Core Points - PHINIA Inc. has declared a quarterly cash dividend of $0.27 per common share [1] - The dividend is payable on December 12, 2025, to shareholders of record as of November 24, 2025 [1] - PHINIA is recognized as a leader in premium fuel systems, electrical systems, and aftermarket solutions [1]

Core Viewpoint - PHINIA Inc. will participate in Baird's 2025 Global Industrial Conference on November 13, 2025, focusing on industry dynamics and the company's business [1] Company Participation - The participation will be in-person and will include a Q&A session [1] - Key executives attending include President and CEO Brady Ericson and Vice President and CFO Chris Gropp [1]

Core Insights - Phinia (PHIN) reported revenue of $908 million for the quarter ended September 2025, reflecting an 8.2% increase year-over-year and surpassing the Zacks Consensus Estimate of $868.76 million by 4.52% [1] - The company's EPS for the quarter was $1.59, compared to $1.17 in the same quarter last year, resulting in an EPS surprise of 35.9% [1] Financial Performance - Revenue breakdown by geography: - Americas: $382 million, exceeding the estimated $366.74 million - Europe: $367 million, above the estimated $361.4 million - Asia: $159 million, surpassing the estimated $140.22 million [4] - Net sales in specific segments: - Aftermarket: $359 million, below the estimated $367.38 million - Fuel Systems: $549 million, exceeding the estimated $531.41 million [4] Market Performance - Phinia's shares have returned -3.8% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change, indicating potential underperformance in the near term [3]

Financial Performance - PHINIA's net sales for Q3 2025 reached $908 million, an increase of $69 million or 8% compared to $839 million in Q3 2024[120] - Gross profit for Q3 2025 was $200 million, up from $187 million in Q3 2024, resulting in a gross profit margin of 22%[120] - Net earnings for Q3 2025 were $13 million, a decrease from $31 million in Q3 2024, leading to a net earnings per diluted share of $0.33 compared to $0.70 in the prior year[119][132] - Net sales for the nine months ended September 30, 2025, totaled $2,594 million, an increase of $24 million, or 1%, compared to the same period in 2024[142] - Net earnings for the nine months ended September 30, 2025, were $85 million, or 3.2% of net sales, compared to $74 million, or 3.0% in 2024[141] - The Company's net earnings per diluted share increased to $2.10 for the nine months ended September 30, 2025, up from $1.63 in 2024[154] Cost and Expenses - The cost of sales for Q3 2025 was $708 million, maintaining a cost percentage of 78% of net sales, consistent with Q3 2024[120] - SG&A expenses for Q3 2025 were $105 million, down from $108 million in Q3 2024, with SG&A as a percentage of net sales decreasing from 13% to 12%[122] - Other operating expenses increased significantly to $57 million in Q3 2025 from $7 million in Q3 2024, primarily due to $39 million in separation-related costs[125] - Total cost of sales for the nine months ended September 30, 2025, was $2,025 million, representing 78.1% of net sales, compared to $2,003 million and 77.9% in 2024[142] - Corporate expenses not allocated to Segment AOI were $75 million for the nine months ended September 30, 2025, compared to $63 million in 2024[158] - Interest expense decreased to $60 million for the nine months ended September 30, 2025, down from $81 million in 2024, primarily due to debt