Gentherm Reports 2025 Fourth Quarter and Full Year Results

Core Insights - Gentherm achieved record annual revenue of $1.5 billion in 2025, marking a 2.9% increase from $1.46 billion in 2024 [2][5] - The company reported a 7% year-over-year increase in full-year operating cash flow, reducing net leverage to approximately 0.2x [2][6] - Gentherm has established guidance for 2026 with a preliminary revenue outlook of approximately $1.7 billion for 2027 [2][7] Financial Performance - In Q4 2025, product revenues reached $382.8 million, an 8.5% increase from $352.9 million in Q4 2024 [6][28] - Full-year product revenues were $1,498.6 million, up 2.9% from $1,456.1 million in 2024 [6][28] - Automotive Climate and Comfort Solutions revenue increased by 11.1% year-over-year, outperforming S&P Global's light vehicle production report by 820 basis points [6][30] Profitability Metrics - Gross margin for Q4 2025 was 23.7%, down from 24.4% in the prior year, primarily due to higher material costs [6][28] - Net income for Q4 2025 was $3.0 million, a decrease from $15.3 million in Q4 2024 [6][28] - Adjusted EBITDA for the full year was $174.8 million, or 11.7% of revenue, compared to $182.9 million, or 12.6% of revenue, in the prior year [6][28] Strategic Initiatives - The company is focused on transforming its business and expanding into adjacent markets, with a planned combination with Modine Performance Technologies expected to close by the end of 2026 [3][6] - Gentherm secured automotive new business awards totaling $2.2 billion in 2025, indicating strong future growth potential [6][28] Guidance and Outlook - For 2026, Gentherm projects product revenues between $1.5 billion and $1.6 billion, with adjusted EBITDA expected to be between $175 million and $195 million [7] - The company anticipates adjusted free cash flow of $80 million to $100 million for 2026 [7]