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 reached $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 year-over-year growth [4] - Free cash flow was reported at $527 million for 2025 [4] 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 segment sales decreased by 2% to $6 billion, with adjusted earnings at $293 million, or 4.9% of sales [36][37] - Both segments exceeded expectations in operational performance, contributing 60 basis points to Seating and 110 basis points to E-Systems margins [8][28] 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 in the 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 secured over $1.4 billion in E-Systems business awards, marking the strongest performance in over a decade [8] - Lear is focused on automation and digital transformation, with significant investments in operational excellence and quality leadership [9][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving growth targets, with a robust pipeline of conquest opportunities in both Seating and E-Systems [21][22] - The company anticipates continued strong cash flow generation and plans to return excess cash to shareholders through share repurchases and dividends [44][45] - Management highlighted the importance of innovation and technology in securing new business awards, particularly in the context of competitive advantages [55][59] Other Important Information - Lear repurchased $325 million in shares during 2025, exceeding the initial target of $250 million [11] - The company achieved a record net performance savings of $195 million, significantly above the original target of $125 million [20] Q&A Session Summary Question: Can you discuss the conquest win and its impact on Seating share? - Management noted that the conquest win was significant, being the largest in Lear's history, driven by innovation and technology [52][53] - The company remains committed to achieving a 29% market share in Seating, supported by strong relationships and technological advancements [58][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 savings from digital and automation initiatives [62][64] Question: How should investors think about earnings cadence throughout the year? - Management expects a solid start to the year, with revenues in the $6 billion range and operating income around $260 million for Q1 [69][70] Question: What is the potential for onshoring wins? - The Orion award is expected to benefit 2027, with limited additional onshoring activity anticipated until 2028 and 2029 [74][75] Question: Can you confirm the revenue potential of the large conquest win? - Management confirmed that the large conquest win is outside the backlog window and is expected to launch at the end of 2028, benefiting 2029 [80]

Financial Data and Key Metrics Changes - Lear Corporation reported revenue of $5.7 billion for Q3 2025, a 2% increase from Q3 2024 [4] - Core operating earnings were $241 million, with an operating margin of 4.2% [4] - Adjusted earnings per share decreased to $2.79 from $2.89 year-over-year [20] - Operating cash flow reached $444 million, significantly up from $183 million in the previous year [20] Business Line Data and Key Metrics Changes - In the Seating segment, sales increased by 3% to $4.2 billion, with adjusted earnings flat at $261 million [20][21] - E-Systems segment sales decreased by 3% to $1.4 billion, with adjusted earnings down to $60 million [22] - The Jaguar Land Rover disruption negatively impacted revenue by $111 million and core operating earnings by $31 million [18][19] Market Data and Key Metrics Changes - Global vehicle production increased by 4%, with North America up 5%, Europe up 1%, and China up 10% [17] - The U.S. dollar weakened against the euro and remained flat against the RMB [17] 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 automation and digital tools to enhance operational efficiency and reduce costs [15][16] - Lear is well-positioned to benefit from the onshoring trend, which is expected to drive incremental revenue and margin expansion [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities, particularly in light of the non-recurrence of the Jaguar Land Rover disruption and a strong backlog [30] - The Lear Fellowship program with Palantir is expected to enhance operational efficiency and reduce costs [31] - Management anticipates a healthy backlog for 2026 and 2027, estimating it to be approximately $1.2 billion [37] Other Important Information - Lear's strong cash flow allowed for $100 million in share repurchases during the quarter [29] - The company has a solid balance sheet with no near-term debt maturities and $3 billion in available liquidity [28] Q&A Session Summary Question: Impact of supply chain issues on guidance - Management indicated cautious production volume assumptions for Q4 due to potential risks from Novelis and JLR's production restart [32][34] Question: Backlog and production plans for 2026 - Management confirmed a backlog of approximately $1.2 billion for 2026 and 2027, with positive feedback from customers on automation and digital efforts [36][37] Question: Margin implications of automated manufacturing in the U.S. - Management stated that onshoring opportunities are expected to yield operating margins similar to existing North American seat business, aided by automation [50]