restructuring[151] Segment Performance - The Fuel Systems segment reported net sales of $1,727 million for the nine months ended September 30, 2025, representing 66.6% of total net sales, while the Aftermarket segment reported $1,035 million, or 39.9%[141] - Segment Adjusted Operating Income (AOI) for the Fuel Systems segment was $73 million with a margin of 13.3% for the three months ended September 30, 2025, compared to $55 million and 11.4% in 2024[138][139] - The Aftermarket segment's Segment AOI decreased to $54 million with a margin of 15.0% for the three months ended September 30, 2025, down from $56 million and 15.8% in 2024[139] - For the nine months ended September 30, 2025, net sales for the Fuel Systems segment were $1,559 million with a Segment AOI of $180 million, resulting in a margin of 11.5%, compared to $1,529 million and $162 million (10.6% margin) for the same period in 2024[160] - The Aftermarket segment reported net sales of $1,035 million and a Segment AOI of $163 million for the nine months ended September 30, 2025, with a margin of 15.7%, down from $1,041 million and $169 million (16.2% margin) in 2024[161] - The total net sales for the company for the nine months ended September 30, 2025, were $2,594 million, with a total Segment AOI of $343 million[160] Tax and Liquidity - The effective tax rate for Q3 2025 was 32%, down from 42% in Q3 2024, influenced by favorable tax adjustments despite a significant loss related to separation claims[130] - The effective tax rate for the nine months ended September 30, 2025, was 41%, a decrease from 49% in 2024, attributed to a change in the jurisdictional mix of pre-tax earnings[152] - As of September 30, 2025, the company had liquidity of $848 million, consisting of $349 million in cash and cash equivalents and $499 million available on its revolving credit facility[162] - The company expects to maintain sufficient liquidity and compliance with all covenants for at least the next 12 months[162] Future Outlook - PHINIA expects a decline in light vehicle volumes by low-single digit percentages in 2025, with commercial vehicle volumes expected to remain flat[113] - The acquisition of Swedish Electromagnet Invest AB for $47 million is anticipated to generate approximately $50 million in annual revenue and $10 million in adjusted EBITDA[111] - PHINIA maintains a positive long-term outlook, focusing on new product development and market share expansion in the commercial vehicle sector[115] Cash Flow - Net cash provided by operating activities decreased to $216 million for the nine months ended September 30, 2025, from $235 million in 2024, primarily due to increased working capital demands[166] - Net cash used in investing activities increased to $103 million in 2025 from $84 million in 2024, mainly due to capital expenditures and the SEM acquisition, representing 3.7% of sales in 2025 compared to 3.3% in 2024[167] - Net cash used in financing activities rose significantly to $245 million in 2025 from $61 million in 2024, primarily due to stock repurchases and debt repayment[168] Currency and Adjustments - The company reported a pre-tax loss of $6 million for the designated net investment hedge as of September 30, 2025, compared to a loss of $11 million at the end of 2024[173] - Currency translation adjustments for the nine months ended September 30, 2025, included a 13% increase against the Euro, resulting in a $75 million impact on other comprehensive income[175]

