Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q _________________________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-34652 SENSATA TECHNOLOGIES HOL ...

[First Quarter 2025 Financial Results](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) [Executive Summary](index=1&type=section&id=Executive%20Summary) Sensata's Q1 2025 results surpassed guidance, demonstrating initial success from strategic focus on operational performance and growth - First-quarter financial results exceeded the high end of the company's guidance ranges[2](index=2&type=chunk) - The company is focused on three key pillars: improving operational performance, optimizing capital allocation, and returning to growth[2](index=2&type=chunk) [Operating Results - First Quarter](index=1&type=section&id=Operating%20Results%20-%20First%20Quarter) Sensata's Q1 2025 revenue declined 9.5% to $911.3 million, with adjusted EPS falling 12.4% to $0.78, while generating $86.6 million in free cash flow Q1 2025 vs. Q1 2024 Financial Performance | Metric | Q1 2025 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $911.3M | $1,006.7M | -$95.5M | -9.5% | | Operating Income | $122.2M | $144.8M | -$22.6M | -15.6% | | Adjusted Operating Income | $166.5M | $188.5M | -$22.0M | -11.7% | | EPS | $0.47 | $0.50 | -$0.03 | -6.0% | | Adjusted EPS | $0.78 | $0.89 | -$0.11 | -12.4% | - Generated free cash flow of **$86.6 million** in the first quarter of 2025[5](index=5&type=chunk) - Ended the quarter with **$588.1 million** of cash on hand[5](index=5&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) In Q1 2025, Sensata returned $118.4 million to shareholders through $100.5 million in share repurchases and $17.9 million in dividends - Total capital returned to shareholders in Q1 2025 was approximately **$118.4 million**[7](index=7&type=chunk) - Share repurchases amounted to **$100.5 million**[7](index=7&type=chunk) - Quarterly dividends paid totaled **$17.9 million**, at **$0.12 per share**[7](index=7&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) [Second Quarter 2025 Guidance](index=2&type=section&id=Second%20Quarter%202025%20Guidance) Sensata forecasts Q2 2025 revenue of $910 million-$940 million and adjusted EPS of $0.80-$0.86, with tariff recovery having no net income impact Q2 2025 Guidance | Metric | Q2-25 Guidance Range | Q1-25 Actual | Q/Q Change | | :--- | :--- | :--- | :--- | | Revenue | $910M - $940M | $911.3M | 0% - 3% | | Adjusted Operating Income | $169M - $177M | $166.5M | 1% - 6% | | Adj. Operating Margin | 18.6% - 18.8% | 18.3% | 30 bps - 50 bps | | Adjusted Net Income | $117M - $125M | $116.6M | 0% - 7% | | Adjusted EPS | $0.80 - $0.86 | $0.78 | 3% - 10% | - Guidance includes approximately **$20 million** in revenue related to expected tariff recovery from customers, which is expected to be offset by an equal amount of tariff expense[12](index=12&type=chunk) [Segment and Business Performance](index=9&type=section&id=Segment%20and%20Business%20Performance) [Segment Performance](index=9&type=section&id=Segment%20Performance) In Q1 2025, Performance Sensing revenue declined to $650.4 million, while Sensing Solutions revenue grew to $260.8 million with expanded operating margin Segment Performance (Q1 2025 vs Q1 2024) | Segment | Revenue (Q1 2025) | Revenue (Q1 2024) | Operating Income (Q1 2025) | Operating Income (Q1 2024) | Operating Margin (Q1 2025) | Operating Margin (Q1 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Performance Sensing | $650.4M | $713.3M | $142.9M | $169.0M | 22.0% | 23.7% | | Sensing Solutions | $260.8M | $257.8M | $76.1M | $72.3M | 29.2% | 28.0% | | Other | $0 | $35.6M | $0 | $6.8M | 0.0% | 19.1% | [Revenue by Business, Geography, and End Market](index=9&type=section&id=Revenue%20by%20Business%2C%20Geography%2C%20and%20End%20Market) Q1 2025 revenue mix: Performance Sensing 71.4%, Americas 40.9%, and Automotive 58.3% as the largest end market contributor Revenue Mix (% of Total Revenue) | Category | Sub-Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Business** | Performance Sensing | 71.4% | 70.9% | | | Sensing Solutions | 28.6% | 25.6% | | **Geography** | Americas | 40.9% | 42.6% | | | Europe | 27.7% | 28.3% | | | Asia/Rest of World | 31.4% | 29.1% | | **End Market** | Automotive | 58.3% | 55.9% | | | Heavy vehicle and off-road | 17.0% | 18.8% | | | Industrial | 15.2% | 13.4% | | | Aerospace | 5.2% | 4.6% | [Financial Statements (Unaudited)](index=6&type=section&id=Financial%20Statements%20%28Unaudited%29) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net revenue decreased to $911.3 million from $1,006.7 million, resulting in lower operating income of $122.2 million and net income of $69.9 million Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $911,255 | $1,006,709 | | Total operating costs and expenses | $789,059 | $861,917 | | Operating income | $122,196 | $144,792 | | Income before taxes | $90,641 | $98,591 | | Net income | $69,919 | $76,021 | | Diluted EPS | $0.47 | $0.50 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $7.18 billion, with $588.1 million cash, total liabilities $4.33 billion, and shareholders' equity at $2.85 billion Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $588,139 | $593,670 | | Total current assets | $2,098,227 | $2,027,239 | | Total assets | $7,177,138 | $7,143,264 | | Total current liabilities | $793,594 | $711,358 | | Long-term debt, net | $3,177,278 | $3,176,098 | | Total liabilities | $4,328,504 | $4,252,821 | | Total shareholders' equity | $2,848,634 | $2,890,443 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from operations increased to $119.2 million, with $119.1 million used in financing activities, leading to a $5.5 million net cash decrease Q1 2025 Cash Flow Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $119,199 | $106,487 | | Net cash used in investing activities | ($6,874) | ($42,130) | | Net cash used in financing activities | ($119,147) | ($107,948) | | Net change in cash and cash equivalents | ($5,531) | ($47,745) | | Cash and cash equivalents, end of period | $588,139 | $460,359 | [Supplemental Information](index=2&type=section&id=Supplemental%20Information) [Non-GAAP Reconciliations and Definitions](index=2&type=section&id=Non-GAAP%20Reconciliations%20and%20Definitions) This section reconciles non-GAAP measures like adjusted net income ($116.6 million) and free cash flow, with a net leverage ratio of 3.1x for Q1 2025 Q1 2025 GAAP to Non-GAAP Reconciliation Highlights | Metric | GAAP | Adjustments | Non-GAAP (Adjusted) | | :--- | :--- | :--- | :--- | | Operating Income | $122.2M | $44.3M | $166.5M | | Net Income | $69.9M | $46.7M | $116.6M | | Diluted EPS | $0.47 | $0.31 | $0.78 | Free Cash Flow (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $119,199 | $106,487 | | Additions to PP&E and software | ($32,575) | ($42,130) | | Free cash flow | $86,624 | $64,357 | Leverage Ratios | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Debt | $2,634.6M | $2,629.7M | | Adjusted EBITDA (LTM) | $859.8M | $882.8M | | Net leverage ratio | 3.1x | 3.0x | [Conference Call and Webcast](index=2&type=section&id=Conference%20Call%20and%20Webcast) Sensata will host a conference call at 4:30 p.m. ET to discuss Q1 2025 results and Q2 outlook, with a webcast available online - A conference call is scheduled for **4:30 p.m. Eastern Time** to discuss Q1 2025 results and Q2 2025 outlook[10](index=10&type=chunk) - A live webcast and a replay of the call will be made available on the investor relations page of Sensata's website[10](index=10&type=chunk) [Safe Harbor Statement](index=5&type=section&id=Safe%20Harbor%20Statement) This statement warns investors about forward-looking statements subject to risks like market instability and trade tariffs, advising review of SEC filings - The report includes forward-looking statements concerning future financial and operating results, business outlook, and strategic initiatives[25](index=25&type=chunk) - These statements are subject to risks and uncertainties, including global market instability, supplier interruptions, trade tariffs, and competition[26](index=26&type=chunk) - Investors are advised to consider risk factors detailed in the company's Annual Report on Form 10-K and other SEC filings[27](index=27&type=chunk)

