Financial Data and Key Metrics Changes - The company reported sales of $203 million, with a gross margin of 48.2%, and non-GAAP EPS of $0.09, exceeding guidance [8][16] - Q1 sales increased by 5% sequentially and 22% year over year [17] - Operating margin improved to 11.1%, compared to 9% in Q4 and 6% a year ago [19] Business Line Data and Key Metrics Changes - Automotive sales increased by 3% sequentially, led by e-mobility sales, which rose by 16% sequentially and 31% year over year [17] - Industrial and other sales increased by 11% sequentially and 50% year over year, driven by growth in data centers, robotics, and automation [17][18] - Sales of magnetic sensors increased by 10% sequentially and 12% year over year, while power products sales declined by 2% sequentially but increased by 43% year over year [18] Market Data and Key Metrics Changes - Sales by geography were distributed as follows: 28% in China, 24% in the rest of Asia, 17% in Japan, 16% in The Americas, and 15% in Europe [18] - Distributor inventory dollars declined by 13% sequentially and 28% year over year, indicating a tightening supply chain [18] Company Strategy and Development Direction - The company aims to demonstrate relentless innovation to drive performance leadership in new and existing markets [9] - A new ACL C current sensor was released, designed for XEV inverters, optimizing customer bill of materials [10] - The company is focusing on cost innovation to improve gross margins, with a goal of reaching 50% gross margin in the future [14][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong bookings, increasing backlog, and significant orders within lead times [8][16] - The automotive production forecast has been revised to a flat vehicle production landscape, indicating potential recovery [41] - The company expects Q2 sales to be in the range of $205 million to $215 million, reflecting a 12% year-over-year increase [22] Other Important Information - The company ended Q1 with cash of $139 million and free cash flow of $51 million, representing 25% of sales [20] - A voluntary debt repayment of $35 million was made, reducing net debt to $181 million [21] Q&A Session Summary Question: Can you talk about the forward demand picture and inventory needs? - Management noted strong bookings and backlog, with discussions about potential future component shortages indicating increased demand [26][27] Question: Can you elaborate on the industrial exposure and clean energy? - The company highlighted a broad industrial market with strong growth in data centers, robotics, and clean energy, despite some softness in clean energy [30][32] Question: What drove the upside in gross margin? - The gross margin exceeded expectations due to higher revenue and favorable pricing dynamics, with a projected drop-through of 75% moving forward [35][36] Question: How do you see automotive demand recovery? - Management observed positive signs for recovery in automotive demand, with increased discussions about expedited delivery from customers [42] Question: Is the revenue guide shipping to true end demand? - The revenue guide does not yet reflect shipping to end demand, as the company continues to under-ship the distribution channel [46] Question: What trends are seen in China? - The company reported strong momentum in e-mobility and noted the importance of the "China for China" strategy for competitive positioning [62][64] Question: When will capital deployment shift from debt repayment to capital return? - Currently, the focus remains on debt repayment as the most accretive action, with no immediate plans for share buybacks or dividends [100]

Core Insights - BorgWarner Inc. has reported a 1% increase in U.S. GAAP net sales for Q2 2025, reaching $3,638 million, with light vehicle eProduct sales growing by 31% year-over-year [6][7] - The company has increased its full-year 2025 guidance for net sales to a range of $14.0 billion to $14.4 billion, up from the previous range of $13.6 billion to $14.2 billion, driven by higher industry production expectations and favorable foreign exchange impacts [8][9] - BorgWarner's Board of Directors has authorized a 55% increase in its quarterly cash dividend per share and a $1 billion share repurchase program through 2028 [6][9] Financial Performance - U.S. GAAP net earnings for Q2 2025 were $224 million, or $1.03 per diluted share, compared to $315 million, or $1.39 per diluted share in Q2 2024 [7][16] - Adjusted net earnings per diluted share for Q2 2025 were $1.21, a 2% increase from $1.19 in Q2 2024, primarily due to a lower share count [7][8] - The company achieved a U.S. GAAP operating margin of 7.9% in Q2 2025, with an adjusted operating margin of 10.3% [6][9] Business Developments - BorgWarner secured multiple new business awards, including turbocharger and electric motor contracts with major global OEMs, expected to support long-term profitable growth [3][6] - Production for several new contracts is anticipated to begin between 2025 and 2028, indicating a strong pipeline for future revenue [6][9] Guidance and Expectations - The company expects its U.S. GAAP operating margin for 2025 to be in the range of 8.3% to 8.5%, with adjusted operating margin projected between 10.1% and 10.3% [9] - Net earnings for 2025 are expected to be in the range of $3.80 to $3.97 per diluted share, with adjusted net earnings projected between $4.45 and $4.65 per diluted share [9][8]

Core Insights - BorgWarner Inc. is a transformative global product leader with over 130 years of experience in mobility innovation [1] - The company is focused on accelerating the transition to eMobility, aiming to contribute to a cleaner, healthier, and safer future [1] Company Information - BorgWarner will hold its 2025 Second Quarter Results Conference Call on July 31, 2025, at 9:30 am Eastern Time [2] - The conference call will be accessible live over the Internet via the company's investor relations website [2]

Core Insights - The company reported a decrease in U.S. GAAP net sales of approximately 2% for the first quarter of 2025 compared to the same period in 2024, with net sales totaling $3,515 million [5][6][14] - Adjusted earnings per diluted share increased by approximately 8% to $1.11 in Q1 2025, up from $1.03 in Q1 2024, despite a decline in net earnings per diluted share from $0.93 to $0.72 [4][6] - The company has provided full-year 2025 guidance, expecting net sales between $13.6 billion and $14.2 billion, reflecting slight growth from 2024 sales of approximately $14.1 billion [7][8] Financial Performance - U.S. GAAP net earnings for Q1 2025 were $157 million, down from $213 million in Q1 2024, while adjusted net earnings were $1.11 per diluted share, an increase from $1.03 [6][14] - The company achieved an adjusted operating margin of 10.0% in Q1 2025, compared to a U.S. GAAP operating margin of 6.7%, reflecting a 60 basis point improvement year-over-year [5][6] - The company reported net cash provided by operating activities of $82 million for Q1 2025, a significant improvement from a net cash used of $(118) million in Q1 2024 [17] Business Developments - The company secured multiple new business awards, including a high-volume hybrid eMotor award and a high-voltage coolant heater award, which are expected to support long-term profitable growth [2][5] - The company plans to exit its Charging business, which is anticipated to eliminate approximately $30 million in annualized adjusted operating losses [5][6] - The company is consolidating its North American Battery Systems business, aiming for annual cost savings of approximately $20 million by 2026 [5] Market Outlook - The company expects its weighted light and commercial vehicle markets to decline by 4% to 2% in 2025, a revision from the previous estimate of down 3% to down 1% [7][8] - The sales guidance implies a year-over-year change in organic sales of down 2% to up 2%, with an estimated outgrowth above market production of approximately 200 to 400 basis points [7][8] - The company anticipates operating margins in the range of 8.1% to 8.6% for 2025, with adjusted operating margins expected to be between 9.6% and 10.2% [8]