Q2 2025 Financial Performance - Revenue reached $943 million[14], exceeding guidance, but down approximately 9% year-over-year due to divestitures[19,36] - Adjusted Operating Income was $179 million[15], above guidance[6] - Adjusted EPS was $0.87[17], exceeding guidance[6] - Free Cash Flow was $116 million[17], with a conversion rate of 91%[6,17], up 20 percentage points year-over-year[6,19] Segment Performance - Performance Sensing Net Revenue decreased by 9.9% year-over-year to $652.2 million[23], or 6.1% organically[23] - Sensing Solutions Net Revenue increased by 8.6% year-over-year to $291.2 million[23], or 10.7% organically[23] Capital Allocation and Leverage - Net leverage ratio decreased to 3.0x[21] from 3.1x as of March 31, 2025[21] - Approximately 0.7 million shares were repurchased in Q2, and 4.2 million year-to-date[21] Q3 2025 Financial Guidance - Revenue is expected to be between $900 million and $930 million[31], a decrease of 1% to 5% sequentially[31] - Adjusted EPS is expected to be between $0.81 and $0.87[31], in line with Q2[31]

[Financial Results Overview](index=1&type=section&id=SENSATA%20TECHNOLOGIES%20REPORTS%20SECOND%20QUARTER%202025%20FINANCIAL%20RESULTS) [Second Quarter 2025 Financial Results](index=1&type=section&id=Operating%20Results%20-%20Second%20Quarter) In the second quarter of 2025, Sensata reported revenue of $943.4 million, an 8.9% decrease year-over-year, primarily due to divestitures and product lifecycle management actions, while GAAP operating margin improved to 14.6% and free cash flow reached $115.5 million - The CEO highlighted that the company's "back-to-basics" approach led to exceeding revenue and earnings commitments and a **significant improvement in free cash flow**[2](index=2&type=chunk) Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $943.4 | $1,035.5 | -$92.2 | -8.9% | | Operating Income (GAAP) | $138.1 | $129.9 | +$8.1 | +6.2% | | Operating Margin (GAAP) | 14.6% | 12.5% | +210 bps | N/A | | Adjusted Operating Income | $179.1 | $196.7 | -$17.6 | -8.9% | | Adjusted Operating Margin | 19.0% | 19.0% | 0 bps | N/A | | EPS (GAAP) | $0.41 | $0.47 | -$0.06 | -12.8% | | Adjusted EPS | $0.87 | $0.92 | -$0.05 | -5.4% | - The company generated **$115.5 million** in free cash flow and ended the quarter with **$661.8 million** in cash[5](index=5&type=chunk) [Six Months 2025 Financial Results](index=2&type=section&id=Operating%20Results%20-%20Six%20Months) For the first six months of 2025, revenue decreased by 9.2% year-over-year to $1,854.6 million, attributed to divestitures and product lifecycle management, with GAAP operating margin slightly increasing and free cash flow robust at $202.1 million Six Months 2025 Key Financial Metrics (vs. Six Months 2024) | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change (in millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,854.6 | $2,042.2 | -$187.6 | -9.2% | | Operating Income (GAAP) | $260.3 | $274.7 | -$14.5 | -5.3% | | Operating Margin (GAAP) | 14.0% | 13.5% | +50 bps | N/A | | Adjusted Operating Income | $345.6 | $385.2 | -$39.6 | -10.3% | | Adjusted Operating Margin | 18.6% | 18.9% | -30 bps | N/A | | EPS (GAAP) | $0.88 | $0.98 | -$0.10 | -10.2% | | Adjusted EPS | $1.65 | $1.81 | -$0.16 | -8.8% | - Free cash flow for the six months ended June 30, 2025, was **$202.1 million**[11](index=11&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) Sensata actively returned capital to shareholders during the first half of 2025, totaling $156.1 million, with $37.7 million returned in the second quarter through share repurchases and quarterly dividends Capital Returned to Shareholders | Period | Share Repurchases (in millions) | Dividends Paid (in millions) | Total Return (in millions) | | :--- | :--- | :--- | :--- | | Q2 2025 | $20.1 | $17.6 | $37.7 | | H1 2025 | $120.6 | $35.5 | $156.1 | [Business Outlook](index=3&type=section&id=Guidance) [Third Quarter 2025 Guidance](index=3&type=section&id=Guidance) For the third quarter of 2025, Sensata anticipates revenue between $900 million and $930 million, with adjusted EPS projected to be in the range of $0.81 to $0.87, including an expected $15 million from tariff cost recovery Q3 2025 Guidance | Metric | Q3-25 Guidance Range (in millions) | | :--- | :--- | | Revenue | $900 - $930 | | Adjusted Operating Income | $171 - $179 | | Adjusted Operating Margin | 19.0% - 