Industry Overview - The Zacks Automotive - Original Equipment industry is expected to benefit from acquisitions, collaborations, a diverse customer base, and the global expansion of original equipment manufacturers [1][2] - The industry focuses on designing and producing passive safety systems, driveline, and metal forming technologies for various vehicle types, including electric and hybrid vehicles [2] Factors Influencing the Industry Outlook - Automation technology is enhancing efficiency, productivity, quality, and safety while reducing labor costs for manufacturers, providing a competitive edge [3] - A new tax incentive allows car buyers to deduct up to $10,000 annually in auto loan interest from their federal taxable income, which is anticipated to increase demand for new vehicles [4] Demand and Production Trends - A decline in vehicle production due to weak demand, particularly for unsold electric vehicles, is expected to negatively impact the demand for auto equipment [5] - The U.S. government has implemented a 25% import tax on essential auto components, raising costs for domestic equipment manufacturers [6] Industry Performance and Valuation - The Zacks Automotive - Original Equipment Industry ranks 91, placing it in the top 37% of over 250 Zacks industries, indicating positive near-term prospects [7][8] - The industry has underperformed the S&P 500, declining 3% over the past year compared to the S&P 500's growth of 16.6% [10] - The industry is currently trading at an EV/EBITDA ratio of 18.57X, higher than the S&P 500's 17.77X and lower than the sector's 22.63X [13] Company Highlights - **Gentex Corporation (GNTX)**: Supplies automatic-dimming mirrors and electronics, with growth potential in tech products and a recent acquisition of VOXX International expanding its portfolio [16][17] - **Adient plc (ADNT)**: A leading automotive seating supplier focusing on automation and modularity, with a diverse customer base and international presence [22][23] - **American Axle & Manufacturing Holdings, Inc. (AXL)**: A supplier of driveline systems advancing in electrification, with a strong market position bolstered by recent acquisitions [26][27]

Core Insights - Adient (ADNT) reported adjusted earnings per share (EPS) of 45 cents for Q3 FY2025, an increase from 32 cents year-over-year but below the Zacks Consensus Estimate of 47 cents [1][9] - The company generated net sales of $3.74 billion, reflecting a 0.7% year-over-year increase and exceeding the Zacks Consensus Estimate of $3.56 billion [1][9] - Adient raised its revenue guidance for FY2025 to $14.4 billion from a previous estimate of $13.9 billion, with adjusted EBITDA also increased to $875 million from $850 million [7][9] Segment Performance - The Americas segment reported revenues of $1.76 billion, up 1.3% year-over-year, surpassing the Zacks Consensus Estimate of $1.59 billion, with adjusted EBITDA of $112 million, an increase from $99 million in the prior year [3] - The EMEA segment generated revenues of $1.27 billion, down 1.6% year-over-year but above the Zacks Consensus Estimate of $1.22 billion, with adjusted EBITDA declining to $21 million from $25 million [4] - The Asia segment's revenues were $721 million, slightly up from $712 million year-over-year but below the Zacks Consensus Estimate of $739 million, with adjusted EBITDA increasing to $113 million from $101 million [5] Financial Position - As of June 30, 2025, Adient had cash and cash equivalents of $860 million, down from $945 million as of September 30, 2024, and long-term debt stood at $2.39 billion [6] - Capital expenditures for the quarter totaled $57 million, compared to $70 million in the prior-year quarter [6] Guidance Updates - Adient's updated guidance for FY2025 includes projected revenues of $14.4 billion, adjusted EBITDA of $875 million, equity income of $75 million, and free cash flow anticipated in the range of $150-$170 million, with capital expenditures estimated at $260 million [7]

Linda brings a wealth of financial expertise to Adient. Most recently, she served as vice president, Finance - Corporate at Harman International. Linda Conrad joins Adient as vice president of FP&A and Investor Relations Linda Conrad joins Adient as vice president of FP&A and Investor Relations In addition, her career includes extensive finance leadership roles at tier one automotive and manufacturing organizations such as Cooper Standard Automotive, Plasan Carbon Composites and Visteon. Linda holds an MBA ...

