Sensata Technologies (ST) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue was $908 million, exceeding guidance, driven by strong auto production in North America and China, but down 8% year-over-year; full-year revenue was $3.93 billion, a 3% decrease from 2023, or 1% decrease adjusting for divestitures and product exits.

• Adjusted operating margins improved for four consecutive quarters, reaching 19.3% in Q4 and 19% for the year.

• Free cash flow conversion improved to 76% of adjusted net income, totaling $393 million for 2024, up 44% year-over-year.

• Portfolio optimization included divestitures and product pruning, exiting $370 million in annual revenue, including the Insights business, and implementing restructuring to streamline operations.

• CEO emphasized focus on operational excellence, growth, and capital efficiency for future value creation.

Financial highlights

• Q4 adjusted operating income was $175 million (19.3% margin), up 80 bps year-over-year; full-year adjusted operating income was $749 million (19% margin).

• Adjusted EPS for Q4 was $0.76 (vs. $0.81 prior year); full-year adjusted EPS was $3.44 (vs. $3.61 in 2023).

• Return on invested capital improved to 10.2% in 2024 (from 9.7% in 2023).

• Net leverage reduced to under 3x trailing 12-month EBITDA by year-end 2024.

• Free cash flow for 2024 was $393 million, up 44% year-over-year; cash on hand at year-end was $593.7 million.

Outlook and guidance

• Q1 2025 revenue expected at $870–$890 million, reflecting seasonality and FX headwinds.

• Full-year 2025 revenue expected to be organically flat at ~$3.6 billion, with $300 million of 2024 revenue not repeating due to divestitures and currency.

• Adjusted operating margins for Q1 2025 expected at 18.2–18.4%, returning to 19%+ in Q2 and improving in the second half.

• Q1 2025 adjusted EPS guidance: $0.70–$0.73.

• Guidance excludes potential impacts from new or threatened US tariffs and retaliatory actions.