Sensata Technologies (ST) Q4 2025 earnings summary

Executive summary

• Achieved or exceeded guidance midpoints for all quarters in 2025, with sequential margin expansion and a return to organic revenue growth in Q4, demonstrating operational excellence and resilience despite market headwinds.

• Completed a major transformation, reorganizing into three segments: Automotive, Industrials, and Aerospace, Defense & Commercial Equipment, each with distinct growth mandates.

• Built a new leadership team and implemented a disciplined, KPI-driven operating model to drive value creation.

• Improved free cash flow and strengthened the balance sheet, supporting a more resilient organization.

Financial highlights

• Q4 2025 revenue was $918 million, up 1% year-over-year; organic revenue up 4%; Q4 adjusted operating income was $180 million (19.6% margin), and adjusted EPS was $0.88, up $0.14 year-over-year.

• Full-year 2025 revenue was $3.70 billion, down 6% due to divestitures; organic revenue flat; adjusted operating income was $705 million (19% margin); adjusted EPS was $3.42.

• Record free cash flow of $490 million in 2025, up 25% year-over-year, with 97% conversion of adjusted net income.

• Returned $191 million to shareholders in 2025 via $121 million in buybacks and $70 million in dividends.

• Net leverage reduced from 3.0x to 2.7x trailing 12 months adjusted EBITDA; cash on hand at year-end 2025 was $573 million.

Outlook and guidance

• Q1 2026 revenue guidance: $917–$937 million; adjusted operating income: $168–$175 million; adjusted EPS: $0.81–$0.85.

• Adjusted operating margin for Q1 2026 expected at 18.4–18.8%, or 18.6–18.8% excluding tariff pass-through.

• Expect low single-digit revenue growth for full year 2026, with margin expansion of at least 20 basis points.

• Annual margin floor reiterated at 19%; Q1 margin expected to be seasonally lower, normalizing to 19%+ in Q2 and beyond.

• Free cash flow conversion targeted in the high 80s percent for 2026.