19.2% | | Adjusted Net Income | $119 - $127 | | Adjusted EPS | $0.81 - $0.87 | - The revenue guidance includes approximately **$15 million** related to expected tariff recovery from customers, which is expected to be offset by a corresponding tariff expense, resulting in no impact on adjusted earnings metrics[14](index=14&type=chunk)[15](index=15&type=chunk) [Segment and Revenue Analysis](index=10&type=section&id=Segment%20Performance) [Segment Performance](index=10&type=section&id=Segment%20Performance) For the first six months of 2025, the Performance Sensing segment's revenue declined to $1.30 billion, while the Sensing Solutions segment grew its revenue to $552.0 million and demonstrated higher profitability with a 29.7% operating margin Segment Financials for the Six Months Ended June 30 | Segment | Revenue 2025 (in millions) | Revenue 2024 (in millions) | Operating Income 2025 (in millions) | Operating Income 2024 (in millions) | Operating Margin 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Performance Sensing | $1,302.6 | $1,437.2 | $289.8 | $330.4 | 22.2% | | Sensing Solutions | $552.0 | $525.9 | $164.1 | $152.0 | 29.7% | [Revenue Breakdown](index=10&type=section&id=Revenue%20by%20Business%2C%20Geography%2C%20and%20End%20Market) The revenue mix for the first half of 2025 shows a shift towards the Sensing Solutions business, which grew to 29.8% of total revenue, with Asia's geographic contribution increasing and Automotive remaining the largest end market contributor [Revenue by Business](index=10&type=section&id=Revenue%20by%20Business) In the first six months of 2025, the Sensing Solutions segment's contribution to total revenue increased to 29.8% from 25.8% in the prior year, while Performance Sensing's share slightly decreased to 70.2% Revenue Mix by Business (Six Months Ended June 30) | Business | % of Total Revenue 2025 | % of Total Revenue 2024 | | :--- | :--- | :--- | | Performance Sensing | 70.2% | 70.4% | | Sensing Solutions | 29.8% | 25.8% | | Other | 0.0% | 3.8% | [Revenue by Geography](index=10&type=section&id=Revenue%20by%20Geography) The geographic revenue mix for the first half of 2025 saw the Americas' share decrease to 40.6% from 43.5% year-over-year, while Asia/Rest of World's share grew to 31.5% from 29.0% Revenue Mix by Geography (Six Months Ended June 30) | Geography | % of Total Revenue 2025 | % of Total Revenue 2024 | | :--- | :--- | :--- | | Americas | 40.6% | 43.5% | | Europe | 27.9% | 27.5% | | Asia/Rest of World | 31.5% | 29.0% | [Revenue by End Market](index=10&type=section&id=Revenue%20by%20End%20Market) For the first six months of 2025, the Automotive end market slightly increased its share of total revenue to 57.1%, with Industrial and Aerospace also seeing their revenue contributions grow Revenue Mix by End Market (Six Months Ended June 30) | End Market | % of Total Revenue 2025 | % of Total Revenue 2024 | | :--- | :--- | :--- | | Automotive | 57.1% | 55.8% | | Heavy vehicle and off-road | 17.2% | 18.5% | | Industrial | 16.2% | 13.5% | | Aerospace | 5.1% | 4.5% | [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2025, Sensata reported Net Revenue of $1.85 billion, down from $2.04 billion in the prior year, with Operating Income at $260.3 million and Net Income at $130.6 million Statement of Operations Summary (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net revenue | $1,854,639 | $2,042,244 | | Operating income | $260,258 | $274,739 | | Net income | $130,587 | $147,724 | | Diluted EPS | $0.88 | $0.98 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Sensata's balance sheet showed total assets of $7.27 billion, a slight increase from year-end 2024, with cash and cash equivalents rising to $661.8 million and total liabilities at $4.39 billion Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $661,777 | $593,670 | | Total current assets | $2,240,020 | $2,027,239 | | Total assets | $7,270,072 | $7,143,264 | | Total liabilities | $4,389,861 | $4,252,821 | | Total shareholders' equity | $2,880,211 | $2,890,443 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities was $260.1 million, with $33.6 million used in investing activities and $160.8 million used in financing activities, primarily for share repurchases and dividends Cash Flow Summary (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $260,103 | $249,943 | | Net cash used in investing