BorgWarner (BWA) Q4 2025 earnings summary

Executive summary

• Achieved $14.3 billion in net sales for 2025, up 1.6% year-over-year, driven by 23% growth in light vehicle e-product sales and record new business awards across foundational and e-product portfolios.

• Adjusted operating margin expanded to 10.7%, with adjusted EPS up 14% to $4.91 and free cash flow rising 66% to $1.2 billion.

• Over $630 million returned to shareholders in 2025 through dividends and share repurchases, with $1.3 billion repurchased over four years.

• Entered the data center market with a master supply agreement for a modular turbine generator system, targeting AI-driven and microgrid applications, with production ramping in 2027 and initial sales expected to exceed $300 million.

• Well positioned for future earnings growth, supported by technology-focused portfolio awards and strategic market entries.

Financial highlights

• FY 2025 net sales were $14,316 million, up 1.6% year-over-year; Q4 2025 net sales reached $3,572 million, up 3.9% year-over-year.

• Adjusted operating margin for 2025 was 10.7%, up 60 basis points; Q4 2025 margin was 12.0%.

• Adjusted EPS for 2025 was $4.91, up 14%; Q4 2025 adjusted EPS was $1.35, up 34%.

• Free cash flow for 2025 was $1,208 million, up 66% year-over-year; Q4 2025 free cash flow was $470 million.

• Operating cash flow increased 19% to $1,648 million; cash and cash equivalents at year-end 2025 were $2,313 million.

Outlook and guidance

• 2026 net sales expected between $14.0 billion and $14.3 billion, with organic sales projected to decline 1.5%–3.5% year-over-year.

• Adjusted operating margin guidance for 2026 is 10.7%–10.9%; adjusted EPS expected between $5.00 and $5.20.

• Free cash flow for 2026 projected at $900 million to $1,100 million, reflecting higher capital spending for new product launches.

• CapEx planned at $600 million to $700 million; adjusted tax rate for ongoing operations ~23%.

• Light vehicle markets expected to be down 3% to flat; Battery & Charging Systems segment sales to decline by $210 million.