Financial Data and Key Metrics Changes - Gentherm reported record quarterly revenue of $387 million, representing a 4.1% increase year-over-year, with revenues excluding foreign currency translation increasing by 2.4% [15][16] - Adjusted EBITDA was $49 million, or 12.7% of sales, compared to 12.9% in the same quarter last year, reflecting a 20 basis point decline primarily due to higher material costs [16] - Operating cash flow year-to-date reached $88 million, strengthening the company's balance sheet, with net leverage at 0.2 times at the end of the quarter [17] Business Line Data and Key Metrics Changes - Automotive climate and comfort solutions revenue increased by 8.6% year-over-year, or 7% excluding foreign exchange, which offset planned revenue decreases from strategic exits [16] - Medical revenue decreased by 0.4% year-over-year, or 1.6% excluding foreign exchange [16] Market Data and Key Metrics Changes - The company secured $745 million in automotive new business awards in the third quarter, totaling $1.8 billion year-to-date, with expectations to exceed $2 billion for the full year [4][11] - Significant wins included a strategic award from Mercedes-Benz, which will more than double annual lumbar and massage revenue with this customer after production begins in 2028 [11][12] Company Strategy and Development Direction - Gentherm is focused on scaling core technologies across multiple end markets to drive profitable growth, with a commercial funnel of over $300 million in lifetime revenue generated in the past 90 days [8][10] - The company is preparing to enter the furniture market, with production expected to start in Q1 of 2026, leveraging existing plant capacity [8][10] - M&A is seen as a key strategy to access new markets and expand the product portfolio, with a focus on opportunities aligned with core technology platforms [10][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged potential impacts from supply chain disruptions but noted that visibility into OEM production schedules remains limited [7][17] - The company is increasing the midpoint of its revenue guidance for the full year to a range of $1.47 to $1.49 billion, driven by improved light vehicle industry production [17][18] Other Important Information - Gentherm's global strategic manufacturing footprint realignment plans are on track to be substantially complete by the end of next year, with significant progress in relocating manufacturing processes [10] - The company is leveraging existing automotive intellectual property to accelerate new product development in the medical sector [9] Q&A Session Summary Question: Factors contributing to momentum in winning conquest business - Management highlighted innovative edge, strong customer relationships, and value proposition as key factors driving momentum in securing conquest business [22][23] Question: Breakdown of the $300 million adjacent market opportunity - Management indicated that the pipeline is roughly a third for furniture, a third for commercial vehicles, and a third for other mobility, with furniture showing rapid adoption rates [25][26] Question: Near-term production environment and guidance - Management discussed the impact of supply chain issues, including those related to Jaguar Land Rover and aluminum suppliers, and noted that visibility into the magnitude of these impacts is limited [36][38] Question: Opportunities in the Indian market - Management expressed interest in the Indian market due to its scale and potential for alternative revenue streams, particularly in two-wheelers [41] Question: Strategic footprint alignment plan and margin progression - Management indicated that savings from the footprint alignment plan will be realized more significantly in 2027, with a gradual impact expected in 2026 [47][48] Question: M&A pipeline focus - Management clarified that M&A efforts will focus on building resilience, accessing new markets, and expanding the product portfolio, aligning with the company's core strategy [49][50]

Financial Data and Key Metrics Changes - First quarter revenues decreased by 0.6% year-over-year but grew approximately 1% when adjusted for foreign exchange [28] - Adjusted EBITDA for the quarter was $39.3 million, representing 11.1% of sales, down from 12.2% in the same quarter last year [28] - Adjusted diluted earnings per share decreased to $0.51 from $0.62 year-over-year [29] Business Line Data and Key Metrics Changes - Automotive Climate and Comfort Solutions revenue increased by 3.8% year-over-year or 5.3% when excluding foreign exchange effects, driven by strong growth in lumbar and massage comfort solutions [28] - Medical segment revenues increased by 6% year-over-year when adjusted for foreign exchange, primarily due to growth in Europe [28] Market Data and Key Metrics Changes - The outlook for 2025 annual volumes has declined by 2% compared to previous reports, with a notable 10% decline expected in North America, which constitutes about 40% of the company's business [9][33] - The company is closely monitoring dealer inventory levels and customer demand schedules to adapt to market changes [9] Company Strategy and Development Direction - The company is focused on expanding revenue while increasing margins and cash flow, with a strategic emphasis on scaling four core technology platforms: thermal management, air moving devices, pneumatic solutions, and valve systems [12][36] - The company is actively pursuing opportunities in adjacent markets, particularly in the medical sector, leveraging existing technologies without significant incremental investments [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased economic uncertainty due to tariffs but expressed confidence in the company's ability to mitigate impacts and maintain a strong balance sheet [6][10] - The company is committed to driving profitable growth and operational excellence, with plans to optimize production across regions [18][20] Other Important Information - The company received $400 million in new automotive business awards during the quarter, including significant wins with Japanese OEMs and Volvo [24][25] - The company was recognized as General Motors Supplier of the Year for the third time, highlighting strong relationships and innovative technology [27] Q&A Session Summary Question: How much pass-through revenue is incorporated in the guidance? - Management indicated that the impact of tariffs is relatively limited, with only a small portion of the overall business affected, primarily in Mexico and North America [42] Question: Why is the approach to adjacent markets different this time? - Management clarified that the focus is on scaling existing technologies into adjacent markets rather than developing new products, emphasizing the use of current capital equipment [45] Question: What are the booking dynamics in Q1? - Management stated that the first quarter's new program awards were in line with expectations, despite appearing lower than previous quarters [50] Question: How is the company maintaining its sales guidance despite weaker industry forecasts? - Management explained that while North American volumes are under pressure, favorable foreign exchange impacts and tariff pass-throughs are helping to maintain guidance [51]