Sensata(ST) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results Executive Summary 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] - The company is focused on three key pillars: improving operational performance, optimizing capital allocation, and returning to growth[2] Operating Results - First Quarter 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] - Ended the quarter with $588.1 million of cash on hand[5] Shareholder Returns 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] - Share repurchases amounted to $100.5 million[7] - Quarterly dividends paid totaled $17.9 million, at $0.12 per share[7] Business Outlook Second Quarter 2025 Guidance 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] Segment and Business Performance Segment Performance 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 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) Condensed Consolidated Statements of Operations 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 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 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 Non-GAAP Reconciliations and Definitions 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 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] - A live webcast and a replay of the call will be made available on the investor relations page of Sensata's website[10] Safe Harbor Statement 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] - These statements are subject to risks and uncertainties, including global market instability, supplier interruptions, trade tariffs, and competition[26] - Investors are advised to consider risk factors detailed in the company's Annual Report on Form 10-K and other SEC filings[27]