Core Insights - BorgWarner reported strong financial results for 2025, with adjusted net earnings per diluted share increasing by approximately 14% to $4.91 compared to 2024, driven by higher operating income and share repurchases [1][2] - The company strategically entered the data center market with a turbine generator system, expected to generate over $300 million in sales during its first year of production starting in early 2027 [1][2] - For 2026, BorgWarner anticipates a slight decline in net sales, projecting between $14.0 billion and $14.3 billion, while expecting adjusted operating margin improvement [2][5] Full Year 2025 Highlights - BorgWarner secured a record number of light vehicle awards, which are expected to enhance profitable growth in 2027 and beyond [1] - U.S. GAAP net earnings per diluted share were $1.28, with adjusted net earnings at $4.91 [1][2] - Operating cash flow increased to $1,648 million, a 19% rise compared to 2024, while free cash flow surged by approximately 66% to $1,208 million [1][2] - Light vehicle eProducts grew by approximately 23% in 2025, reflecting strong demand for hybrid and electric technologies [1][2] New Business Awards - BorgWarner received a master supply agreement for a turbine generator system aimed at the AI-driven data center market [1] - Additional awards include an electric cross differential with a leading Chinese OEM, a battery management system for global OEMs, and integrated drive modules for various vehicle architectures [1][2] Fourth Quarter Highlights - U.S. GAAP net sales for Q4 2025 were $3,572 million, a 3.9% increase from Q4 2024 [2][4] - The company reported a net loss of $(1.23) per diluted share for Q4 2025, compared to a loss of $(1.84) in Q4 2024 [2][4] - Adjusted net earnings for Q4 2025 were $1.35 per diluted share, up approximately 34% from $1.01 in Q4 2024 [2][4] 2026 Guidance - BorgWarner expects net sales in the range of $14.0 billion to $14.3 billion for 2026, reflecting a year-over-year organic sales decline of approximately 3.5% to 1.5% [2][5] - The company anticipates an adjusted operating margin between 10.7% and 10.9% for 2026, with net earnings per diluted share projected between $4.74 and $4.91 [2][5] - Full-year operating cash flow is expected to be between $1,600 million and $1,700 million, while free cash flow is projected to range from $900 million to $1,100 million [2][5]

Core Insights - BorgWarner has entered the data center market by signing a Master Supply Agreement with TurboCell to provide a modular turbine generator system aimed at meeting the rising demand for power in AI-driven data centers and microgrid applications [1] Group 1: Product and Technology - The turbine generator system is designed to be a transformative power generation solution, expected to support AI campuses at gigawatt scale [1] - The product will offer adaptability for various applications, including backup and prime power, and is expected to meet future CARB emission standards while allowing for flexible fuel types such as natural gas, propane, diesel, and hydrogen [1] - BorgWarner plans to control approximately 65% of the turbine generator system content, leveraging its automotive supply base and manufacturing capabilities for vertical integration [1] Group 2: Strategic Partnerships and Market Position - The collaboration with TurboCell is seen as a significant opportunity for growth, with expectations that the turbine generator system will address power quality and energy needs across hyperscalers and colocators [1] - The partnership aims to combine Endeavour's innovation with BorgWarner's engineering and manufacturing expertise to meet the dynamic power demands of AI infrastructure [1] Group 3: Production and Future Outlook - Production of the turbine generator system is expected to begin in Hendersonville, North Carolina, in 2027, with an initial capacity of 2 GW [1] - The technology is positioned to unlock long-term value from data center power infrastructure by providing immediate prime and backup power solutions [1]