Sensata(US:ST)2025-11-03 21:49Financial Performance - Net revenue for Q3 2025 was $932.0 million, a decrease of 5.2% from $982.8 million in Q3 2024, with organic revenue growth of 3.1%[96] - Operating loss for Q3 2025 was $122.9 million (13.2% of net revenue), an increase of 38.3% compared to an operating loss of $199.2 million (20.3% of net revenue) in Q3 2024[97] - Net loss for Q3 2025 was $162.5 million, or 17.4% of net revenue, compared to a net loss of $25.0 million, or 2.5% of net revenue, in Q3 2024[102] - For the three months ended September 30, 2025, the reported operating loss was $122.9 million, with an operating margin of -13.2%[149] - Adjusted (non-GAAP) operating income for the same period was $179.6 million, representing an operating margin of 19.3%[149] - For the nine months ended September 30, 2025, the reported operating income was $137.4 million, with an operating margin of 4.9%[150] - Adjusted (non-GAAP) operating income for the nine months ended September 30, 2025, was $525.2 million, reflecting an operating margin of 18.8%[150] Revenue Breakdown - Performance Sensing net revenue for Q3 2025 decreased 0.4% on a reported basis but increased 3.6% on an organic basis, driven by growth in Automotive and HVOR end markets[105] - Sensing Solutions net revenue for Q3 2025 increased 0.2% on a reported basis and 2.5% on an organic basis, primarily due to content growth in HVAC and aerospace markets[107] Cash Flow and Liquidity - Operating cash flows generated in the nine months ended September 30, 2025, were $420.0 million, with cash and cash equivalents totaling $791.3 million at the end of the quarter[99] - Free cash flow for the nine months ended September 30, 2025, was $338.4 million, compared to $254.1 million for the same period in 2024[156] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $420.0 million, an increase from $380.8 million in the prior year[165] - Cash and cash equivalents increased to $791.3 million as of September 30, 2025, up from $593.7 million as of December 31, 2024[161] - The company has $645.8 million available under the Revolving Credit Facility as of September 30, 2025[170] Expenses and Costs - Total operating costs and expenses for Q3 2025 were $1,054.9 million, representing 113.2% of net revenue, compared to 120.3% in Q3 2024[110] - Research and development expenses for Q3 2025 were $33.0 million, a decrease from $42.7 million in Q3 2024, primarily due to the divestiture of the Insights Business[112] - The company incurred restructuring-related costs of $263.9 million for the three months ended September 30, 2025[151] Debt and Leverage - As of September 30, 2025, total gross indebtedness was $3.22 billion, with a net debt of $2.43 billion[168] - Adjusted EBITDA for the last twelve months (LTM) was $829.3 million, with a net leverage ratio of 2.9[168] - The gross leverage ratio represents gross debt divided by last twelve months adjusted EBITDA, providing insight into the company's financial condition[143] - The net leverage ratio represents net debt divided by last twelve months adjusted EBITDA, also serving as a measure of financial condition[144] Strategic Actions - A non-cash goodwill impairment charge of $225.7 million was recorded in Q3 2025 for the Dynapower reporting unit, reflecting a strategic shift and lower market outlook[117] - The company has authorized a share repurchase program with approximately $282.4 million remaining as of September 30, 2025[176] - A cash tender offer for up to $350 million of outstanding Senior Notes was announced in October 2025[178] - The company announced a quarterly dividend of $0.12 per share, payable in November 2025[177] Tax and Adjustments - The provision for income taxes during the third quarter of 2024 included a deferred tax benefit of approximately $257.7 million due to a tax strategy related to intellectual property[132] - Adjusted operating income and adjusted EPS are used by management for planning and evaluating business performance, excluding certain non-GAAP adjustments[139] - Non-GAAP adjustments include restructuring-related charges and other costs that are unique or unusual to the reporting period, aimed at better positioning the company for future growth[145] - Total adjustments for the three months ended September 30, 2025, amounted to $302.5 million, leading to an adjusted net income of $129.6 million[149]