Financial Data and Key Metrics Changes - Gentherm reported record quarterly revenue of $387 million, an increase of 4.1% year-over-year, with revenues excluding foreign currency translation increasing by 2.4% [15][16] - Adjusted EBITDA was $49 million, representing 12.7% of sales, a slight decline from 12.9% in the same quarter last year due to higher material costs and operating expenses [16] - Year-to-date operating cash flow reached $88 million, with net leverage at 0.2x, indicating strong financial health and access to capital [16][17] Business Line Data and Key Metrics Changes - Automotive climate and comfort solutions revenue increased by 8.6% year-over-year, or 7% excluding foreign exchange impacts, offsetting planned revenue decreases from strategic exits [16] - Medical revenue decreased by 0.4% year-over-year, or 1.6% excluding foreign exchange [16] Market Data and Key Metrics Changes - Third quarter automotive new business awards totaled $745 million, bringing the year-to-date total to $1.8 billion, with expectations to exceed $2 billion for the full year [4][11] - Improved performance was noted in China, with several new programs launched with domestic OEMs contributing to growth [5][14] Company Strategy and Development Direction - The company is focused on scaling core technologies across multiple end markets to drive profitable growth, with a commercial funnel of over $300 million in lifetime revenue opportunities [8][10] - Gentherm is actively pursuing M&A opportunities to access new markets and expand its product portfolio, aligning with its core technology platforms [10][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged potential impacts from supply chain disruptions but emphasized ongoing efforts to mitigate risks and maintain visibility [7][38] - The company is increasing the midpoint of its revenue guidance for the year, expecting revenue in the range of $1.47 billion to $1.49 billion, while narrowing the adjusted EBITDA margin range to 11.9% to 12.3% [17][18] Other Important Information - Gentherm is preparing for production in the furniture market, with expectations to start in Q1 of 2026, utilizing existing capacity [8][30] - The company is also focusing on the medical sector, with a significant product announcement anticipated near year-end [9] Q&A Session Summary Question: Factors contributing to momentum in winning conquest business - Management highlighted innovative solutions, strong customer relationships, and a value-added proposition as key factors driving success in securing new business [22][23] Question: Breakdown of the $300 million adjacent market opportunity - The pipeline is roughly divided into a third for furniture, a third for commercial vehicles, and a third for other mobility solutions, with furniture showing rapid adoption [25][26] Question: Near-term production environment and guidance - Management discussed ongoing supply chain issues, including impacts from Jaguar Land Rover and aluminum supply, but noted no significant schedule shifts yet [36][38] Question: Potential markets for adjacent opportunities - The company is evaluating the Indian market, particularly for two-wheelers, as a new growth opportunity [41] Question: Strategic footprint alignment plan and margin progression - Expected savings from the footprint transition will be more pronounced in 2027, with legacy costs falling off and inventory build impacting margins [47][48] Question: M&A strategy focus - M&A efforts will focus on building resilience, accessing new markets, and expanding product offerings, aligning with the company's core strategy [50]

Financial Data and Key Metrics Changes - Gentherm reported record quarterly revenue of $387 million, representing a 4.1% increase year-over-year, with revenues excluding foreign currency translation increasing by 2.4% [18][19] - Adjusted EBITDA was $49 million, or 12.7% of sales, compared to 12.9% in the same quarter last year, reflecting a 20 basis point decline primarily due to higher material costs [19] - Operating cash flow year-to-date reached $88 million, strengthening the company's balance sheet, with net leverage at 0.2 times at the end of the quarter [20] Business Line Data and Key Metrics Changes - Automotive Climate and Comfort Solutions revenue increased by 8.6% year-over-year, or 7% excluding foreign exchange impacts, which offset planned revenue decreases from strategic exits [19] - Medical revenue decreased by 0.4% year-over-year, or 1.6% excluding foreign exchange [19] Market Data and Key Metrics Changes - Third quarter automotive new business awards totaled $745 million, bringing the year-to-date total to $1.8 billion, with expectations to exceed $2 billion for the full year [6][14] - Improved performance was noted in China, with the automotive climate and comfort solutions outperforming actual light vehicle production in key markets by 160 