Financial Data and Key Metrics Changes - Lear Corporation reported a 5% increase in revenue for Q4 2025, totaling $23.3 billion for the full year [4] - Core operating earnings were $1.1 billion, representing 4.6% of net sales for the full year [4] - Adjusted earnings per share increased by 1% to $12.80, marking the fifth consecutive year of growth [4] - Operating cash flow was $1.1 billion, with free cash flow at $527 million for 2025 [4][5] Business Line Data and Key Metrics Changes - In the Seating segment, sales for 2025 were $17.3 billion, a slight increase of 0.4% from 2024, with adjusted operating margins at 6.4% [34][35] - E-Systems sales decreased by 2% to $6 billion, with adjusted earnings at $293 million, or 4.9% of sales [36][37] - The company secured over $1.4 billion in E-Systems business awards, the strongest performance in over a decade [8] Market Data and Key Metrics Changes - Global vehicle production increased by 1% year-over-year, with production volumes flat in North America and down 2% in Europe, while China saw a 3% increase [30] - Lear expects more than 50% of its revenue in China to come from domestic automakers next year [22] Company Strategy and Development Direction - Lear's strategic priorities include extending leadership in Seating, expanding margins in E-Systems, and supporting sustainable value creation through disciplined capital allocation [5] - The company is focused on innovation and technology, particularly in modularity and automation, to enhance manufacturing efficiency and product design [56][59] - Lear aims to achieve a seating market share of 29%, supported by strong relationships with both traditional and domestic Chinese automakers [60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow revenue, operating income, margins, and free cash flow in 2026 and beyond [47] - The company anticipates continued strong performance from its IDEA initiatives and digital transformation efforts, which are expected to drive future savings and operational improvements [64] - Management acknowledged the challenges posed by industry volatility but emphasized the company's solid foundation for growth [46] Other Important Information - Lear repurchased $325 million in shares during 2025, exceeding the initial target of $250 million, returning nearly $500 million to shareholders [10] - The company has a robust backlog of $1.325 billion, with significant contributions expected from new business awards in both Seating and E-Systems [24] Q&A Session Summary Question: Can you discuss the conquest win and its impact on seating share? - Management highlighted the significance of the conquest win as the largest in Lear's history, driven by innovation and technology, and expressed confidence in achieving a 29% seating market share [52][60] Question: What is the outlook for Net Performance in 2026? - Management indicated that they expect similar levels of Net Performance in 2026 as in 2025, with continued opportunities for savings from digital and automation initiatives [62][64] Question: How should investors think about earnings cadence throughout the year? - Management noted a strong start to the year, with expectations for Q1 revenues around $6 billion and operating income of approximately $260 million, despite some anticipated downtime [68][70] Question: Can you provide details on onshoring wins and their launch timing? - Management confirmed that the Orion award will benefit 2027, with limited additional onshoring activity expected until 2028 and 2029 [73][74] Question: What is the expected revenue impact of the large conquest win? - Management clarified that the large conquest win is outside the current backlog and is expected to launch in late 2028, potentially generating $400 million-$500 million in annual revenue [79][80]

Financial Performance - Q3 2025 - Sales reached $5.7 billion, a slight increase from $5.6 billion in Q3 2024[11] - Core operating earnings were $241 million, down from $257 million in Q3 2024[11] - Adjusted earnings per share decreased to $2.79 from $2.89 year-over-year[11] - Operating cash flow significantly increased to $444 million compared to $183 million in the same quarter last year[11] Segment Performance - Seating sales were $4.25 billion with adjusted earnings of $261 million, resulting in a 6.14% margin[32] - E-Systems sales were $1.43 billion with adjusted earnings of $60 million, resulting in a 4.20% margin[36] Full Year 2025 Outlook - Net sales are projected to be between $22.85 billion and $23.15 billion[41] - Core operating earnings are expected to be between $995 million and $1.055 billion[41] - The company anticipates generating free cash flow between $475 million and $525 million[41] Market and Currency - Global vehicle production increased by 1% year-over-year, with China showing the strongest growth at 10%[25] - The Euro appreciated against the dollar, increasing 6% from $1.10/€ to $1.17/€[26]