Summary of Aptiv Conference Call - August 12, 2025 Company Overview - **Company**: Aptiv (APTV) - **Industry**: Automotive parts supplier Key Points and Arguments Financial Performance and Outlook - **Strong Q2 Performance**: Aptiv reported a strong second quarter with vehicle production exceeding expectations, leading to increased confidence in Q3 outlook [3][4] - **Conservative Guidance for H2 2025**: The company has reinstated its 2025 outlook with some conservatism, anticipating potential softening in vehicle production due to tariffs [5][6] - **Cash Position**: Aptiv holds a strong balance sheet with $1.4 billion in cash, allowing for stock repurchases and potential M&A activities [3][9] - **Operational Efficiency**: The company has achieved strong margin expansion and cash flow generation, returning to pre-COVID operational levels [8] Tariff Management - **Direct Impact of Tariffs**: The direct impact of tariffs on Aptiv has been minimal due to effective supply chain management and regional sourcing strategies [11][12] - **Future Tariff Concerns**: The company is monitoring proposed semiconductor tariffs closely, as they could significantly impact operations [13][14] - **USMCA Compliance**: 95% of imports into the U.S. from Aptiv's operations in Mexico are USMCA compliant, which is crucial for maintaining tariff advantages [15][16] Vehicle Electrification - **EV Adoption Forecast**: Aptiv's outlook for EV penetration is around 50% by 2030, lower than IHS's forecast of 70%, with strong growth expected in China and Europe but flat growth in North America [19][20][21] - **Content Opportunities**: EVs present significant content opportunities for Aptiv, particularly in the BEV and plug-in hybrid segments [23][24] Chinese Market Dynamics - **Focus on Top OEMs**: Aptiv is concentrating on partnerships with the top five Chinese OEMs, such as BYD and Geely, while maintaining profitability and cash flow [28][30] - **Growth in Domestic Automakers**: The company has seen a shift towards a higher percentage of business from Chinese domestic automakers, with a focus on maintaining commercial discipline [93][94] EDS Spin-Off - **Value Creation from Spin-Off**: The separation of the EDS business is expected to enhance capital allocation and allow both entities to pursue growth opportunities more effectively [32][38] - **Market Position of EDS**: EDS is a leading player in the wire harness market, with significant margin advantages over competitors [34] Non-Automotive Business Growth - **Increasing Non-Automotive Revenue**: Aptiv's non-automotive revenue is projected to grow, currently at 22% post-spin, with a focus on high-growth markets [46][50] Award Activity and Market Position - **New Business Bookings**: Aptiv has not seen a slowdown in award activity but rather an elongated award cycle due to regulatory uncertainties [52][53] - **Gen Six ADAS Product**: The company has gained traction with its Gen Six ADAS product, which offers cost savings and flexibility for OEMs [56][60] Capital Structure Post-Separation - **Capital Structure Plans**: Post-separation, EDS will have a high sub-investment grade capital structure, while the remaining Aptiv will maintain an investment-grade profile [76][78] Additional Important Insights - **Copper Tariffs**: The impact of copper tariffs is being managed effectively, with minimal exposure anticipated [70][72] - **Mexican Peso Exposure**: The strengthening of the Mexican peso poses a cash flow headwind for Aptiv, as most employees are paid in pesos while revenue is generated in dollars [74][75] This summary encapsulates the key insights and strategic directions discussed during the Aptiv conference call, highlighting the company's performance, market dynamics, and future outlook.