Core Viewpoint - Analysts expect Sensata (ST) to report quarterly earnings of $0.72 per share, reflecting a year-over-year decline of 19.1% and revenues of $879.52 million, down 12.6% from the previous year [1] Earnings Projections - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong link between earnings estimate trends and short-term stock price movements [2] Key Metrics Analysis - Analysts estimate 'Net Revenue- Sensing Solutions' at $245.61 million, indicating a year-over-year decline of 4.7% - The consensus for 'Net Revenue- Performance Sensing' is $635.90 million, reflecting a decrease of 10.9% from the same quarter last year [4] Segment Profit Estimates - Estimated 'Segment Profit- Performance Sensing' is $137.69 million, down from $185.13 million reported in the same quarter last year - 'Segment Profit- Sensing Solutions' is projected to be $69.39 million, compared to $72.48 million reported in the same quarter of the previous year [5] Stock Performance - Sensata shares have increased by 22.3% over the past month, outperforming the Zacks S&P 500 composite's 10.6% increase, but the stock holds a Zacks Rank 4 (Sell), indicating expected underperformance in the near term [6]

Sensata (ST) shares ended the last trading session 18% higher at $20.88. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 35.9% loss over the past four weeks.The increase in share price can attributed to President Trump’s announcement of a 90-day pause on reciprocal tariffs, barring China. This led to subsequent increases for most stocks including Seagate and skyrocketing indices.The rise in ST’s share price can als ...

Sensata Technologies Holding plc (ST) has introduced its latest innovation — the STPS500 series PyroFuse — a pyrotechnic circuit breaker designed to deliver enhanced safety and performance in high-voltage applications up to 1000V. With an ultra-fast disconnect time of less than one millisecond, this compact and lightweight device provides critical protection against electrical faults, such as short circuits or accident-related shocks, making it ideal for automotive, charging infrastructure, aerospace and in ...

Sensata Technologies Holding plc (ST) has launched its new SIM200 Insulation Monitoring Device (IMD), engineered to elevate safety standards in the rapidly evolving electric vehicle (EV) ecosystem. The SIM200 is designed for continuous, active monitoring of unearthed (Isolated Terra) DC systems, including EVs, charging stations and other applications operating above 60 VDC.Electrical isolation is maintained through the use of non-conductive materials like cable insulation, plastic casings on components and ...

Core Viewpoint - Sensata Technologies is facing significant internal and competitive challenges, exacerbated by a difficult macroeconomic environment impacting its end markets [1] Group 1: Company Challenges - The company has experienced painful and frustrating delays in improvement due to its own internal issues [1] - Competitive challenges have intensified, making recovery more difficult for Sensata Technologies [1] Group 2: Market Environment - The macroeconomic environment across Sensata's end markets has become increasingly challenging, further complicating the company's situation [1]

