Visteon (NasdaqGS:VC) Q4 2025 Earnings call February 19, 2026 09:00 AM ET Company ParticipantsJerome Rouquet - SVP and CFOJoe Spak - Managing DirectorKris Doyle - VP of Investor Relations and FP&ASachin Lawande - President and CEOShreyas Patil - VP of Equity ResearchConference Call ParticipantsItay Michaeli - Senior Equity Research AnalystLuke Junk - Senior Research AnalystNone - AnalystKris DoyleGood morning. I'm Kris Doyle, Vice President of Investor Relations and FP&A. Welcome to our earnings call for th ...

Visteon (NasdaqGS:VC) Q4 2025 Earnings call February 19, 2026 09:00 AM ET Company ParticipantsJerome Rouquet - SVP and CFOJoe Spak - Managing DirectorKris Doyle - VP of Investor Relations and FP&ASachin Lawande - President and CEOShreyas Patil - VP of Equity ResearchConference Call ParticipantsItay Michaeli - Senior Equity Research AnalystLuke Junk - Senior Research AnalystNone - AnalystKris DoyleGood morning. I'm Kris Doyle, Vice President of Investor Relations and FP&A. Welcome to our earnings call for th ...

Visteon (NasdaqGS:VC) Q4 2025 Earnings call February 19, 2026 09:00 AM ET Speaker3Good morning. I'm Kris Doyle, Vice President of Investor Relations and FP&A. Welcome to our earnings call for the fourth quarter of 2025. Before we begin this morning's call, I'd like to remind you that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to various risks, un ...

Financial Data and Key Metrics Changes - Sales for Q3 2025 were $917 million, a 6% decline year-over-year, primarily due to an unplanned production shutdown at JLR, which impacted sales by approximately $12 million [2][20][21] - Adjusted EBITDA was $119 million, with a margin of 13%, reflecting strong operational execution and cost control [3][20][23] - Adjusted free cash flow for the quarter was $110 million, supported by robust EBITDA performance [3][21] Business Line Data and Key Metrics Changes - Cockpit electronics business showed strong growth in Europe and the Americas, while BMS sales declined significantly year-over-year in the U.S. due to a challenging EV market [3][6][20] - In North America, cockpit electronics exceeded expectations, while BMS sales were down due to a saturated EV market [5][6] - In Europe, sales were flat year-over-year, with gains in cockpit electronics for ICE hybrids and battery electric vehicles [6][7] Market Data and Key Metrics Changes - Sales in China declined year-over-year, driven by a negative vehicle mix and market share loss of global OEMs, but remained stable sequentially [7][8] - The company secured $1.8 billion in new business during the quarter, with a strong focus on large display programs and AI-enabled cockpit systems [4][11] - The overall market environment remains challenging, particularly for EVs, with a price war among numerous car brands in China [15][16] Company Strategy and Development Direction - The company is focusing on expanding its product portfolio, particularly in cockpit electronics and AI-enabled systems, to address evolving market demands [4][18] - Strategic initiatives include diversifying the customer base and expanding into two-wheeler and commercial vehicle markets [18][19] - The company aims to exceed its original new business win target of $6 billion, now expecting to close the year at over $7 billion [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in China, with multiple new model launches expected in 2026 [36][44] - The company is closely monitoring the impact of recent trade restrictions on semiconductor suppliers, which could disrupt production [31][32] - Despite headwinds, management remains optimistic about long-term growth prospects, driven by increasing demand for digital content in vehicles [33] Other Important Information - The company resumed capital returns to shareholders with a newly initiated quarterly dividend and plans for additional capital returns in Q4 [4][21] - Capital expenditures for the year are trending towards $140 million, slightly lower than anticipated, with ongoing investments in vertical integration initiatives [30] Q&A Session Summary Question: Expectations for growth in China into 2026 - Management expects stabilization in Q4 and a return to growth in 2026, with about 20 new model launches planned, primarily in the back half of the year [36] Question: Indirect impacts of Nexperia supply issues - Management indicated that Visteon has a higher level of semiconductor inventory compared to peers, providing some cushion against supply disruptions [39] Question: Revenue growth target through 2027 - Management noted that while S&P Global forecasts a decline in vehicle production, they expect to outperform customer production in China next year [44] Question: Sustainability of new business booking momentum - Management believes the strong performance in new business wins, particularly in displays, is sustainable due to ongoing investments and market demand [48] Question: Profit implications for BMS in the coming years - BMS represents about 5% of sales, and while lower volumes may impact profitability, margins are expected to remain similar to other product lines [67]

