Sensata Technologies (ST) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $943.4M, down 8.9% year-over-year, mainly due to divestitures and product lifecycle actions, but exceeded the high end of guidance with strong free cash flow and Sensing Solutions growth.

• Adjusted operating income and adjusted EPS both exceeded guidance, with adjusted EPS at $0.87, up $0.09 sequentially but down year-over-year due to divestitures.

• Operating income rose 6.2% to $138.1M (14.6% margin), driven by cost savings and lower amortization.

• Free cash flow reached $116M in Q2, with a 91% conversion rate, and $202.1M for H1 2025.

• Leadership transition: Andrew Lynch named CFO, bringing extensive financial and operational experience.

Financial highlights

• Q2 2025 revenue was $943.4M, down 8.9% year-over-year, with adjusted operating income of $179.1M (19.0% margin) and adjusted EPS of $0.87.

• Net income for Q2 2025 was $60.7M (6.4% margin); diluted EPS was $0.41.

• Free cash flow conversion rate improved to 91% in Q2, up from 71% in Q2 2024.

• Cash and cash equivalents at quarter-end were $661.8M.

• GAAP net income for H1 2025 was $130.6M; adjusted EPS for H1 was $1.65.

Outlook and guidance

• Q3 2025 guidance: revenue of $900–$930M, adjusted operating income of $171–$179M, adjusted operating margin of 19.0–19.2% (19.3–19.5% excluding tariff impact), and adjusted EPS of $0.81–$0.87.

• Sequential margin expansion of ~10 bps expected at midpoint, with $15M in tariff costs and pass-throughs assumed.

• Free cash flow conversion target set at 80% or higher as a floor.

• CapEx for FY 2025 expected at ~$150M, funded with cash on hand.

• Liquidity sources are expected to be sufficient for all obligations for at least the next 12 months.