Core Insights - Adient reported revenue of $3.74 billion for the quarter ended June 2025, reflecting a year-over-year increase of 0.7% and a surprise of +5.08% over the Zacks Consensus Estimate of $3.56 billion [1] - The company's EPS for the quarter was $0.45, compared to $0.32 in the same quarter last year, although it fell short of the consensus estimate of $0.47, resulting in an EPS surprise of -4.26% [1] Company Performance Metrics - Adient's stock has returned -0.2% over the past month, while the Zacks S&P 500 composite has increased by +0.5%, indicating underperformance relative to the broader market [3] - The company holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the market in the near term [3] Light Vehicle Production Insights - Global light vehicle production reached 22.6 million, exceeding the two-analyst average estimate of 21.97 million [4] - North American light vehicle production was 4 million, surpassing the average estimate of 3.81 million [4] - Light vehicle production in Asia (excluding China) was 5.9 million, above the average estimate of 5.6 million [4] - EMEA light vehicle production was reported at 4.4 million, slightly above the average estimate of 4.35 million [4] - In China, light vehicle production was 7.6 million, exceeding the average estimate of 7.47 million [4] - South American light vehicle production was 0.7 million, slightly below the average estimate of 0.75 million [4] Net Sales Performance - Net sales in the Americas were $1.76 billion, exceeding the average estimate of $1.59 billion, with a year-over-year change of +1.3% [4] - Net sales from eliminations were reported at -$8 million, significantly better than the average estimate of -$25.92 million, representing a year-over-year change of -61.9% [4] - Net sales in Asia were $721 million, slightly below the average estimate of $739.34 million, with a year-over-year change of +1.3% [4] - EMEA net sales were $1.27 billion, above the average estimate of $1.22 billion, but showed a year-over-year decline of -1.6% [4]

PART I - FINANCIAL INFORMATION [Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) The company's Q3 net income improved to $36 million, but the nine-month net loss widened to $299 million due to a significant goodwill impairment charge Consolidated Statements of Income (Loss) Highlights | Indicator (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $3,741 | $3,716 | $10,847 | $11,126 | | **Gross profit** | $237 | $207 | $714 | $683 | | **Earnings before interest and income taxes** | $118 | $94 | $(5) | $213 | | **Net income (loss) attributable to Adient** | $36 | $(11) | $(299) | $(61) | | **Diluted EPS** | $0.43 | $(0.12) | $(3.56) | $(0.67) | Consolidated Statements of Financial Position Highlights | Indicator (in millions) | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Total current assets** | $4,022 | $4,086 | | **Total assets** | $8,836 | $9,351 | | **Total current liabilities** | $3,598 | $3,678 | | **Long-term debt** | $2,385 | $2,396 | | **Total liabilities** | $6,676 | $6,817 | | **Total shareholders' equity** | $2,074 | $2,443 | Consolidated Statements of Cash Flows Highlights (Nine Months Ended June 30) | Indicator (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | **Cash provided by operating activities** | $236 | $280 | | **Cash used by investing activities** | $(127) | $(183) | | **Cash used by financing activities** | $(212) | $(313) | | **Decrease in cash and cash equivalents** | $(85) | $(220) | | **Cash and cash equivalents at end of period** | $860 | $890 | - A triggering event in Q2 fiscal 2025 led to a **$333 million non-cash goodwill impairment charge** for the EMEA reporting unit, leaving no remaining goodwill in that segment[35](index=35&type=chunk)[36](index=36&type=chunk) - In February 2025, the company issued **$795 million of 7.50% senior unsecured notes** due 2033 to redeem its 4.875% notes due 2026[50](index=50&type=chunk) - Adient repurchased **4,014,410 ordinary shares for $75 million** during the first nine months of fiscal 2025, with **$185 million remaining** under the repurchase authorization[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Macroeconomic pressures and slower EV adoption impacted performance, leading to a goodwill impairment, while restructuring efforts continue amid sufficient liquidity [Factors Affecting Adient's Operating Environment](index=33&type=section&id=Factors%20Affecting%20Adient's%20Operating%20Environment) The company's operating environment is challenged by weakening consumer demand, tariffs, and market pressures, which prompted a significant goodwill impairment charge - The company faces uncertainties from weakening consumer demand, tariffs, market share loss for foreign OEMs in Asia, and overcapacity in EMEA due to slower EV adoption rates[117](index=117&type=chunk) - As a result of these macroeconomic factors, Adient recorded a **$333 