activities | ($33,606) | ($85,194) | | Net cash (used in)/provided by financing activities | ($160,776) | $365,090 | | Net change in cash and cash equivalents | $68,107 | $524,948 | [Non-GAAP Reconciliations and Definitions](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Non-GAAP Financial Measures Definitions](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Sensata supplements its GAAP financial reporting with non-GAAP measures such as adjusted net income, adjusted EPS, adjusted operating income, free cash flow, and adjusted EBITDA, which management uses for internal decision-making and to provide useful comparisons of underlying business trends - The company utilizes several non-GAAP financial measures to evaluate its business performance, including **Adjusted net income and adjusted EPS**, **Adjusted operating income and margin**, **Free cash flow**, **Organic revenue growth**, **Adjusted EBITDA**, and **Net debt and leverage ratios**[18](index=18&type=chunk)[21](index=21&type=chunk) [GAAP to Non-GAAP Reconciliations](index=11&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP results to the company's non-GAAP metrics, showing how GAAP net income of $60.7 million was adjusted to an adjusted net income of $127.3 million for Q2 2025, and how free cash flow and adjusted EBITDA are derived [Operating Income, Net Income, and EPS Reconciliation](index=11&type=section&id=Operating%20income%20and%20margin%2C%20income%20tax%2C%20net%20income%2C%20and%20earnings%20per%20share) For Q2 2025, GAAP operating income of $138.1 million was adjusted by $41.0 million for items like restructuring and amortization to reach an adjusted operating income of $179.1 million, while GAAP net income of $60.7 million was adjusted by $66.7 million to arrive at an adjusted net income of $127.3 million Q2 2025 GAAP to Non-GAAP Reconciliation (in thousands) | Metric | Reported (GAAP) | Total Adjustments | Adjusted (non-GAAP) | | :--- | :--- | :--- | :--- | | Operating Income | $138,062 | $41,011 | $179,073 | | Net Income | $60,668 | $66,652 | $127,320 | | Diluted EPS | $0.41 | $0.45 | $0.87 | [Free Cash Flow Reconciliation](index=13&type=section&id=Free%20cash%20flow) Free cash flow for Q2 2025 was $115.5 million, calculated from $140.9 million in net cash from operating activities less $25.4 million in capital expenditures, representing a 17.4% increase compared to the same period in 2024 Free Cash Flow Calculation (Q2 2025, in thousands) | Metric | Amount | | :--- | :--- | | Net cash provided by operating activities | $140,904 | | Less: Additions to PP&E and capitalized software | ($25,385) | | **Free cash flow** | **$115,519** | [Adjusted EBITDA Reconciliation](index=14&type=section&id=Adjusted%20EBITDA) For the last twelve months (LTM) ending June 30, 2025, Sensata's adjusted EBITDA was $840.3 million, derived from a net income of $111.3 million, adjusted for interest, taxes, D&A, and other non-GAAP items Adjusted EBITDA Calculation (LTM, in thousands) | Metric | Amount | | :--- | :--- | | Net income | $111,340 | | Interest expense, net | $136,790 | | (Benefit from)/provision for income taxes | ($124,330) | | Depreciation & Amortization | $284,324 | | Other Non-GAAP Adjustments | $432,145 | | **Adjusted EBITDA** | **$840,269** | [Debt and Leverage Reconciliation](index=14&type=section&id=Gross%20and%20net%20debt%20and%20leverage) As of June 30, 2025, the company's net debt was $2.56 billion, resulting in a net leverage ratio of 3.0x when compared to an LTM adjusted EBITDA of $840.3 million, consistent with the end of 2024 Net Leverage Ratio (as of June 30, 2025, in thousands) | Metric | Amount | | :--- | :--- | | Total gross indebtedness | $3,222,124 | | Less: cash and cash equivalents | ($661,777) | | **Net debt** | **$2,560,347** | | Adjusted EBITDA (LTM) | $840,269 | | **Net leverage ratio** | **3.0x** | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) [Conference Call and Webcast](index=3&type=section&id=Conference%20Call%20and%20Webcast) Sensata will host a conference call and webcast at 5:00 p.m. Eastern Time on the day of the release to discuss the second quarter 2025 financial results and provide an outlook for the third quarter - A conference call is scheduled for 5:00 p.m. Eastern Time to discuss Q2 2025 results, with a live webcast available on the investor relations page of Sensata's