Core Insights - Phinia (PHIN) reported quarterly earnings of $1.59 per share, exceeding the Zacks Consensus Estimate of $1.17 per share, and showing a year-over-year increase from $1.17 per share [1] - The company achieved revenues of $908 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.52% and up from $839 million a year ago [2] - Phinia's stock has increased approximately 14.1% year-to-date, compared to a 16.9% gain for the S&P 500 [3] Earnings Performance - The earnings surprise for the recent quarter was +35.90%, following a previous surprise of +28.28% when earnings were $1.27 per share against an expectation of $0.99 [1][2] - Over the last four quarters, Phinia has exceeded consensus EPS estimates two times and revenue estimates three times [2] Future Outlook - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $1.16 for the upcoming quarter and $4.55 for the current fiscal year [7] - The Zacks Rank for Phinia is currently 4 (Sell), indicating expectations of underperformance in the near future due to unfavorable estimate revisions prior to the earnings release [6] Industry Context - Phinia operates within the Zacks Automotive - Original Equipment industry, which is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable industry backdrop [8] - The performance of Phinia's stock may also be influenced by the overall outlook for the automotive industry [8]

Financial Data and Key Metrics Changes - The company reported record net sales of $908 million for Q3 2025, an increase of 8.2% year-over-year, benefiting from the SEM acquisition, favorable foreign exchange, and customer pricing related to tariff recoveries [7][18] - Adjusted EBITDA reached $133 million with a margin of 14.6%, reflecting a 30 basis point year-over-year expansion, primarily due to lower R&D expenses and strong performance from the fuel systems segment [7][8] - Adjusted earnings per share increased to $1.59, up from $1.17 in the same period last year [8] Business Line Data and Key Metrics Changes - The fuel systems segment saw sales increase by 13.4%, with a segment margin of 13.3%, up 190 basis points year-over-year, driven by supply chain savings and productivity improvements [19][20] - The aftermarket segment's sales were slightly up year-over-year, but the margin decreased by 80 basis points to 15% due to an unfavorable product mix [20] Market Data and Key Metrics Changes - The company experienced increased volumes in Asia and the Americas, contributing to the overall sales growth [7][19] - The integration of SEM is expected to contribute approximately $50 million in annual sales, although initial headwinds are anticipated due to market challenges [21][39] Company Strategy and Development Direction - The company is focused on enhancing operational efficiency and data visibility by consolidating four ERP systems into a single global SAP S/4HANA platform [6] - A disciplined approach to capital allocation is being maintained, with $26 million invested in capital expenditures during Q3, primarily for new tooling and equipment [14] - The company is exploring selective M&A opportunities to enhance product offerings and increase market presence [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic and industry outlook but emphasized a focus on operational efficiency and sustainable performance [7][10] - The company has adjusted its 2025 guidance to account for the SEM acquisition and external factors, raising the midpoint of revenue guidance by $40 million [16][24] - The expected adjusted tax rate has improved to a range of 33% to 37%, reflecting ongoing tax structuring projects [25] Other Important Information - The company reached an agreement with its former parent to resolve litigation, with expectations that settlement payments will be offset by tax recoveries [9][22] - Cash and cash equivalents stood at $349 million, with total liquidity of approximately $900 million, maintaining a solid balance sheet [15][23] Q&A Session Summary Question: Inquiry on sales growth excluding acquisition and currency impact - Management indicated that the 5.1% sales growth was balanced between pricing, tariff recoveries, and increased volumes [29][30] Question: Impact of pricing and tariff recovery on future margins - Management confirmed that pricing linked to tariffs is expected to remain sticky, affecting EBITDA margins [30][31] Question: Aerospace program's impact on future business - Management noted increased interest from aerospace companies following the launch of their first aerospace program, anticipating additional awards [32][33] Question: Commentary on fourth quarter guidance and SEM's performance - Management explained that SEM's expected contribution in Q4 is lower due to seasonal factors and initial integration challenges [37][39] Question: Impact of Ford fuel pump recall on cash flow - Management reported no cash impacts from the recall and no adjustments to warranty accruals [49][50] Question: Timing and realization of restructuring program savings - Management indicated that the restructuring program is rolling out now, with full realization of savings expected by 2028 [51][52]