million non-cash goodwill impairment** in its EMEA segment as of March 31, 2025[118](index=118&type=chunk) [Consolidated Results of Operations](index=34&type=section&id=Consolidated%20Results%20of%20Operations) Q3 net sales rose 1% to $3.74 billion, while the nine-month net loss widened to $299 million, primarily due to a goodwill impairment charge Net Sales Performance | Period | Net Sales (in millions) | Change YoY | | :--- | :--- | :--- | | **Q3 2025** | $3,741 | +1% | | **Nine Months 2025** | $10,847 | -3% | - Q3 2025 net sales increase was driven by favorable foreign currencies (**$84M**) and pricing (**$10M**), partially offset by lower volumes (**$54M**)[125](index=125&type=chunk) - Gross profit margin improved from **5.6% to 6.3%** in Q3 YoY and from **6.1% to 6.6%** for the nine-month period YoY, driven by favorable pricing and operating performance[127](index=127&type=chunk) - The nine-month net loss of **$299 million** was primarily driven by a **$333 million goodwill impairment charge** in EMEA and a **$10 million impairment** on an investment[132](index=132&type=chunk)[143](index=143&type=chunk) [Segment Analysis](index=39&type=section&id=Segment%20Analysis) Segment performance varied, with Americas and Asia showing Adjusted EBITDA growth, while the EMEA segment experienced a decline Adjusted EBITDA by Segment (Q3 2025 vs Q3 2024) | Segment | Q3 2025 Adj. EBITDA (in millions) | Q3 2024 Adj. EBITDA (in millions) | Change YoY | | :--- | :--- | :--- | :--- | | **Americas** | $112 | $99 | +13% | | **EMEA** | $21 | $25 | -16% | | **Asia** | $113 | $101 | +12% | - **Americas:** Adjusted EBITDA increased by **$13 million** in Q3 due to favorable pricing adjustments (**$22M**) and improved operating performance (**$6M**)[160](index=160&type=chunk) - **EMEA:** Adjusted EBITDA decreased by **$4 million** in Q3 due to higher administrative expenses (**$11M**) and lower production volumes (**$5M**), partially offset by favorable pricing (**$14M**)[164](index=164&type=chunk) - **Asia:** Adjusted EBITDA increased by **$12 million** in Q3 due to favorable operating performance (**$10M**) and positive currency effects (**$6M**)[168](index=168&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through operating cash flow and its credit facility while continuing share repurchases and restructuring efforts Cash Flow Summary (Nine Months Ended June 30) | Cash Flow (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | **Operating Activities** | $236 | $280 | | **Investing Activities** | $(127) | $(183) | | **Financing Activities** | $(212) | $(313) | - As of June 30, 2025, Adient had **$872 million of availability** under its ABL Credit Facility, with no amounts drawn down[172](index=172&type=chunk) - The company initiated the "2025 Plan" for restructuring, with expected annual operating cost savings of approximately **$53 million** upon completion[181](index=181&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There were no material changes to the company's market risk exposures since the last annual report - Adient reported **no material adverse changes** in its market risk exposures since its last annual report[197](index=197&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period[198](index=198&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[199](index=199&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings are not expected to have a material adverse effect on the company's financial condition - The company is involved in various legal proceedings but does not expect them to have a **material adverse effect** on its financial condition or results[201](index=201&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) Updated risks include impacts from U.S. trade policy, auto industry conditions evidenced by a goodwill impairment, and potential limitations on tax attribute usage - An updated risk factor highlights the adverse effect of U.S. trade policy and tariffs, noting that Adient had incurred **$13 million of incremental tariff expense**, net of recoveries[204](index=204&type=chunk) - The risk related to the global automotive industry's condition was updated to reflect the **$333 million non-cash goodwill impairment** in the EMEA reporting unit[207](index=207&type=chunk) - A new risk factor was added regarding the potential limitation on using net operating loss carryforwards if the company undergoes an **"ownership change"** under U.S. tax law[208](index=208&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased approximately $50 million of its shares in June 2025, with $185 million remaining under its repurchase authorization Share Repurchase Activity (Q3 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Total Cost (approx. in millions) | | :--- | :--- | :--- | :--- | | **April 2025** | — | $— | $0 | | **May 2025** | — | $— | $0 | | **June 2025** | 2,787,081 | $17.94 | $50 | | **Total** | **2,787,081** | **$17.94** | **$50** | - As