Financial Data and Key Metrics Changes - Sales for Q3 2025 were $917 million, a 6% decline from the prior year, primarily due to an unplanned production shutdown at Jaguar Land Rover (JLR) [3][19][20] - Adjusted EBITDA was $119 million, representing a margin of 13%, with a slight improvement in margin compared to the previous year [4][20][23] - Adjusted free cash flow for the quarter was $110 million, driven by robust EBITDA performance [4][21] Business Line Data and Key Metrics Changes - Strong momentum in cockpit electronics business, particularly in Europe and the Americas, offset by lower sales in China and battery management systems (BMS) in the U.S. [3][4][19] - BMS sales were down significantly year over year, reflecting a challenging environment for electric vehicles (EVs) [6][19] - The company launched 28 new products across 10 different OEMs in Q3, indicating strong product portfolio execution [8][10] Market Data and Key Metrics Changes - Sales in North America for cockpit electronics exceeded expectations, while sales in Europe were flat year over year [5][6] - In China, sales declined year over year due to a negative vehicle mix and ongoing market share loss of global OEMs [7][8] - The company expects to return to growth in China, with approximately 20 new model launches planned for 2026, predominantly in the back half of the year [37][46] Company Strategy and Development Direction - The company is focusing on expanding its product portfolio and securing new business wins, with expectations to close the year at over $7 billion in new business awards [11][12] - Strategic initiatives include diversifying the customer base and expanding into two-wheeler and commercial vehicle markets [17][18] - The company is well-positioned to benefit from the growing demand for digital content in vehicle cockpits, regardless of powertrain type [33] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by the current macro environment, particularly in China and for EVs in the U.S., but remains optimistic about long-term growth prospects [14][15][18] - The company is actively addressing risks related to recent trade restrictions affecting semiconductor supply, which could impact production schedules [32][33] - Management expects to see a modest sequential increase in sales in Q4, driven by new program launches and higher customer production volumes [29][30] Other Important Information - The company resumed capital returns to shareholders with the initiation of a quarterly dividend and plans for additional capital returns in Q4 [5][21] - Capital expenditures for the quarter were $88 million, slightly below the expected run rate, with ongoing investments in vertical integration initiatives [26][31] Q&A Session Summary Question: Expectations for growth in China into 2026 - Management expects to return to growth in China, with about 20 new model launches planned for next year, predominantly in the back half [37] Question: Indirect impacts of Nexperia trade restrictions - Management indicated that Visteon has a higher level of semiconductor parts inventory, providing a cushion against potential supply disruptions [40] Question: Impact of revenue shifts on 5% CAGR target through 2027 - Management noted that while vehicle production is expected to decline, they anticipate recovery in production volumes and growth in China [44][46] Question: Sustainability of $7 billion new business bookings - Management believes that the strong performance in new business wins, particularly in displays, is sustainable due to ongoing demand [48][50] Question: Margin implications and one-time items - Management indicated that margins have been strong, with about $30 million in one-time items expected to be backed out in 2026 [56][58] Question: Toyota exposure and future revenue growth - Management confirmed a gradual ramp-up in launches with Toyota, expecting about 10% of revenue to come from this customer by 2028 [60][62]

Summary of Visteon (VC) 2025 Conference Call Company Overview - Visteon is a global leading tier one supplier of vehicle cockpit solutions, including instrument clusters, displays, and main controllers [1] - In the previous year, Visteon generated nearly $3.9 billion in sales and secured over $6 billion in new business, particularly with Japanese OEMs [2] - The company achieved record profit of $474 million and free cash flow of $300 million despite challenges in China [2] Industry Trends - The vehicle cockpit is becoming a key differentiator in car sales, with increasing technology integration [4] - There is a significant trend towards more digital clusters, connectivity, and advanced infotainment systems in vehicles globally, with China leading in technology adoption [4][5] - Consumer preferences are shifting towards more technology in cars, including digital clusters and larger displays [7][8] Product Offerings and Competitive Position - Visteon offers a wide range of products, including digital clusters, infotainment systems, cockpit domain controllers, and electrification solutions [3][9] - The company emphasizes innovation and has been proactive in developing new technologies, such as the cockpit domain controller system [10] - Visteon maintains a strong relationship with Qualcomm for chip supply, while also being agnostic to other chip suppliers [11] Financial Performance and Strategy - Visteon reported a 12.3% EBITDA margin and generated $300 million in free cash flow in 2024 [4] - The company aims to maintain margin and cash flow as priorities, with a focus on vertical integration and engineering productivity [35][36] - Visteon has a net cash position and has been active in share repurchases, with a focus on M&A for technology-focused companies [42][43] Market Opportunities - Visteon has successfully gained business with Toyota, winning over $2 billion in new business and expanding its customer base [30][31] - The company is targeting additional customers such as Maruti Suzuki, Hyundai Kia, and Honda, which represent significant market share [32] - Visteon sees growth opportunities in adjacent markets like commercial vehicles and two-wheelers, which are also increasing digital content [32] Challenges and Outlook - The company acknowledges challenges in the Chinese market but anticipates a recovery starting in 2026 [33][34] - Visteon is focusing on technology-critical items in China to remain competitive amidst price wars [34] - The overall visibility in production schedules is stable, with optimism for continued volume growth in North America and Europe [38] Competitive Landscape - There is potential for consolidation among suppliers, particularly in China, due to market turmoil [47] - Visteon believes its technological edge and nimbleness as a mid-sized company allow it to compete effectively against larger competitors and emerging Chinese suppliers [50]