Financial Data and Key Metrics Changes - The company reported record net sales of $908 million for Q3 2025, an increase of 8.2% year-over-year, benefiting from the SEM acquisition, favorable foreign exchange, and customer pricing related to tariff recoveries [7][18] - Adjusted EBITDA reached $133 million with a margin of 14.6%, reflecting a 30 basis point year-over-year expansion, primarily due to lower R&D expenses and strong performance from the fuel systems segment [7][8] - Adjusted earnings per share increased to $1.59 from $1.17 in the same period last year [8] Business Line Data and Key Metrics Changes - The fuel systems segment saw sales increase by 13.4%, with a segment margin of 13.3%, up 190 basis points year-over-year, driven by supply chain savings and productivity improvements [19][20] - The aftermarket segment's sales were slightly up year-over-year, but the margin decreased by 80 basis points to 15% due to unfavorable product mix [20] Market Data and Key Metrics Changes - The company experienced increased volumes in Asia and the Americas, contributing to the overall sales growth [7][19] - The integration of SEM is expected to contribute approximately $50 million in annual sales, although initial headwinds are anticipated due to market challenges [21][39] Company Strategy and Development Direction - The company is focused on enhancing efficiency and data visibility by consolidating four ERP systems into a single global SAP S/4HANA platform [6] - A disciplined approach to capital allocation is being maintained, with $26 million invested in capital expenditures during Q3, primarily for new tooling and equipment [14] - The company is exploring selective M&A opportunities to enhance product offerings and increase market presence [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic and industry outlook but emphasized a focus on operational and cost efficiency initiatives [7] - The company has adjusted its 2025 revenue outlook to account for the SEM acquisition and external factors, raising the midpoint by $40 million [16][24] - Management expressed confidence in generating solid returns despite challenges from low-margin tariff recoveries and market volatility [25] Other Important Information - The company reached an agreement with its former parent company to resolve litigation, expecting that settlement payments will be offset by tax recoveries [9][22] - Cash and cash equivalents stood at $349 million, with total liquidity of approximately $900 million, maintaining a net leverage ratio of 1.4 times [15][23] Q&A Session Summary Question: Inquiry about sales growth excluding acquisition and currency impact - Management indicated that the 5.1% sales growth was balanced between pricing, tariff recoveries, and increased volumes [29] Question: Discussion on pricing and tariff recovery sustainability - Management noted that pricing linked to tariffs is expected to remain sticky unless tariffs are removed, impacting EBITDA margins [30] Question: Impact of aerospace program on customer interest - Management confirmed that successful delivery of aerospace components is expected to attract more inquiries from major engine manufacturers [32] Question: Commentary on Q4 guidance and SEM's performance - Management highlighted that Q4 typically sees lighter volumes and that SEM's initial performance may face headwinds due to seasonal factors [38][39] Question: Clarification on factors affecting EBIT flow-through in fuel systems - Management explained that low margins on certain components, such as ECUs, impacted EBIT flow-through despite strong productivity improvements [44] Question: Update on Ford fuel pump recall impact - Management reported no cash impacts or concerns related to the Ford fuel pump recall [50] Question: Timing and realization of restructuring program savings - Management indicated that the restructuring program is rolling out now, with full realization of savings expected by 2028 [52][53]

Financial Data and Key Metrics Changes - The company reported record net sales of $908 million for Q3 2025, an increase of 8.2% year-over-year, benefiting from the SEM acquisition, favorable foreign exchange, and increased volume in Asia and the Americas [6][18] - Adjusted EBITDA reached $133 million with a margin of 14.6%, reflecting a 30 basis point year-over-year expansion, primarily due to lower R&D expenses and strong performance from the fuel systems segment [6][8] - Adjusted earnings per share increased to $1.59, up from $1.17 in the same period last year [8] Business Line Data and Key Metrics Changes - The fuel systems segment saw sales increase by 13.4%, with a segment margin of 13.3%, up 190 basis points year-over-year, driven by supply chain savings and productivity improvements [19] - The aftermarket segment's sales were slightly up year-over-year, with a margin of 15%, down 80 basis points due to unfavorable product mix [20] Market Data and Key Metrics Changes - The company experienced increased sales volumes in Asia and the Americas, contributing to overall revenue growth [6][19] - The impact of foreign exchange was a favorable $19 million, while the SEM acquisition contributed an additional $8 million to net sales [18][19] Company Strategy and Development Direction - The acquisition of SEM is expected to enhance the company's ignition and electronic control capabilities, creating a platform for innovation and efficiency [5] - The company is consolidating four ERP systems into a single global SAP S/4HANA platform to enhance efficiency and data visibility [5] - The company is focused on operational and cost efficiency initiatives to drive sustainable performance across all markets [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic and industry outlook but emphasized a commitment to operational efficiency and customer value [6] - The company adjusted its 2025 revenue guidance upward by $40 million, reflecting contributions from SEM and favorable market conditions [16][25] - Management expressed confidence in generating solid returns despite challenges from tariffs and market volatility [26] Other Important Information - The company returned $41 million to shareholders through dividends and share repurchases during the quarter, maintaining a solid balance sheet with cash and cash equivalents of $349 million [15][24] - The company expects to incur restructuring charges of approximately $35 million to optimize its operations, with an estimated $25 million in annual savings [26] Q&A Session Summary Question: Can you provide more detail on the 5.1% sales increase excluding acquisition and currency impacts? - Management indicated that the increase was balanced between pricing, tariff recoveries, and volume growth [30] Question: Will pricing remain sticky moving forward? - Management stated that pricing linked to tariffs is expected to remain stable unless tariffs are removed, impacting EBITDA margins [31] Question: How is the aerospace program progressing? - Management confirmed increased interest from aerospace companies and expects additional awards in the coming quarters [34] Question: What is the guidance for SEM in Q4? - Management noted that Q4 typically sees lighter sales due to seasonality, with SEM expected to contribute around $7 million [39] Question: What impact is the Ford fuel pump recall having on cash? - Management reported no cash impacts or adjustments to warranty accruals related to the recall [50] Question: When will the restructuring program be fully realized? - Management indicated that the restructuring program is rolling out now, with full realization of savings expected by 2028 [52]