of June 30, 2025, the remaining authorized amount for share repurchases under the program was **$185 million**[211](index=211&type=chunk) [Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None[212](index=212&type=chunk) [Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Adient's business - Not applicable[213](index=213&type=chunk) [Other Information](index=50&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[214](index=214&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section indexes the exhibits filed with the report, including required CEO/CFO certifications and interactive data files - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, as well as Inline XBRL documents[217](index=217&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $226 million, up 12% year-on-year, with EBITDA margins expanding by 60 basis points to 6% [33][34] - Consolidated sales reached approximately $3.7 billion, an increase of $25 million compared to Q3 fiscal year 2024, driven by $84 million of favorable FX [34][35] - Adjusted net income was $38 million, or $0.45 per share [34] Business Line Data and Key Metrics Changes - In The Americas, improved business performance of $20 million was primarily driven by favorable commercial actions and lower input costs, despite lower net engineering recoveries [39] - EMEA saw a positive business performance of approximately $6 million, offset by lower volume and mix [40] - Asia's results improved year-on-year by $12 million, with EBITDA margin expanding by 150 basis points [41] Market Data and Key Metrics Changes - The Americas outperformed industry volumes, while EMEA and Asia faced ongoing customer volume and mix headwinds [8][15] - Sales in China underperformed industry production, primarily due to lower volumes from traditional luxury OEM customers [35][41] - The company expects to capitalize on growth opportunities with local China OEMs, despite near-term pressure on revenue from China [18][19] Company Strategy and Development Direction - The company is focused on leveraging its competitive advantages in innovation and operational execution to win new business, particularly in the context of U.S. onshoring [7][20] - The management emphasized a balanced capital allocation plan, including share repurchases and maintaining a strong cash balance [14][31] - The company anticipates significant U.S. onshoring opportunities with minimal incremental investment, aiming to capture a share of the estimated 600,000 units of annual vehicles potentially moving to the U.S. [23][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage tariff impacts, with net tariff expenses expected to decrease in Q4 [16][40] - The company is optimistic about achieving mid-single-digit EBITDA margins in EMEA over the next few years, driven by restructuring benefits and new business awards [17][40] - The management team believes that strong business performance will continue into 2026, despite uncertainties related to production volumes [60][61] Other Important Information - The company generated strong free cash flow of $115 million in Q3, maintaining a strong cash balance of $860 million and ample liquidity of $1.7 billion [14][44] - The company repurchased $50 million of its stock in Q3, bringing total repurchases for the fiscal year to $75 million, or approximately 4% of outstanding shares [14][44] Q&A Session Summary Question: Clarification on Nissan business and onshoring opportunity - Management confirmed that the Nissan business moving to the U.S. represents incremental revenue, estimated between $150 million to $200 million starting in 2026 [51][52] Question: Guidance on business performance into 2026 - Management indicated that business performance is expected to be a positive factor heading into 2026, with production volumes being a key variable [60][61] Question: Guidance for sales and EBITDA - Management explained that the increase in sales guidance was primarily due to FX impacts, which have a low margin pull-through effect [64] Question: Competitive advantage from local footprint - Management highlighted that the cost of establishing a JIT plant in the U.S. ranges from $20 million to $30 million, emphasizing the importance of customer relationships and delivery track record [83][84] Question: Margin performance and restructuring in Europe - Management indicated that achieving mid-single-digit EBITDA margins in Europe will require stability in production and successful execution of restructuring plans over the next few years [106][107]

