Garrett Motion (NasdaqGS:GTX) Q3 2025 Earnings Call October 23, 2025 08:30 AM ET Company ParticipantsOlivier Rabiller - President and CEOCyril Grandjean - VP, Investor Relations and TreasurerSean Deason - CFONathan Jones - Managing DirectorConference Call ParticipantsEric Gregg - Founder and Principal AnalystJake Scholl - Stock AnalystHamed Khorsand - Founder and AnalystNone - AnalystOperatorHello, my name is Megan, and I will be your operator this morning. I would like to welcome everyone to the Garrett Mo ...

Garrett Motion (NasdaqGS:GTX) Q3 2025 Earnings Call October 23, 2025 08:30 AM ET Speaker1Hello, my name is Megan, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion Third Quarter 2025 Financial Results Conference Call. This call is being recorded, and a replay will be available later today. After the company's presentation, there will be a Q&A session. I would now like to hand the call over to Cyril Grandjean, Garrett's Vice President, Investor Relations and Tre ...

Garrett Motion (NasdaqGS:GTX) Q3 2025 Earnings Call October 23, 2025 08:30 AM ET Speaker0Hello. My name is Megan, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion Third Quarter twenty twenty five Financial Results Conference Call. This call is being recorded and a replay will be available later today. After the company's presentation, there will be a Q and A session.I would now like to hand the call over to Cyril Granjean, Garrett's Vice President, Investor Re ...

Third Quarter 2025 Financial Highlights Net sales totaled $902 million, up 9% on a reported basis and 6% on a constant currency* basis vs prior yearNet income totaled $77 million; Net income margin of 8.5%Adjusted EBIT* totaled $133 million; Adjusted EBIT margin* of 14.7%Net cash provided by operating activities totaled $100 millionAdjusted free cash flow* totaled $107 millionRaised 2025 midpoint outlook reflecting strong performance and improved second half automotive industry outlook Third Quarter 2025 Bu ...

Core Viewpoint - Garrett Motion Inc. (NASDAQ:GTX) is viewed positively by analysts as one of the best small-cap EV stocks to buy, with expectations for strong fiscal third-quarter results in 2025 [1] Financial Performance - In the fiscal second quarter, Garrett Motion Inc. reported revenue of $913 million, reflecting a year-over-year growth of 2.58% and exceeding estimates by $3.10 million [2] - The earnings per share (EPS) for the same quarter was $0.42, surpassing consensus estimates by $0.06 [2] - The company has raised its full-year sales outlook for 2025 to a range of $3.4 billion to $3.6 billion, up from the previous forecast of $3.3 billion to $3.5 billion [2] - The net income outlook has also been increased from a range of $209 million to $254 million to a new range of $233 million to $278 million [2] Analyst Ratings - Analysts have shown bullish sentiment towards Garrett Motion Inc., with Stifel Nicolaus initiating coverage with a Buy rating and a price target of $17.5 on September 19 [3] - On September 30, BWS Financials raised its price target for the stock from $14 to $18 while maintaining a Buy rating [3] Company Overview - Garrett Motion Inc. is a Swiss automotive company specializing in the design and manufacture of turbochargers and electric boosting technologies for both light and commercial vehicles [4]

Core Viewpoint - Garrett Motion announced a significant secondary offering of 17 million shares, leading to a 10% drop in its stock value as investors reacted negatively to the increased share supply [1][4]. Company Overview - Garrett Motion is the former auto division of Honeywell International, specializing in turbochargers for internal combustion engine vehicles and components for hybrid and battery electric vehicles [3]. - The company underwent bankruptcy after separating from Honeywell but has since returned to public markets with substantial ownership from private equity firms that aided in its restructuring [3]. Shareholder Dynamics - The secondary offering consists of shares owned by affiliates of Oaktree Capital Management, Centerbridge Partners, and Cyrus Capital Partners, with Garrett not receiving any proceeds from this offering [4]. - Private equity investors typically do not hold long-term stakes, indicating their intention to gradually cash out to return capital to their investors [5]. Financial Performance - Despite the ownership overhang from private equity sales, Garrett has successfully transformed into a free cash flow-generating entity, with the capacity to repurchase shares and currently offering a dividend yield of 2.3% [6]. Investment Perspective - For investors seeking solid cash generation opportunities, Garrett is considered an attractive option despite the short-term volatility associated with the secondary offering [7].

Financial Highlights - Net sales for Q1 2025 were $878 million, a decrease of 4% from $915 million in Q1 2024, with a 2% decline on a constant currency basis [4][38] - Gross profit increased to $179 million, with a gross profit margin of 20.4%, compared to 18.8% in Q1 2024 [7][36] - Net income for Q1 2025 was $62 million, down from $66 million in Q1 2024, resulting in a net income margin of 7.1% [13][36] - Adjusted EBIT rose to $131 million, with an adjusted EBIT margin of 14.9%, compared to 13.2% in the prior year [15][36] - Adjusted EBITDA was $159 million, with an adjusted EBITDA margin of 18.1%, up from 16.5% in Q1 2024 [15][36] - Net cash provided by operating activities totaled $56 million, down from $84 million in Q1 2024 [14][36] - Adjusted free cash flow decreased to $36 million from $68 million in the previous year [16][36] Business Highlights - The company declared a cash dividend of $0.06 per share, payable on June 16, 2025 [2] - The company repurchased $30 million of common stock during the quarter, with a remaining repurchase capacity of $220 million [18] - The company secured new business in turbocharging, particularly in plug-in hybrid and range-extended electric platforms [3][4] - A significant milestone was achieved with the first major series production award for high-speed electric traction motors, expected to start production in 2027 [3][4] Liquidity and Capital Resources - As of March 31, 2025, the company had $760 million in available liquidity, including $130 million in cash and cash equivalents [17] - Total principal amount of debt outstanding was $1,494 million, slightly up from $1,493 million at the end of 2024 [18] Full Year 2025 Outlook - The company expects net sales for 2025 to be between $3.3 billion and $3.5 billion, with a constant currency growth forecast of -3% to +2% [21][44] - Projected net income for 2025 is between $209 million and $254 million [21][45] - Adjusted EBITDA is expected to range from $545 million to $605 million for the full year [21][45]

Core Insights - Garrett Motion is transitioning from a traditional turbo supplier to a cash-flowing entity with opportunities in electric vehicles (EV) and industrial sectors, indicating a strategic shift in its business model [1] - The stock of Garrett Motion is still considered a buy due to the ongoing relevance of turbochargers and internal combustion engines (ICE) in the market [1] Company Overview - Garrett Motion is focusing on enhancing its cash flow while diversifying into emerging markets such as EVs and industrial applications [1] - The company is leveraging its legacy in turbo technology while adapting to new market demands [1] Market Position - The relevance of turbochargers and ICE remains significant, which supports the investment thesis for Garrett Motion's stock [1] - The company is positioned to benefit from both traditional automotive markets and the growing EV sector, providing a balanced growth opportunity [1]

The tech-heavy Nasdaq Composite Index saw the largest intraday swing since 2008 in the April 8 trading session. The index closed 0.1% higher yesterday after swinging from a loss of around 5.2% to a gain of 4.5% at intraday extremes, marking its largest intraday comeback since Oct. 10, 2008. Fidelity Nasdaq Composite Index ETF (ONEQ) , which tracks the Nasdaq Composite Index, also saw wild swings of 10% from high to low in a single day and closed 0.1% lower. While most of the stocks in the ETF portfolio have ...