website[16](index=16&type=chunk) [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) This earnings release contains forward-looking statements regarding future financial and operating results, which are subject to various risks and uncertainties, including global market instability, supplier issues, trade tariffs, and competition - The report includes forward-looking statements that are subject to risks and uncertainties, with key risk factors including **instability in global markets**, **supplier interruption**, **changes in trade-related tariffs**, **competition in dependent industries**, and **cybersecurity incidents**[31](index=31&type=chunk)[32](index=32&type=chunk)

Industry Overview - The Zacks Instruments – Control industry is positioned to benefit from a focus on energy-efficient production processes and integrated software systems, with rising demand for advanced technology to replace legacy industrial controls driving growth [1] - The industry comprises manufacturers of precision and specialty motion-control components and systems used across various sectors, providing solutions for flow measurement, control, and communication for air, water, and other gases and liquids [3] Growth Drivers - The industry's growth is primarily driven by the emphasis on digitized technologies in manufacturing, such as the Industrial Internet of Things, and the demand for process automation and safety automation systems [4] - Increased adoption of automation and higher investments in new technologies are expected to drive growth, particularly in North America, supported by rising infrastructural investments in the energy sector and favorable government policies [6] Challenges - Elevated customer inventory levels, high capital expenditures for infrastructure upgrades, and intense market volatility may hinder the process automation and instrumentation market [2] - Material cost inflation and rising transportation costs, along with high raw material prices due to geopolitical tensions, are affecting industry players' margins and profitability [5] Market Performance - The Zacks Instruments – Control industry has lagged behind the S&P 500 and the broader Zacks Computer and Technology sector over the past year, gaining only 2.2% compared to the S&P 500's 18.2% and the sector's 23.3% [9] - The industry has a trailing 12-month Enterprise Value-to-EBITDA (EV/EBITDA) ratio of 13.89X, which is below the S&P 500's 17.98X and the sector's 18.29X [12] Notable Companies - **Watts Water Technologies, Inc. (WTS)**: Focuses on water safety and flow control products, benefiting from cost-reduction actions and a strong balance sheet, with a long-term earnings growth expectation of 7.4% and a stock gain of 24.8% in the past year [15] - **Sensata Technologies Holding plc (ST)**: A global industrial technology company specializing in sensor-based solutions, with a long-term earnings growth expectation of 7.3% and a focus on electrification for hybrid and electric vehicles [18][19] - **Thermon Group Holdings, Inc. (THR)**: Provides engineered industrial process heating solutions, with a recent acquisition enhancing its market exposure and a long-term earnings surprise of 12.7% on average in the trailing four quarters [22]

Core Viewpoint - Sensata Technologies Holding (ST) is identified as a strong value stock with a Zacks Rank of 2 (Buy) and an A grade in the Value category, indicating potential for investment based on its valuation metrics [3][8]. Valuation Metrics - ST has a Forward P/E ratio of 9.63, significantly lower than the industry average of 18.52, with a historical range between 5.38 and 10.18 over the past 52 weeks [3]. - The PEG ratio for ST is 1.31, compared to the industry average of 2.22, indicating a favorable valuation relative to expected earnings growth [4]. - ST's P/B ratio stands at 1.7, which is attractive compared to the industry average of 3.78, with historical values ranging from 0.91 to 1.96 [5]. - The P/S ratio for ST is 1.24, significantly lower than the industry average of 2.79, suggesting a better valuation based on revenue [6]. - ST has a P/CF ratio of 8.47, compared to the industry average of 18.80, indicating strong cash flow relative to its market value [7]. Investment Outlook - The combination of these valuation metrics suggests that ST is likely undervalued at present, making it an appealing option for value investors [8].