Company Performance - Adient reported quarterly earnings of $0.45 per share, missing the Zacks Consensus Estimate of $0.47 per share, but showing an increase from $0.32 per share a year ago, resulting in an earnings surprise of -4.26% [1] - The company posted revenues of $3.74 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.08%, and showing a slight increase from $3.72 billion year-over-year [2] - Over the last four quarters, Adient has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - Adient shares have increased approximately 28.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $3.46 billion, and for the current fiscal year, it is $1.87 on revenues of $14.12 billion [7] Industry Outlook - The Automotive - Original Equipment industry, to which Adient belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Adient's stock performance [5]

Financial Performance - Consolidated net sales increased by approximately 1% year-over-year to ~$3.7 billion in Q3 FY25[11] - Adjusted EBITDA increased by $24 million year-over-year to $226 million in Q3 FY25, with a margin increase of 60 bps[11, 12] - Free cash flow was $115 million in Q3 FY25[11] - The company returned $50 million to shareholders through share repurchases in Q3, bringing the year-to-date total to $75 million, representing approximately 4% of shares outstanding[11, 12] - Adient is raising its FY25 revenue and EBITDA guidance[12] Regional Performance - Americas sales outperformed the market by 300 bps due to favorable volume/mix and full run-rate of key programs[32] - EMEA sales underperformed the broader market mainly due to customer mix and intentional portfolio actions[32] - Asia sales growth outpaced the broader market by 700 bps, driven by customer launches reaching full production volumes[32] Debt and Capital Structure - Cash balance was $860 million as of June 30, 2025[11] - Gross debt was approximately $2.4 billion and net debt was approximately $1.5 billion[11] - Net leverage ratio on a trailing twelve-month basis is 1.7x, within the targeted range of 1.5x-2.0x[44] Outlook - Consolidated revenue is expected to be approximately $14.4 billion[46] - Adjusted EBITDA is expected to be approximately $875 million[46] - Capital expenditures are expected to be approximately $150 million-$170 million[46]

[Q3 FY2025 Performance Summary](index=1&type=section&id=Q3%20FY2025%20Performance%20Summary) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Adient reported strong Q3 FY2025 results with a 1% year-over-year revenue increase to $3.741 billion and a significant 15% rise in Adjusted EBIT to $145 million, prompting an upward revision of its full-year financial outlook | | REVENUE | EBIT | NET INCOME | EPS DILUTED | | :--- | :--- | :--- | :--- | :--- | | **AS REPORTED** | $3,741M | $118M | $36M | $0.43 | | **vs. Q3 24** | 1% | 26% | NM | NM | | | **ADJ. EBIT** | **ADJ. EBITDA** | **ADJ. NET INCOME** | **ADJ. EPS DILUTED** | | **AS ADJUSTED** | $145M | $226M | $38M | $0.45 | | **vs. Q3 24** | 15% | 12% | 31% | 41% | - Adjusted EBITDA for Q3FY25 reached **$226M**, a **$24M** year-over-year improvement, with the Adjusted EBITDA margin expanding by **60 basis points** to **6.0%**, attributed to favorable material margins and reduced operating costs[2](index=2&type=chunk)[6](index=6&type=chunk) - The company's strong financial performance in the first three quarters of FY25 led to an upward revision of its full-year guidance for revenue and Adjusted EBITDA[2](index=2&type=chunk)[6](index=6&type=chunk) [Business Developments and Strategic Wins](index=1&type=section&id=Business%20Developments%20and%20Strategic%20Wins) Adient secured significant new business across all regions, including a key conquest win with Mercedes in EMEA and new business with an Asia-based OEM moving production to the U.S., reinforcing its market position - Adient is leveraging its operational strengths to benefit from the trend of customers onshoring programs to the U.S., positioning itself as a net beneficiary[1](index=1&type=chunk)[2](index=2&type=chunk)[5](index=5&type=chunk) - Key business wins in Q3 include new conquest business for the Mercedes VAN C-Large in EMEA, SUV business with an Asia-based OEM moving to the U.S., and new trim business with BYD in Asia[5](index=5&type=chunk) - The company received numerous global awards for performance and quality from major OEMs including GAC Toyota, Renault Korea, GM, Nissan, Toyota, and Ford[4](index=4&type=chunk) [Capital Allocation and Shareholder Returns](index=1&type=section&id=Capital%20Allocation%20and%20Shareholder%20Returns) The company demonstrated its commitment to shareholder returns by repurchasing $50 million of its shares during the third quarter, with $185 million remaining under the current authorization - Resumed its share repurchase program, returning **$50M** to shareholders in Q3[3](index=3&type=chunk)[6](index=6&type=chunk) - Year-to-date share repurchases total **$75M**, retiring about **4%** of shares outstanding from the beginning of the fiscal year[3](index=3&type=chunk)[6](index=6&type=chunk) - The current share repurchase authorization has **$185M** remaining with no expiration date[3](index=3&type=chunk) [Detailed Financial and Segment Analysis](index=2&type=section&id=Detailed%20Financial%20and%20Segment%20Analysis) [Segment