basis points, excluding foreign exchange [7][16] Company Strategy and Development Direction - The company is focused on scaling core technologies across multiple end markets to drive profitable growth, with a commercial funnel of over $300 million in lifetime revenue generated in the last 90 days [10] - Gentherm is preparing to enter the furniture market, with production expected to start in 2026, leveraging existing plant capacity [10][11] - The company is also pursuing M&A opportunities to access new markets and expand its product portfolio, aligning with its core technology platforms [13][51] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding potential supply chain impacts on OEM production but noted that they are actively working with customers and suppliers to mitigate risks [9][40] - The company increased the midpoint of its revenue guidance for the full year to a range of $1.47 billion to $1.49 billion, driven by improved light vehicle industry production expectations [21] Other Important Information - The company is in discussions with several furniture brands for thermal and pneumatic solutions, viewing this as an attractive adjacent market with significant annual volumes and margin profiles [11] - Gentherm's global strategic manufacturing footprint realignment plans are on track to be substantially complete by the end of next year, with significant progress in relocating manufacturing processes [13] Q&A Session Summary Question: Factors contributing to conquest business momentum - Management highlighted innovative solutions, strong commercial relationships with OEMs, and the value proposition provided to end users as key factors driving momentum in winning conquest business [26][28] Question: Breakdown of the $300 million adjacent market opportunity - Management indicated that the pipeline is roughly a third for furniture, a third for commercial vehicles, and a third for other mobility, with furniture showing rapid adoption and expected revenue starting in 2026 [30][32] Question: Near-term production environment and guidance - Management addressed concerns regarding supply chain issues, noting that while there are challenges, they have not seen significant impacts on schedules yet [39][42] Question: Opportunities in adjacent markets - Management discussed the Indian market as an attractive opportunity, particularly for two-wheelers, and emphasized the potential for alternative revenue streams [44][45] Question: Strategic footprint alignment plan and margin progression - Management expects to see incremental savings from the strategic footprint alignment plan, with real savings anticipated more in 2027 [47][48] Question: M&A pipeline focus - Management clarified that M&A efforts will focus on building a more resilient company, providing access to new markets, and broadening the product portfolio [50][51]

Financial Data and Key Metrics Changes - Gentherm reported record quarterly revenue of $387 million, an increase of 4.1% year-over-year, with revenues excluding foreign currency translation increasing by 2.4% [14][15] - Adjusted EBITDA was $49 million, representing 12.7% of sales, a slight decline from 12.9% in the same quarter last year due to higher material costs and operating expenses [15] - Operating cash flow year-to-date reached $88 million, with net leverage at 0.2 times, indicating strong financial health and access to capital [16] Business Line Data and Key Metrics Changes - Automotive climate and comfort solutions revenue increased by 8.6% year-over-year, or 7% excluding foreign exchange, offsetting planned revenue decreases from strategic exits [15] - Medical revenue decreased by 0.4% year-over-year, or 1.6% excluding foreign exchange, highlighting challenges in that segment [15] Market Data and Key Metrics Changes - The company secured $745 million in new automotive business awards in Q3, bringing the year-to-date total to $1.8 billion, on track to exceed $2 billion for the full year [4][10] - Improved performance was noted in China, with several new programs launched with domestic OEMs contributing to growth [5][12] Company Strategy and Development Direction - Gentherm is focused on scaling core technologies across multiple end markets to drive profitable growth, with significant progress in power sports and commercial vehicles [6][7] - The company is preparing to enter the furniture market, with a $300 million commercial funnel identified, indicating a strategic move into adjacent markets [7][25] - M&A is viewed as a critical component for achieving strategic priorities, with a focus on accessing new markets and expanding the product portfolio [9][41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged potential impacts from supply chain disruptions but emphasized proactive measures to mitigate risks [6][31] - The company is increasing its revenue guidance for the full year to a range of $1.47 to $1.49 billion, driven by improved light vehicle production expectations [16] - The strategic footprint realignment is on track for completion by the end of next year, with anticipated savings and margin improvements expected to materialize in 2027 [9][40] Other Important Information - Gentherm's operational excellence initiatives are gaining traction, contributing to improved cash generation and efficiency [5][8] - The company is leveraging existing automotive intellectual property to accelerate new product development in the medical segment [8] Q&A Session Summary Question: Factors contributing to momentum in winning the conquest business with Mercedes-Benz - Management highlighted innovative edge, strong customer relationships, and value proposition as key factors [22][23] Question: Breakdown of the $300 million adjacent market opportunity - Management indicated that the pipeline is roughly a third for furniture, a third for commercial vehicles, and a third for other mobility, with furniture showing rapid adoption [25][26] Question: Near-term production environment and guidance - Management discussed ongoing supply chain issues but noted no significant impacts on Gentherm's schedules yet [31][34] Question: Potential opportunities in the Indian market - Management expressed interest in the Indian market due to its scale and potential for alternative revenue streams, particularly in two-wheelers [35][36] Question: Strategic footprint alignment plan and expected savings - Management indicated that savings from the footprint transitions will be more apparent in 2027, with some legacy costs falling off in 2026 [40][41]

Core Viewpoint - Gentherm reported quarterly earnings of $0.73 per share, exceeding the Zacks Consensus Estimate of $0.64 per share, but down from $0.75 per share a year ago, indicating a mixed performance in earnings despite a positive surprise [1][2] Financial Performance - The company achieved revenues of $386.87 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.16% and showing an increase from $371.51 million year-over-year [2] - Over the last four quarters, Gentherm has surpassed consensus EPS estimates two times and topped revenue estimates three times [2] Stock Performance and Outlook - Gentherm shares have declined approximately 14% since the beginning of the year, contrasting with the S&P 500's gain of 13.9%, indicating underperformance in the market [3] - The company's earnings outlook is crucial for future stock movements, with current consensus EPS estimates at $0.53 for the upcoming quarter and $2.21 for the current fiscal year [4][7] Industry Context - The Automotive - Original Equipment industry, to which Gentherm belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable industry backdrop [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Gentherm's stock performance [5]

2025 Third Quarter Results October 23, 2025 Proprietary © Gentherm Forward-Looking Statements Except for historical information contained herein, statements in this presentation are forward-looking statements that are made by Gentherm Incorporated (the "Company") pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements that address future operating, financial or business performance or strategies or expectations are forward-looking statements. The forwar ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q3 2025 Performance Overview](index=1&type=section&id=Q3%202025%20Performance%20Overview) Gentherm reported record quarterly revenue of $387 million in Q3 2025, alongside strong year-to-date operating cash flow of $88 million, secured $745 million in Automotive New Business Awards, and raised its full-year 2025 revenue guidance midpoint - Achieved **Record Quarterly Revenue of $387 million**[3](index=3&type=chunk) - Reported **Strong Year to Date Operating Cash Flow of $88 million**[3](index=3&type=chunk) - Secured **$745 million of Automotive New Business Awards** in the Quarter, on pace to deliver over **$2 billion** for the year[3](index=3&type=chunk)[4](index=4&type=chunk) - **Revenue Mid-point Raised** in 2025 Full Year Guidance Update[3](index=3&type=chunk) [Q3 2025 Key Highlights](index=1&type=section&id=Q3%202025%20Key%20Highlights) Gentherm achieved significant commercial momentum with new business awards, including a conquest lumbar and massage comfort solution for Mercedes-Benz, while product revenues increased 4.1% year-over-year, driven by Automotive Climate and Comfort Solutions - Secured Automotive New Business Awards totaling **$745 million**, highlighted by a conquest lumbar and massage comfort solutions award with Mercedes-Benz, including Puls.A™[6](index=6&type=chunk) - Selected by a leading global furniture brand to supply comfort solutions, with start of production expected in Q1 2026, reinforcing ability to scale core technologies[6](index=6&type=chunk) Q3 2025 Key Financial