Internal Control and Compliance - The company has identified material weaknesses in its internal control over financial reporting, impacting the accuracy and timeliness of financial results as of December 31, 2024 or 2023[178] - Remediation efforts are underway, including the engagement of third-party consultants and a risk assessment to strengthen internal controls[178] - The company faces risks related to compliance with environmental laws, which could adversely affect demand for its products and overall revenue[165] - Legal and regulatory risks, including potential violations of anti-bribery laws, could disrupt business operations and negatively impact financial condition[164] - The company is exposed to litigation risks that may result in significant expenses and could adversely affect financial results[176] - The company has discovered deficiencies in its trade compliance program, which could lead to governmental enforcement actions and negatively affect business operations[173] Taxation and Financial Impact - The company is subject to various tax regulations across multiple jurisdictions, which could lead to volatility in its global effective tax rate[157] - The implementation of the OECD's Pillar Two framework will establish a global minimum effective tax rate of 15% starting January 1, 2024, potentially increasing the company's tax liabilities[160] - The effective tax rate is expected to fluctuate due to various factors, including foreign tax rate differentials and changes in tax laws[261] - Future audits by tax authorities could impact the company's tax rate and financial condition[161] - The company’s deferred tax assets are recognized based on the likelihood of realization, with significant judgment required in assessing future taxable income and the need for a valuation allowance[372] Financial Performance - Net revenue for the year ended December 31, 2024, decreased by 3.0% compared to the prior year, with an organic decrease of 1.5% after excluding foreign currency exchange rate impacts and divestiture effects[270] - Operating income for the year was $149.3 million, representing 3.8% of total net revenue, a decrease from 4.5% in the previous year[268] - The company reported a net income of $128.5 million, or 3.3% of total net revenue, compared to a net loss of $3.9 million in the prior year[268] - Adjusted operating income for the same period was $748.5 million, resulting in an adjusted operating margin of 19.0%[312] - The adjusted net income for the year ended December 31, 2024, was $519.1 million, leading to an adjusted EPS of $3.44[312] Revenue Segmentation - Performance Sensing generated net revenue of $2,743.6 million, accounting for 69.8% of total net revenue, while Sensing Solutions contributed $1,061.3 million, or 27.0%[268] - Automotive end market net revenue increased by 0.6%, with an organic growth of 1.5% after adjusting for foreign currency changes, driven by content growth[272] - HVOR end market net revenue decreased by 2.7%, with an organic decline of 2.1% after excluding foreign currency effects, primarily due to market decline[273] - Sensing Solutions net revenue decreased by 8.2%, with a 7.9% organic decline after excluding foreign currency impacts, reflecting weakness in industrial content[274] Costs and Expenses - Total operating costs and expenses for the year ended December 31, 2024 were $3,783.5 million, representing 96.2% of net revenue, an increase from 95.5% in the prior year[276] - Operating income decreased by $32.4 million, or 17.8%, to $149.3 million, primarily due to a $150.1 million goodwill impairment charge and a $98.8 million loss on the sale of the Insights Business[286] - Interest expense amounted to $155.8 million, which is 4.0% of total net revenue, down from 4.5% the previous year[268] Goodwill and Impairment - The company recorded a $150.1 million non-cash goodwill impairment charge in Q3 2024, primarily due to a lower long-range financial forecast[283] - The company recorded a non-cash goodwill impairment charge of $321.7 million in Q4 2023 for the Insights reporting unit, representing the entire goodwill balance allocated to that unit[365] - The company evaluates goodwill for impairment annually, with the most recent assessment indicating that no reporting units, except Dynapower, are at risk of failing the goodwill impairment test[368] Cash Flow and Capital Management - Net cash provided by operating activities for fiscal year 2024 was $551.5 million, an increase from $456.7 million in 2023[329] - Free cash flow for fiscal year 2024 was $393.0 million, compared to $272.1 million in 2023[319] - The company anticipates capital expenditures of approximately $150.0 million in fiscal year 2025, funded by cash flows from operations[333] - The company repurchased approximately 1.9 million ordinary shares at a weighted average price of $36.19 during the year ended December 31, 2024, with $403.0 million remaining under the September 2023 share repurchase program[348] Accounting Standards and Disclosures - The company adopted ASU No. 2023-07 on January 1, 2024, which requires annual and interim disclosures of significant segment expenses and other segment items[374] - ASU No. 2023-09, effective after December 31, 2024, will enhance transparency in income tax disclosures, with key changes being assessed for implementation by the year ending December 31, 2025[375] - ASU No. 2024-03, issued in November 2024, mandates detailed disclosures of income taxes paid, including federal, state/local, and foreign taxes, effective for annual periods beginning after December 15, 2026[376] - The company is currently evaluating the impact of ASU No. 2024-03 on its consolidated financial statements and disclosures[377] - The new guidance under ASU No. 2023-07 will be applied retrospectively to all prior periods presented in the Annual Report on Form 10-K for the year ended December 31, 2024[374]

