sort of drown in sorrows. You take quick action. You make sure that your resources that you have deployed are befitting the demand that you have from your customers. And then you go out and you build new basis of business and you take the opportunity of the crisis. And that's really important that you take the opportunity from that crisis to diversify your business even further, to support the customers who still need you in those difficult times. Because then when it comes back, you have a much broader, more stable, more robust and high potential business to run. And that's what our team, who works in commercial air has done. And so yes, we're not quite back to the kind of pre-pandemic levels, but the world is also not quite back to pre-pandemic levels. I mean certainly, there's more travel and airports are more crowded here. But Craig and I went to Asia recently and I can tell you, there's a lot less flights crossing the Pacific than they ever were before. So…

Thank you. And I'll now turn the call back over to Mr. Norwitt for any closing remarks.

Well, operator, thank you so much. And in particular, thank you to everybody who is on the call here today. Thanks for your great questions. And I wish that everybody enjoys a wonderful fall, and we will be back together with you here in 90 days. And by then, amazingly, it will be 2023. So have a wonderful rest of the year, and we look forward to seeing you all soon. Thanks so much.

Thank you for attending today's conference, and have a nice day.