Q3 2025 EARNINGS October 28, 2025 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements are statements other than historical fact that provide current expectations or forecasts of future events based on certain assumptions and are not guarantees of future performance. Forward-looking statements use words such as "anticipate," "believe," "continue," "could," "designed," "effect," "estimate," "evaluate," ...

Financial Performance - Net sales for Q3 2025 reached $908 million, an increase of 8.2% compared to Q3 2024, with adjusted sales increasing by 5.1% after excluding foreign currency impacts and the SEM acquisition[4] - Net earnings for Q3 2025 were $13 million, a decrease of $18 million year-over-year, resulting in a net margin of 1.4%, down 230 basis points[4] - Adjusted EBITDA for Q3 2025 was $133 million, reflecting a year-over-year increase of $13 million, with an adjusted EBITDA margin of 14.6%[4] - Adjusted sales for the three months ended September 30, 2025, were $908 million, representing a 8.4% increase from $838 million in the same period of 2024[33] - Adjusted EBITDA for the three months ended September 30, 2025, was $133 million, up 10.8% from $120 million in the same period of 2024[34] - Net earnings for the three months ended September 30, 2025, were $13 million, a decrease of 58.1% compared to $31 million in the same period of 2024[35] - Adjusted free cash flow for Q3 2025 was $104 million, compared to $60 million in Q3 2024, primarily due to higher earnings adjusted for non-cash charges[7] - Adjusted free cash flow for the three months ended September 30, 2025, was $104 million, an increase of 73.3% from $60 million in the same period of 2024[37] Debt and Cash Position - Cash and cash equivalents at the end of Q3 2025 were $349 million, with total debt at $992 million[6] - Total debt as of September 30, 2025, was $992 million, slightly up from $988 million as of December 31, 2024[23] - Net debt increased to $643 million as of September 30, 2025, compared to $504 million as of December 31, 2024[23] - Cash and cash equivalents at the end of the period were $349 million, down from $477 million at the end of the previous quarter[22] Acquisitions and Investments - The company completed the acquisition of Swedish Electromagnet Invest AB for approximately $47 million, enhancing its capabilities in alternative fuel ignition systems[4] - The company reported capital expenditures of $26 million for the three months ended September 30, 2025, compared to $25 million in the same period of 2024[22] Shareholder Returns - The company returned $41 million to shareholders through share repurchases and dividends[4] New Business and Product Development - New product developments include next-generation canister technology for PHEVs and a brushless alternator for industrial applications[4] - The company secured new business with a leading Chinese OEM for gasoline direct injection fuel rail assembly and controller[4] Guidance - Full year 2025 guidance projects net sales between $3.39 billion and $3.45 billion, with net earnings expected to be $100 million to $110 million[8] Operating Activities - For the three months ended September 30, 2025, net cash provided by operating activities was $119 million, an increase of 25.3% compared to $95 million in the same period of 2024[22]