Gentherm (THRM) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly revenue of $376 million, up 0.9% year-over-year, driven by double-digit growth in Lumbar and Massage Comfort Solutions and strong OEM demand.

• Secured $660 million in new automotive business awards in Q2, including the first Puls.A™ technology award and multiple OEM wins, with year-to-date awards totaling $1.2 billion.

• Medical segment revenue grew 9% year-over-year ex-FX, with strong Blanketrol growth in the US and expansion in China.

• Recognized by Honda as a top North American supplier for efficiency and cost improvements.

• Continued innovation with launches of Puls.A™, CCS® Compact Vent™, and software-driven WellSense™ and ClimateSense® solutions.

Financial highlights

• Q2 2024 product revenues were $375.7 million, up from $372.3 million in Q2 2023; gross margin improved to 25.7% from 23.6% year-over-year.

• Adjusted EBITDA was $49.9 million (13.3% margin), up from $42.4 million (11.4%) in Q2 2023.

• Net income for Q2 2024 was $18.9 million, compared to a net loss of $1.6 million in Q2 2023.

• Adjusted diluted EPS was $0.66, up from $0.58 year-over-year; GAAP diluted EPS was $0.60, up from a loss of $0.05.

• Operating cash flow for the first half was $58.6 million; capital expenditures were $30.7 million.

Outlook and guidance

• Full-year 2024 product revenue guidance at the low end of $1.5B–$1.6B range; adjusted EBITDA margin expected above mid-point of 12.5%–13.5%.

• Full-year adjusted effective tax rate and capital expenditure guidance unchanged at 26%–29% and $65M–$75M, respectively.

• Guidance assumes low single-digit decline in light vehicle production in key markets and EUR/USD at 1.08.

• Anticipates higher revenue in H2 vs. H1, driven by new program launches; Q3 revenue expected similar to Q2.

• Adjusted EBITDA margin rate expected above midpoint of prior range, despite one-time start-up costs at new plants.