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 net income of $310 million.

• Q4 2025 net sales were $891 million (up 6% YoY), with adjusted EBIT of $122 million (13.7% margin) and net income of $84 million.

• Expanded zero-emission and industrial technology portfolio, securing first E-powertrain and E-cooling compressor awards for 2027 production and launching industrial HVAC compressors.

• Returned $260 million to shareholders in 2025 through $208 million in share repurchases and $52 million in dividends; new $250 million repurchase program authorized for 2026.

• Advanced strategic initiatives, increasing share of demand, expanding portfolio, and securing key partnerships in turbo, zero-emission, and industrial applications.

Financial highlights

• Full year 2025 adjusted free cash flow reached $403 million, with a conversion rate of 79%.

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

• Q4 net sales increased by $47 million year-over-year (6% reported, 1% constant currency).

• Q4 adjusted EBIT margin declined 100 bps sequentially due to unfavorable mix and one-time charges.

• Closed 2025 with $807 million in liquidity and net leverage ratio of 1.9x.

Outlook and guidance

• 2026 outlook: net sales of $3.6–$3.8 billion, net income of $295–$335 million, adjusted EBIT of $520–$570 million (margin up to 14.7%), and adjusted free cash flow of $355–$455 million.

• Capital expenditures and RD&E expected at 2.5% and 4.2% of sales, with up to 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.

• Declared Q1 2026 dividend of $0.08 per share.