Stoneridge (SRI) Q4 2024 earnings summary

Executive summary

• Outperformed weighted average end markets by 490 basis points in 2024, driven by strong growth in MirrorEye/Mirai and Smart 2 tachograph, despite a 10.4% market decline.

• Achieved $23.8 million in free cash flow, a $55.5 million year-over-year improvement, supported by a $36.4 million inventory reduction.

• Focused on cost control, manufacturing efficiency, and inventory management, resulting in improved cost structure and positive free cash flow.

• 2024 sales reached $908.3 million, with a net loss of $16.5 million and adjusted EBITDA of $37.9 million (4.2% of sales).

• Long-term targets include $1.3–$1.45 billion revenue and $160–$200 million EBITDA by 2029.

Financial highlights

• Full year 2024 sales were $908.3 million; gross margin was 20.9% and adjusted EBITDA margin was 4.2%.

• Free cash flow improved to $23.8 million, up $55.5 million from 2023, driven by a $36.4 million inventory reduction.

• Adjusted net loss was $13.1 million; adjusted EPS was $(0.47).

• Control Devices sales declined 14% to $296.3 million, while Electronics sales were flat at $594.7 million, outperforming end markets by 16.3%.

• Stoneridge Brazil sales were $50.3 million, with a 500 basis point margin decline due to macroeconomic challenges.

Outlook and guidance

• 2025 sales guidance is $860–$890 million (midpoint $875 million), with gross margin expected to improve by 135 basis points to 22.25%.

• EBITDA margin targeted at 4.6% ($40 million midpoint), and free cash flow guidance of $25–$30 million.

• MirrorEye/Mirai revenue expected to nearly double to $120 million in 2025, offset by $41 million in program roll-offs.

• 2026 revenue targeted at $975 million (11% growth), with EBITDA of at least $70 million (7% margin); long-term targets: $1.3–$1.45 billion revenue and $160–$200 million EBITDA by 2029.

• Compliance leverage ratio expected between 2 and 2.5 times by end of 2025.