Performance (Adjusted EBITDA)](index=2&type=section&id=Segment%20Performance%20(Adjusted%20EBITDA)) In Q3 FY25, the Americas and Asia segments showed strong year-over-year growth in Adjusted EBITDA, driven by improved business performance and lower operating costs, while EMEA experienced a decline due to volume/mix and unfavorable net commodities | | Americas | | EMEA | | Asia | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | **Q3 25** | **Q3 24** | **Q3 25** | **Q3 24** | **Q3 25** | **Q3 24** | | **Adj. EBITDA** | $112M | $99M | $21M | $25M | $113M | $101M | - **Americas:** Adj. EBITDA increased to **$112M** from **$99M** YoY, with a **70 bps** margin expansion, driven by favorable commercial actions and lower operating expenses[7](index=7&type=chunk) - **Asia:** Adj. EBITDA grew to **$113M** from **$101M** YoY, resulting in a **150 bps** margin expansion, primarily due to lower operating and launch costs[7](index=7&type=chunk)[8](index=8&type=chunk) - **EMEA:** Adj. EBITDA decreased to **$21M** from **$25M** YoY, impacted by unfavorable volume/mix, net commodities, and transactional FX[7](index=7&type=chunk)[8](index=8&type=chunk) [Financial Position and Cash Flow](index=2&type=section&id=Financial%20Position%20and%20Cash%20Flow) Adient maintained a solid financial position with $860 million in cash and cash equivalents as of June 30, 2025, generating $115 million in free cash flow during Q3 FY25, while total debt remained stable at approximately $2.4 billion | | **06/30/25** | **09/30/24** | | :--- | :--- | :--- | | **CASH & CASH EQUIVALENTS** | $860M | $945M | | **TOTAL DEBT** | $2,394M | $2,405M | | **NET DEBT** | $1,534M | $1,460M | | | **YTD 25** | **YTD 24** | | :--- | :--- | :--- | | **OPERATING CASH FLOW** | $236M | $280M | | **CAPITAL EXPENDITURES** | $(166)M | $(194)M | | **FREE CASH FLOW** | $70M | $86M | - Free cash flow for the third quarter of FY25 was **$115M**, a significant improvement compared to **$88M** in Q3FY24[10](index=10&type=chunk) [Key Operating Metrics](index=2&type=section&id=Key%20Operating%20Metrics) Consolidated sales for Q3 FY25 increased by approximately 1% to $3.741 billion, mainly due to translational FX impacts, while unconsolidated sales declined by 9% due to portfolio rationalization | | **Q3 25** | **Q3 24** | | :--- | :--- | :--- | | **CONSOLIDATED SALES** | $3,741M | $3,716M | | **UNCONSOLIDATED SALES** | $825M | $925M | | **EQUITY INCOME (as adjusted)** | $23M | $23M | | **INTEREST EXPENSE (as adjusted)** | $51M | $48M | | **INCOME TAX EXPENSE (as adjusted)** | $30M | $30M | - The **~1%** increase in consolidated revenues was primarily driven by translational foreign exchange impacts[11](index=11&type=chunk) - The **~9%** year-over-year decrease in unconsolidated revenues was mainly due to portfolio rationalization finalized in Q1 FY2025[11](index=11&type=chunk) [FY2025 Outlook](index=3&type=section&id=FY2025%20Outlook) [Revised Full-Year Guidance](index=3&type=section&id=Revised%20Full-Year%20Guidance) Reflecting strong performance through the first three quarters, Adient has raised its FY2025 guidance, now expecting consolidated sales of approximately $14.4 billion and Adjusted EBITDA of around $875 million, with free cash flow outlook unchanged | Metric | FY2025 Outlook | Previous Outlook | | :--- | :--- | :--- | | **Consolidated sales** | ~$14.4B | ~$13.9B | | **Adj.-EBITDA** | ~$875M | ~$850M | | **Equity income** | ~$75M | ~$80M | | **Interest expense** | ~$190M | No change | | **Cash taxes** | ~$100M | ~$105M | | **Capital expenditures** | ~$260M | ~$285M | | **Free cash flow** | ~$150M-$170M | No change | - The updated guidance reflects strong year-to-date performance and current macroeconomic conditions, including production volumes, tariffs, and foreign exchange rates[12](index=12&type=chunk) - The company anticipates that most tariff costs will be largely mitigated and the guidance assumes no change to current tariff policy[12](index=12&type=chunk) [Appendix: Financial Statements & Non-GAAP Reconciliations](index=5&type=section&id=Appendix%3A%20Financial%20Statements%20%26%20Non-GAAP%20Reconciliations) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for Adient plc, including the Statement of Income, Statement of Financial Position (Balance Sheet), and Statement of Cash Flows for the periods ended June 30, 2025 [Statement of Income (Loss)](index=5&type=section&id=Statement%20of%20Income%20(Loss)) Presents the company's revenues, expenses, and net income for the three months ended June 30, 2025, compared to the same period in 2024, with net income attributable to Adient significantly improving to $36 million | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net sales** | $3,741 | $3,716 | | **Gross profit** | $237 | $207 | | **Earnings before interest and income taxes** | $118 | $94 | | **Net income attributable to