Financial Data and Key Metrics Changes - In Q4 2025, net sales were $891 million, with adjusted EBIT of $122 million and a margin of 13.7% [4][13] - For the full year 2025, net sales reached $3.58 billion, with adjusted EBIT of $510 million and a margin of 14.2% [4][5] - Adjusted free cash flow for the year was $403 million, demonstrating disciplined execution [4][17] Business Line Data and Key Metrics Changes - The company secured new light vehicle turbo awards, increasing share in gasoline VNT applications and hybrid platforms [6][8] - Diesel applications for light commercial vehicles and trucks remained resilient, contributing to over 23% of sales [8] - Commercial vehicle sales expanded across regions, while aftermarket sales declined due to lower demand in North America [15][16] Market Data and Key Metrics Changes - Gasoline accounted for over 44% of sales, while diesel represented more than 23% [8] - The company experienced growth in commercial vehicle and diesel segments, but gasoline volumes declined outside of Europe, particularly in Asia [15][16] - The company recovered $10 million and $40 million in tariffs during Q4 and the full year, respectively [15] Company Strategy and Development Direction - The company aims to strengthen its core business while accelerating zero-emission technologies [5][12] - A strategic collaboration with Trane Technologies was announced to integrate next-generation oil-free compressors into commercial HVAC applications [9][22] - The company is targeting to achieve over 5% of revenue from industrial cooling by the end of the decade [11][12] Management's Comments on Operating Environment and Future Outlook - Management anticipates further share of demand gains, margin expansion, and strong free cash flow for 2026 [5][20] - The outlook for 2026 includes net sales of $3.7 billion and adjusted EBIT of $545 million, implying a 14.7% margin [20][21] - The company expects to direct approximately 50% of R&D expenses towards zero-emission technologies and industrial cooling [20] Other Important Information - The company repaid $50 million of its term loan and repurchased $208 million of common stock in 2025 [5][18] - A $250 million share repurchase program was authorized for 2026, with a target distribution of approximately 75% of adjusted free cash flow to shareholders [18][19] Q&A Session Summary Question: Economic opportunity from the Trane partnership - Management indicated that the first application will be delivered in 2026, with a significant ramp-up expected in 2027, but specific numbers for 2027 were not provided [26][28] Question: Comparison of power generation and cooling opportunities - Management noted both markets are growing rapidly, with significant demand for energy and cooling solutions, but did not favor one over the other [40][44] Question: New light vehicle turbo awards and market share - Management confirmed a consistent win rate above 60% in the turbocharger market, indicating an increase in share of demand [46][49] Question: Trane partnership exclusivity and addressable market - Management confirmed that while Trane is a key partner, there will be opportunities to develop relationships with other players in the cooling industry [59][62] Question: Progress on zero-emission products and revenue targets - Management reported accelerated progress on pre-development programs and confirmed that the $1 billion revenue target for 2030 remains intact [63][66]