Highlights | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Product Revenues | $386.9 million | $371.5 million | +4.1% | | Product Revenues (ex-FX) | $380.3 million | $371.5 million | +2.4% | | Automotive Climate and Comfort Solutions Revenue | | | +8.6% | | Automotive Climate and Comfort Solutions Revenue (ex-FX) | | | +7.0% | | Gross Margin | 24.6% | 25.5% | -0.9 pp | | Net Income | $14.9 million | $16.0 million | -6.9% | | Adjusted EBITDA | $49.0 million | $48.1 million | +1.9% | | Adjusted EBITDA Margin | 12.7% | 12.9% | -0.2 pp | | GAAP Diluted EPS | $0.49 | $0.51 | -3.9% | | Adjusted Diluted EPS | $0.73 | $0.75 | -2.7% | | YTD Operating Cash Flow | $87.8 million | $73.1 million | +20.1% | | Net Leverage | ~0.2x | | | | Liquidity | $462.2 million | | | [About Gentherm](index=2&type=section&id=About%20Gentherm) Gentherm is a global market leader in innovative thermal management and pneumatic comfort technologies, serving automotive and medical sectors with over 14,000 employees across 13 countries - Gentherm (NASDAQ: THRM) is a global market leader of innovative thermal management and pneumatic comfort technologies[12](index=12&type=chunk) - Automotive products include Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, and Valve Systems, while Medical products include patient temperature management systems[12](index=12&type=chunk) - The Company has more than **14,000 employees** in facilities across **13 countries**[12](index=12&type=chunk) 2024 Annual Performance | Metric | Value | | :-------------------------- | :------------ | | Annual Sales (2024) | ~$1.5 billion | | Automotive New Business Awards (2024) | $2.4 billion | [Financial Guidance](index=2&type=section&id=Financial%20Guidance) [2025 Full Year Guidance Update](index=2&type=section&id=2025%20Full%20Year%20Guidance%20Update) Gentherm updated its full-year 2025 guidance, raising the midpoint for product revenues and slightly adjusting the Adjusted EBITDA Margin Rate, while also lowering capital expenditures guidance Full Year 2025 Guidance Update (as of Oct 23, 2025) | Metric | Previous (July 24, 2025) | Revised (Oct 23, 2025) | | :-------------------------- | :----------------------- | :----------------------- | | Product Revenues | $1.43 billion – $1.5 billion | $1.47 billion – $1.49 billion | | Adjusted EBITDA Margin Rate | 11.7% – 12.5% | 11.9% – 12.3% | | Full-year Adjusted Effective Tax Rate | 26% – 29% | No change | | Capital Expenditures | $55 million – $65 million | $45 million – $55 million | - Guidance is based on tariffs currently in effect, current forecast of customer orders, expectations of near-term conditions, flat to slightly increasing light vehicle production in relevant markets for full year 2025 versus 2024, and a EUR to USD exchange rate of $1.13/Euro[7](index=7&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) [Consolidated Condensed Statements of Income](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) For the three months ended September 30, 2025, Gentherm reported product revenues of $386.9 million, a 4.1% increase year-over-year, with gross margin slightly decreasing to 24.6% and net income declining to $14.9 million Consolidated Condensed Statements of Income (Q3 2025 vs Q3 2024) | Metric (in thousands) | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Product revenues | $386,870 | $371,512 | +4.1% | | Cost of sales | $291,722 | $276,639 | +5.5% | | Gross margin | $95,148 | $94,873 | +0.3% | | Operating income | $23,858 | $32,337 | -26.2% | | Earnings before income tax | $20,884 | $19,410 | +7.6% | | Net income | $14,949 | $15,965 | -6.4% | | Diluted earnings per share | $0.49 | $0.51 | -3.9% | Consolidated Condensed Statements of Income (YTD Sept 30, 2025 vs 2024) | Metric (in thousands) | YTD 2025 | YTD 2024 | Change (YoY) | | :-------------------------- | :------- | :------- | :----------- | | Product revenues | $1,115,814 | $1,103,210 | +1.1% | | Gross margin | $271,375 | $280,327 | -3.2% | | Operating income | $64,928 | $83,374 | -22.1% | | Net income | $15,298 | $49,626 | -69.2% | | Diluted earnings per share | $0.50 | $1.57 | -68.1% | [Revenue by Product Category and Foreign Currency Impact](index=7&type=section&id=Revenue%20by%20Product%20Category%20and%20Foreign%20Currency%20Impact) Automotive Climate and Comfort Solutions revenue increased 8.6% year-over-year in Q3 2025, or 7.0% excluding foreign currency translation, outperforming light vehicle production, with Lumbar and Massage Comfort Solutions showing the strongest growth Revenue by Product Category (Q3 2025 vs Q3 2024) | Product Category (in thousands) | Q3 2025 | Q3 2024 | % Change | | :-------------------------------- | :------ | :------ | :------- | | Climate Control Seats | $201,275 | $189,898 | 6.0% | | Lumbar and Massage Comfort Solutions | $55,799 | $48,970 | 13.9% | | Climate Control Interiors | $52,638 | $49,283 | 6.8% | | Climate