Core Viewpoint - Sensata (ST) is anticipated to report a year-over-year decline in earnings and revenues for the quarter ended June 2025, which could significantly influence its stock price depending on the actual results compared to estimates [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for July 29, and if the results exceed expectations, the stock may rise; conversely, a miss could lead to a decline [2]. - The Zacks Consensus Estimate predicts quarterly earnings of $0.84 per share, reflecting a year-over-year decrease of 9.7%, with revenues expected to be $933.26 million, down 9.9% from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 1.55% higher, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Sensata is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.27%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Sensata currently holds a Zacks Rank of 2, which, along with the positive Earnings ESP, suggests a high likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Sensata exceeded the expected earnings of $0.72 per share by delivering $0.78, resulting in a surprise of +8.33% [13]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [14]. Conclusion - While Sensata is positioned as a compelling earnings-beat candidate, other factors should also be considered when evaluating the stock ahead of its earnings release [17].

Core Insights - Sensata Technologies Holding plc (ST) has launched the High Efficiency Contactor (HEC), which facilitates voltage transitions from 400V to 800V in electric vehicles (EVs), enhancing system reliability, safety, and efficiency [1][10] - The HEC addresses the challenge of EVs needing to operate with both 400V and 800V systems, as most current chargers still utilize 400V [1][2] - The HEC enables seamless battery reconfiguration, allowing for efficient interfacing with both old and new charging standards [2][10] Product Features - The HEC allows independent access to dual 400V battery packs, supporting battery balancing and limp-home mode, which enhances vehicle reliability and performance [3][10] - It incorporates a hardware-centric safety design with mechanically synchronized contacts, reducing the risk of incorrect switching and enhancing overall safety [4][5] - The system can handle short-circuit events up to 25 kA and mechanical shocks over 90g, while its compact design reduces system components by more than 50% [6][7] Market Position and Challenges - Sensata has a diverse portfolio that includes high-voltage protection and battery management systems, positioning it well in the electrification market [9] - The company faces challenges from global economic uncertainty and changing trade policies, which may impact its quarterly performance [12] - Despite these challenges, ST's stock has underperformed, losing 19% over the past year compared to the industry growth of 10.2% [13]

Group 1 - Sensata Technologies Holding N.V. (ST) has reached a key level of support and is showing potential for a bullish breakout due to a "golden cross" formation, where the 50-day simple moving average has crossed above the 200-day simple moving average [1] - The golden cross indicates a positive trend reversal after a downtrend, suggesting that ST could continue to gain momentum towards higher prices [2] - ST's shares have increased by 9.8% over the past four weeks, and the company holds a 2 (Buy) rating on the Zacks Rank, indicating strong potential for further gains [3] Group 2 - There has been a positive shift in ST's earnings expectations, with one upward revision and no downward changes in the last 60 days, leading to an increase in the Zacks Consensus Estimate [3] - The combination of favorable earnings estimate revisions and the technical breakout signals suggests that investors should monitor ST for potential gains in the near future [4]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true v ...

Company Overview - Sensata Technologies Holding PLC (NYSE: ST) specializes in manufacturing sensors, controls, and electrical protection systems for various applications including automobiles, trucks, airplanes, industrial machines, and HVAC systems [1]. Industry Insights - The company operates in sectors where monitoring for safety and efficiency is critical, indicating a strong market demand for its products [1]. Analyst Background - The analysis is conducted by a financial analyst with a background in petroleum and gas engineering, focusing on technology, infrastructure, and internet services, emphasizing companies with strong fundamentals and growth potential [1].

Core Points - Sensata Technologies, Inc. experienced a data breach that compromised the personal and confidential information of thousands of current and former employees [2][4] - The breach occurred between March 28, 2025, and April 6, 2025, when cybercriminals infiltrated Sensata's computer systems [2] - The exposed information includes names, Social Security numbers, financial account information, payment card information, tax identification numbers, driver's license numbers, medical information, health insurance information, passport numbers, dates of birth, and addresses [5] Legal Actions - Murphy Law Firm is investigating claims on behalf of individuals affected by the data breach and is evaluating legal options, including a potential class action lawsuit [1][3] - The firm specializes in data breach class actions and has a track record of securing favorable recoveries for clients [4]