Core Viewpoint - Sensata Technologies Holding plc reported a decline in adjusted earnings per share and revenues for the fourth quarter of 2024, attributed to product lifecycle transitions and divestitures, but exceeded management's expectations due to stronger auto production in key markets [1][2]. Financial Performance - Adjusted EPS for Q4 2024 was 76 cents, down from 81 cents year-over-year, meeting the Zacks Consensus Estimate [1]. - Revenues for the quarter were $907.7 million, an 8.5% decrease from the previous year, but above management's guidance of $870-$900 million and 2.4% higher than consensus estimates [2]. - Adjusted operating income was $175 million, down from $183.7 million in the prior-year quarter, with an adjusted operating margin of 19.3%, an increase of 80 basis points [5]. Segment Performance - Performance Sensing revenues, which account for 71.2% of total revenues, decreased 6.5% year-over-year to $646.7 million, with adjusted operating income dropping to $152 million from $170.6 million [4]. - Sensing Solutions revenues, making up 28.8% of total revenues, were $261 million, down 2.3% year-over-year, with adjusted operating income slightly increasing to $79.4 million [4]. Cash Flow and Shareholder Returns - The company generated $170.7 million in net cash from operating activities, up from $105.1 million a year ago, with free cash flow increasing to $138.9 million from $56.7 million [6]. - Sensata returned $17.9 million to shareholders through dividends and repurchased shares worth $21.6 million [8]. Outlook - Management expects full-year 2025 revenues to stabilize around $3.6 billion, despite a $300 million revenue exit in 2024, with Q1 revenues projected between $870-$890 million, indicating a decline of 4-2% [9][10]. - Adjusted operating margins are anticipated to reach 19% or higher in Q2 2025, with gradual revenue increases expected in the second quarter [9].

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $908 million, exceeding guidance of $870 million to $900 million, but down 8% from $992 million in Q4 2023 [9][12] - Full-year revenue was $3.93 billion, a decrease of approximately 3% from $4.05 billion in 2023, with an adjusted decrease of about 1% after accounting for divestitures [12] - Adjusted operating income for Q4 2024 was $175 million, with a margin of 19.3%, up 80 basis points from 18.5% in Q4 2023 [13] - Full-year adjusted earnings per share was $3.44, down from $3.61 in 2023 [13] - Free cash flow for the year totaled $393 million, with a conversion rate of 76% of adjusted net income, up from 49% in 2023 [10][36] Business Line Data and Key Metrics Changes - Performance Sensing reported revenue of $2.74 billion in 2024, roughly flat year-over-year, with a 24.6% operating margin, down 80 basis points [14] - Sensing Solutions, primarily Industrial and Aerospace, reported revenue of $1.06 billion, an 8% decrease year-over-year, but operating margins increased to 29.5% [15][16] Market Data and Key Metrics Changes - The automotive and heavy vehicle markets contracted, yet Performance Sensing achieved outgrowth of approximately 350 basis points [14] - The industrial end market demand has not yet turned, but there are signs of stabilization in Q4 2024 [15] Company Strategy and Development Direction - The company aims to return to growth, improve operational performance, and optimize capital allocation [23][24] - Focus on innovation and customer relationships to drive growth, particularly in the automotive sector [24][26] - Plans to enhance operational excellence through lean manufacturing and supply chain improvements [30][32] Management's Comments on Operating Environment and Future Outlook - Management expects organic revenue for 2025 to be flat compared to 2024, with a focus on returning to growth in the long term [25][40] - The company is well-positioned with a strong product portfolio to capitalize on opportunities in electrification and HVAC systems [26][27] - Management is optimistic about cash flow generation and plans to prioritize reducing net leverage and share repurchases [33][35] Other Important Information - The company reduced net leverage to under 3x trailing 12-month EBITDA for the first time in three years [10][37] - A quarterly dividend of $0.12 per share was announced for Q1 2025 [39] Q&A Session Summary Question: What drove the outperformance in auto production? - Management noted that the first half of 2024 benefited from stronger internal combustion engine (ICE) performance, particularly in Europe, and expects modest outgrowth in 2025 [49][51] Question: When should the company expect to gain share in the EV business in Europe? - Management indicated that they are well-positioned for upcoming launches, but significant gains may not materialize until 2026 or 2027 [55] Question: How much of the margin expansion is driven by operational improvements versus revenue leverage? - Management stated that while volume is important, operational productivity improvements are expected to drive margin expansion in 2025 [59][61] Question: What enabled the impressive free cash flow conversion in Q4? - The operational team improved inventory management significantly, contributing to the strong free cash flow conversion [63][64] Question: Will growth be more organic or through M&A? - Management emphasized that growth will focus on organic opportunities at this time, particularly in Asia Pacific and China [68][70] Question: What is the company's exposure to tariffs? - Management noted that while there is some exposure, they have a redundant manufacturing structure that allows for flexibility in response to potential tariffs [73][75] Question: What are the opportunities in the Industrial and Aerospace businesses? - Management highlighted potential in thermal management and electrical protection, particularly in heat pumps and leak detection [102][104]