and Comfort Electronics | $8,599 | $4,883 | 76.1% | | Automotive Climate and Comfort Solutions | $318,311 | $293,034 | 8.6% | | Valve Systems | $24,487 | $26,082 | (6.1)% | | Other Automotive | $31,413 | $39,688 | (20.9)% | | Subtotal Automotive segment | $374,211 | $358,804 | 4.3% | | Medical segment | $12,659 | $12,708 | (0.4)% | | Total Company | $386,870 | $371,512 | 4.1% | Total Company Revenue Excluding Foreign Currency Translation | Metric (in thousands) | Q3 2025 (ex-FX) | Q3 2024 | % Change | | :-------------------------------- | :-------------- | :------ | :------- | | Total Company, excluding foreign currency translation impact | $380,255 | $371,512 | 2.4% | - Automotive Climate and Comfort Solutions revenue increased **7.0% year over year excluding foreign currency translation**, outperforming S&P Global's mid-October light vehicle production report in relevant markets by **160 basis points**[6](index=6&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q3 2025 increased to $49.0 million from $48.1 million in Q3 2024, though the Adjusted EBITDA margin slightly decreased to 12.7% from 12.9%, reflecting adjustments for non-cash stock-based compensation and restructuring expenses Adjusted EBITDA Reconciliation (Q3 2025 vs Q3 2024) | Metric (in thousands) | Q3 2025 | Q3 2024 | | :-------------------------- | :------ | :------ | | Net income | $14,949 | $15,965 | | Depreciation and amortization | $13,274 | $12,351 | | Income tax expense | $5,935 | $3,445 | | Interest expense, net | $3,313 | $4,710 | | Non-cash stock based compensation | $3,980 | $2,927 | | Restructuring expenses, net | $3,986 | $2,662 | | Unrealized currency loss | $1,865 | $8,604 | | Adjusted EBITDA | $49,007 | $48,103 | | Adjusted EBITDA margin | 12.7% | 12.9% | Adjusted EBITDA Reconciliation (YTD Sept 30, 2025 vs 2024) | Metric (in thousands) | YTD 2025 | YTD 2024 | | :-------------------------- | :------- | :------- | | Net income | $15,298 | $49,626 | | Adjusted EBITDA | $134,245 | $141,518 | | Adjusted EBITDA margin | 12.0% | 12.8% | [Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20and%20Adjusted%20EPS) Adjusted net income for Q3 2025 was $22.6 million, down from $23.6 million in Q3 2024, with adjusted diluted EPS at $0.73, reflecting adjustments for items like amortization of intangibles, restructuring, and unrealized currency loss Adjusted Net Income and EPS Reconciliation (Q3 2025 vs Q3 2024) | Metric (in thousands, except per share) | Q3 2025 | Q3 2024 | | :-------------------------------------- | :------ | :------ | | Net income | $14,949 | $15,965 | | Amortization of acquisition related intangibles | $1,676 | $1,608 | | Restructuring expenses, net | $3,986 | $2,662 | | Unrealized currency loss | $1,865 | $8,604 | | Adjusted net income | $22,599 | $23,583 | | Diluted earnings per share, as reported | $0.49 | $0.51 | | Adjusted diluted earnings per share | $0.73 | $0.75 | Adjusted Net Income and EPS Reconciliation (YTD Sept 30, 2025 vs 2024) | Metric (in thousands, except per share) | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------- | :------- | | Net income | $15,298 | $49,626 | | Adjusted net income | $54,892 | $64,206 | | Adjusted diluted earnings per share | $1.78 | $2.03 | [Consolidated Condensed Balance Sheets](index=10&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) As of September 30, 2025, total assets increased to $1.38 billion from $1.25 billion at December 31, 2024, driven by increases in cash, accounts receivable, and inventory, while total shareholders' equity grew significantly to $717.9 million Consolidated Condensed Balance Sheets (Sept 30, 2025 vs Dec 31, 2024) | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | Change | | :-------------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $154,250 | $134,134 | +$20,116 | | Accounts receivable, net | $291,293 | $258,112 | +$33,181 | | Inventory, net | $253,253 | $227,356 | +$25,897 | | Total current assets | $785,892 | $684,015 | +$101,877 | | Total assets | $1,381,335 | $1,247,556 | +$133,779 | | Total current liabilities | $400,325 | $340,293 | +$60,032 | | Long-term debt, less current maturities | $189,000 | $220,064 | -$31,064 | | Total liabilities | $663,387 | $630,609 | +$32,778 | | Total shareholders' equity | $717,948 | $616,947 | +$101,001 | [Consolidated Condensed Statements of Cash Flows](index=11&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for the nine months ended September 30, 2025, significantly increased to $87.8 million from $73.1 million in the prior year, while net cash used in investing activities decreased Consolidated Condensed Statements of Cash Flows (YTD Sept 30, 2025 vs 2024) | Metric (in thousands) | YTD 2025 | YTD 2024 | Change | | :-------------------------------- | :------- | :------- | :----- | | Net cash provided by operating activities | $87,820 | $73,089 | +$14,731 | | Net cash used in investing