Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $902 million, up 6% at constant currency, reflecting outperformance in light vehicle turbo sales for both gasoline and diesel applications [7][14] - Adjusted EBIT was $133 million with an adjusted EBIT margin of 14.7%, which includes a 20 basis point dilution from tariff recoveries [8][17] - Adjusted free cash flow for the quarter was $107 million, contributing to a year-to-date total of $264 million [23] Business Line Data and Key Metrics Changes - Gasoline sales grew by 10% in the quarter, driven by demand gains and new product launches [8][16] - Diesel performance was strong in Europe and North America, although there was continued weakness in aftermarket applications, particularly in North America [16][51] - The company secured over $40 million in awards for commercial vehicles and industrial turbochargers, with expectations for sales exceeding $100 million in 2025 from these products [11] Market Data and Key Metrics Changes - The company experienced favorable foreign currency impacts, contributing to a 9% increase in net sales compared to the prior year [15] - There was a noted recovery of $12 million from tariffs within the quarter, which positively impacted financial results [16] Company Strategy and Development Direction - The company aims to leverage its capabilities to develop differentiated, high-speed, and highly efficient technologies to generate robust returns for shareholders [22] - There is a growing interest in developing turbochargers for hybrids and range-extended electric vehicles, with several awards secured for these technologies [10] - The company is focusing on zero-emission products, with significant progress in developing high-speed e Powertrain and oil-free centrifugal compressors [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the automotive industry's improved forecast for the second half of the year, leading to a raised 2025 outlook midpoint [8][21] - The company noted that while diesel is trending down slowly, it remains a strong business, particularly in light commercial vehicle applications [50][51] - Management highlighted the importance of capital allocation, committing to return 75% of adjusted free cash flow to shareholders over time through dividends and share repurchases [20][60] Other Important Information - The Board approved a 33% increase in the quarterly dividend to $0.08 per share for Q4 2025 [9][20] - The company repurchased $84 million worth of shares during the quarter, including shares from its largest shareholder [20] Q&A Session Summary Question: Can you elaborate on the volume mix and its geographic impact? - Management clarified that the mix impact is primarily due to strong growth in gasoline turbos and some weakness in the aftermarket, particularly in commercial vehicle applications [27][28] Question: What is the outlook for commercial vehicle performance? - Management indicated that while the outlook is generally soft, there are signs of stabilization in China, particularly in agricultural and construction equipment [31][32] Question: What is the path to achieving $1 billion in zero-emission technology revenue by 2030? - Management outlined three technologies contributing to this goal, emphasizing the growth potential in e Powertrain and e cooling compressors, with production expected to ramp up starting in 2027 [36][39] Question: Can you discuss the recovery seen in diesel? - Management noted a year-over-year recovery in diesel, particularly in North America, but acknowledged a long-term trend of declining diesel penetration in passenger vehicles [50][51] Question: What are the performance attributes of the e cooling technologies? - Management highlighted the efficiency, low noise, and weight advantages of their e cooling technologies, which leverage high-speed electric motors and airfoil bearing systems [66][68] Question: What should be expected regarding capital allocation moving forward? - Management reiterated their commitment to returning capital to shareholders while remaining flexible based on macroeconomic conditions [71][72]