TE Connectivity filed its annual report on Form 10-K on November 9, 2026, for the fiscal year ended September 25, 2026. The filing reports revenue of $19.89 billion, gross profit of $7.21 billion, cost of goods sold of $12.68 billion, net income of $3.25 billion and diluted earnings per share of $11.06. The company's fiscal 2025 results, as reported in its 10-K for that year, showed revenue of $17.26 billion and net income of $1.84 billion.
The headline numbers are good, but the quarterly detail tells a more mixed story than a simple run of improvement. This piece walks through the gross margin, the path from operating income to net income, and the interest line, using only the figures the company reported.
Gross profit rose; gross margin did not
Computed from the reported gross profit and cost of goods sold, the full-year gross margin was about 36.2%, compared with about 35.2% for fiscal 2025. That is a year-over-year improvement for the full year.
Within fiscal 2026, however, the pattern runs the other way. Quarterly gross profit rose steadily, from $1.74 billion in the first quarter to $1.75 billion, $1.84 billion and $1.89 billion in the second, third and fourth quarters. Revenue grew faster than gross profit over the same stretch, so the gross margin on each quarter's sales fell from roughly 37.2% in the first quarter to roughly 35.5% in the fourth. Dollar gross profit is climbing, but each dollar of sales is producing slightly less of it. An investor watching the business for pricing power or cost discipline will want to understand why that happened, and the company's filings are the place to look for the explanation.
| Fiscal 2026 quarter | Revenue | Cost of goods sold | Gross profit | Gross margin (derived) | Operating income | Net income |
|---|---|---|---|---|---|---|
| Q1 (ended Dec. 26, 2025) | $4.67B | $2.93B | $1.74B | 37.2% | $963M | $750M |
| Q2 (ended Mar. 27, 2026) | $4.74B | $3.00B | $1.75B | 36.8% | $954M | $855M |
| Q3 (ended June 26, 2026) | $5.16B | $3.33B | $1.84B | 35.6% | $981M | $748M |
| Q4 (ended Sept. 25, 2026) | $5.31B | $3.43B | $1.89B | 35.5% | $1.09B | $900M |
| Full year fiscal 2026 | $19.89B | $12.68B | $7.21B | 36.2% | $3.99B | $3.25B |
Net income did not climb in a straight line
Quarterly net income did not rise sequentially across the year. It was $750 million in the first quarter, $855 million in the second, $748 million in the third and $900 million in the fourth. The third quarter was the weakest of the four on a net basis even though its gross profit and operating income were both higher than in the first half. The company's reported quarterly tax expense explains much of the swing: tax was $87 million in the second quarter, against $210 million in the first, $223 million in the third and $175 million in the fourth. Readers should treat the quarterly net income series as shaped by tax timing as much as by operations.
From operating income to net income
For the full year, the company reported operating income of $3.99 billion. Interest expense was $124 million, and after other non-operating items the company reported pre-tax income of $3.95 billion. Income tax expense was $695 million, leaving net income of $3.25 billion.
Interest is a modest drag. The $124 million figure compares with $77 million in fiscal 2025 and $70 million in fiscal 2024, as reported in those years' filings, so the cost of debt is rising from a low base but is still small against operating income. Quarterly interest expense was steady at between $30 million and $32 million in each quarter of fiscal 2026.
The larger change between the two years is in taxes. Fiscal 2026 operating income rose about 24% from $3.21 billion in fiscal 2025, while net income rose about 77% from $1.84 billion. Most of the gap comes from the tax line: income tax expense was $1.36 billion in fiscal 2025 and $695 million in fiscal 2026. An investor comparing headline net income growth with the business's operating progress should separate those two effects. Operating income growth is the cleaner read on the underlying operations, and it is the figure most directly tied to the gross profit trend described above.
Operating costs and what they signal
According to the reported figures, research and development expense rose to $803 million in fiscal 2026 from $699 million in fiscal 2025, and selling, general and administrative expense rose to $2.12 billion from $1.87 billion. Both grew faster than the company's gross profit in percentage terms, which helps explain why operating income growth (about 24%) was smaller than gross profit growth (about 19%, computed from the reported $6.08 billion in fiscal 2025 gross profit). Spending on engineering and on selling and administration is a deliberate choice for a company that sells connectivity and sensor products into automotive, industrial, data-network and aerospace end markets. The question for long-term holders is whether that spending keeps widening the business's advantages, and the filings give the reader the numbers to test that over several years rather than a single quarter.
What to watch in the next filings
Three items in the reported figures deserve follow-up in the company's next quarterly reports. The first is whether the gross margin decline seen across fiscal 2026, from about 37.2% in the first quarter to about 35.5% in the fourth, stabilizes or continues. The second is the tax rate, since quarterly tax expense moved considerably and drove much of the net income pattern. The third is the trajectory of interest expense as it rises from its fiscal 2025 level. Each can be checked directly against the company's 10-Q and 10-K filings. This analysis describes what the reported numbers show and does not draw a conclusion about the company's value.