activities | $(29,779) | $(33,141) | +$3,362 | | Net cash used in financing activities | $(42,433) | $(40,605) | -$1,828 | | Net increase in cash and cash equivalents | $20,116 | $908 | +$19,208 | | Cash and cash equivalents at end of period | $154,250 | $150,581 | +$3,669 | - Purchases of property and equipment decreased to **$33.4 million** in YTD 2025 from **$50.4 million** in YTD 2024[40](index=40&type=chunk) - Repayments of debt increased to **$103.1 million** in YTD 2025 from **$53.5 million** in YTD 2024[40](index=40&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) [Definitions and Use](index=4&type=section&id=Definitions%20and%20Use) Gentherm provides several non-GAAP financial measures, including Adjusted EBITDA, Adjusted EPS, Free Cash Flow, Net Debt, and Liquidity, to offer investors supplemental insights into its operating performance and liquidity, as these measures are used by management to assess performance by excluding items not indicative of ongoing operations - The Company provides non-GAAP financial measures such as Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EPS, free cash flow, net capital expenditures, Net Debt, liquidity, net leverage ratio, and revenue/segment revenue/product revenue excluding foreign currency translation[18](index=18&type=chunk) - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, deferred financing cost amortization, non-cash stock based compensation expenses, restructuring expenses, net, unrealized currency gain or loss and other gains and losses not reflective of the Company's ongoing operations and related tax effects[18](index=18&type=chunk) - Management provides non-GAAP financial measures to assist investors in properly assessing the Company's performance on a period-over-period basis by excluding matters not indicative of the Company's ongoing operating or liquidity results[22](index=22&type=chunk) [Other Non-GAAP Reconciliations](index=12&type=section&id=Other%20Non-GAAP%20Reconciliations) This section provides reconciliations for adjusted operating expenses, which were $61.6 million for Q3 2025, and total liquidity, which stood at $462.2 million as of September 30, 2025 Adjusted Operating Expenses Reconciliation (Q3 2025 vs Q3 2024) | Metric (in thousands) | Q3 2025 | Q3 2024 | | :-------------------------- | :------ | :------ | | Total operating expenses | $71,290 | $62,536 | | Restructuring expense, net | $(3,986) | $(2,662) | | Non-cash stock based compensation | $(3,979) | $(2,708) | | Adjusted operating expenses | $61,621 | $57,166 | Total Liquidity (Sept 30, 2025 vs Sept 30, 2024) | Metric (in thousands) | Sep 30, 2025 | Sep 30, 2024 | | :-------------------------- | :----------- | :----------- | | Cash and cash equivalents | $154,250 | $150,581 | | Revolving line of credit availability | $307,938 | $278,000 | | Total liquidity | $462,188 | $428,581 | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) [Disclaimer and Risk Factors](index=3&type=section&id=Disclaimer%20and%20Risk%20Factors) This section outlines forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995, based on management's expectations and beliefs, highlighting significant risks and uncertainties that could cause actual results to differ materially - Statements in this release are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, representing Gentherm's goals, beliefs, plans and expectations about its prospects for the future[14](index=14&type=chunk) - Such statements are subject to a number of important assumptions, significant risks and uncertainties (some of which are beyond our control) and other factors that may cause actual results or performance to differ materially[14](index=14&type=chunk) - Key risks include macroeconomic, geopolitical and global factors in the automotive industry; impact of global economic and trade policies; increasing U.S. and global competition; ability to manage new product launches; evolution of the automotive industry towards electric and autonomous vehicles; supply chain constraints; production levels of major customers; business in China; global operations and foreign currency risk; product quality and safety; ability to attract and retain employees; labor market issues; achievement of product cost reductions; optimization of global supply chain and manufacturing footprint; strategic acquisitions; security breaches; loss or insolvency of key customers/suppliers; intellectual property protection; and compliance with anti-corruption laws[14](index=14&type=chunk)[20](index=20&type=chunk) - The Company expressly disclaims any obligation or undertaking to update any forward-looking statements to reflect any change in its strategies or expectations, except as required by law[17](index=17&type=chunk) [Supplemental Information](index=2&type=section&id=Supplemental%20Information) [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Gentherm