Garrett Motion (GTX) Q4 2025 earnings summary

Executive summary

• Achieved strong operational and financial performance in 2025, with net sales of $3.58 billion (up 3% YoY), adjusted EBIT of $510 million (14.2% margin), and Q4 net sales of $891 million (up 6% YoY).

• Expanded zero-emission and industrial technology portfolios, securing first E-powertrain and E-cooling compressor awards for 2027 production, and launched industrial HVAC compressors with oil-free centrifugal technology.

• Returned significant capital to shareholders in 2025 through $208 million in share repurchases, $52 million in dividends, and a new $250 million repurchase program for 2026.

• Advanced strategic initiatives, including major new awards in turbo, hybrid, diesel, commercial vehicle, and industrial applications, and expanded into marine and power generation markets.

• Net income for FY 2025 was $310 million (8.6% margin), with strong free cash flow and margin expansion.

Financial highlights

• Q4 2025 adjusted EBIT was $122 million (13.7% margin); FY 2025 adjusted EBIT was $510 million (14.2% margin); adjusted free cash flow for FY 2025 was $403 million.

• Net income for FY 2025 was $310 million, up from $282 million in 2024; Q4 net income was $84 million.

• Gross profit for FY 2025 was $731 million (20.4% margin); Q4 gross margin was 20.8%.

• Q4 adjusted free cash flow was $139 million, with strong cash conversion and working capital recovery.

• Net sales grew 6% YoY in Q4, driven by commercial vehicle and diesel, partially offset by aftermarket weakness.

Outlook and guidance

• 2026 outlook midpoint: net sales of $3.7 billion, net income of $315 million, adjusted EBIT of $545 million (14.7% margin), and adjusted free cash flow of $405 million.

• 2026 net sales expected between $3.6B–$3.8B, with constant currency growth of -2% to +2%.

• Capital expenditures and RD&E expected at 2.5% and 4.2% of sales, with about 50% of RD&E focused on zero-emission and industrial cooling.

• Assumes 2026 light vehicle production down 1–3%, commercial vehicle up 1–2%, and BEV penetration at 19%.

• Anticipates further share gains, margin expansion, and strong free cash flow in 2026, despite a projected 2% decline in global light vehicle industry.