Adient** | $36 | $(11) | | **Diluted earnings (loss) per share** | $0.43 | $(0.12) | [Statement of Financial Position](index=6&type=section&id=Statement%20of%20Financial%20Position) Details the company's assets, liabilities, and shareholders' equity as of June 30, 2025, compared to the fiscal year-end on September 30, 2024, with total assets at $8.836 billion and total debt at $2.394 billion | (in millions) | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Total assets** | $8,836 | $9,351 | | **Cash and cash equivalents** | $860 | $945 | | **Total liabilities** | $7,360 | $7,855 | | **Long-term debt** | $2,385 | $2,396 | | **Total shareholders' equity attributable to Adient** | $1,785 | $2,134 | [Statement of Cash Flows](index=7&type=section&id=Statement%20of%20Cash%20Flows) Outlines the cash inflows and outflows from operating, investing, and financing activities for the three months ended June 30, 2025, showing $172 million in cash from operations and $50 million used for share repurchases | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Cash provided by operating activities** | $172 | $158 | | **Cash used by investing activities** | $(49) | $(70) | | **Cash used by financing activities** | $(63) | $(92) | | **Increase (decrease) in cash and cash equivalents** | $106 | $(15) | [Non-GAAP Reconciliations and Footnotes](index=8&type=section&id=Non-GAAP%20Reconciliations%20and%20Footnotes) This section provides detailed reconciliations of non-GAAP financial measures, such as Adjusted EBITDA, Adjusted EBIT, and Free Cash Flow, to their most directly comparable U.S. GAAP measures, along with footnotes explaining segment composition and specific adjustments [Segment Results and Reconciliation](index=8&type=section&id=Segment%20Results%20and%20Reconciliation) Provides a breakdown of net sales and Adjusted EBITDA by geographic segment for Q3 2025 and Q3 2024, along with a reconciliation of total segment Adjusted EBITDA to the consolidated income before income taxes Adjusted EBITDA by Segment (Q3 2025 vs Q3 2024) | (in millions) | Americas | EMEA | Asia | Consolidated | | :--- | :--- | :--- | :--- | :--- | | **Q3 2025 Adj. EBITDA** | $112 | $21 | $113 | $226 | | **Q3 2024 Adj. EBITDA** | $99 | $25 | $101 | $202 | - A reconciliation from total segment Adjusted EBITDA (**$246M** in Q3 2025) to Income before income taxes (**$66M** in Q3 2025) is provided, detailing adjustments for corporate costs, restructuring, depreciation, and other items[27](index=27&type=chunk) [Adjusted EBIT and EBITDA Reconciliation](index=11&type=section&id=Adjusted%20EBIT%20and%20EBITDA%20Reconciliation) Reconciles GAAP Net Income to non-GAAP EBIT, Adjusted EBIT, and Adjusted EBITDA for the third quarter, showing Net Income of $59 million reconciled to Adjusted EBITDA of $226 million for Q3 2025 Reconciliation to Adjusted EBITDA (Q3 2025) | (in millions) | Q3 2025 | | :--- | :--- | | **Net income** | $59 | | Net financing charges | $51 | | Other pension expense | $1 | | Income tax expense | $7 | | **EBIT** | **$118** | | EBIT adjustments | $27 | | **Adjusted EBIT** | **$145** | | Depreciation & Equity based comp. | $81 | | **Adjusted EBITDA** | **$226** | [Adjusted Earnings Per Share (EPS) Reconciliation](index=12&type=section&id=Adjusted%20Earnings%20Per%20Share%20(EPS)%20Reconciliation) Details the calculation of Adjusted Diluted EPS, reconciling from reported diluted EPS, with Q3 2025 reported diluted EPS of $0.43 adjusted to an Adjusted Diluted EPS of $0.45 | (per share data) | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | **Diluted earnings (loss) per share as reported** | $0.43 | $(0.12) | | EBIT adjustments total | $0.31 | $0.35 | | Tax impact of EBIT adjustments and other tax items | $(0.27) | $0.11 | | Impact of adjustments on noncontrolling interests | $(0.02) | $(0.02) | | **Adjusted diluted earnings per share** | **$0.45** | **$0.32** | [Free Cash Flow Analysis](index=14&type=section&id=Free%20Cash%20Flow%20Analysis) Provides a reconciliation of cash from operating activities to the non-GAAP measure of free cash flow, showing Q3 2025 operating cash flow of $172 million less capital expenditures of $57 million resulted in free cash flow of $115 million | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Operating cash flow** | $172 | $158 | | **Capital expenditures** | $(57) | $(70) | | **Free cash flow** | **$115** | **$88** | [Net Debt and Leverage](index=15&type=section&id=Net%20Debt%20and%20Leverage) Calculates the company's net debt and net leverage ratio as of June 30, 2025, with total debt of $2.394 billion less cash of $860 million resulting in net debt of $1.534 billion and a net leverage ratio of 1.72x | (in millions) | June 30, 2025 | | :--- | :--- | | **Total debt** | $2,394 | | Less: cash and cash equivalents | $860 | | **Net debt** | **$1,534** | | **Adjusted EBITDA - last four quarters** | $890 | | **Net leverage ratio** | **1.72** |