held a conference call on October 23, 2025, at 8:00 am Eastern Time to discuss the Q3 results, with details for live access, webcast, and telephonic replay provided - Gentherm conducted a conference call on **October 23, 2025, at 8:00 am Eastern Time** to review the Q3 results[9](index=9&type=chunk) - A live webcast and one-year archived replay of the call, along with supplemental materials, are accessible on the Events page of the Investor section of Gentherm's website[10](index=10&type=chunk) - A telephonic replay was available approximately two hours after the call until **11:59 pm Eastern Time on November 6, 2025**[11](index=11&type=chunk) [Investor and Media Contacts](index=2&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor relations (Gregory Blanchette) and media inquiries (Melissa Fischer) is provided - Investor Contact: Gregory Blanchette, investors@gentherm.com, 248.308.1702[12](index=12&type=chunk) - Media Contact: Melissa Fischer, media@gentherm.com, 248.289.9702[12](index=12&type=chunk) [Revenue by Product Category Historical Recast](index=13&type=section&id=Revenue%20by%20Product%20Category%20Historical%20Recast) This section provides a historical recast of revenue by product category for 2023 and 2024, reflecting modifications to product categories to conform with the current period presentation, including reclassifications within Climate Control Seats, Climate Control Interiors, and Other Automotive - Product categories have been modified, and prior-period amounts have been recast to conform with the current period presentation[45](index=45&type=chunk) - Recategorizations include Climate Control Seat (CCS®) now encompassing CCS® Heat, CCS® Vent/CCS® Active Cool, and CCS® Neck Conditioners; Climate Control Interiors (CCI™) now includes CCI™ Steering Wheel Heat and CCI™ Interior Heat; and Other Automotive now includes Automotive Cables, Battery Performance Solutions, non-automotive electronics, and contract manufacturing electronics[45](index=45&type=chunk) Total Company Revenue Historical Recast (2023 & 2024 Full Year) | Metric (in thousands) | 2023 Full Year | 2024 Full Year | | :-------------------------- | :------------- | :------------- | | Total Company Revenue | $1,469,076 | $1,456,124 |

Core Insights - Gentherm achieved record quarterly revenue of $387 million and strong year-to-date operating cash flow of $88 million [1][5] - The company secured $745 million in new automotive business awards during the quarter, contributing to a projected total of over $2 billion for the year [2][5] - Full-year revenue guidance for 2025 has been raised, with product revenues now expected to be between $1.47 billion and $1.49 billion [4] Financial Performance - Product revenues increased by 4.1% year-over-year, from $371.5 million to $386.9 million, with automotive revenues rising by 2.5% [5][21] - Gross margin decreased to 24.6% from 25.5% in the prior year, primarily due to higher material costs and one-time adjustments [5][21] - Net income for the quarter was $14.9 million, down from $16.0 million in the previous year, while adjusted EBITDA was $49.0 million, or 12.7% of revenue [5][21] Strategic Initiatives - The company is expanding into adjacent markets, including a partnership with a global furniture brand to supply comfort solutions, with production expected to start in Q1 2026 [4][5] - Operational excellence initiatives are contributing to strong cash generation, with year-to-date cash flow from operations reaching $87.8 million, up from $73.1 million in the prior year [5][21] Guidance and Outlook - Revised guidance for 2025 includes an adjusted EBITDA margin rate of 11.9% to 12.3% and capital expenditures reduced to $45 million to $55 million [4] - The company remains focused on executing its strategic priorities and positioning itself for long-term value creation [4][2]

Company Overview - Gentherm is a global market leader in innovative thermal management and pneumatic comfort technologies [4] - The company offers automotive products such as Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, and Valve Systems [4] - In the medical sector, Gentherm provides patient temperature management systems [4] - The company employs over 14,000 people across 13 countries [4] Financial Performance - Gentherm recorded annual sales of approximately $1.5 billion in 2024 [4] - The company secured $2.4 billion in new business awards in the automotive sector [4] Upcoming Events - Gentherm will report its financial results for the third quarter of 2025 on October 23, 2025 [1] - A conference call to discuss these results will take place at 8 am (ET) on the same day [1] Communication Details - The conference call can be accessed via toll-free and international dial-in numbers, with a specific conference ID [2] - A telephonic replay of the call will be available approximately two hours after the call [3]

Core Insights - Modine Manufacturing Company (MOD) and Gentherm Incorporated (THRM) are both involved in thermal management technologies for the automotive sector, with Modine also serving other markets such as HVAC and construction equipment [1][2] - The analysis aims to compare the fundamentals of both companies to determine which is better positioned to meet investor expectations amid tariff-related uncertainties [2] Modine Manufacturing Company (MOD) - Modine has consistently exceeded earnings expectations for the last four quarters, reporting net sales of $682.8 million in Q1 fiscal 2026, a 3% increase from $661.5 million the previous year, driven by strong performance in the Climate Solutions segment [3][9] - The company anticipates a significant volume ramp-up in the second half of the year, projecting full-year fiscal 2026 net sales growth of 10-15% year over year and adjusted EBITDA growth of 12-20% [3][21] - Modine has implemented the 80/20 principle, leading to transformative operational and financial improvements during fiscal 2025 [4] - Recent acquisitions, including AbsolutAire, L.B. White, and Climate by Design International, are aimed at addressing thermal management challenges and expanding into high-growth adjacent markets [5] - Modine announced a $100 million investment over 12-18 months to enhance U.S. manufacturing of data center cooling products, expecting data center revenues to approach $2 billion by fiscal 2028 [6] - The company boasts a high return on equity (ROE) of 24%, significantly above the industry average of 7.2%, indicating strong profitability relative to shareholder equity [7] Gentherm Incorporated (THRM) - Gentherm reported stable revenues of $375 million in Q2 2025, with a 3.8% year-over-year growth in Automotive Climate and Comfort Solutions, outperforming S&P Global's light vehicle production report by 10 basis points [8][11] - The company secured $620 million in new automotive business awards in Q2, raising its 2025 revenue outlook to between $1.43 billion and $1.5 billion [11] - Gentherm is focusing on narrowing the gap in Asia, with 70% of year-to-date awards going to domestic OEMs in China, compared to 50% in the previous two years [10] - The company is diversifying into the medical sector, enhancing its European distribution through a partnership with DUOMED [12] - However, tariffs have posed a challenge, resulting in a narrowed EBITDA margin guidance range of 11.7-12.5% [13] - Gentherm's ROE stands at 9.9%, which, while respectable, is lower than Modine's [13][22] Price Performance and Valuation - Year-to-date, Modine shares have increased by approximately 31.5%, while Gentherm's stock has decreased by 11% [14] - Modine is trading at a forward sales multiple of 2.62X, close to its five-year mean of 2.72X, whereas Gentherm's forward sales multiple is at 0.73X, significantly below its median of 2.85X [16] Earnings Estimates - The Zacks Consensus Estimate for Modine's fiscal 2026 EPS indicates a year-over-year growth of 14.3%, with estimates trending upward [18] - Conversely, the Zacks Consensus Estimate for Gentherm's 2025 EPS suggests a year-over-year decline of 4.3%, although estimates have also been trending upward [19] Conclusion - Modine is positioned for solid top-line growth with projected double-digit revenue and EBITDA gains for fiscal 2026, supported by strategic acquisitions and investments [21] - Gentherm shows resilience with steady revenues and strong automotive business wins, but its lower ROE and margin pressures from tariffs present challenges [22] - Overall, Modine's stronger financial performance and clearer growth strategy make it a more attractive investment option compared to Gentherm [23]

Core Insights - The focus is on identifying undervalued companies through traditional analysis of key valuation metrics, particularly in value investing [2] - The Zacks Rank system emphasizes earnings estimates and revisions to find strong stock picks, complemented by the Style Scores system that highlights stocks with specific traits [1][3] Company Analysis: Gentherm (THRM) - Gentherm currently has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4] - The stock has a P/E ratio of 14.29, significantly lower than the industry average P/E of 20.49, suggesting it may be undervalued [4] - THRM's Forward P/E has fluctuated between 8.71 and 15.96 over the past 12 months, with a median of 12.42, indicating variability in market perception [4] - The P/B ratio for THRM is 1.54, which is favorable compared to the industry average P/B of 3.05, further supporting the undervaluation thesis [5] - Over the past year, THRM's P/B has ranged from 1.11 to 2.51, with a median of 1.80, reflecting its market value relative to book value [5] - Overall, Gentherm appears to be undervalued based on these metrics, combined with a strong earnings outlook, making it an attractive investment opportunity [6]